01—Abstract
Summary
Summary of the 10-K filed February 9, 2010. Cited figures are marked; the original filing is the authoritative source.
Mettler-Toledo International Inc. (NYSE: MTD) reported that net sales for 2009 were $1,728.9 milliona, down from $1,973.3 million in 2008 and $1,793.7 million in 2007.
Net sales in U.S. dollars decreased 12% in 2009, and in local currencies decreased 10%. Net earnings fell to $172.6 millionb ($5.03 diluted EPS) from $202.8 million ($5.79 diluted EPS) in 2008. The decline reflected broad-based sales declines across geographies and products tied to the global economic slowdown, partly offset by a global cost reduction program the company says has annualized savings of approximately $100 million, with workforce reductions of about 1,000 employees.
Gross margin improved to 51.4% of net sales from 50.3% in 2008, driven by lower material costs, higher pricing and favorable mix. Operating cash flow rose to $232.6 millionc from $223.1 million, and the company ended the year with $85.0 million of cash and total debt of $293.6 million. Total shareholders' equity increased to $711.1 million from $503.2 million.
The company restarted its share repurchase program in December 2009 after suspending it in October 2008, with $410.6 milliond remaining under the $1.5 billion authorization. Management stated that it expects previous-year comparisons to improve during 2010 but that it is difficult to predict the extent of adverse effects from the uncertain economic environment. The company also noted it issued $100 million of 6.30% Senior Notes due 2015, that its $950 million revolving Credit Agreement had $853.4 million available at year end, and that its Blue Ocean ERP program is expected to go live in early 2010 with capitalized first-phase costs expected to exceed $100 million.
02—Key points
Key Highlights
- Net sales of $1,728.9 million in 2009, down 12% in U.S. dollars and 10% in local currencies from $1,973.3 million in 2008.
- Diluted EPS of $5.03 in 2009 versus $5.79 in 2008; net earnings of $172.6 million versus $202.8 million.
- Gross profit as a percentage of net sales rose to 51.4% from 50.3%, reflecting reduced material costs, increased pricing and favorable product mix.
- Global cost reduction program targets approximately $100 million of annualized savings, with a workforce reduction of about 1,000 (roughly 10% of total workforce).
- Cash provided by operating activities was $232.6 million in 2009; year-end cash was $85.0 million and total debt was $293.6 million.
- Issued $100 million of 6.30% Senior Notes due 2015 and repurchased $75 million of 4.85% Senior Notes via tender offer in 2009.
- Share repurchase program restarted in December 2009 with $410.6 million remaining authorized through December 31, 2010.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 9, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $1.73B$1.97B | −12.4% |
| Cost of Revenue | $584.00M$701.64M | −16.8% |
| Gross Profit | $889.34M$993.08M | −10.4% |
| R&D Expenses | $89.69M$102.28M | −12.3% |
| SG&A Expenses | $505.18M$579.81M | −12.9% |
| Interest Expense | $25.12M$25.39M | −1.1% |
| Net Income | $172.59M$202.78M | −14.9% |
| EPS (Basic) | $5.12$5.92 | −13.5% |
| EPS (Diluted) | $5.03$5.79 | −13.1% |
| Shares Outstanding (Basic) | 33.72M34.25M | −1.6% |
| Shares Outstanding (Diluted) | 34.29M35.05M | −2.2% |
05—Questions
Frequently Asked Questions
How did Mettler-Toledo's sales and earnings perform in 2009?
Net sales fell to $1,728.9 million from $1,973.3 million in 2008, a 12% decline in U.S. dollars and 10% in local currencies. Net earnings decreased to $172.6 million from $202.8 million, and diluted EPS was $5.03 compared with $5.79. The filing attributes the decline to broad-based sales drops tied to the global economic slowdown.
Which geographies generated the company's sales?
In 2009, net sales were derived 41% from Europe, 35% from North and South America and 24% from Asia and other countries. Local-currency net sales decreased 11% in the Americas, 14% in Europe and 2% in Asia/Rest of World.
What is the company doing to address the downturn and improve profitability?
The company initiated a global cost reduction program in late 2008 and revised it in early 2009. It reports annualized savings of approximately $100 million, workforce reductions of about 1,000 and restructuring charges of $31.4 million in 2009. Gross margin also improved to 51.4% of net sales.
How is the company's balance sheet and liquidity position?
At December 31, 2009, cash was $85.0 million and total debt was $293.6 million, with short-term borrowings and current debt of $90.0 million. Shareholders' equity rose to $711.1 million. The $950 million Credit Agreement had approximately $853.4 million available, and management believes operating cash flow and credit availability will be sufficient for the foreseeable future.
Does the company pay dividends and what are its capital return plans?
The company has historically not paid dividends on its common stock and will evaluate that policy periodically. It restarted its share repurchase program in December 2009, having suspended it in October 2008, and had $410.6 million remaining under its $1.5 billion authorization as of December 31, 2009.
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