01—Abstract
Summary
Summary of the 10-K filed February 8, 2013. Cited figures are marked; the original filing is the authoritative source.
Mettler-Toledo International Inc. (MTD) reported net sales of $2,341.5 milliona for 2012, up from $2,309.3 million in 2011 and $1,968.2 million in 2010.
Net earnings were $290.8 millionb, or $9.14 per diluted share, compared with $269.5 million ($8.21 per diluted share) in 2011. Management described the global environment as having deteriorated during 2012, especially in Europe, and expects local-currency organic sales growth in 2013 to be less than the growth rates experienced in 2011, with net sales possibly declining in future quarters depending on economic conditions. Restructuring charges rose to $16.7 million from $5.9 million, and the company initiated additional cost reduction measures.
The company is the largest provider of weighing instruments for laboratory, industrial and food retailing applications, with laboratory instruments about 46% of 2012 net sales, industrial instruments about 45%, and retail about 9%. China is a significant concentration: Chinese operations generated $432.3 millionc of sales to external customers and $125.2 million of segment profit in 2012. Cash provided by operating activities was $327.7 million, and capital expenditures were $95.6 million.
During 2012 the company repurchased 1,637,827 shares for $278.7 milliond, and $437 million remained under its $2.25 billion share repurchase program at year end. Balance sheet items include total debt of $388.7 million, cash of $101.7 million, and shareholders' equity of $827.2 million at December 31, 2012. The company issued $50 million of 3.67% Senior Notes due 2022 in October 2012, and its $880 million Credit Agreement had $197.1 million outstanding at year end.
The company has historically not paid dividends on its common stock. PricewaterhouseCoopers LLP issued an unqualified opinion, and management concluded that internal control over financial reporting was effective as of December 31, 2012.
02—Key points
Key Highlights
- Net sales of $2,341.5 million in 2012, up 1% in U.S. dollars and 4% in local currencies from $2,309.3 million in 2011
- Net earnings of $290.8 million, or $9.14 per diluted share, up from $8.21 per diluted share in 2011
- Gross margin of 53.0% in 2012, compared with 52.8% in 2011; research and development was 4.8% of net sales
- Restructuring charges of $16.7 million in 2012, primarily severance, versus $5.9 million in 2011, tied to additional cost reduction measures
- Concentration in China: Chinese operations generated $432.3 million of external sales and $125.2 million of segment profit in 2012
- Operating cash flow of $327.7 million and capital expenditures of $95.6 million in 2012
- Repurchased $278.7 million of stock in 2012, with $437 million remaining under the $2.25 billion authorization
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 8, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $2.34B$2.31B | +1.4% |
| Cost of Revenue | $811.20M$798.68M | +1.6% |
| Gross Profit | $1.24B$1.22B | +1.9% |
| R&D Expenses | $112.53M$116.14M | −3.1% |
| SG&A Expenses | $684.03M$703.63M | −2.8% |
| Interest Expense | $22.76M$23.23M | −2.0% |
| Net Income | $290.85M$269.49M | +7.9% |
| EPS (Basic) | $9.37$8.45 | +10.9% |
| EPS (Diluted) | $9.14$8.21 | +11.3% |
| Shares Outstanding (Basic) | 31.04M31.90M | −2.7% |
| Shares Outstanding (Diluted) | 31.82M32.84M | −3.1% |
05—Questions
Frequently Asked Questions
How did Mettler-Toledo perform in 2012 and what is the outlook for 2013?
Net sales rose 1% in U.S. dollars to $2,341.5 million and net earnings rose to $290.8 million. Management said the global environment deteriorated during 2012, especially in Europe, and expects local-currency organic sales growth in 2013 to be less than the growth rates experienced in 2011, with net sales possibly declining in future quarters depending on economic conditions.
Which businesses and regions drive the company's sales?
Laboratory instruments accounted for about 46% of 2012 net sales, industrial instruments about 45%, and retail weighing solutions about 9%. Sales were 34% from both Europe and North and South America and 32% from Asia and other countries. Service represented about 21% of net sales in 2012.
What are the main risks highlighted in the filing?
The filing highlights economic uncertainty in developed markets and the European debt crisis, significant concentration in China with $57.1 million of cash held in Chinese subsidiaries at year end, currency fluctuations (particularly the Swiss franc against the euro), competition from lower-cost emerging market competitors, and the multi-year Blue Ocean ERP implementation.
How is the company funding its operations and shareholder returns?
At December 31, 2012, total debt was $388.7 million against cash of $101.7 million. The company issued $50 million of 3.67% Senior Notes due 2022 in October 2012, and $197.1 million was outstanding under its $880 million Credit Agreement. It repurchased $278.7 million of stock during 2012, and it has historically not paid dividends on its common stock.
06—Continue