01—Abstract
Summary
Summary of the 10-K filed February 7, 2014. Cited figures are marked; the original filing is the authoritative source.
Mettler-Toledo International Inc. reported net sales of $2,378,972 thousanda ($2.38 billion) for 2013, up from $2,341,528 thousand in 2012, and net earnings of $306,094 thousand ($9.96 diluted earnings per share) versus $290,847 thousand in 2012.
Management describes 2013 as affected by weak global market conditions, particularly in China, where net sales to external customers fell 8%b in local currencies. Management states that it is cautious about its sales growth outlook. Laboratory-related products represented approximately 46% of net sales, industrial-related products approximately 45%, and food retailing approximately 9%.
Gross profit as a percentage of net sales rose to 53.9% from 53.0%, which management attributes primarily to price realization, business mix and lower material costs. The balance sheet strengthened over the year. Total assets were $2,152,819 thousandc and shareholders' equity was $935,052 thousand at December 31, 2013.
Cash provided by operating activities was $345.9 milliond. The company repurchased 1,321,577 shares for $295.0 million during 2013, and $892 million remained available under its $3 billion share repurchase program. It issued $50 million of 4.10% Senior Notes and entered into an $800 million Credit Agreement maturing November 26, 2018, of which approximately $600.0 million was available at year end.
The company has historically not paid dividends on its common stock. The filing identifies several risks, including exposure to European sovereign debt concerns, currency fluctuations between the Swiss franc, euro and U.S. dollar, and a significant concentration of business in China, where the company held $64.4 million of cash in its Chinese subsidiaries at December 31, 2013.
Goodwill of $455.8 million and other intangible assets of $114.4 million are subject to potential impairment. The company reports that it is not currently involved in any legal proceeding expected to have a material adverse effect.
02—Key points
Key Highlights
- Net sales rose to $2,378,972 thousand in 2013 from $2,341,528 thousand in 2012, with local-currency growth of 1%.
- Net earnings increased to $306,094 thousand, or $9.96 per diluted share, compared with $290,847 thousand, or $9.14 per diluted share, in 2012.
- Gross profit margin reached 53.9% of net sales in 2013, up from 53.0% in 2012, driven mainly by price realization, business mix and reduced material costs.
- Net sales to external customers in China decreased 8% in local currencies in 2013 on weak market conditions and reduced credit availability for Chinese customers.
- The company repurchased $295.0 million of common stock in 2013 and had $892 million remaining under its $3 billion share repurchase program at year end.
- Operating cash flow was $345.9 million in 2013, and the company issued $50 million of 4.10% Senior Notes due 2023 during the year.
- Management reports effective internal control over financial reporting as of December 31, 2013, and PricewaterhouseCoopers LLP issued an unqualified opinion.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 7, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $2.38B$2.34B | +1.6% |
| Cost of Revenue | $795.23M$811.20M | −2.0% |
| Gross Profit | $1.28B$1.24B | +3.3% |
| R&D Expenses | $116.35M$112.53M | +3.4% |
| SG&A Expenses | $692.69M$684.03M | +1.3% |
| Interest Expense | $22.71M$22.76M | −0.2% |
| Net Income | $306.09M$290.85M | +5.2% |
| EPS (Basic) | $10.22$9.37 | +9.1% |
| EPS (Diluted) | $9.96$9.14 | +9.0% |
| Shares Outstanding (Basic) | 29.95M31.04M | −3.5% |
| Shares Outstanding (Diluted) | 30.73M31.82M | −3.4% |
05—Questions
Frequently Asked Questions
How did Mettler-Toledo perform financially in 2013?
Net sales were $2,378,972 thousand, up from $2,341,528 thousand in 2012, and net earnings were $306,094 thousand, up from $290,847 thousand. Diluted earnings per share were $9.96 compared with $9.14 in 2012. Growth was held back by weak market conditions in China and reflected a 1% increase in local-currency sales.
What were the main sources of revenue?
Laboratory-related products represented approximately 46% of 2013 net sales, industrial-related products approximately 45%, and food retailing products approximately 9%. Service revenue, including spare parts, was $516,946 thousand of total net sales in 2013.
How is the company's balance sheet and liquidity position?
At December 31, 2013, cash and cash equivalents were $111,874 thousand, total assets were $2,152,819 thousand, long-term debt was $395,960 thousand, and shareholders' equity was $935,052 thousand. Approximately $600.0 million was available under the $800 million Credit Agreement.
Does the company pay dividends, and how does it return capital to shareholders?
The filing states that the company has historically not paid dividends on its common stock and will evaluate that policy periodically. Capital has been returned through share repurchases, with $295.0 million spent on 1,321,577 shares in 2013 and $892 million remaining under the authorized program at year end.
What are the most significant risks disclosed in the filing?
Key risks include sovereign debt and euro stability concerns in Europe, a significant concentration of business in China with $64.4 million of cash held in Chinese subsidiaries, currency exposure to the Swiss franc, euro and U.S. dollar, potential goodwill and intangible asset impairments, and covenants in the company's debt agreements.
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