Mettler-Toledo(US:MTD)2024-11-08 15:51PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited interim consolidated financial statements and accompanying notes for the periods ended September 30, 2024 Unaudited Interim Consolidated Financial Statements Financial statements show slight Q3 2024 net sales and earnings growth, with improved year-over-year operating cash flow for the nine-month period Q3 2024 vs Q3 2023 Performance | Financial Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $954,535 | $942,462 | +1.3% | | Gross Profit | $572,467 | $559,539 | +2.3% | | Net Earnings | $211,516 | $201,631 | +4.9% | | Diluted EPS | $9.96 | $9.21 | +8.1% | YTD 2024 vs YTD 2023 Performance | Financial Metric | YTD 2024 (in thousands) | YTD 2023 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $2,827,234 | $2,853,317 | -0.9% | | Gross Profit | $1,686,268 | $1,689,648 | -0.2% | | Net Earnings | $610,839 | $603,984 | +1.1% | | Diluted EPS | $28.55 | $27.37 | +4.3% | Balance Sheet Summary | Balance Sheet Item | Sep 30, 2024 (in thousands) | Dec 31, 2023 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $1,198,232 | $1,230,203 | | Total Assets | $3,319,828 | $3,355,555 | | Total Current Liabilities | $1,184,968 | $1,181,082 | | Total Liabilities | $3,474,181 | $3,505,493 | | Total Shareholders' Equity | ($154,353) | ($149,938) | - For the nine months ended September 30, 2024, net cash provided by operating activities was $702.2 million, a slight increase from $684.4 million in the prior year period, while net cash used in financing activities increased to $632.3 million due to share repurchases12 Notes to the Interim Consolidated Financial Statements Notes detail revenue disaggregation, a new $1.35 billion credit agreement, continued share repurchases, and segment performance - The company's revenue is primarily generated from three product categories: Laboratory (56% of sales), Industrial (39%), and Retail (5%)41 Revenue by Geography | Revenue by Geography | Nine Months 2024 (in thousands) | Nine Months 2023 (in thousands) | | :--- | :--- | :--- | | Americas | $1,181,992 | $1,166,691 | | Europe | $792,690 | $755,470 | | Asia / Rest of World | $852,552 | $931,156 | | Total | $2,827,234 | $2,853,317 | - On May 30, 2024, the company entered into a new $1.35 billion Credit Agreement, with total debt at approximately $2.08 billion as of September 30, 20245960 - During the first nine months of 2024, the company repurchased 482,413 shares for $637.5 million, with $1.9 billion remaining available under the program6970 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 1% local currency sales increase in Q3 2024, improved gross margins, varied segment performance, and strong liquidity Results of Operations – Consolidated Consolidated net sales grew 1% in local currency for Q3 2024, with expanded gross margins driven by favorable pricing despite soft demand in China Net Sales Growth | Period | Net Sales Growth (USD) | Net Sales Growth (Local Currency) | | :--- | :--- | :--- | | Q3 2024 | +1% | +1% | | YTD 2024 | -1% | 0% | - Geographic performance in local currency for the nine months was mixed, with Europe at +4%, Americas at +1%, and Asia/Rest of World at -6%, including a 15% decline in China103 - Gross profit margin increased for both the three and nine-month periods due to favorable price realization and business mix111112 Results of Operations – by Operating Segment Segment results varied in Q3 2024, with strong profit growth in U.S. and Swiss operations contrasting with continued market softness in China Q3 2024 Segment Performance | Operating Segment | Q3 2024 External Sales Growth (USD) | Q3 2024 Segment Profit Growth (USD) | | :--- | :--- | :--- | | U.S. Operations | -1% | +7% | | Swiss Operations | +6% | +25% | | Western European Operations | +2% | -5% | | Chinese Operations | +1% | +7% | | Other | +3% | +5% | - The Chinese Operations segment experienced a significant decline in market demand, with nine-month external sales down 17% in USD, though Q3 showed a slight recovery130 - Swiss Operations' segment profit increased significantly by 25% in Q3 2024, driven by favorable business mix and cost-saving initiatives125 Liquidity and Capital Resources The company maintains strong liquidity with operating cash flow of $702.2 million YTD, primarily used for share repurchases and capital expenditures - Cash provided by operating activities increased to $702.2 million in the first nine months of 2024, up from $684.4 million in the same period of 2023137 - The company spent $637.5 million on share repurchases in the first nine months of 2024, with $1.9 billion remaining under the program140148 - As of September 30, 2024, the company had $71.6 million in cash and $585.3 million of additional borrowing capacity143 Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk disclosures were reported compared to the 2023 year-end Form 10-K - No material change in market risk information was reported for the period ended September 30, 2024, compared to the 2023 year-end report156 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective, with no material changes to internal controls during the quarter157 PART II. OTHER INFORMATION Item 1. Legal Proceedings and Item 1A. Risk Factors The company reports no new legal proceedings and no material changes to previously disclosed risk factors - The company reported no legal proceedings for the period159 - There were no material changes from the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023159 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 151,921 shares for approximately $212.5 million in Q3 2024, with $1.9 billion remaining under the program Q3 2024 Share Repurchases | Period (2024) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July | 54,054 | $1,375.64 | | August | 54,714 | $1,423.47 | | September | 43,153 | $1,396.26 | | Q3 Total | 151,921 | $1,398.73 | - As of September 30, 2024, the company has $1.9 billion of remaining availability for its share repurchase program160