filings.toolsItem 1. Financial Statements
68K characters. Original on sec.gov · Markdown
Item 1. Financial Statements
METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months ended March 31, 2024 and 2023
(In thousands, except share data)
(unaudited)
| March 31, 2024 | March 31, 2023 | ||||||||||
| Net sales | |||||||||||
| Products | $ | 700,968 | $ | 716,001 | |||||||
| Service | 224,981 | 212,737 | |||||||||
| Total net sales | 925,949 | 928,738 | |||||||||
| Cost of sales | |||||||||||
| Products | 271,927 | 285,751 | |||||||||
| Service | 105,889 | 96,421 | |||||||||
| Gross profit | 548,133 | 546,566 | |||||||||
| Research and development | 46,415 | 45,477 | |||||||||
| Selling, general and administrative | 234,390 | 234,638 | |||||||||
| Amortization | 18,228 | 17,779 | |||||||||
| Interest expense | 19,232 | 18,184 | |||||||||
| Restructuring charges | 9,664 | 4,274 | |||||||||
| Other charges (income), net | (343) | (396) | |||||||||
| Earnings before taxes | 220,547 | 226,610 | |||||||||
| Provision for taxes | 43,038 | 38,184 | |||||||||
| Net earnings | $ | 177,509 | $ | 188,426 | |||||||
| Basic earnings per common share: | |||||||||||
| Net earnings | $ | 8.28 | $ | 8.53 | |||||||
| Weighted average number of common shares | 21,437,673 | 22,083,456 | |||||||||
| Diluted earnings per common share: | |||||||||||
| Net earnings | $ | 8.24 | $ | 8.47 | |||||||
| Weighted average number of common and common equivalent shares | 21,543,313 | 22,253,435 | |||||||||
| Total comprehensive income, net of tax (Note 9) | $ | 199,250 | $ | 187,143 |
The accompanying notes are an integral part of these interim consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED BALANCE SHEETS
As of March 31, 2024 and December 31, 2023
(In thousands, except share data)
(unaudited)
| March 31, 2024 | December 31, 2023 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 70,191 | $ | 69,807 | |||||||
| Trade accounts receivable, less allowances of $19,069 at March 31, 2024 | |||||||||||
| and $20,103 at December 31, 2023 | 650,333 | 663,893 | |||||||||
| Inventories | 373,670 | 385,865 | |||||||||
| Other current assets and prepaid expenses | 116,920 | 110,638 | |||||||||
| Total current assets | 1,211,114 | 1,230,203 | |||||||||
| Property, plant and equipment, net | 773,495 | 803,374 | |||||||||
| Goodwill | 665,816 | 670,108 | |||||||||
| Other intangible assets, net | 274,375 | 285,429 | |||||||||
| Deferred tax assets, net | 31,478 | 31,199 | |||||||||
| Other non-current assets | 326,839 | 335,242 | |||||||||
| Total assets | $ | 3,283,117 | $ | 3,355,555 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Trade accounts payable | $ | 189,449 | $ | 210,411 | |||||||
| Accrued and other liabilities | 190,023 | 196,138 | |||||||||
| Accrued compensation and related items | 129,526 | 160,308 | |||||||||
| Deferred revenue and customer prepayments | 216,659 | 202,022 | |||||||||
| Taxes payable | 223,102 | 219,984 | |||||||||
| Short-term borrowings and current maturities of long-term debt | 183,173 | 192,219 | |||||||||
| Total current liabilities | 1,131,932 | 1,181,082 | |||||||||
| Long-term debt | 1,903,574 | 1,888,620 | |||||||||
| Deferred tax liabilities, net | 100,115 | 108,679 | |||||||||
| Other non-current liabilities | 306,213 | 327,112 | |||||||||
| Total liabilities | 3,441,834 | 3,505,493 | |||||||||
| Commitments and contingencies (Note 14) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Preferred stock, $0.01 par value per share; authorized 10,000,000 shares | — | — | |||||||||
| Common stock, $0.01 par value per share; authorized 125,000,000 shares; issued 44,786,011 and 44,786,011 shares; outstanding 21,357,370 and 21,526,172 shares at March 31, 2024 and December 31, 2023, respectively | 448 | 448 | |||||||||
| Additional paid-in capital | 876,417 | 871,110 | |||||||||
| Treasury stock at cost (23,428,641 shares at March 31, 2024 and 23,259,839 shares at December 31, 2023) | (8,425,613) | (8,212,437) | |||||||||
| Retained earnings | 7,688,105 | 7,510,756 | |||||||||
| Accumulated other comprehensive loss | (298,074) | (319,815) | |||||||||
| Total shareholders’ equity | (158,717) | (149,938) | |||||||||
| Total liabilities and shareholders’ equity | $ | 3,283,117 | $ | 3,355,555 |
The accompanying notes are an integral part of these interim consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Three months ended March 31, 2024 and 2023
(In thousands, except share data)
(unaudited)
| Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Retained Earnings | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | 22,139,009 | $ | 448 | $ | 850,368 | $ | (7,325,656) | $ | 6,726,866 | $ | (227,233) | $ | 24,793 | ||||||||||||||||||||||||||||
| Exercise of stock options, restricted stock units and performance stock units | 47,849 | — | 1,278 | 12,720 | (2,525) | — | 11,473 | ||||||||||||||||||||||||||||||||||
| Repurchases of common stock | (166,628) | — | — | (249,999) | — | — | (249,999) | ||||||||||||||||||||||||||||||||||
| Excise tax on net repurchases of common stock | — | — | — | (1,906) | — | — | (1,906) | ||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | 4,027 | — | — | — | 4,027 | ||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | 188,426 | — | 188,426 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | — | (1,283) | (1,283) | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2023 | 22,020,230 | $ | 448 | $ | 855,673 | $ | (7,564,841) | $ | 6,912,767 | $ | (228,516) | $ | (24,469) | ||||||||||||||||||||||||||||
| Balance at December 31, 2023 | 21,526,172 | $ | 448 | $ | 871,110 | $ | (8,212,437) | $ | 7,510,756 | $ | (319,815) | $ | (149,938) | ||||||||||||||||||||||||||||
| Exercise of stock options, restricted stock units and performance stock units | 4,898 | — | 585 | 1,406 | (160) | — | 1,831 | ||||||||||||||||||||||||||||||||||
| Repurchases of common stock | (173,700) | — | — | (212,499) | — | — | (212,499) | ||||||||||||||||||||||||||||||||||
| Excise tax on net repurchases of common stock | — | — | — | (2,083) | — | — | (2,083) | ||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | 4,722 | — | — | — | 4,722 | ||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | 177,509 | — | 177,509 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | — | 21,741 | 21,741 | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | 21,357,370 | $ | 448 | $ | 876,417 | $ | (8,425,613) | $ | 7,688,105 | $ | (298,074) | $ | (158,717) |
The accompanying notes are an integral part of these interim consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 2024 and 2023
(In thousands)
(unaudited)
| March 31, 2024 | March 31, 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net earnings | $ | 177,509 | $ | 188,426 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
| Depreciation | 12,522 | 12,023 | |||||||||
| Amortization | 18,228 | 17,779 | |||||||||
| Deferred tax provision (benefit) | (2,063) | 602 | |||||||||
| Share-based compensation | 4,722 | 4,027 | |||||||||
| Increase (decrease) in cash resulting from changes in: | |||||||||||
| Trade accounts receivable, net | (1,708) | 72,109 | |||||||||
| Inventories | (3,954) | 15,559 | |||||||||
| Other current assets | (7,469) | (3,720) | |||||||||
| Trade accounts payable | (15,944) | (71,941) | |||||||||
| Taxes payable | 16,632 | (3,752) | |||||||||
| Accruals and other | (8,488) | (77,850) | |||||||||
| Net cash provided by operating activities | 189,987 | 153,262 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property, plant and equipment | (17,391) | (23,196) | |||||||||
| Acquisitions | (1,000) | (613) | |||||||||
| Other investing activities | 9,456 | 1,423 | |||||||||
| Net cash used in investing activities | (8,935) | (22,386) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from borrowings | 449,863 | 605,018 | |||||||||
| Repayments of borrowings | (418,280) | (503,516) | |||||||||
| Proceeds from stock option exercises | 1,831 | 11,473 | |||||||||
| Repurchases of common stock | (212,499) | (249,999) | |||||||||
| Other financing activities | — | (611) | |||||||||
| Net cash used in financing activities | (179,085) | (137,635) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (1,583) | (122) | |||||||||
| Net (decrease) increase in cash and cash equivalents | 384 | (6,881) | |||||||||
| Cash and cash equivalents: | |||||||||||
| Beginning of period | 69,807 | 95,966 | |||||||||
| End of period | $ | 70,191 | $ | 89,085 |
The accompanying notes are an integral part of these interim consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
**1.**BASIS OF PRESENTATION
Mettler-Toledo International Inc. (Mettler-Toledo or the Company) is a leading global supplier of precision instruments and services. The Company manufactures weighing instruments for use in laboratory, industrial, packaging, logistics and food retailing applications. The Company also manufactures several related analytical instruments and provides automated chemistry solutions used in drug and chemical compound discovery and development. In addition, the Company manufactures metal detection and other end-of-line inspection systems used in production and packaging and provides solutions for use in certain process analytics applications. The Company's primary manufacturing facilities are located in China, Germany, Switzerland, the United Kingdom, the United States and Mexico. The Company's principal executive offices are located in Columbus, Ohio and Greifensee, Switzerland.
The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include all entities in which the Company has control, which are its wholly-owned subsidiaries. The interim consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
The accompanying interim consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. These financial statements were prepared using information reasonably available as of March 31, 2024 and through the date of this report. Actual results may differ from those estimates due to uncertainty around the ongoing developments related to Ukraine and the Israel-Hamas war, as well as other factors.
All intercompany transactions and balances have been eliminated.
**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for expected credit losses represents the Company's best estimate based on historical information, current information, and reasonable and supportable forecasts of future events and circumstances.
Inventories
Inventories are valued at the lower of cost or net realizable value. Cost, which includes direct materials, labor and overhead, is generally determined using the first in, first out (FIFO) method. The estimated net realizable value is based on assumptions for future demand and related pricing. Adjustments to the cost basis of the Company’s inventory are made for excess and obsolete items based on usage, orders and technological obsolescence. If actual market conditions are less favorable than those projected by management, reductions in the value of inventory may be required in the future.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
Inventories consisted of the following:
| March 31, 2024 | December 31, 2023 | ||||||||||
| Raw materials and parts | $ | 169,556 | $ | 180,352 | |||||||
| Work-in-progress | 75,135 | 81,181 | |||||||||
| Finished goods | 128,979 | 124,332 | |||||||||
| $ | 373,670 | $ | 385,865 |
Goodwill and Other Intangible Assets
Goodwill, representing the excess of purchase price over the net asset value of companies acquired, and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The annual evaluation for goodwill and indefinite-lived intangible assets are generally based on an assessment of qualitative factors to determine whether it is more likely than not that the fair values of the assets are less than their carrying amounts.
Other intangible assets include indefinite-lived assets and assets subject to amortization. Where applicable, amortization is charged on a straight-line basis over the expected period to be benefited. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company assesses the initial acquisition of intangible assets in accordance with the provisions of ASC 805 “Business Combinations” and the continued accounting for previously recognized intangible assets and goodwill in accordance with the provisions of ASC 350 “Intangibles – Goodwill and Other” and ASC 360 “Property, Plant and Equipment.”
Other intangible assets consisted of the following:
| March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||
| Gross Amount | Accumulated Amortization | Intangibles, Net | Gross Amount | Accumulated Amortization | Intangibles, Net | ||||||||||||||||||||||||||||||
| Customer relationships | $ | 286,364 | $ | (106,405) | $ | 179,959 | $ | 294,180 | $ | (107,665) | $ | 186,515 | |||||||||||||||||||||||
| Proven technology and patents | 125,662 | (74,198) | 51,464 | 129,227 | (75,014) | 54,213 | |||||||||||||||||||||||||||||
| Trade name (finite life) | 7,718 | (4,614) | 3,104 | 7,908 | (4,535) | 3,373 | |||||||||||||||||||||||||||||
| Trade name (indefinite life) | 35,110 | — | 35,110 | 36,320 | — | 36,320 | |||||||||||||||||||||||||||||
| Other | 12,997 | (8,259) | 4,738 | 13,236 | (8,228) | 5,008 | |||||||||||||||||||||||||||||
| $ | 467,851 | $ | (193,476) | $ | 274,375 | $ | 480,871 | $ | (195,442) | $ | 285,429 |
The Company recognized amortization expense associated with the above intangible assets of $6.8 million and $6.9 million for the three months ended March 31, 2024 and 2023, respectively. The annual aggregate amortization expense based on the current balance of other intangible assets is estimated at $27.2 million for 2024, $26.2 million for 2025, $22.2 million for 2026, $20.7 million for 2027, $19.4 million for 2028 and $17.7 million for 2029. Purchased intangible amortization was $6.6 million, $5.1 million after tax for both three month periods ended March 31, 2024 and 2023.
In addition to the above amortization, the Company recorded amortization expense associated with capitalized software of $11.3 million and $10.8 million for the three months ended March 31, 2024 and 2023, respectively.
Revenue Recogniti**on
Product revenue is recognized from contracts with customers when a customer has obtained control of a product. The Company considers control to have transferred based upon shipping terms. To the extent the Company’s arrangements have a separate performance obligation, revenue related to any post-shipment performance obligation is deferred until completed. Shipping and handling costs charged to
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
customers are included in total net sales and the associated expense is a component of cost of sales. Certain products are also sold through indirect distribution channels whereby the distributor assumes any further obligations to the end customer. Revenue is recognized on these distributor arrangements upon transfer of control to the distributor. Contracts do not contain variable pricing arrangements that are retrospective, except for rebate programs. Rebates are estimated based on expected sales volumes and offset against revenue at the time such revenue is recognized. The Company generally maintains the right to accept or reject a product return in its terms and conditions and also maintains appropriate accruals for outstanding credits. The related provisions for estimated returns and rebates are immaterial to the consolidated financial statements.
Certain of the Company’s product arrangements include separate performance obligations, primarily related to installation. Such performance obligations are accounted for separately when the deliverables have stand-alone value and the satisfaction of the undelivered performance obligations is probable and within the Company's control. The allocation of revenue between the performance obligations is based on the observable stand-alone selling prices at the time of the sale in accordance with a number of factors including service technician billing rates, time to install, and geographic location.
Software is generally not considered a distinct performance obligation with the exception of a limited number of software applications. The Company primarily sells software products with the related hardware instrument as the software is embedded in the product. The Company’s products typically require no significant production, modification, or customization of the hardware or software that is essential to the functionality of the products.
Service revenue not under contract is recognized upon the completion of the service performed. Revenue from spare parts sold on a stand-alone basis is recognized when control is transferred to the customer, which is generally at the time of shipment or delivery. Revenue from service contracts is recognized ratably over the contract period using a time-based method. These contracts represent an obligation to perform repair and other services including regulatory compliance qualification, calibration, certification, and preventative maintenance on a customer’s pre-defined equipment over the contract period.
Share-Based Compensation
The Company recognizes share-based compensation expense within selling, general and administrative in the consolidated statements of operations and comprehensive income with a corresponding offset to additional paid-in capital in the consolidated balance sheet. The Company recognized $4.7 million and $4.0 million of share-based compensation expense for the three months ended March 31, 2024 and 2023, respectively.
Research and Development
Research and development costs primarily consist of salaries, consulting and other costs. The Company expenses these costs as incurred.
Business Combinations and Asset Acquisitions
The Company accounts for business acquisitions under the accounting standards for business combinations utilizing the acquisition method of accounting. The results of each acquisition are included in the Company's consolidated results as of the acquisition date. The purchase price of an acquisition is generally allocated to tangible and intangible assets and assumed liabilities based on their estimated fair values and any consideration in excess of the net assets acquired is recognized as goodwill. The determination of the values of the acquired assets and assumed liabilities, including goodwill and intangible assets, require significant judgement. Acquisition transaction costs are expensed when incurred.
In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the expected contingent payments as of the acquisition date. Subsequent changes in the fair value of the contingent consideration are recorded to other charges (income), net.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
Recent Accounting Pronouncements
In March 2020, January 2021 and December 2022, the FASB issued ASU 2020-04, ASU 2021-01 and ASU 2022-06: Reference Rate Reform, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. The guidance may be applied to any applicable contract entered into before December 31, 2024. The Company amended its credit agreement and cross currency swap agreements in June 2023 to change the interest rate benchmark from LIBOR to SOFR and other non-U.S. dollar references, which did not change the amount or timing of cash flows. As a result, the discontinuation of LIBOR did not have a material impact on the Company's financial statements.
In November 2023, the FASB issued ASU 2023-07: Improvements to Reportable Segment Disclosures which requires incremental disclosures about a public entity's reportable segments but does not change the definition of a segment or the guidance for determining reportable segments. The Company will adopt the annual disclosure requirements in 2024 and is currently evaluating the impact of these requirements on the consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09: Improvements to Income Tax Disclosures, which enhances income tax disclosures, especially related to the rate reconciliation and income taxes paid information. The Company will adopt the annual disclosure requirements in 2025 and is currently evaluating the impact of these requirements on the consolidated financial statements.
**3.**REVENUE
The Company disaggregates revenue from contracts with customers by product, service, timing of revenue recognition, and geography. A summary by the Company’s reportable segments follows:
| Three months ended March 31, 2024 | U.S. Operations | Swiss Operations | Western European Operations | Chinese Operations | Other Operations | Total | |||||||||||||||||||||||||||||
| Product Revenue | $ | 250,737 | $ | 43,621 | $ | 151,535 | $ | 129,011 | $ | 126,064 | $ | 700,968 | |||||||||||||||||||||||
| Service Revenue: | |||||||||||||||||||||||||||||||||||
| Point in time | 73,133 | 7,765 | 42,821 | 9,901 | 31,210 | 164,830 | |||||||||||||||||||||||||||||
| Over time | 22,253 | 2,865 | 20,409 | 4,286 | 10,338 | 60,151 | |||||||||||||||||||||||||||||
| Total | $ | 346,123 | $ | 54,251 | $ | 214,765 | $ | 143,198 | $ | 167,612 | $ | 925,949 |
| Three months ended March 31, 2023 | U.S. Operations | Swiss Operations | Western European Operations | Chinese Operations | Other Operations | Total | |||||||||||||||||||||||||||||
| Product Revenue | $ | 246,529 | $ | 36,461 | $ | 140,707 | $ | 170,430 | $ | 121,874 | $ | 716,001 | |||||||||||||||||||||||
| Service Revenue: | |||||||||||||||||||||||||||||||||||
| Point in time | 70,626 | 7,461 | 41,165 | 11,347 | 30,045 | 160,644 | |||||||||||||||||||||||||||||
| Over time | 20,247 | 2,447 | 17,552 | 3,990 | 7,857 | 52,093 | |||||||||||||||||||||||||||||
| Total | $ | 337,402 | $ | 46,369 | $ | 199,424 | $ | 185,767 | $ | 159,776 | $ | 928,738 |
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
A breakdown of net sales to external customers by geographic customer destination for the three months ended March 31 follows:
| 2024 | 2023 | ||||||||||
| Americas | $ | 384,342 | $ | 372,073 | |||||||
| Europe | 273,861 | 253,974 | |||||||||
| Asia / Rest of World | 267,746 | 302,691 | |||||||||
| Total | $ | 925,949 | $ | 928,738 |
The Company's global revenue mix by product category is laboratory (57% of sales), industrial (38% of sales) and retail (5% of sales). The Company's product revenue by reportable segment is proportionately similar to the Company's global revenue mix except the Company's Swiss Operations is largely comprised of laboratory products, while the Company's Chinese Operations has a slightly higher percentage of industrial products. A breakdown of the Company’s sales by product category for the three months ended March 31 follows:
| 2024 | 2023 | ||||||||||
| Laboratory | $ | 525,056 | $ | 520,031 | |||||||
| Industrial | 351,845 | 355,181 | |||||||||
| Retail | 49,048 | 53,526 | |||||||||
| Total | $ | 925,949 | $ | 928,738 |
The payment terms in the Company’s contracts with customers do not exceed one year and therefore contracts do not contain a significant financing component. In most cases, after appropriate credit evaluations, payments are due in arrears and are recognized as receivables. Unbilled revenue is recorded when performance obligations have been satisfied, but not yet billed to the customer. Unbilled revenue as of March 31, 2024 and December 31, 2023 was $40.1 million and $35.7 million, respectively, and is included within accounts receivable. Deferred revenue and customer prepayments are recorded when cash payments are received or due in advance of the performance obligation being satisfied. Deferred revenue primarily includes prepaid service contracts, as well as deferred installation.
Changes in the components of deferred revenue and customer prepayments during the periods ended March 31, 2024 and 2023 are as follows:
| 2024 | 2023 | ||||||||||
| Beginning balances as of January 1 | $ | 202,022 | $ | 192,759 | |||||||
| Customer pre-payments/deferred revenue | 188,295 | 190,262 | |||||||||
| Revenue recognized | (169,663) | (172,890) | |||||||||
| Foreign currency translation | (3,995) | 1,171 | |||||||||
| Ending balance as of March 31 | $ | 216,659 | $ | 211,302 |
The Company generally expenses sales commissions when incurred because the contract period is one year or less. These costs are recorded within selling, general, and administrative expenses. The value of unsatisfied performance obligations other than customer prepayments and deferred revenue associated with contracts greater than one year is immaterial.
4. FINANCIAL INSTRUMENTS
The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. The Company enters into certain interest rate swap agreements in order to manage its exposure to changes in interest rates. The amount of the Company's fixed obligation interest payments
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
may change based upon the expiration dates of its interest rate swap agreements and the level and composition of its debt. The Company also enters into certain foreign currency forward contracts to limit the Company's exposure to currency fluctuations on the respective hedged items. For additional disclosures on derivative instruments regarding balance sheet location, fair value, and the amounts reclassified into other comprehensive income and the effective portions of the cash flow hedges, also see Notes 5 and 9 to the interim consolidated financial statements. As also mentioned in Note 7, the Company has designated its euro-denominated debt as a hedge of a portion of its net investment in euro-denominated foreign subsidiaries.
Cash Flow Hedges
The Company has entered into a number of cross currency swaps designated as cash flow hedges. The agreements convert borrowings under the Company’s credit facility into synthetic Swiss franc debt, which allows the Company to effectively change the floating rate SOFR-based interest payments, excluding the credit spread, to a fixed Swiss franc income or expense as follows:
| Agreement Date | Amount Converted | Effective Swiss Franc Interest Rate | Maturity Date | |||||||||||||||||
| June 2019 | $50 million | (0.82)% | June 2023 | |||||||||||||||||
| November 2021 | $50 million | (0.67)% | November 2023 | |||||||||||||||||
| June 2021 | $50 million | (0.73)% | June 2024 | |||||||||||||||||
| June 2021 | $50 million | (0.59)% | June 2025 | |||||||||||||||||
| December 2023 | $50 million | 1.04% | November 2026 | |||||||||||||||||
| November 2023 | $50 million | 1.16% | November 2026 | |||||||||||||||||
| June 2023 | $50 million | 1.55% | June 2027 |
The Company amended all active cross currency swap agreements to replace all references of LIBOR to SOFR as the interest rate benchmark to align with the amendment to the Company's Credit Facility Agreement, as discussed in Note 10 to the consolidated financial statements for the year ended December 31, 2023. As part of these amendments, the corresponding fixed Swiss franc interest rates were amended as well to reflect the change in the benchmark.
The Company's cash flow hedges are recorded gross at fair value in the consolidated balance sheet at March 31, 2024 and December 31, 2023, respectively. A derivative gain of $7.2 million based upon interest rates at March 31, 2024, is expected to be reclassified from other comprehensive income (loss) to earnings in the next twelve months. The cash flow hedges remain effective as of March 31, 2024.
Other Derivatives
The Company enters into foreign currency forward contracts in order to economically hedge short-term trade and non-trade intercompany balances largely denominated in Swiss franc, other major European currencies, and the Chinese renminbi with its foreign businesses. In accordance with U.S. GAAP, these contracts are considered “derivatives not designated as hedging instruments.” Gains or losses on these instruments are reported in current earnings. The foreign currency forward contracts are recorded at fair value in the consolidated balance sheet at March 31, 2024 and December 31, 2023, as disclosed in Note 5. The Company recognized in other charges (income) a net gain of $8.8 million and net gain of $3.5 million during the three months ended March 31, 2024 and 2023, respectively, which offset the related transaction gains (losses) associated with these contracts. At March 31, 2024 and December 31, 2023, these contracts had a notional value of $774.3 million and $793.9 million, respectively.
5. FAIR VALUE MEASUREMENTS
At March 31, 2024 and December 31, 2023, the Company had derivative assets totaling $13.2 million and $8.3 million, respectively, and derivative liabilities totaling $8.1 million and $25.2 million,
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
respectively. The Company has limited involvement with derivative financial instruments and therefore does not present all the required disclosures in tabular format. The fair values of the interest rate swap agreements, the cross currency swap agreements, and the foreign currency forward contracts that economically hedge short-term intercompany balances are estimated based upon inputs from current valuation information obtained from dealer quotes and priced with observable market assumptions and appropriate valuation adjustments for credit risk. The Company has evaluated the valuation methodologies used to develop the fair values by dealers in order to determine whether such valuations are representative of an exit price in the Company’s principal market. In addition, the Company uses an internally developed model to perform testing on the valuations received from brokers. The Company has also considered both its own credit risk and counterparty credit risk in determining fair value and determined these adjustments were insignificant at March 31, 2024 and December 31, 2023.
Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement consists of observable and unobservable inputs that reflect the assumptions that a market participant would use in pricing an asset or liability.
A fair value hierarchy has been established that categorizes these inputs into three levels:
Level 1: Quoted prices in active markets for identical assets and liabilities
Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities
Level 3: Unobservable inputs
The following table presents the Company’s assets and liabilities, which are all categorized as Level 2 and are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023. The Company does not have any assets or liabilities which are categorized as Level 1.
| March 31, 2024 | December 31, 2023 | Balance Sheet Location | ||||||||||||||||||
| Foreign currency forward contracts not designated as hedging instruments | $ | 10,306 | $ | 8,330 | Other current assets and prepaid expenses | |||||||||||||||
| Cash Flow Hedges: | ||||||||||||||||||||
| Cross currency swap agreements | 577 | — | Other current assets and prepaid expenses | |||||||||||||||||
| Cross currency swap agreements | 2,275 | — | Other non-current assets | |||||||||||||||||
| Total derivative assets | $ | 13,158 | $ | 8,330 | ||||||||||||||||
| Foreign currency forward contracts not designated as hedging instruments | $ | 5,652 | $ | 8,245 | Accrued and other liabilities | |||||||||||||||
| Cash Flow Hedges: | ||||||||||||||||||||
| Cross currency swap agreements | — | 2,678 | Accrued and other liabilities | |||||||||||||||||
| Cross currency swap agreements | 2,429 | 14,270 | Other non-current liabilities | |||||||||||||||||
| Total derivative liabilities | $ | 8,081 | $ | 25,193 |
The Company had $5.2 million and $4.0 million of cash equivalents at March 31, 2024 and December 31, 2023, respectively, the fair value of which is determined using Level 2 inputs, through quoted and corroborated prices in active markets. The fair value of cash equivalents approximates cost.
The fair value of the Company's debt is less than the carrying value by approximately $211.5 million as of March 31, 2024. The fair value of the Company's fixed interest rate debt was estimated using Level 2 inputs, primarily utilizing discounted cash flow models based on estimated current rates offered for similar debt under current market conditions for the Company.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
6. INCOME TAXES
The Company's reported tax rate was 19.5% and 16.9% during the three months ended March 31, 2024 and 2023, respectively. The provision for taxes is based upon using the Company's projected annual effective tax rate of 19.0% and 18.5% before non-recurring discrete tax items during 2024 and 2023, respectively. The difference between the Company's projected annual effective tax rate and the reported tax rate is related to the timing of excess tax benefits associated with stock option exercises.
7. DEBT
Debt consisted of the following at March 31, 2024:
| U.S. Dollar | Other Principal Trading Currencies | Total | |||||||||||||||
| 3.84% $125 million ten-year Senior Notes due September 19, 2024 | 125,000 | — | 125,000 | ||||||||||||||
| 4.24% $125 million ten-year Senior Notes due June 25, 2025 | 125,000 | — | 125,000 | ||||||||||||||
| 3.91% $75 million ten-year Senior Notes due June 25, 2029 | 75,000 | — | 75,000 | ||||||||||||||
| 5.45% $150 million ten-year Senior Notes due March 1, 2033 | 150,000 | — | 150,000 | ||||||||||||||
| 2.83% $125 million twelve-year Senior Notes due July 22. 2033 | 125,000 | — | 125,000 | ||||||||||||||
| 3.19% $50 million fifteen-year Senior Notes due January 24, 2035 | 50,000 | — | 50,000 | ||||||||||||||
| 2.81% $150 million fifteen-year Senior Notes due March 17, 2037 | 150,000 | — | 150,000 | ||||||||||||||
| 2.91% $150 million fifteen-year Senior Notes due September 1, 2037 | 150,000 | — | 150,000 | ||||||||||||||
| 1.47% Euro 125 million fifteen-year Senior Notes due June 17, 2030 | — | 135,303 | 135,303 | ||||||||||||||
| 1.30% Euro 135 million fifteen-year Senior Notes due November 6, 2034 | — | 146,127 | 146,127 | ||||||||||||||
| 1.06% Euro 125 million fifteen-year Senior Notes due March 19, 2036 | — | 135,303 | 135,303 | ||||||||||||||
| Senior notes debt issuance costs, net | (2,573) | (1,323) | (3,896) | ||||||||||||||
| Total Senior Notes | 947,427 | 415,410 | 1,362,837 | ||||||||||||||
| $1.25 billion Credit Agreement, interest at SOFR plus 87.5 basis points | 446,920 | 214,704 | 661,624 | ||||||||||||||
| Other local arrangements | 8,534 | 53,752 | 62,286 | ||||||||||||||
| Total debt | 1,402,881 | 683,866 | 2,086,747 | ||||||||||||||
| Less: current portion | (129,694) | (53,479) | (183,173) | ||||||||||||||
| Total long-term debt | $ | 1,273,187 | $ | 630,387 | $ | 1,903,574 |
As of March 31, 2024, the Company had $583.6 million of additional borrowings available under its Credit Agreement, and the Company maintained $70.2 million of cash and cash equivalents.
In December 2022, the Company entered into an agreement to issue and sell $150 million 10-year Senior Notes in a private placement. The Company issued $150 million with a fixed interest rate of 5.45% (5.45% Senior Notes) in March 2023. The 5.45% Senior Notes are senior unsecured obligations of the Company. The 5.45% Senior Notes mature on March 1, 2033. The terms of the 5.45% Senior Notes are consistent with the previous Senior Notes as described in the Company's Annual Report Form 10-K for the year ended December 31, 2023. The Company used the proceeds from the sale of the 5.45% Senior Notes to refinance existing indebtedness and for other general corporate purposes.
The Company has designated the EUR 125 million 1.47% Euro Senior Notes, the EUR 135 million 1.30% Euro Senior Notes, and the EUR 125 million 1.06% Euro Senior Notes as a hedge of a portion of its net investment in a euro denominated foreign subsidiary to reduce foreign currency risk associated with this net investment. Changes in the carrying value of this debt resulting from fluctuations in the euro to U.S. dollar exchange rate are recorded as foreign currency translation adjustments within other comprehensive income (loss). The Company recorded in other comprehensive income (loss) related to this net investment hedge an unrealized gain of $8.2 million and $5.3 million for the three months ended
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
March 31, 2024 and 2023, respectively. The Company has a gain of $25.5 million recorded in accumulated other comprehensive income (loss) as of March 31, 2024.
Other Local Arrangements
In 2018, two of the Company's non-U.S. pension plans issued loans totaling $39.6 million (Swiss franc 38 million) to a wholly owned subsidiary of the Company. The loans have the same terms and conditions which include an interest rate of SARON plus 87.5 basis points. The loans were renewed for one year in April 2024.
8. SHARE REPURCHASE PROGRAM AND TREASURY STOCK
The Company has $2.3 billion of remaining availability for its share repurchase program as of March 31, 2024. The share repurchases are expected to be funded from cash generated from operating activities, borrowings, and cash balances. Repurchases will be made through open market transactions, and the amount and timing of purchases will depend on business and market conditions, the stock price, trading restrictions, the level of acquisition activity, and other factors.
The Company has purchased 31.9 million common shares at an average price per share of $287.08 since the inception of the program in 2004 through March 31, 2024. During the three months ended March 31, 2024 and 2023, the Company spent $212.5 million and $250.0 million on the repurchase of 173,700 shares and 166,628 shares at an average price per share of $1,223.35 and $1,511.78, respectively. The Company reissued 4,898 shares and 47,849 shares held in treasury for the exercise of stock options and restricted stock units during the three months ended March 31, 2024 and 2023, respectively. In addition, the Company incurred $2.1 million and $1.9 million of excise tax during the three months ended March 31, 2024 and 2023, respectively, related to the Inflation Reduction Act which is reflected as a reduction in shareholders' equity in the Company's consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
9. ACCUMULATED COMPREHENSIVE AND OTHER COMPREHENSIVE INCOME
Comprehensive income (loss), net of tax consisted of the following:
| March 31, 2024 | March 31, 2023 | ||||||||||
| Net earnings | $ | 177,509 | $ | 188,426 | |||||||
| Other comprehensive income (loss), net of tax | 21,741 | $ | (1,283) | ||||||||
| Comprehensive income, net of tax | $ | 199,250 | $ | 187,143 |
The following table presents changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2024 and 2023:
| Currency Translation Adjustment | Net Unrealized Gain (Loss) on Cash Flow Hedging Arrangements, Net of Tax | Pension and Post-Retirement Benefit Related Items, Net of Tax | Total | ||||||||||||||||||||
| Balance at December 31, 2023 | $ | (117,230) | $ | 120 | $ | (202,705) | $ | (319,815) | |||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Unrealized gains from cash flow hedging arrangements | — | 16,074 | — | 16,074 | |||||||||||||||||||
| Foreign currency translation adjustment | 8,519 | — | 11,841 | 20,360 | |||||||||||||||||||
| Amounts recognized from accumulated other comprehensive income (loss), net of tax | — | (17,169) | 2,476 | (14,693) | |||||||||||||||||||
| Net change in other comprehensive income (loss), net of tax | 8,519 | (1,095) | 14,317 | 21,741 | |||||||||||||||||||
| Balance at March 31, 2024 | $ | (108,711) | $ | (975) | $ | (188,388) | $ | (298,074) |
| Currency Translation Adjustment | Net Unrealized Gain (Loss) on Cash Flow Hedging Arrangements, Net of Tax | Pension and Post-Retirement Benefit Related Items, Net of Tax | Total | ||||||||||||||||||||
| Balance at December 31, 2022 | $ | (82,864) | $ | 4,256 | $ | (148,625) | $ | (227,233) | |||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Unrealized gains from cash flow hedging arrangements | — | 19 | — | 19 | |||||||||||||||||||
| Foreign currency translation adjustment | (893) | — | (728) | (1,621) | |||||||||||||||||||
| Amounts recognized from accumulated other comprehensive income (loss), net of tax | — | (1,259) | 1,578 | 319 | |||||||||||||||||||
| Net change in other comprehensive income (loss), net of tax | (893) | (1,240) | 850 | (1,283) | |||||||||||||||||||
| Balance at March 31, 2023 | $ | (83,757) | $ | 3,016 | $ | (147,775) | $ | (228,516) |
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
The following table presents amounts recognized from accumulated other comprehensive income (loss) for the three months ended March 31:
| 2024 | 2023 | Location of Amounts Recognized in Earnings | ||||||||||||||||||
| Effective portion of (gains) losses on cash flow hedging arrangements: | ||||||||||||||||||||
| Cross currency swap | (21,196) | (1,554) | (a) | |||||||||||||||||
| Provision for taxes | (4,027) | (295) | Provision for taxes | |||||||||||||||||
| Total, net of taxes | $ | (17,169) | $ | (1,259) | ||||||||||||||||
| Recognition of defined benefit pension and post-retirement items: | ||||||||||||||||||||
| Recognition of actuarial (gains) losses, plan amendments and prior service cost, before taxes | $ | 3,108 | $ | 2,002 | (b) | |||||||||||||||
| Provision for taxes | 632 | 424 | Provision for taxes | |||||||||||||||||
| Total, net of taxes | $ | 2,476 | $ | 1,578 |
(a)The cross currency swap reflects an unrealized gain of $18.2 million recorded in other charges (income) that was offset by the underlying unrealized loss in the hedged debt for the three months ended March 31, 2024. The cross currency swap also reflects a realized gain of $3.0 million recorded in interest expense for the three months ended March 31, 2024.
(b)These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and post-retirement cost. See Note 12 for additional details for the three months ended March 31, 2024 and 2023.
10. EARNINGS PER COMMON SHARE
In accordance with the treasury stock method, the Company has included 105,640 and 169,979 common equivalent shares in the calculation of diluted weighted average number of common shares outstanding for the three months ended March 31, 2024 and 2023, respectively, relating to outstanding stock options and restricted stock units.
Outstanding options and restricted stock units to purchase or receive 72,089 and 35,063 shares of common stock for the three months ended March 31, 2024 and 2023, respectively, have been excluded from the calculation of diluted weighted average number of common and common equivalent shares as such options and restricted stock units would be anti-dilutive.
- 17 -
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
11. NET PERIODIC BENEFIT COST
Net periodic pension cost for the Company’s defined benefit pension plans and U.S. post-retirement medical plan includes the following components for the three months ended March 31:
| U.S. Pension Benefits | Non-U.S. Pension Benefits | Other U.S. Post-retirement Benefits | Total | ||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||
| Service cost, net | $ | 397 | $ | 289 | $ | 4,020 | $ | 3,396 | $ | — | $ | — | $ | 4,417 | $ | 3,685 | |||||||||||||||||||||||||||||||
| Interest cost on projected benefit obligations | 1,192 | 1,256 | 4,479 | 4,876 | 7 | 7 | 5,678 | 6,139 | |||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | (1,368) | (1,383) | (9,345) | (8,567) | — | — | (10,713) | (9,950) | |||||||||||||||||||||||||||||||||||||||
| Recognition of prior service cost | — | — | (1,161) | (1,050) | (19) | (19) | (1,180) | (1,069) | |||||||||||||||||||||||||||||||||||||||
| Recognition of actuarial losses/(gains) | 521 | 548 | 3,761 | 2,537 | 8 | — | 4,290 | 3,085 | |||||||||||||||||||||||||||||||||||||||
| Net periodic pension cost/(credit) | $ | 742 | $ | 710 | $ | 1,754 | $ | 1,192 | $ | (4) | $ | (12) | $ | 2,492 | $ | 1,890 |
As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, the Company expects to make employer contributions of approximately $27.3 million to its non-U.S. pension plan during the year ended December 31, 2024. These estimates may change based upon several factors, including fluctuations in currency exchange rates, actual returns on plan assets and changes in legal requirements.
12. OTHER CHARGES (INCOME), NET
Other charges (income), net includes non-service pension costs (benefits), (gains) losses from foreign currency transactions and related hedging activities, interest income and other items. Non-service pension benefits for the three months ended March 31, 2024 and 2023 were $2.0 million and $1.8 million, respectively.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
13. SEGMENT REPORTING
As disclosed in Note 18 to the Company's consolidated financial statements for the year ended December 31, 2023, the Company has determined there are five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other.
The Company evaluates segment performance based on Segment Profit (gross profit less research and development and selling, general and administrative expenses, before amortization, interest expense, restructuring charges, other charges (income), net and taxes).
The following tables show the operations of the Company’s reportable segments:
| Net Sales to | Net Sales to | ||||||||||||||||||||||||||||
| For the three months ended | External | Other | Total Net | Segment | |||||||||||||||||||||||||
| March 31, 2024 | Customers | Segments | Sales | Profit | Goodwill | ||||||||||||||||||||||||
| U.S. Operations | $ | 346,123 | $ | 37,418 | $ | 383,541 | $ | 93,636 | $ | 526,385 | |||||||||||||||||||
| Swiss Operations | 54,251 | 223,371 | 277,622 | 59,086 | 25,601 | ||||||||||||||||||||||||
| Western European Operations | 214,765 | 47,738 | 262,503 | 50,311 | 99,985 | ||||||||||||||||||||||||
| Chinese Operations | 143,198 | 80,641 | 223,839 | 75,823 | 605 | ||||||||||||||||||||||||
| Other (a) | 167,612 | 3,331 | 170,943 | 25,182 | 13,240 | ||||||||||||||||||||||||
| Eliminations and Corporate (b) | — | (392,499) | (392,499) | (36,710) | — | ||||||||||||||||||||||||
| Total | $ | 925,949 | $ | — | $ | 925,949 | $ | 267,328 | $ | 665,816 |
| Net Sales to | Net Sales to | ||||||||||||||||||||||||||||
| For the three months ended | External | Other | Total Net | Segment | |||||||||||||||||||||||||
| March 31, 2023 | Customers | Segments | Sales | Profit | Goodwill | ||||||||||||||||||||||||
| U.S. Operations | $ | 337,402 | $ | 33,248 | $ | 370,650 | $ | 81,796 | $ | 524,470 | |||||||||||||||||||
| Swiss Operations | 46,369 | 202,134 | 248,503 | 76,422 | 25,195 | ||||||||||||||||||||||||
| Western European Operations | 199,424 | 44,876 | 244,300 | 44,523 | 97,558 | ||||||||||||||||||||||||
| Chinese Operations | 185,767 | 60,452 | 246,219 | 81,241 | 643 | ||||||||||||||||||||||||
| Other (a) | 159,776 | 957 | 160,733 | 24,243 | 13,876 | ||||||||||||||||||||||||
| Eliminations and Corporate (b) | — | (341,667) | (341,667) | (41,774) | — | ||||||||||||||||||||||||
| Total | $ | 928,738 | $ | — | $ | 928,738 | $ | 266,451 | $ | 661,742 |
(a)Other includes reporting units in Southeast Asia, Latin America, Eastern Europe and other countries.
(b)Eliminations and Corporate includes the elimination of inter-segment transactions and certain corporate expenses and intercompany investments, which are not included in the Company’s operating segments.
A reconciliation of earnings before taxes to segment profit for the three months ended March 31 follows:
| Three Months Ended | |||||||||||
| March 31, 2024 | March 31, 2023 | ||||||||||
| Earnings before taxes | $ | 220,547 | $ | 226,610 | |||||||
| Amortization | 18,228 | 17,779 | |||||||||
| Interest expense | 19,232 | 18,184 | |||||||||
| Restructuring charges | 9,664 | 4,274 | |||||||||
| Other charges (income), net | (343) | (396) | |||||||||
| Segment profit | $ | 267,328 | $ | 266,451 |
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – Unaudited
(In thousands, except share data, unless otherwise stated)
14. CONTINGENCIES
The Company is party to various legal proceedings, including certain environmental matters, incidental to the normal course of business. Management does not expect that any of such proceedings, either individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
- 20 -
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