SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
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MT INVESTORS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3668641
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
IM LANGACHER
P.O. BOX MT-100
CH 8608 GREIFENSEE, SWITZERLAND
(Address of principal executive offices)
41-1-944-22-11
(Registrant's telephone number, including area code)
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Securities to be registered pursuant to Section 12(b)
of the Act: NONE
Securities to be registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $.01 per share
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(Title of class)
Class C Common Stock, par value $.01 per share
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(Title of class)
MT INVESTORS INC.
REGISTRATION STATEMENT ON FORM 10
INDEX
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PAGE
ITEM 1. BUSINESS..............................................1
ITEM 2. FINANCIAL INFORMATION..................................11
ITEM 3. PROPERTIES.............................................23
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT...........................................24
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.....25
ITEM 6. EXECUTIVE COMPENSATION.................................27
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........29
ITEM 8. LEGAL PROCEEDINGS......................................30
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........30
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES...............31
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED...........................................32
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.............33
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...........34
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE..................34
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.....................34
SIGNATURES.....................................................35
The "Company" or "Mettler-Toledo" as used herein means
the Registrant's indirectly wholly owned subsidiary
Mettler-Toledo, Inc. and its subsidiaries, after giving effect to
the acquisition of the Mettler-Toledo Group on October 15, 1996.
The Registrant has no material assets, liabilities or operations
other than those that result from its ownership of 100% of the
outstanding common stock of Mettler-Toledo Holding Inc., the
parent of Mettler-Toledo, Inc.
Mettler-Toledo(registered trademark), Mettler(registered
trademark), Ingold(registered trademark), Garvens(registered
trademark), Ohaus(registered trademark), and DigiTol(registered
trademark) are registered trademarks of the Company and
Brickstone(trademark), Spider(trademark), Mentor SC(trademark),
MultiRange(trademark) and TRUCKMATE(trademark) are trademarks of
the Company.
THE "COMPANY" OR "METTLER-TOLEDO" AS USED HEREIN MEANS THE
REGISTRANT'S INDIRECTLY WHOLLY OWNED SUBSIDIARY METTLER-TOLEDO, INC.
AND ITS SUBSIDIARIES, AFTER GIVING EFFECT TO THE ACQUISITION OF THE
METTLER-TOLEDO GROUP ON OCTOBER 15, 1996. THE REGISTRANT HAS NO
MATERIAL ASSETS, LIABILITIES OR OPERATIONS OTHER THAN THOSE THAT
RESULT FROM ITS OWNERSHIP OF 100% OF THE OUTSTANDING COMMON STOCK OF
METTLER-TOLEDO HOLDING INC., THE PARENT OF METTLER-TOLEDO, INC.
METTLER-TOLEDOr, METTLERr, INGOLDr, GARVENSr, OHAUSr, AND
DIGITOLr ARE REGISTERED TRADEMARKS OF THE COMPANY AND BRICKSTONEt,
SPIDERt, MENTOR SCt, MULTIRANGEt AND TRUCKMATEt ARE TRADEMARKS OF THE
COMPANY.
ITEM 1.BUSINESS
GENERAL
Mettler-Toledo is the world's largest manufacturer and
marketer of weighing instruments for use in laboratory, industrial and
food retailing applications. The Company focuses on the high value-
added segments of the weighing instruments market by providing
solutions for specific applications. The Company also manufactures and
sells certain related laboratory measurement instruments, with one of
the top three market positions worldwide in titrators, thermal
analysis systems, pH meters, and lab reactors. Mettler-Toledo
services a worldwide customer base, with 1996 net sales of $849
million, which were derived 50% in Europe, 39% in North and South
America and 11% in Asia and other markets. For additional financial
information by geographic segment, see Note 20 to the Consolidated
Financial Statements included elsewhere in this Registration Statement
(the "Consolidated Financial Statements"). The Company has a global
manufacturing presence, with manufacturing facilities in Europe, the
United States and Asia.
Mettler-Toledo is the only company to offer weighing
products for laboratory, industrial and food retailing applications
throughout the world. The Company believes that in 1996, the global
market for weighing instruments for laboratory, industrial and food
retailing applications was approximately $4.5 billion and that the
Company held a market share more than two times greater than its
nearest competitor. The Company believes that in 1996, it had an
approximate 40% market share of the global market for laboratory
balances, including the largest market share in each of Europe, the
United States and Asia (excluding Japan), and one of the three leading
positions in Japan. In the industrial and food retailing market, the
Company believes it has the largest market share in Europe and in the
United States. In Asia, the Company has a substantial, rapidly
growing industrial and food retailing business supported by its
established manufacturing presence in China. The Company attributes
its worldwide market leadership position to its brand recognition, its
leadership in technological innovation, its comprehensive product
range, its global sales and service organization, its large installed
base of weighing instruments and the diversity of its revenue base.
HISTORY
The Company traces its roots to the invention of the single-
pan analytical balance by Dr. Erhard Mettler and the formation of
Mettler Instrumente AG ("Mettler") in 1945. During the 1970s and
1980s, Mettler expanded from laboratory balances into industrial and
food retailing products, and it introduced the first fully electronic
precision balance in 1973. The Toledo Scale Company ("Toledo Scale")
was founded in 1901 and developed a leading market position in the
industrial weighing market in the United States. During the 1970s,
Toledo Scale expanded into the food retailing market. In 1981, Toledo
Scale set up a joint venture in Changzhou, China, which gave it early
access to the large potential Chinese weighing market. Following the
1989 acquisition of Toledo Scale by Mettler, the name of the Company
was changed to Mettler-Toledo to reflect the combined strengths of the
two companies and to capitalize on their historic reputations for
quality and innovation. During the past 15 years, the Company has
grown through other acquisitions that complemented existing geographic
markets and product lines. In 1986, Mettler acquired the Ingold Group
of companies, manufacturers of electrodes, and Garvens Kontrollwaagen
AG, a maker of dynamic checkweighers. Toledo Scale acquired Hi-Speed
Checkweigher Co., Inc. in 1981. In 1990, the Company acquired Ohaus
Corporation, a manufacturer of laboratory balances.
The Registrant was incorporated in December 1991. It
was recapitalized in connection with the October 15, 1996 acquisition
(the "Acquisition") of the Mettler-Toledo Group from Ciba-Geigy
AG ("Ciba"). See Note 1 to the Consolidated Financial Statements
for further information with respect to the Acquisition. The
Company is a wholly owned subsidiary of Mettler-Toledo Holding
Inc.
PRODUCTS
LABORATORY
The Company manufactures and markets a complete range of
laboratory balances, as well as other selected laboratory measurement
instruments, such as titrators, thermal analysis systems, pH meters
and lab reactors, for laboratory applications in research and
development, quality assurance, production and education. Laboratory
products accounted for approximately 40% of the Company's net sales in
1996 (including revenues from related after-sale service). The Company
believes that it has an approximate 40% share of the global market for
laboratory balances and is among the top three worldwide producers of
titrators, thermal analysis systems, pH meters and lab reactors. The
Company believes it has the leading market share for laboratory
balances in Europe, the United States and Asia (excluding Japan) and
one of the three leading positions in Japan.
BALANCES. The balance is the most common piece of equipment
in the laboratory. The Company believes that it sells the highest
performance laboratory balances available on the market, with weighing
ranges up to 32 kilograms and down to one ten-millionth of a gram.
The Mettler-Toledo name is identified worldwide with accuracy,
reliability and innovation. The Company's brand name is so well
recognized that laboratory balances are often referred to as
"Mettlers." This reputation, in management's judgment, constitutes
one of the Company's principal competitive strengths.
In order to cover a wide range of customer needs and price
points, Mettler-Toledo markets precision balances, analytical and
semimicrobalances, microbalances and ultramicrobalances in three
principal product tiers offering different levels of functionality.
High-end balances provide maximum automation of calibration,
application support and additional functions. Mid-level balances
provide a more limited but still extensive set of automated features
and software applications, while basic level balances provide simple
operations and a limited feature set. The Company also manufactures
mass comparators, which are used by weights and measures regulators as
well as laboratories to ensure the accuracy of reference weights. Due
to the wide range of functions and features offered by the Company's
products, prices vary significantly. A typical mid-range precision
balance is priced at approximately $2,500 and a typical microbalance
is priced at approximately $14,000.
The Company regularly introduces new features and updated
models in its lines of balances. For example, the Company's
DeltaRange models permit weighing of light and heavy samples on the
same balance without the need for difficult adjustments, a function
particularly useful in dispensing and formula weighing. High-end
balances are equipped with fully automatic calibration technology.
These balances are carefully calibrated many times in controlled
environments, with the results of the calibrations incorporated into
built-in software, so that adjustments to ambient temperature and
humidity can automatically be made at any time. The Company also
offers universal interfaces that offer simultaneous connection of up
to five peripheral devices. The customer can then interface one
balance with, for example, a computer for further processing of
weighing data, a printer for automatically printing results and a bar-
code reader for sample identification.
In addition to Mettler-Toledo brand products, the Company
also manufactures and sells balances under the brand name "Ohaus."
Ohaus brand products include triple-beam balances, strain gauge
balances and electronic balances for the educational market and other
markets in which customers are interested in lower cost, a more
limited set of features and less comprehensive service.
TITRATORS. Titrators measure the chemical composition of
samples. The Company's high-end titrators are multi-tasking models,
which can perform two determinations simultaneously. They permit high
sample throughputs and have extensive expansion capability and
flexibility in calculations, functions and parameters. Lower-range
models permit common determinations to be stored in a database for
frequent use. Titrators are used heavily in the food and beverage
industry. A typical titrator is priced at approximately $12,000.
THERMAL ANALYSIS SYSTEMS. Thermal analysis systems measure
different properties, such as weight, dimension and energy flow, at
varying temperatures. The Company's thermal analysis products include
full computer integration and a significant amount of proprietary
software. Thermal analysis systems are used primarily in the plastics
and polymer industries. A typical thermal analysis system is priced
at approximately $50,000.
PH METERS. A pH meter measures acidity in a laboratory
sample and is the second most widely used measurement instrument in
the laboratory, after the balance. The Company manufactures desktop
models and portable models. Desktop models are microprocessor-based
instruments, offering a wide range of features and self-diagnostic
functions. Portable models are waterproof, ultrasonically welded and
ergonomically designed, and permit later downloading of data to a
computer or printer using an interface kit and custom software. PH
meters are used in a wide range of industries. A typical pH meter is
priced at approximately $1,200.
LAB REACTORS AND REACTION CALORIMETERS. Lab reactors and
reaction calorimeters are used to simulate an entire chemical
manufacturing process in the laboratory before proceeding to
production, in order to ensure the safety and feasibility of the
process. The Company's products are fully computer-integrated, with a
significant software component, and offer wide flexibility in the
structuring of experimental processes. Lab reactors and reaction
calorimeters are typically used in the chemical and pharmaceutical
industries. A typical lab reactor is priced at approximately
$140,000.
ELECTRODES. The Company manufactures electrodes for use in
a variety of laboratory instruments and in-line process applications.
Laboratory electrodes are consumable goods used in pH meters and
titrators, which may be replaced many times during the life of the
instrument. In-line process electrodes are used to monitor production
processes, for example, in the beverage industry. A typical in-line
process electrode is priced at approximately $1,600.
OTHER INSTRUMENTS. The Company sells density and
refractometry instruments, which measure chemical concentrations in
solutions. These instruments are sourced through a marketing joint
venture with a third-party manufacturer, but are sold under the
Mettler-Toledo brand name. In addition, the Company manufactures and
sells moisture analyzers, which precisely determine the moisture
content of a sample by utilizing an infrared dryer to evaporate
moisture.
INDUSTRIAL AND FOOD RETAILING
Weighing is one of the most broadly used measurement
techniques in industry and food retailing. The Company's industrial
and food retailing weighing and related products include bench and
floor scales for standard industrial applications, truck and railcar
scales for heavy industrial applications, checkweighers (which
determine the weight of goods in motion), scales for use in food
retailing establishments and specialized software systems for
industrial processes. Increasingly, many of the Company's industrial
and food retailing products can integrate weighing data into process
controls and information systems. The Company's industrial and food
retailing products are also sold to original equipment manufacturers
("OEMs"), which incorporate the Company's products into larger process
solutions and comprehensive food retailing checkout systems. At the
same time, the Company's products themselves include significant
software content and additional functions including networking,
printing and labeling capabilities, and the incorporation of other
measuring technologies such as dimensioning. The Company works with
customer segments to create specific solutions to their weighing
needs. The Company has also recently worked closely with the leading
manufacturer of postal meters to develop a new generation of postal
metering systems.
Industrial and food retailing products accounted for
approximately 60% of the Company's net sales in 1996 (including
revenues from related after-sale service). The Company believes that
it has the leading position in industrial and food retailing sales in
Europe and in the United States. In Asia, the Company has a
substantial, rapidly growing industrial and food retailing business
supported by established manufacturing capabilities in China. The
Company believes that it is the only company with a true global
presence across industrial and food retailing weighing applications.
STANDARD INDUSTRIAL PRODUCTS. The Company offers a complete
line of standard industrial scales, such as bench scales and floor
scales, for weighing loads from a few grams to loads of several
thousand kilograms in applications ranging from measuring materials in
chemical production to weighing mail and packages. Product lines
include the "Spider" range of scales, often used in receiving and
shipping departments in counting applications; "TrimWeigh" scales,
which determine whether an item falls within a specified weight range,
and are used primarily in the food industry; "Mentor SC" scales, for
counting parts; and precision scales for formulating and mixing
ingredients. The Company's "MultiRange" products include standardized
software which uses the weight data obtained to calculate other
parameters, such as price or number of pieces. The modular design of
these products facilitates the integration of the Company's weighing
equipment into a computer system performing other functions, like
inventory control or batch management. Prices vary significantly with
the size and functions of the scale, generally ranging from $1,000 to
$20,000.
HEAVY INDUSTRIAL PRODUCTS. The Company's primary heavy
industrial products are scales for weighing trucks or railcars (i.e.,
weighing bulk goods as they enter a factory or at a toll station).
The Company's truck scales, such as the "DIGITOL TRUCKMATE," generally
have digital load cells, which offer significant advantages in
serviceability over analog load cells. Heavy industrial scales are
capable of measuring weights up to 500 tons and permit accurate
weighing under extreme environmental conditions. The Company also
offers advanced computer software that can be used with its heavy
industrial scales to permit a broad range of applications. Truck
sales prices generally range from $25,000 to $50,000.
DYNAMIC CHECKWEIGHING. The Company offers solutions to
checkweighing requirements in the food, pharmaceutical, chemical and
cosmetic industries, where accurate filling of packages is required,
and in the transportation and package delivery industries, where
tariffs are levied based on weight. Customizable software
applications utilize the information generated by checkweighing
hardware to find production flaws, packaging and labeling errors and
nonuniform products, as well as to sort rejects and record the
results. Mettler-Toledo checkweighing equipment can accurately
determine weight in dynamic applications at speeds of up to several
hundred units per minute. Checkweighers generally range in price from
$8,000 to $40,000.
FOOD RETAILING PRODUCTS. Supermarkets, hypermarkets and
other food retail establishments make use of multiple weighing
applications for the handling of perishable goods from backroom to
checkout counter. For example, perishable goods are weighed on
arrival to determine payment to suppliers and some of these goods are
repackaged, priced and labeled for sale to customers. Other goods are
kept loose and selected by customers and either weighed at the produce
or deli counter or at the check-out counter.
The Company offers stand-alone scales for basic counter
weighing and pricing, price finding, and printing. In addition, the
Company offers network scales and software, which can integrate
backroom, counter, self-service and checkout functions, and can
incorporate weighing data into a supermarket's overall perishable
goods management system. Backroom products include dynamic weighing
products, labeling and wrapping machines, perishable goods management
and data processing systems. In some countries in Europe, the Company
also sells slicing and mincing equipment. Prices for food retailing
scales generally range from $800 to $5,000, but are often sold as part
of comprehensive weighing solutions.
SYSTEMS. The Company's systems business consists of
software applications for drum filling in the food and chemical
industries and batching systems in the glass industry. The software
systems control or modify the manufacturing process.
CUSTOMERS AND DISTRIBUTION
The Company's business is geographically diversified, with
1996 net sales derived 50% in Europe, 39% in North and South America
and 11% in Asia and other markets. The Company's customer base is also
diversified by industry and by individual customer. The Company's
largest single customer accounted for no more than 2% of 1996 net
sales.
LABORATORY
Principal customers for laboratory products include
chemical, pharmaceutical and cosmetics manufacturers; food and
beverage makers; the metals, electronics, plastics, transportation,
packaging, logistics and rubber industries; the jewelry and precious
metals trade; educational institutions; and government standards labs.
Balances and pH meters are the most widely used laboratory measurement
instruments and are found in virtually every laboratory across a wide
range of industries. Other products have more specialized uses.
The Company's laboratory products are sold in more than 100
countries through a worldwide distribution network. The Company's
extensive direct distribution network and its dealer support
activities enable the Company to maintain a significant degree of
control over the distribution of its products. In markets where there
are strong laboratory distributors, such as the United States, the
Company uses them as the primary marketing channel for lower- and mid-
price point products. This strategy allows the Company to leverage
the strength of both the Mettler-Toledo brand and the laboratory
distributors' market position into sales of other laboratory
measurement instruments. The Company provides its distributors with a
significant amount of technical and sales support. High-end products
are handled by the Company's own sales force. There has been recent
consolidation among distributors in the United States market. While
this consolidation could adversely affect the Company's U.S.
distribution, the Company believes its leadership position in the
market gives it a competitive advantage when dealing with its U.S.
distributors. Asian distribution is primarily through distributors,
while European distribution is primarily through direct sales.
European and Asian distributors are generally fragmented on a country-
by-country basis. The Company negotiated a transfer of the laboratory
business in Japan from its former agent to a subsidiary of the Company
effective January 1, 1997. For this transfer a total sum of
approximately SFr. 8.0 million (approximately US$6.4 million) was
partially paid in 1996 with the remaining to be paid in 1997. In
addition, the Company began to distribute laboratory products directly
in certain other Asian countries.
Ohaus brand products are generally positioned in alternative
distribution channels to those of Mettler-Toledo brand products. In
this way, the Company is able to fill a greater number of distribution
channels and increase penetration of its existing markets. Since the
acquisition of Ohaus in 1990, the Company has expanded the Ohaus brand
beyond its historical U.S. focus. Ohaus brand products are sold
exclusively through distributors.
INDUSTRIAL AND FOOD RETAILING
Customers for Mettler-Toledo industrial products include
chemical companies (E.G., formulating, filling and bagging
applications), food companies (E.G., packaging and filling
applications), electronics and metal processing companies (E.G., piece
counting and logistical applications), transportation companies (E.G.,
sorting, dimensioning and vehicle weighing applications) and auto body
paint shops, which mix paint colors based on weight. The Company's
products for these industries share similar weighing technology, and
often minor modifications of existing products can make them useful
for applications in a variety of industrial processes. The Company
also sells to OEMs which integrate weighing modules into larger
process control applications, or comprehensive packaging lines. OEM
applications often include software content and technical support, as
the Company's weighing module must communicate with a wide variety of
other process modules and data management functions. The Company's
products are also purchased by engineering firms, systems integrators
and vertical application software companies.
Customers for food retailing products include supermarkets,
hypermarkets and smaller food retailing establishments. The North
American and European markets include many large supermarket chains.
In most of the Company's markets, food retailing continues to shift to
supermarkets and hypermarkets from "mom and pop" grocery stores.
While supermarkets and hypermarkets generally buy less equipment per
customer, they tend to buy more advanced products that require more
electronic and software content. In emerging markets, however, the
highest growth is in basic scales. As with industrial products, the
Company also sells food retailing products to OEMs for inclusion in
more comprehensive checkout systems. For example, the Company's
checkout scales are incorporated into scanner-scales, which can both
weigh perishable goods and also read bar codes on other items.
Scanner-scales are in turn integrated with cash registers to form a
comprehensive checkout system.
The Company's industrial products are sold in more than 100
countries and its food retailing products in 20 countries. In the
industrial and food retailing market, the Company distributes directly
to customers (including OEMs) and through distributors. In the United
States, distributor sales slightly exceed direct sales. Distributors
are highly fragmented in the U.S., with many small "scale houses"
selling the Company's products. In Europe, direct sales predominate,
with distributors used in certain cases. As in its laboratory
distribution, the Company provides significant support to its
distributors.
SALES AND SERVICE
MARKET ORGANIZATIONS
The Company has over 30 geographically-focused market
organizations ("MOs") around the world that are responsible for all
aspects of sales and service. The MOs are local marketing and service
organizations designed to maintain close relationships with the
Company's customer base. Each MO has the flexibility to adapt its
marketing and service efforts to account for different cultural and
economic conditions. MOs also work closely with the Company's
producing organizations (described below) by providing feedback on
manufacturing and product development initiatives and relaying
innovative product and application ideas.
The Company has the only global sales and service
organization among weighing instruments manufacturers. At December
31, 1996, this organization consisted of approximately 2,800 employees
in sales, marketing and customer service (including related
administration) and after-sales technical service. This field
organization has the capability to provide service and support to the
Company's customers and distributors in virtually all major markets
across the globe. Sales managers and representatives interact across
product lines and markets in order to serve customers that have a wide
range of weighing needs, such as pharmaceutical companies that
purchase both laboratory and industrial products. The Company
classifies customers according to their potential for sales and the
appropriate distribution channel is selected to service the customer
as efficiently as possible. Larger accounts tend to have dedicated
sales representatives. Other representatives are specialized by
product line. Sales representatives call directly on end-users either
alone or, in regions where sales are made through distributors,
jointly with distributors. The Company utilizes a variety of
advertising media, including trade journals, catalogs, exhibitions and
trade shows. The Company also sponsors seminars, product
demonstrations and customer training programs. An extensive database
on markets helps the Company to gauge growth opportunities, target its
message to appropriate customer groups and monitor competitive
developments.
AFTER-SALES SERVICE
The Company believes that it has the largest installed base
of weighing instruments in the world. To support its installed base,
the Company employs service technicians who provide contract and
repair services in all countries in which the Company's products are
sold. Service (representing service contracts, repairs and
replacement parts) accounted for approximately 17% of the Company's
total net sales in 1996. (Service revenue is included in the
laboratory and industrial and food retailing sales percentages given
above.) Management believes that service is a key part of its product
offering and helps significantly in repeat sales. The close
relationships and frequent contact with its large customer base
provide the Company with sales opportunities and innovative product
and application ideas. Moreover, a global service network is an
important factor in the ability to expand in emerging markets.
Widespread adoption of quality laboratory and manufacturing standards
and the privatization of weights and measures certification are both
favorable trends for the Company's service business, as they tend to
increase demand for on-site calibration services.
The Company's service contracts provide for repair services
within various guaranteed response times, depending on the level of
service selected. Many contracts also include periodic calibration
and testing. Contracts are generally one year in length, but may be
longer. The Company's own employees directly provide all service on
Mettler-Toledo products. If the service contract also includes
products of other manufacturers, the Company will generally perform
calibration, testing and basic repairs directly, and contract out more
significant repair work. As application software becomes more
complex, the Company's service efforts increasingly include
installation and customer training programs as well as product
service.
Warranties on Mettler-Toledo products are generally one
year. Based on past experience, the Company believes its reserves for
warranty claims are adequate.
RESEARCH AND PRODUCT DEVELOPMENT; MANUFACTURING
PRODUCING ORGANIZATIONS
The Company is organized into a number of producing
organizations ("POs"), which are specialized centers responsible for
product development, research and manufacturing. At December 31,
1996, POs included approximately 3,900 employees worldwide, and
consisted of product development teams whose members are from
marketing, development, research, manufacturing, engineering and
purchasing. POs also often seek customer input to ensure that the
products developed are tailored to market needs. The Company has
organized POs in order to reduce product development time, improve its
customer focus, reduce costs and maintain technological leadership.
The POs work together to share ideas and best practices. Some
employees are in both MOs and POs. The Company is currently
implementing a number of projects that it believes will result in
increased productivity and lower costs. For example, the Company is
restructuring the order and product delivery process in Europe to
enable the Company to deliver many of its products to its customers
directly from the manufacturing facility within several days, which
minimizes the need to store products in decentralized warehouses. In
addition, the Company is centralizing its European spare parts
inventory management system.
RESEARCH AND PRODUCT DEVELOPMENT
The Company closely integrates research and development with
marketing, manufacturing and product engineering. The Company has
nearly 600 professionals in research and development and product
engineering. The Company's principal product development activities
involve applications improvements to provide enhanced customer
solutions, systems integration and product cost reduction. However,
the Company also actively conducts research in basic weighing
technologies. As part of its research and development activities, the
Company has frequent contact with university experts, industry
professionals and the governmental agencies responsible for weights
and measures. In addition, the Company's in-house development is
complemented by technology and product development alliances with
customers and OEMs.
A recent example of innovation at the Company is the
"Brickstone" technology, which eliminates many of the complex
mechanical linkages in a weighing sensor and reduces the number of
parts in the sensor from approximately 100 to approximately 50. The
Brickstone sensor permits more accurate weighing, lower manufacturing
costs and cheaper and faster design changes. Brickstone technology
has been incorporated into certain of the Company's products, and the
Company expects to expand its use to additional product lines in the
future.
The Company has been spending an increasing proportion of
its research and development budget on software development. Software
development for weighing applications includes application-specific
software, as well as software utilized in sensor mechanisms, displays,
and other common components, which can be leveraged across the
Company's broad product lines.
The Company spent $50.0 million on research and development
in 1996 (excluding research and development purchased in connection
with the Acquisition), $54.5 million in 1995 and $48.0 million in
1994, which the Company believes was more than any of its competitors.
Including costs associated with customer-specific engineering
projects, which are included in cost of sales for financial reporting
purposes, the Company spent approximately 6.6% of net sales on
research and development in 1996.
MANUFACTURING
The Company's manufacturing strategy is to produce directly
those components that require its specific technical competence, or
for which dependable, high-quality suppliers cannot be found. The
Company contracts out the manufacture of its other component
requirements. Consequently, much of the Company's manufacturing
capability consists of assembly of components sourced from others.
The Company utilizes a wide range of suppliers and it believes its
supply arrangements to be adequate. From time to time the Company
relies on one supplier for all of its requirements of a particular
component, but in such cases the Company believes adequate alternative
sources would be available if necessary. Supply arrangements for
electronics are generally made globally. For mechanical components,
the Company generally uses local sources to optimize materials flow.
The Company's manufacturing operations emphasize product
quality. Most of its products require very strict tolerances and
exact specifications. The Company utilizes an extensive quality
control system that is integrated into each step of the manufacturing
process. This integration permits field service technicians to trace
important information about the manufacture of a particular unit,
which facilitates repair efforts and permits fine-tuning of the
manufacturing process. Many of the Company's measuring instruments
are subjected to an extensive calibration process that allows the
software in the unit to automatically adjust for the impact of
temperature and humidity.
The Company has six manufacturing plants in the U.S. (after
giving effect to the closure of the Westerville, Ohio facility in
1996), four in Switzerland, two in Germany and two in China, of which
one is a 60% owned joint venture and the other, the Shanghai facility,
was completed and began to produce laboratory products by the end of
1996. Laboratory products are produced mainly in Switzerland and to a
lesser extent in the United States, while industrial and food
retailing products are produced in all four countries. The Company
believes its manufacturing capacity is sufficient to meet its present
and currently anticipated needs.
BACKLOG
Manufacturing turnaround time is generally sufficiently
short so as to permit the Company to manufacture to fill orders for
most of its products, which helps to limit inventory costs. Backlog
is therefore generally a function of requested customer delivery dates
and is typically no longer than one to two months.
EMPLOYEES
As of December 31, 1996, the Company had approximately 6,400
employees throughout the world, including more than 3,200 in Europe
and more than 2,400 in North and South America. Management believes
that its relations with employees are good. The Company has not
suffered any material employee work stoppage or strike in its
worldwide operations during the last five years. Labor unions do not
represent a meaningful number of the Company's employees
In certain of its facilities, the Company has instituted a
flexible workforce environment, in which hours vary depending on the
quantity of workload. The Company believes that this flexible working
environment enhances employees' involvement, thus increasing
productivity, and improves efficient payroll management by permitting
the Company to adjust staffing to match workload to a greater degree
without changing the size of the overall workforce.
INTELLECTUAL PROPERTY
The Company holds more than 1,150 patents and trademarks,
primarily in the United States, Switzerland, Germany and Japan and, to
a lesser extent, in China. The Company's products generally
incorporate a wide variety of technological innovations, many of which
are protected by patents and many of which are not. Moreover,
products are generally not protected as a whole by individual patents.
Accordingly, no one patent or group of related patents is material to
the Company's business. The Company also has numerous trademarks and
considers the Mettler-Toledo name and logo to be material to its
business. The Company regularly protects against infringement of its
intellectual property.
REGULATION
The Company's products are subject to regulatory standards
and approvals by weights and measures regulatory authorities in the
countries in which it sells its products. Weights and measures
regulation has been harmonized across the European Union. The
Company's food processing and food retailing products are subject to
regulation and approvals by relevant governmental agencies, such as
the United States Food and Drug Administration. Products used in
hazardous environments may also be subject to special requirements.
All of the Company's electrical components are subject to electrical
safety standards. The Company believes that it is in compliance in
all material respects with applicable regulations.
ENVIRONMENTAL MATTERS
The Company is subject to various environmental laws and
regulations in the jurisdictions in which it operates, including those
relating to air emissions, wastewater discharges, the handling and
disposal of solid and hazardous wastes and the remediation of
contamination associated with the use and disposal of hazardous
substances. The Company wholly or partly owns, leases or holds a
direct or indirect equity interest in a number of properties and
manufacturing facilities around the world, including the United
States, Europe, Canada, Mexico, Brazil, Australia and China. The
Company, like many of its competitors, has incurred, and will continue
to incur, capital and operating expenditures and other costs in
complying with such laws and regulations in both the United States and
abroad.
The Company is currently involved in, or has potential
liability with respect to, the remediation of past contamination in
certain of its presently and formerly owned and leased facilities in
both the United States and abroad. In addition, certain of the
Company's present and former facilities have or had been in operation
for many decades and, over such time, some of these facilities may
have used substances or generated and disposed of wastes which are or
may be considered hazardous. It is possible that such sites, as well
as disposal sites owned by third parties to which the Company has sent
wastes, may in the future be identified and become the subject of
remediation. Accordingly, although the Company believes that it is in
substantial compliance with applicable environmental requirements and
the Company to date has not incurred material expenditures in
connection with environmental matters, it is possible that the Company
could become subject to additional environmental liabilities in the
future that could result in a material adverse effect on the Company's
financial condition or results of operations.
The Company is involved in litigation concerning remediation
of hazardous substances at its operating facility in Landing, New
Jersey. On or about July 1988, an affiliate of Ciba ("AGP") purchased
100% of the outstanding stock of Metramatic Corporation
("Metramatic"), a manufacturer of checkweighing equipment located in
Landing, from GEI International Corporation ("GEI"). GEI agreed to
indemnify and hold harmless AGP for certain pre-closing environmental
conditions, including those resulting in cleanup responsibilities
required by the New Jersey Department of Environmental Protection
("NJDEP") pursuant to the New Jersey Environmental Cleanup
Responsibility Act ("ECRA"). ECRA is now the Industrial Site Recovery
Act. Pursuant to a 1988 NJDEP administrative consent order naming GEI
and Metramatic as respondents, GEI has spent approximately $2 million
in the performance of certain investigatory and remedial work
addressing groundwater contamination at the site. However, a final
remedy has not yet been selected by NJDEP, and, therefore, future
remedial costs are currently unknown. In 1992, GEI filed a suit
against various parties including Hi-Speed Checkweigher Co., Inc., a
wholly-owned subsidiary of the Company that currently owns the
facility, to recover certain costs incurred by GEI in connection with
the site. Based on currently available information and the Company's
rights of indemnification from GEI, the Company believes that its
ultimate allocation of costs associated with the past and future
investigation and remediation of this site will not have a material
adverse effect on the Company's financial condition or results of
operations.
In addition, the Company is aware that Toledo Scale, the
former owner of Toledo Scale or the Company has been named a
potentially responsible party under CERCLA or analogous state statutes
at the following third-party owned sites with respect to the alleged
disposal at the sites by Toledo Scale during the period it was owned
by such former owner: Granville Solvents Site, Granville, Ohio; Aqua-
Tech Environmental, Inc. Site, Greer, South Carolina; and Seaboard
Chemical Company Site, Jamestown, North Carolina. The former owner
has also been named in a lawsuit seeking contribution pursuant to
CERCLA with respect to the Caldwell Trucking Site, New Jersey based on
the alleged disposal at the site by Toledo Scale during the former
owner's period of ownership. Pursuant to the terms of the stock
purchase agreement between Mettler and the former owner of Toledo
Scale, the former owner is obligated to indemnify Mettler for various
environmental liabilities. To date, with respect to each of the
foregoing sites, the former owner has undertaken the defense and
indemnification of Toledo Scale. Based on currently available
information and the Company's contractual rights of indemnification,
the Company believes that the costs associated with the investigation
and remediation of these sites will not have a material adverse effect
on the Company's financial condition or results of operations.
COMPETITION
The markets in which the Company operates are highly
competitive. Because of the fragmentation of weighing instruments
markets, particularly the industrial and food retailing market, both
geographically and by application, the Company competes with numerous
regional or specialized competitors, many of which are well-
established in their markets. Some competitors are less leveraged
than the Company and/or are divisions of larger companies with
potentially greater financial and other resources than the Company.
Although the Company believes that it has certain competitive
advantages over its competitors, realizing and maintaining these
advantages will require continued investment by the Company in
research and development, sales and marketing and customer service and
support. The Company has, from time to time, experienced price
pressures from competitors in certain product lines and geographic
markets.
In the United States, the Company believes that the
principal competitive factors on which purchasing decisions are made
are accuracy and durability, while in Europe accuracy and service are
the most important factors. In emerging markets, where there is
greater demand for less sophisticated products, price is a more
important factor than in developed markets. Competition in the United
States laboratory market is also influenced by the presence of large
distributors through which the Company and its competitors sell many
of their products.
ITEM 2. FINANCIAL INFORMATION
The selected historical financial information set forth
below at December 31, 1994, 1995, 1996, for the years ended December
31, 1993, 1994, 1995, and for the period from January 1, 1996 to
October 14, 1996, and for the period from October 15, 1996 to December
31, 1996 is derived from the Registrant's financial statements,
which were audited by KPMG Fides Peat, independent auditors. The
financial information for all periods prior to October 15, 1996,
the date of the Acquisition, is combined financial information of
the Mettler-Toledo Group, the Predecessor Business. The combined
historical data of the Mettler-Toledo Group and the consolidated
historical data of the Registrant are not comparable in many
respects due to the Acquisition. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations", below
and the Consolidated Financial Statements and accompanying notes.
The consolidated financial statements were prepared in accordance
with U.S. generally accepted accounting principles.
<TABLE>
<CAPTION>
Predecessor Business MT Investors Inc.
---------------------------------------------------------------------------
For The Years Ended December 31, January 1 to October 15 to
October 14, December 31, Combined
1993 1994 1995 1996 1996 1996 (1)
------------ -------------- ------------- ------------- --------------- ---------
(Dollars in thousands, except per share data)
STATEMENT OF OPERATIONS DATA (2):
<S> <C> <C> <C> <C> <C> <C>
Net sales........................ $728,958 $769,136 $850,415 $662,221 $186,912 $849,133
Cost of sales (3)................ 443,534 461,629 508,089 395,239 136,820 532,059
-------- -------- -------- -------- ---------- ----------
Gross profit..................... 285,424 307,507 342,326 266,982 50,092 317,074
Research and development
expenses....................... 46,438 47,994 54,542 40,244 9,805 50,049
Selling, general and
administrative expenses........ 209,692 224,978 248,327 186,898 59,353 246,251
Amortization..................... 2,917 6,437 2,765 2,151 1,065 3,216
Purchased research and
development (4)................. - - - - 114,070 114,070
Other charges (income), net (5).. 18,284 (2,852) (701) 1,872 9,892 11,764
Earnings (loss) before interest ------- -------- -------- -------- ----------
and taxes....................... 8,093 30,950 37,393 35,817 (144,093) (108,276)
Interest expense................. 15,239 13,307 18,219 13,868 8,738 22,606
Financial expense (income), net.. (4,174) (4,864) (8,630) (3,204) 7,245 4,041
Provision for taxes.............. 3,041 8,676 8,782 10,055 (938) 9,117
Minority interest................ 1,140 347 768 637 (92) 545
-------- -------- -------- -------- ---------- ----------
Net earnings (loss).............. $(7,153) $13,484 $18,254 $14,461 $(159,046) $(144,585)
======== ======== ======== ======== ========== ==========
Earnings (loss) per common share(6):
Weighted average number
of common shares............. 2,438,514 2,438,514 2,438,514 1,930,490 499,165 2,429,655
Earnings (loss) per common
share........................ $(2.93) $5.53 $7.49 $7.49 $(318.62) $(59.51)
======== ======== ======== ======== ========== ==========
BALANCE SHEET DATA (2)(at end of period):
Cash and cash equivalents........ $ 63,802 $ 41,402 $60,696
Net working capital.............. 126,065 90,740 83,947
Total assets..................... 683,198 724,094 771,888
Long-term third party debt....... 862 3,621 373,758
Net borrowing from Ciba and
affiliates (7).................. 177,651 203,157
Other long-term liabilities (8).. 83,964 84,303 96,810
Shareholder's equity (9)......... 228,194 193,254 12,426
OTHER DATA:
Depreciation and amortization
expense......................... $29,591 $34,118 $33,363 $21,663 $8,990 $30,653
Capital expenditures............... 25,122 24,916 25,858 16,649 11,928 28,577
- -------------------------
(1) Combined 1996 data represents the combined data of the Predecessor Business for the period January 1, 1996 to
October 14, 1996 and of MT Investors Inc. for the period October 15, 1996 to December 31, 1996.
(2) Balance sheet information at December 31, 1992 and 1993 is not available. Income statement information for
the year ended December 31, 1992 is not available, except that net sales were $769,000.
(3) In connection with the Acquisition, the Company allocated approximately $32,200 of the purchase price to
revalue certain inventories (principally work-in-progress and finished goods) to fair value (net realizable value).
Substantially all such inventories were sold during the period October 15, 1996 to December 31, 1996.
(4) In conjunction with the Acquisition, the Company allocated, based upon independent valuations, $114,070
of the purchase price to purchased research and development in process. Such amount was recorded as an expense in the
period from October 15, 1996 to December 31, 1996.
(5) For 1993, consists primarily of costs associated with the closure of a manufacturing facility in Cologne,
Germany, and also includes the restructuring of certain manufacturing operations and an early retirement program in the
United States. Other income for 1993, 1994 and 1995 relates primarily to gains from the sale of real property and, in
1994, to a gain on the sale of an investment. Other charges for the period January 1, 1996 to October 14, 1996 of $1,872
represent employee severance of $1,545 and other exit costs of $327 associated with the closing of its Westerville,
Ohio facility. Other charges for the period October 15, 1996 to December 31, 1996 principally represent employee
severance benefits associated with (i) the Company's general headcount reduction programs, in Europe and North America,
of $4,557 which were announced during such period, and (ii) the realignment of the analytical and precision balance
business in Switzerland of $6,205 which was internally announced in December, 1996. In connection with such programs
the Company reduced its workforce by 168 employees in 1996 and intends to further reduce its workforce by approximately
70 employees. See Note 17 to the Consolidated Financial Statements.
(6) Earnings per common share for MT Investors Inc. has been computed using the weighted average number of
outstanding common shares during the related period. Earnings per common share for the Predecessor Business have been
computed assuming the common shares issued in the Acquisition were outstanding during each of the periods presented.
(7) Includes notes payable and long-term debt payable to Ciba and affiliates less amounts due from Ciba and
affiliates. See Notes 3 and 11 to the Consolidated Financial Statements.
(8) Consists primarily of obligations under various pension plans and plans that provide post-retirement medical
benefits. See Note 15 to the Consolidated Financial Statements.
(9) Shareholder's equity for the Predecessor Business consists of the combined net assets of the Mettler-Toledo
Group.
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of the Company's
financial condition and results of operations should be read in
conjunction with the Consolidated Financial Statements. The
Registrant has no material assets, liabilities or operations other
than those that result from its ownership of 100% of the outstanding
common stock of Mettler-Toledo Holding Inc., the parent of Mettler-
Toledo, Inc. Therefore, the analysis set forth is of the Company.
GENERAL
The financial statements for periods ended prior to October
15, 1996 reflect the combined operations of the Mettler-Toledo Group,
while the financial statements for periods after October 15, 1996
reflect the consolidated operations of the Company after accounting
for the Acquisition using the purchase method of accounting. See Note
1 to the Consolidated Financial Statements. Operating results
subsequent to the Acquisition are not comparable in many respects to
the operating results prior to the Acquisition. See "Effect of
Acquisition on Results of Operations." References to results of
operations for the year ended December 31, 1996 are references to the
combined results of operations for the period beginning January 1,
1996 and ended October 14, 1996 for the Mettler-Toledo Group plus the
consolidated results of operations for the Company for the period
beginning October 15, 1996 and ended December 31, 1996. Financial
information is presented in accordance with U.S. generally accepted
accounting principles.
In 1996, the Company undertook several efforts to increase
productivity and lower costs. In July 1996, the Company announced the
closure of its Westerville, Ohio facility. In the fourth quarter of
1996, the Company recorded charges for a general headcount reduction
program in Europe and North America and the realignment of the
analytical and precision balance business in Switzerland. In
connection with such programs, the Company reduced its workforce by
168 employees in 1996 and intends to further reduce its workforce by
approximately 70 employees. The Company recorded costs of $11.8
million in 1996, primarily relating to severance, in connection with
these efforts.
RESULTS OF OPERATIONS
The following table sets forth certain items in the
statements of operations as a percentage of net sales for the years
1994, 1995 and, on a combined basis, 1996.
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
--------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------
1994 1995 1996
---------- ---------- -----------
<S> <C> <C> <C>
Net sales................... 100.0% 100.0% 100.0%
Cost of sales............... 60.0 59.7 62.7
---------- ---------- -----------
Gross profit................ 40.0 40.3 37.3
Research and development
expenses (1)............... 6.3 6.4 5.9
Selling, general and
administrative expenses... 29.3 29.3 29.0
Amortization................ 0.8 0.3 0.4
Purchased research and
development............... - - 13.4
Other charges (income), net. (0.4) (0.1) 1.4
---------- ---------- -----------
Earnings (loss) before
interest and taxes......... 4.0% 4.4% (12.8)%
========== ========== ===========
- ------------------------
(1) Total research and development expenses were 7.2% in 1994, 7.3%
in 1995 and 6.6% in 1996, including costs associated with customer-
specific engineering projects, which are included in cost of sales for
financial reporting purposes.
</TABLE>
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31,
1995
Net sales were virtually unchanged at $849.1 million in 1996
compared to $850.4 million in 1995. Net sales in local currency
increased 2.6%, excluding the impact of the reduction of the systems
business, but were offset by a strengthening of the U.S. dollar, the
Company's reporting currency, relative to the local currencies of the
Company's operations. The flat sales in 1996 compared to 1995 resulted
from slightly lower sales from products in the industrial and food
retailing markets, offset by strong performance by the product lines
in the laboratory market. The growth in the laboratory market was
across substantially all product lines and geographical regions as
sales in local currency increased 7% compared to the previous year. In
particular, new product introductions in titration, thermal and
reaction calorimetry as well as new Ohaus products for the education,
laboratory and light industrial market helped to increase laboratory
market sales. The slight decline in industrial and food retailing
sales resulted from overall weakness in the European market while the
Company has been able to retain its market share. This market weakness
has persisted in early 1997.
Net sales in Europe in local currency decreased 2% in 1996
compared to 1995 due to a weaker second half of the year in 1996 in
all major markets, and especially in key countries such as Germany,
France and the United Kingdom. Net sales in the Americas in local
currency increased by 5% over 1995 due to growth in the United States
and Latin America and double digit expansion in laboratory measurement
instruments other than balances and in related service. Net sales in
Asia and other markets in local currency increased by 8% over 1995,
primarily as a result of significantly increased sales in the Shanghai
operation and strong sales in Japan and Australia.
Gross profit as a percentage of net sales decreased to 37.3%
in 1996 from 40.3% in 1995, principally as a result of the sale of
inventories revalued (to fair value) in connection with the
Acquisition. Excluding the impact of the revaluation of inventories,
gross profit as a percentage of sales would have increased to 41.1% in
1996. The increased gross profit margin resulted principally from
operational improvements and the depreciation of the Swiss franc
against the Company's other principal trading currencies. See "Effect
of Currency on Results of Operations."
Selling, general and administrative expenses and research
and development expenses as a percentage of net sales decreased to an
aggregate of 34.9% in 1996 from 35.7% in 1995. The cost decreases
resulted primarily from the currency effect of the depreciation of the
Swiss franc against the Company's other major trading currencies and
the Company's cost control efforts.
In connection with the Acquisition, the Company allocated,
based upon independent valuations, $114,070 of the purchase price to
purchased research and development in process. Such amount was
expensed immediately following the Acquisition.
Other charges in 1996 of $11.8 million represent principally
severance costs for the general headcount reduction programs in Europe
and North America, the closure of the Company's Westerville, Ohio
manufacturing facility, and the realignment of the analytical and
precision balance business in Switzerland. See Note 16 to the
Consolidated Financial Statements.
Loss before interest and taxes was $108.3 million in 1996
compared to earnings before interest and taxes of $37.4 million in
1995. This loss includes an expense of $114.1 million for the
allocation of purchase price to in-process research and development
projects in connection with the Acquisition and $11.8 million of other
charges. Excluding these expenses, as well as the revaluation of
inventories discussed above, earnings before interest and taxes would
have been $49.8 million in 1996. If 1995 currency exchange rates had
remained in effect throughout 1996, earnings before interest and taxes
in 1996 excluding the expense for in-process research and development,
the revaluation of inventories and other charges would have been
approximately $46.0 million.
Interest expense increased to $22.6 million in 1996 from
$18.2 million in 1995, an increase of 24.2%, principally due to a
higher debt level as a result of the Acquisition and higher interest
rates on amounts due to Ciba. Interest expense since the Acquisition
is materially different. See "Effect of Acquisition on Results of
Operations" and "Liquidity and Capital Resources." Financial expense
(income), net decreased to an expense of $4.0 million in 1996 from
income of $8.6 million in 1995. The reduction resulted principally
from losses on foreign currency transactions due to the appreciation
of the dollar.
The net loss of $144.6 million in 1996 compared to net
earnings of $18.3 million in 1995. Excluding the expense for in-
process research and development, the revaluation of inventories and
other charges, net earnings would have been approximately $1.0
million in 1996.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31,
1994
Net sales were $850.4 million in 1995 compared to $769.1
million in 1994, an increase of 11%. Net sales in local currency
increased 5%; the remaining 6% of the increase resulted from changes
in currency exchange rates. In 1994 the Company discontinued certain
items in its systems and laboratory measurement instruments product
lines. Excluding the effect of these discontinued items, net sales in
local currency would have increased 6%. Sales growth in local
currency reflected steady growth across all major product lines in
laboratory, industrial and food retailing markets as result of
favorable economic conditions and market share gains in selected
geographic markets. Sales were helped by the expansion of the
Company's line of titrators and the introduction of a family of
standard industrial programmable terminals for weighing instruments.
Net sales in Europe in local currency increased 7% in 1995
over 1994, consistent with the continuing recovery from the 1993
recession and market share gains in selected regions and product
lines. Southern Europe contributed significantly to the increase.
Net sales in the Americas in local currency decreased 1% in 1995 from
1994. Results in the Americas reflect reduced demand in the United
States for laboratory instruments in the wake of consolidation in the
pharmaceutical and chemical industries and unusually high demand for
retail equipment in 1994 as a result of a new labeling law that caused
food retailers to buy additional retail weighing and labeling
equipment. Net sales in Asia and other markets in local currency
increased 20% in 1995 over 1994, primarily as a result of continued
economic growth and the Company's increased market share in selected
markets. Sales were also helped by the recovery in China from the
poor market conditions of 1994.
Gross profit as a percentage of net sales increased slightly
to 40.3% in 1995 from 40.0% in 1994. These results were achieved
despite the appreciation of the Swiss franc against the Company's
other principal trading currencies, which has the effect of increasing
overall manufacturing costs due to the Company's significant
manufacturing operations in Switzerland. Improved manufacturing
productivity contributed to the increase, including the favorable
effects of the Company's mid-1994 closure of its Cologne, Germany
plant, partially offset by higher raw materials costs.
Selling, general and administrative expenses and research
and development expenses were relatively constant as a percentage of
net sales. Cost increases resulting from the currency effect of the
significant appreciation of the Swiss franc against the Company's
other major trading currencies were offset by the Company's cost
control efforts. Earnings before interest and taxes were $37.4 million
in 1995 compared to $30.9 million in 1994. If 1994 currency exchange
rates had remained in effect throughout 1995 earnings before interest
and taxes in 1995 would have been $47.4 million.
Interest expense rose to $18.2 million in 1995 from $13.3
million in 1994, an increase of 37%, principally due to higher
interest rates from the conversion of a loan from Ciba from short term
to long term. Interest expense since the Acquisition is materially
different. See "Effect of Acquisition on Results of Operations," and
"Liquidity and Capital Resources." Net financial income increased to
$8.6 million in 1995 from $4.9 million in 1994. The higher level of
financial income resulted principally from increased gain on foreign
currency transactions.
Net earnings increased to $18.3 million in 1995 from $13.5
million in 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant does not have any liabilities except through
its ownership of the Company.
The Acquisition was financed principally through capital
contributions of $190 million before related expenses from the
Registrant, borrowings under a Credit Agreement ("Credit Agreement")
of $307 million and 9 3/4% Senior Subordinated Notes due 2006 (the
"Notes") of $135 million.
Prior to the Acquisition, the Company's cash and other
liquidity was used principally to fund capital expenditures, working
capital requirements, debt service and dividends to Ciba. Following
the Acquisition, annual interest expense of approximately $39.0
million associated with the borrowings under the Credit Agreement and
the Notes, as well as scheduled principal payments of term loans under
the Credit Agreement, have significantly increased the Company's
liquidity requirements. See "Effect of Acquisition on Results of
Operations."
The Company's capital expenditures totaled $28.6 million in
1996, $25.9 million in 1995 and $24.9 million in 1994. Capital
expenditures are primarily for machinery, equipment and the purchase
and expansion of facilities, including the purchase of land for, and
construction of, the Company's Shanghai manufacturing facility.
Capital expenditures for 1997, as a percentage of sales, are expected
to remain relatively constant with historical expenditures. In
connection with the transfer of the Japanese laboratory business from
a former agent to a subsidiary of the Company, the Company will make
payments of approximately SFr 8.0 million of which SFr.1.0 million had
been paid during 1996. See Item 1, "Business--Customers and
Distribution."
The Credit Agreement provides for term loan borrowings in an
aggregate principal amount of approximately $147.0 million and SFr
125.0 million ($239.7 million at December 31, 1996) that will mature
in 2002, 2003 and 2004 and a revolving credit facility with
availability of $140.0 million, of which approximately $60.0 million
was drawn down in connection with the Acquisition. At December 31,
1996, approximately $75.0 million was available to the Company under
the revolving credit facility and local working capital facilities.
The revolving credit facility matures in 2002 and includes letter of
credit and swingline subfacilities. Mandatory prepayments are
required to be made in certain circumstances with the proceeds of
asset sales or issuance of capital stock or indebtedness and with
certain excess cash flow. The Credit Agreement imposes certain
restrictions on the Company and its subsidiaries, including
restrictions on the ability to incur indebtedness, make investments,
grant liens, sell financial assets and engage in certain other
activities. The Company must also comply with certain financial
covenants. The Credit Agreement requires quarterly principal
amortization payments which increase overtime. The aggregate of such
payments for 1997, 1998 and 1999 will be approximately $9,000, $12,800
and $15,600, respectively. The Credit Agreement is secured by certain
assets of the Company.
The Notes will mature in 2006. The Notes may be required to
be purchased by the Company upon a Change of Control (as defined) and
in certain circumstances with the proceeds of asset sales. The Notes
are subordinated to the indebtedness under the Credit Agreement. The
indenture governing the Notes (the "Indenture") imposes certain
restrictions on the Company and its subsidiaries, including
restrictions on the ability to incur indebtedness, make investments,
grant liens and engage in certain other activities.
Under the Credit Agreement and the Indenture, Mettler-
Toledo, Inc. is prohibited from paying dividends to Mettler-Toledo
Holding Inc., subject to certain limited exceptions. The Company's
obligations under the Credit Agreement and Notes is guaranteed by
Mettler-Toledo Holding Inc.
At December 31, 1996, approximately $147 million of the
borrowings under the Credit Agreement and all of the borrowings under
the Notes were denominated in U.S. dollars. The balance of the
borrowings under the Credit Agreement and under local working capital
facilities were denominated in certain of the Company's other
principal trading currencies. At December 31, 1996, the Company had
$27.5 million of other long-term debt incurred by its various
operating subsidiaries primarily denominated in various currencies.
Changes in exchange rates between the currencies in which the Company
generates cash flow and the currencies in which its borrowings are
denominated will affect the Company's liquidity. See "Effect of
Currency on Results of Operations".
The Company currently believes that cash flow from operating
activities, together with borrowings available under the Credit
Agreement and local working capital facilities will be sufficient to
fund currently anticipated working capital needs and capital spending
requirements as well as debt service requirements for at least several
years, but there can be no assurance that this will be the case.
EFFECT OF CURRENCY ON RESULTS OF OPERATIONS
The Company's operations are conducted by subsidiaries in
many countries, and the results of operations and the financial
position of each of those subsidiaries is reported in the relevant
foreign currency and then translated into U.S. dollars at the
applicable foreign exchange rate for inclusion in the Company's
consolidated financial statements. Accordingly, the results of
operations of such subsidiaries as reported in U.S. dollars can vary
significantly as a result of changes in currency exchange rates.
Swiss franc-denominated costs represent a much greater
percentage of the Company's total expenses than Swiss franc-
denominated sales represent of total sales. In general, an
appreciation of the Swiss franc has a negative impact on the Company's
results of operations and a depreciation of the Swiss franc has a
positive impact on the Company's results of operations. The effect of
these changes generally offsets in part the effect on income from
operations of changes in exchange rate between the U.S. dollar and
other currencies described in the preceding paragraph. If the 1995
currency exchange rates had remained in effect, the loss before
interest and taxes in 1996 would have been approximately $10.0 million
greater.
EFFECT OF ACQUISITION ON RESULTS OF OPERATIONS
In connection with the Acquisition, the Company has, in
accordance with U.S. GAAP relating to purchase accounting rules,
adjusted to fair value the Company's assets and liabilities which, on
a pro forma basis, would have resulted in increased amortization of
approximately $1.5 million for 1996. In addition, as part of the
Acquisition, the Company has incurred additional debt, which would
have resulted in a net increase in interest expense, including
amortization of debt issuance costs and other fees, in the amount of
$16.1 million for 1996, on a pro forma basis. The Company estimates
that it will incur approximately $2.3 million annually in additional
selling, general and administrative expenses as a result of being an
independent company, including an annual management fee of $1.0
million to be paid to AEA Investors Inc. ("AEA Investors"). The
Acquisition would have resulted in a decrease in the Company's
provision for income taxes of $9.9 million for 1996, on a pro forma
basis. As a result of the above adjustments, on a pro forma basis,
the Company would have reported a net loss of $6.4 million in 1996, as
compared to its net loss of $5.4 million in 1995 (before giving effect
to the non-recurring charges referred to below).
The following table represents the unaudited pro forma
statements of operations of the Company after the predecessor business
for the fiscal year 1995 and 1996, assuming the Acquisition occurred
on January 1, 1995. These pro forma statements do not reflect the
anticipated benefits to be derived in the future from the Company's
1996 employee reduction programs.
The pro forma financial data reflects other charges in 1996
of $11.8 million representing principally severance costs for the
general headcount reduction, in Europe and North America, the closure
of the Company's Westerville, Ohio manufacturing facility, and the
realignment of the analytical and precision balance business in
Switzerland.
<TABLE>
<CAPTION>
PRO FORMA
YEARS ENDED DECEMBER 31,
(Dollars in thousands,
except per share data)
1995 1996
-------------- --------------
<S> <C> <C>
Net sales................... $850,415 $849,133
Cost of sales............... 508,089 499,865
-------------- --------------
Gross profit........... 342,326 349,268
-------------- --------------
Research and development.... 54,542 50,049
Selling, general and
administrative............ 250,627 248,337
Amortization................ 4,687 4,687
Other charges (income),
net........................ (701) 11,764
Earnings before
interest and taxes...... 33,171 34,431
Interest expense............ 38,715 38,715
Financial expense (income)
net........................ (3,742) 2,272
-------------- --------------
Loss before taxes and
minority interest....... (1,802) (6,556)
Provision for taxes......... 2,826 (738)
Minority interest........... 768 545
-------------- --------------
Net loss................. $(5,396) $(6,363)
============== ==============
Loss per common share:
Weighted average number
of common shares..... 2,438,514 2,438,514
Loss per common share. $(2.21) $(2.61)
============== ==============
</TABLE>
In addition in accordance with U.S. GAAP, the Company has
allocated a portion of the purchase price to in-process research and
development projects that have economic value and to the revaluation
of inventories to fair values. Approximately $114.1 million has been
allocated to in-process research and development and has been charged
to expense in the fourth quarter of 1996. Approximately $32.2 million
has been allocated to the revaluation of inventories to fair value.
Substantially all of such inventories were sold during the period from
October 15, 1996 to December 31, 1996. These charges are not reflected
in the above table due to their unusual, non-recurring nature.
TAXES
The Company is subject to taxation in many jurisdictions
throughout the world. The Company's effective tax rate and tax
liability will be affected by a number of factors, such as the amount
of taxable income in particular jurisdictions, the tax rates in such
jurisdictions, tax treaties between jurisdictions, the extent to which
the Company transfers funds between jurisdictions and income is
repatriated, and future changes in law. Generally, the tax liability
for each legal entity is determined either (i) on a non-consolidated
basis or (ii) on a consolidated basis only with other entities
incorporated in the same jurisdiction, in either case without regard
to the taxable losses of non-consolidated affiliated entities. As a
result, the Company may pay income taxes in certain jurisdictions even
though the Company on an overall basis incurs a net loss for the
period.
ENVIRONMENTAL MATTERS
The Company is subject to various environmental laws and
regulations in the jurisdictions in which it operates. The Company,
like many of its competitors, has incurred, and will continue to
incur, capital and operating expenditures and other costs in complying
with such laws and regulations in both the United States and abroad.
The Company does not currently anticipate any material capital
expenditures for environmental control technology. Some risk of
environmental liability is inherent in the Company's business, and
there can be no assurance that material environmental costs will not
arise in the future. However, the Company does not anticipate any
material adverse effect on its results of operations or financial
condition as a result of future costs of environmental compliance.
See Item 1, "Business--Environmental Matters."
INFLATION
Inflation can affect the costs of goods and services used by
the Company. The competitive environment in which the Company
operates limits somewhat the Company's ability to recover higher costs
through increased selling prices. Moreover, there may be differences
in inflation rates between countries in which the Company incurs the
major portion of its costs and other countries in which the Company
sells its products, which may limit the Company's ability to recover
increased costs, if not offset by future increase of selling prices.
The Company's growth strategy includes expansion in Latin America and
China, which have experienced inflationary conditions. To date,
inflationary conditions have not had a material effect on the
Company's operating results. However, as the Company's presence in
Latin America and China increases, these inflationary conditions could
have a greater impact on the Company's operating results.
SEASONALITY
The Company's business has historically experienced a slight
amount of seasonal variation, with sales in the first fiscal quarter
slightly lower than, and sales in the fourth fiscal quarter slightly
higher than, sales in the second and third fiscal quarters. This
trend has a somewhat greater effect on income from operations than on
net sales due to the effect of fixed costs.
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISKS
The Company enters into currency forward and option
contracts primarily as a hedge against anticipated foreign currency
exposures and not for speculative purposes. Such contracts, which are
types of financial derivatives, limit the Company's exposure to both
favorable and unfavorable currency fluctuations. These contracts are
adjusted to reflect market values as of each balance sheet date, with
the resulting unrealized gains and losses being recognized in
financial income or expense, as appropriate.
The Company may be exposed to credit losses in the event of
nonperformance by the counterparties to its foreign currency forward
and option contracts. The Company has no reason to believe, however,
that such counterparties will not be able to fully satisfy their
obligations under these contracts. At December 31, 1996, the Company
had contracts maturing during 1997 to sell the equivalent of
approximately $135.0 million in various currencies in exchange for
Swiss francs. These contracts were used to limit its exposure to
foreign currency fluctuations on anticipated future cash flows,
primarily for the delivery of United States dollars, German marks,
French francs, British pounds and Japanese yen in exchange for Swiss
francs. At December 31, 1996, the fair value of such financial
instruments, which the Company recognized as net unrealized losses,
was approximately $5.1 million.
NEW ACCOUNTING STANDARDS
Beginning January 1, 1996 the Company adopted Financial
Accounting Standards Board's Statement of Financial Accounting
Standards No. 121 (SFAS 121), "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS 121
requires that long-lived assets and certain identifiable intangibles
to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. In addition, SFAS 121 requires
that long-lived assets and certain identifiable intangibles to be
disposed of be reported at the lower of carrying amount or fair value
less cost to sell. Adoption of SFAS 121 had no effect on the
consolidated financial statements.
In February 1997, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 128,
"Earnings per Share." The Company has yet to determine the effect
of this statement on its earnings per share.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
This Registration Statement includes forward-looking
statements that reflect the Registrant current views with respect to
future events and financial performance, including capital
expenditures, potential cost savings from planned employee reductions
and the realignment of the analytical and precision balance business
in Switzerland, strategic plans and future cash sources and
requirements. These forward-looking statements are subject to certain
risks and uncertainties, including those identified below, which could
cause actual results to differ materially from historical results or
those anticipated. The words, "believe," "expect," "anticipate" and
similar expressions identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. The Registrant
undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future
events or otherwise. The following risks could cause actual results
to differ materially from historical results or those anticipated:
EFFECT OF SUBSTANTIAL INDEBTEDNESS ON OPERATIONS AND LIQUIDITY
The Credit Agreement and the Indenture contain a number of
covenants that restrict the Company's operations. See "Liquidity and
Capital Resources." The Company's ability to comply with the
covenants and restrictions contained in the Credit Agreement and the
Indenture may be affected by events beyond its control, including
prevailing economic, financial and industry conditions.
The Company's high degree of leverage could have important
consequences including but not limited to the following: (i) the
Company's ability to obtain additional financing for acquisitions,
capital expenditures, working capital or general corporate purposes
may be impaired in the future; (ii) a substantial portion of the
Company's cash flow from operations must be dedicated to the payment
of principal and interest on the Notes and borrowings under the Credit
Agreement and other indebtedness, thereby reducing the funds available
to the Company for its operations and other purposes, including
investments in research and development and capital spending; (iii)
certain of the Company's borrowings are and will continue to be at
variable rates of interest, which exposes the Company to the risk of
increased interest rates; and (iv) the Company may be substantially
more leveraged than certain of its competitors, which may place the
Company at a relative competitive disadvantage and may make the
Company more vulnerable to a downturn in general economic conditions
or its business or changing market conditions and regulations.
RESTRICTIONS ON OPERATIONS UNDER CREDIT AGREEMENT AND INDENTURE
In connection with the Acquisition, the Company incurred a
significant amount of indebtedness. At December 31, 1996, the
Company's consolidated indebtedness (excluding unused commitments) was
approximately $454.2 million and its shareholder's equity was
approximately $12.4 million. On a pro forma basis giving the effect
to the Acquisition, the Company's ratio of earnings to fixed charges
for the year ended December 31, 1996 would have been 1.5x. The Company
has additional borrowing capacity on a revolving credit basis under
the Credit Agreement and under local working capital facilities. The
Company will be required to make semiannual scheduled principal
payments on the term loans under the Credit Agreement commencing in
March 1997. The Company's ability to comply with the terms of the
Indenture and the Credit Agreement, to make cash payments with respect
to the Notes and under the Credit Agreement and to satisfy its other
debt or to refinance any of such obligations will depend on the future
performance of the Company, which, in turn, is subject to prevailing
economic and competitive conditions and certain financial, business
and other factors beyond its control.
RISK OF CURRENCY FLUCTUATIONS
The Company is subject to risks and uncertainties resulting
from changes in currency exchange rates. For a discussion of these
risks, see "Effect of Currency on Results of Operations."
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
The Company does business in numerous countries, including
emerging markets in Asia and Latin America. In addition to currency
risks discussed above, the Company's international operations are
subject to the risk of new and different legal and regulatory
requirements in local jurisdictions, tariffs and trade barriers,
potential difficulties in staffing and managing local operations,
credit risk of local customers and distributors, potential
difficulties in protecting intellectual property, risk of
nationalization of private enterprises, potential imposition of
restrictions on investments, potentially adverse tax consequences,
including imposition or increase of withholding and other taxes on
remittances and other payments by subsidiaries, and local economic,
political and social conditions, including the possibility of hyper-
inflationary conditions, in certain countries. The Company plans to
increase its presence in Latin American countries and China. As a
result, inflationary conditions in these countries could have an
increasingly significant effect on the Company's operating results.
The conversion into foreign currency of funds earned in
local currency through the Company's operations in the People's
Republic of China and the repatriation of such funds require certain
governmental approvals. Failure to obtain such approvals could result
in the Company being unable to convert or repatriate earnings from its
Chinese operations, which may become an increasingly important part of
the Company's international operations.
COMPETITION; IMPROVEMENTS IN TECHNOLOGY
The markets in which the Company operates are highly
competitive. Weighing markets are fragmented both geographically and
by application, particularly the industrial and food retailing market.
As a result, the Company competes with numerous regional or
specialized competitors, many of which are well-established in their
markets. Some competitors are divisions of larger companies with
potentially greater financial and other resources than the Company.
The Company has, from time to time, experienced price pressures from
competitors in certain product lines and geographic markets.
The Company's competitors can be expected to continue to
improve the design and performance of their products and to introduce
new products with competitive price and performance characteristics.
Although the Company believes that it has certain technological and
other advantages over its competitors, realizing and maintaining these
advantages will require continued investment by the Company in
research and development, sales and marketing and customer service and
support. There can be no assurance that the Company will have
sufficient resources to continue to make such investments or that the
Company will be successful in maintaining such advantages.
SIGNIFICANT SALES TO PHARMACEUTICAL AND CHEMICAL INDUSTRIES
The Company's products are used extensively in the
pharmaceutical and chemical industries. Consolidation in these
industries has had an adverse impact on the Company's sales in recent
years. A prolonged downturn or any additional consolidation in these
industries could adversely affect the Company's operating results.
RELIANCE ON KEY MANAGEMENT
Robert F. Spoerry has an employment contract with the
Company and it is anticipated that all of the key management employees
will have employment contracts with the Company. In addition, various
members of management own a portion of the shares of nonvoting capital
stock of the Registrant and will have options to purchase additional
shares of such nonvoting capital stock. Nonetheless, there is no
assurance that such individuals will remain with the Company. If, for
any reason, such key personnel do not continue to be active in the
Company's management, operations could be adversely affected. The
Company has no key man life insurance policies with respect to any of
its senior executives.
ENVIRONMENTAL MATTERS
The Company is subject to various environmental laws and
regulations in the jurisdiction in which it operates. For a discussion
of risks relating to environmental matters, see "Environmental
Matters" above Item 1, "Business-Environmental Matters."
TRANSFER RESTRICTIONS
Transfers by current holders of the Registrant's common
stock are subject to certain restrictions and requirements
pursuant to subscription agreements entered into in connection
with such holder's purchase of such common stock. Generally prior
to transfer, a shareholder must obtain a legal opinion stating
that such transfer may be effected without registering the common
stock under the Securities Act of 1933, as amended (the "Securities
Act"). In the case of employees of the Company, employees may
not transfer shares owned by them within three years or five years
from the date of their acquisition, as the case may be. There
can be no assurance that the value of the Company's common stock
will remain stable during the time when stockholders are unable
to sell such stock. See Item 11, "Description of Registrant's
Securities to be Registered - Restrictions on Transfer."
VOTING RIGHTS
Voting control of the Registrant is vested in holders of
Class B Common Stock. Holders of the Class A Common Stock and Class C
Common Stock registered pursuant to this Registration Statement are
not entitled to vote on any corporate matters, except as provided
by Delaware law. As a result, holders of the Class B Common Stock
will be able to elect all of the members to the Board of Directors
and determine the disposition of practically all matters submitted
to a vote of the Registrant's stockholders, including mergers and
other extraordinary transactions and the terms thereof. See Item
11, "Description of Registrant's Securities to be Registered -
Restrictions on Transfer."
NO MARKET FOR REGISTERED SECURITIES
There is currently no trading market for the Registrant's
common stock, and the Registrant does not anticipate that there will
be such a market in the foreseeable future. Consequently,
shareholders may be unable to sell their shares of common stock once
any applicable transfer restrictions expire and the price obtainable
in such sale may be adversely affected by the lack of such trading
market.
ABSENCE OF DIVIDENDS
The Registrant anticipates that all of its earnings in the
foreseeable future will be retained to finance the continued growth
and expansion of its business and has no current intention to pay cash
dividends on its common stock.
ITEM 3. PROPERTIES
The following table lists the Company's principal operating
facilities, indicating the location, primary use and whether the
facility is owned or leased.
LOCATION PRINCIPAL USE (1) OWNED/LEASED
- ------------------------------ ---------------------- -------------
Europe:
Greifensee/Nanikon,
Switzerland................. Production, Corporate Owned
Headquarters
Uznach, Switzerland......... Production Owned
Urdorf, Switzerland......... Production Owned
Schwerzenbach,
Switzerland................ Production Leased
Albstadt, Germany........... Production Owned
Giessen, Germany............. Production Owned
Giessen, Germany............ Sales and Service Owned
Steinbach, Germany.......... Sales and Service Owned
Viroflay, France............ Sales and Service Owned
Beersel, Belgium............ Sales and Service Owned
Tiel, Netherlands........... Sales and Service Owned
Leicester, England.......... Sales and Service Leased
Americas:
Worthington, Ohio........... Production Owned
Spartanburg,
South Carolina............. Production Owned
Franksville, Wisconsin...... Production Owned
Ithaca, New York............ Production Owned
Wilmington,
Massachusetts.............. Production Leased
Florham Park, New Jersey.... Production Leased
Hightstown, New Jersey...... Sales and Service Owned
Burlington, Canada.......... Sales and Service Owned
Mexico City, Mexico......... Sales and Service Leased
Other:
Shanghai, China............. Production Building
Owned;
Land Leased
Changzhou, China (2)........ Production Building
Owned;
Land Leased
Melbourne, Australia........ Sales and Service Leased
- -------------------
(1) The Company also conducts research and development activities at
certain of the listed facilities in Switzerland, Germany, the
United States and, to a lesser extent, China.
(2) Held by a 60%-owned joint venture.
The Company believes its facilities are adequate for its
current and reasonably anticipated future needs.
ITEM 4.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to
the beneficial ownership of the capital stock of the Registrant by (i)
each director of the Registrant, (ii) the Registrant's Chief Executive
Officer and the four other most highly compensated executives
(collectively, the "Named Executives") and (iii) all directors and
executive officers of the Registrant as a group:
<TABLE>
<CAPTION>
CLASS A NON-VOTING CLASS B VOTING CLASS C NON-VOTING
COMMON STOCK COMMON STOCK (1) COMMON STOCK
------------------- ------------------ ------------------
NUMBER OF % OF NUMBER OF % OF NUMBER OF % OF
NAME SHARES CLASS SHARES CLASS SHARES CLASS
- ---------------------------------- ---------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
Robert F. Spoerry................ 26,873 1.4% 0 *% 7,678 1.4%
Fred Ort......................... 4,726 * 0 * 1,350 *
Karl M. Lang..................... 4,726 * 0 * 1,350 *
Lukas Braunschweiler............. 4,726 * 0 * 1,350 *
John D. Robechek................ 4,055 * 0 * 1,159 *
Philip Caldwell(2)............... 4,644 * 0 * 3,492 *
Reginald H. Jones................ 1,161 * 70 7.0 2,472 *
John D. Macomber................. 1,161 * 65 6.5 2,250 *
Laurence Z. Y. Moh............... 23,218 1.2 0 * 5,134 *
Thomas P. Salice (3)............. 3,701 * 0 * 36,007 6.7
Alan W. Wilkinson (3)............ 3,701 * 0 * 36,007 6.7
All directors and executive
officers as a group
(14 persons (4))................. 94,075 4.94% 135 13.5% 101,501 18.85%
- -----------------------
* Less than 1%
(1) AEA Investors owns 49.0% of the Class B voting common stock of the Registrant.
(2) Includes shares held by, or in trust for, members of such individual's family for which
Messrs. Caldwell, Salice and Wilkinson disclaim beneficial ownership. Does not include shares
held by AEA Investors, of which Messrs. Salice and Wilkinson are officers.
(3) Includes William Donnelly, who became Vice President, Chief Financial Officer, Treasurer
and Assistant Secretary on April 1, 1997, and Fred Ort who ceased to be an executive officer
on April 1, 1997 but who remains a non-executive officer.
</TABLE>
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Registrant are
set forth below. All directors hold office until the annual meeting of
stockholders following their election or until their successors are
duly elected and qualified. Officers are appointed by the Board of
Directors and serve at the discretion thereof.
NAME AGE POSITION
- -------------------- --- --------------------------
Robert F. Spoerry 41 Director; President and
Chief Executive Officer
William Donnelly 35 Vice President, Chief
Financial Officer, Treasurer
and Assistant Secretary
Karl M. Lang 50 Head, Laboratory Division
Lukas Braunschweiler 40 Head, Industrial and Retail
(Europe)
John D. Robechek 48 Head, Industrial and Retail
(Americas)
Peter Burker 51 Head, Human Resources
Thomas Rubbe 42 Head, Logistics and
Information Systems
Philip Caldwell 77 Director; Chairman of the
Board
Reginald H. Jones 79 Director
John D. Macomber 69 Director
Laurence Z. Y. Moh 71 Director
Thomas P. Salice 36 Director
Alan W. Wilkinson 41 Director
Robert F. Spoerry has been President and Chief Executive
Officer of the Company since 1993. He served as Head, Industrial
and Retail (Europe) of the Company from 1987 to 1993. Mr. Spoerry
has been a Director since October 1996.
William Donnelly has been Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary of the Registrant and Chief
Financial Officer of the Company since April 1, 1997. Prior to
joining the Company, he was Group Vice President, and Chief
Financial Officer and was an Executive Committee member of Elsag
Bailey Process Automation ("Elsag Bailey"), a global manufacturer
of instrumentation and analytical products, and developer of
distributed control systems. Mr. Donnelly joined Elsag Bailey in
1993 and held various senior financial positions during that
period. Prior to joining Elsag Bailey, Mr. Donnelly was
associated with the international accounting firm of Price
Waterhouse.
Karl M. Lang has been Head, Laboratory Division of the
Company since 1994. From 1991 to 1994 he was based in Japan as a
representative of senior management with responsibility for expansion
of the Asian operations.
Lukas Braunschweiler has been Head, Industrial and Retail
(Europe) of the Company since 1995. From 1992 until 1995, he held
various senior management positions with the Landis & Gyr Group, a
manufacturer of electrical meters. Prior to August 1992 he was a Vice
President in the Technology Group of Saurer Group, a manufacturer of
textile machinery.
John D. Robechek has been Head, Industrial and Retail
(Americas) of the Company and President of Mettler-Toledo, Inc., a
U.S.-based subsidiary of the Company, since 1995. From 1990 through
1994 he served as Senior Vice President and managed all of the
Company's U.S. subsidiaries.
Peter Burker has been Head, Human Resources of the Company
since 1994. From 1992 to 1994 he was Mettler-Toledo's General Manager
in Spain, and from 1989 to 1991 he headed the Company's operations in
Italy.
Thomas Rubbe has been Head, Logistics and Information
Systems of the Company since 1995. From 1990 to 1995, he was head of
Controlling, Finance and Administration with the Company's German
marketing organization.
Philip Caldwell has been a Director and Chairman of the
Board since October 1996. Mr. Caldwell has been Senior Managing
Director of Lehman Brothers Inc. and its predecessor, Shearson
Lehman Brothers Holdings Inc., since 1985. Mr. Caldwell spent 32
years at Ford Motor Company where he was Chairman of the Board of
Directors and Chief Executive Officer from 1980 to 1985 and a
Director from 1973 through 1990. Mr. Caldwell is a Director of
Lehman Brothers Inc., Zurich Holding Company of America, Inc.,
Zurich Reinsurance Centre Holdings, Inc., American Guarantee &
Liability Insurance Company (a Zurich affiliate), The Mexico Fund,
Waters Corporation and Russell Reynolds Associates, Inc. He has
served as a Director of the Chase Manhattan Bank Corporation, the
Chase Manhattan Bank, N.A., Digital Equipment Corporation,
Federated Department Stores Inc., the Kellogg Company, Shearson
Lehman Brothers Holdings Inc., Castech Aluminum Group Inc. and
Specialty Coatings International Inc.
Reginald H. Jones has been a Director since October 1996.
Mr. Jones retired as Chairman of the Board of Directors of General
Electric Company ("General Electric") in April 1981. At General
Electric, he served as Chairman of the Board of Directors and Chief
Executive Officer from December 1972 through April 1981, President
from June 1972 to December 1972 and a Director from August 1971 to
April 1981. Mr. Jones is also a Director of ASA Limited and
Birmingham Steel Corporation.
John D. Macomber has been a Director since October 1996. He
has been a principal of JDM Investment Group since 1992. He was
Chairman and President of the Export-Import Bank of the United States
(an agency of the U.S. Government) from 1989 to 1992. From 1973 to
1986 Mr. Macomber was Chairman and Chief Executive Officer of
Celanese Corporation. Prior to that, Mr. Macomber was a Senior
Partner or McKinsey & Co. Mr. Macomber is also a Director of
Textron Inc., Bristol-Myers Squibb Company, Xerox Corporation,
Lehman Brothers Holdings Inc. and Pilkington plc.
Laurence Za Yu Moh has been a Director since October 1996.
He is Chairman Emeritus of Universal Furniture Limited, which he
founded in 1959.
Thomas P. Salice has been a Director since October 1996.
He is a Managing Director of AEA Investors and has been associated
with AEA Investors since June 1989. Mr. Salice is also a Director
of Waters Corporation.
Alan W. Wilkinson has been a Director since October
1996. He has been a Managing Director of AEA Investors since
September 1989. Prior to his association with AEA Investors, Mr.
Wilkinson was a Vice President in the Merchant Banking and Mergers
and Acquisitions divisions of Lehman Brothers Inc.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to or
accrued for services performed by the Named Executives for the years
ended December 31, 1995 and 1996.
<TABLE>
SUMMARY COMPENSATION TABLE (1)
<CAPTION> LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (2) COMPENSATION OPTIONS (#) COMPENSATION
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Spoerry, President 1996 $ 435,135 $276,521 $8,857(3) 83,279 $ 124,431
and Chief Executive Officer..... 1995 289,343 85,871 _ 300(4) 54,346 (5)
Fred Ort, Head, Finance and 1996 207,221 99,325 _ 6,246 52,745
Control......................... 1995 227,284 69,701 _ _ 70,804 (5)
Karl M. Lang, Head, Laboratory... 1996 212,997 88,375 _ 16,656 61,901
1995 228,427 38,071 _ _ 60,321 (5)
Lukas Braunschweiler, Head, 1996 210,893 66,162 _ 16,656 62,482
Industrial and Retail (Europe).. 1995 228,427 25,381 _ --- 50,460 (5)
John D. Robechek, Head,
Industrial and Retail 1996 233,754 88,137 _ 16,656 6,215
(Americas)...................... 1995 225,000 40,563 _ _ 6,168 (6)
- --------------------
(1) Amounts paid in Swiss francs (all amounts except those paid to Mr. Robechek) converted to U.S. dollars at
a rate of SFr 1.182 to U.S. $1.00 for 1995 and SFr 1.2355 to U.S. $1.00 for 1996, in each case the average
exchange rate during such year.
(2) Does not include Ciba bonuses to the Named Executives for services rendered to Ciba in connection with
its efforts to sell the Company.
(3) Represents additional compensation paid to fully offset, after payment of all taxes and social security
contributions, interest charged to Mr. Spoerry on a loan to Mr. Spoerry from Mettler-Toledo AG, a subsidiary
of the Company. See Item 13.
(4) Option to purchase the specified number of shares of Ciba common stock at an exercise price of SFr 750
($665 at the date of grant) per share. The fair market value at the date of grant was SFr 764 ($678) per
share.
(5) Represents Company contributions to the Mettler-Toledo Fonds (a Swiss pension plan similar to a
defined contribution plan under U.S. law). Fifty percent of the amount shown is a required employee
contribution under the plan which the Company has contributed on behalf of the Named Executives, and the
other 50% is a required matching employer contribution.
(6) Includes $1,024 for the value of group life insurance over $50,000, $4,500 for the Company's contribution
to Mr. Robechek's 401(k) plan account and $644 for Mr. Robechek's profit sharing payout under the Company's
Performance Dividend Plan.
</TABLE>
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE/ PRICE APPRECIATION FOR OPTION/SAR
UNDERLYING GRANTED TO BASE TERM (2)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------------------
NAME GRANTED (#) (1) FISCAL YEAR ($/SH) DATE 5%($) 10% ($)
- ----------------------- --------------- ------------ --------- --------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Spoerry 83,279 29.85 100 2006 5,237,372 13,272,528
Fred Ort 6,246 2.24 100 2006 392,808 995,452
Karl M. Lang 16,656 5.97 100 2006 1,046,858 2,652,944
Lukas Braunschweiler 16,656 5.97 100 2006 1,046,858 2,652,944
John D. Robechek 16,656 5.97 100 2006 1,046,858 2,652,944
(1) All Options are to purchase shares of Class A Common Stock of the Registrant.
(2) The assumed annual rates of appreciation over the term of the option are set forth in accordance with rules and
regulations adopted by the Securities and Exchange Commission and do not represent the Company's estimate of stock
appreciation price.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND OPTION/SAR VALUES AS OF DECEMBER 31, 1996
---------------------------------------------
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS
ON VALUE YEAR-END AT FISCAL YEAR-END
EXERCISE REALIZED (#) ($) (1)
---------- --------- ----------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ---------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Spoerry 0 0 0 83,279 0 0
Fred Ort 0 0 0 6,246 0 0
Karl M. Lang 0 0 0 16,656 0 0
Lukas Braunschweiler 0 0 0 16,656 0 0
John D. Robechek 0 0 0 16,656 0 0
- -------------------
(1) There is no market value for the Class A Common Stock of the Registrant. Estimated value, as
determined by the Registrant, at December 31, 1996 does not exceed the
exercise price.
</TABLE>
EMPLOYMENT AGREEMENTS; STOCK OPTIONS; MANAGEMENT EQUITY
Mettler-Toledo AG, a subsidiary of the Company, entered into
an employment agreement (the "Agreement") with Robert F. Spoerry (the
"Executive") dated as of October 30, 1996. The Agreement provides
for annual base salary of SFr 560,000 ($435,135 at December 31, 1996),
which may be increased from time to time in accordance with the
Company's normal business practices, and for participation in the
Company's bonus plan. In addition, the Agreement provides for payment
of the amount necessary, after payment of all taxes and social
security contributions, to fully offset the interest charged to the
Executive on a certain loan to the Executive. See Item 7, "Certain
Relationships and Related Transactions" for a description of the loan.
The Agreement prohibits the Executive from competing with the Company
for a period of twenty-four months after termination of employment.
The Agreement may be terminated without cause, on thirty-six months
notice during which period the Executive is entitled to full
compensation under the Agreement.
The Company expects to negotiate new employment agreements
with the other Named Executives. Base salary of executive officers
under these agreements in the aggregate will not be materially
different from historical practice. The agreements will also include
bonuses contingent on meeting performance objectives in amounts to be
determined.
COMPENSATION OF DIRECTORS
All members of the Board of Directors of the Registrant who
are officers of the Company or employees of AEA Investors will not
receive additional compensation for being on the Board or its
committees. Mr. Caldwell purchased 2,856 shares of Class C Common
Stock and each of Messrs. Jones, Macomber and Moh purchased 1,905
shares of Class C Common Stock for being on the Board or its
committees and, in Mr. Caldwell's case, being Chairman of the
Board.
RETIREMENT PLANS
Mr. Robechek is covered under two pensions plans, the
Mettler-Toledo Retirement Plan and the Mettler-Toledo Supplemental
Retirement Income Plan. Benefits under these plans are determined by
career average compensation rather than final compensation. The
annual accrual for each year under both plans is the difference of 2%
of annual compensation in a plan year and 0.6% of the lesser of annual
compensation or covered compensation (defined under the plans as the
average of the Social Security Taxable Wage Bases in effect for each
calendar year during the 35-year period ending on the last day of a
given plan year). The Mettler-Toledo Retirement Plan includes all
compensation up to the qualified plan limitations under the Internal
Revenue Code of 1986, as amended ($150,000 per year in 1996) and the
Mettler-Toledo Supplemental Retirement Income Plan pays for benefits
in excess of these limits. The accrued annual benefit payable to Mr.
Robechek under the Mettler-Toledo Retirement Plan is $45,693 and the
accrued annual benefit under the Mettler-Toledo Supplemental Plan is
$11,329, for a total annual retirement benefit of $57,022.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors served on the Registrant's
Compensation Committee during the fiscal year ended December 31, 1996:
Reginald H. Jones, Laurence Z. Y. Moh and Thomas P. Salice. Mr. Salice
also served as an officer of the Registrant and certain of its
subsidiaries during such fiscal year. Mr. Salice is an officer of AEA
Investors, a stockholder of the Registrant. See Item 7,
"Certain Relationships and Related Transactions" for a description
of relationships between AEA Investors and the Registrant.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AEA Investors and the Company have entered into a Management
Agreement pursuant to which AEA Investors provides management,
consulting and financial services to the Company. Services are
expected to be provided in such areas as the preparation and
evaluation of strategic, operating, financial and capital plans and
the development and implementation of compensation and other incentive
programs. Such services will be provided by the executive staff
of AEA Investors. In consideration of such services, AEA
Investors is entitled to an annual fee of $1.0 million, plus
reimbursement for certain expenses and indemnification against
certain liabilities. The agreement further provides that in the
event the Company employs any employee of AEA Investors as an
officer of the Company or otherwise, and such employment includes
a substantial amount of such employee's time, the Company will
compensate such employee at a reasonable rate. The Company
believes that the terms of these management arrangements are as
favorable as could be obtained from an unaffiliated third party.
In connection with the Acquisition and in consideration of
services by AEA Investors in arranging, structuring and
negotiating the terms of the Acquisition and the related financing
transactions, the Company paid AEA Investors a transaction fee of
$5.5 million and reimbursed AEA Investors for certain related
expenses.
Management and other employees of the Company have
contributed approximately $12 million of the equity of the Registrant.
For information regarding the number of shares purchased by each Named
Executive, see Item 4, "Security Ownership of Certain Beneficial
Owners and Management." Each share of Class A Common Stock was
purchased for $100 per share and each share of Class C Common Stock
was purchased for approximately $.03 per share.
On October 7, 1996, in order to fund a portion of the
purchase price for the shares purchased by Mr. Spoerry, Mettler-Toledo
AG entered into a Loan Agreement with Mr. Spoerry, in the amount of
SFr 1.0 million ($742,000 at December 31, 1996). The loan bears
interest at a rate of 5% and is payable upon demand, which may not be
made until seven years after the date of the loan.
ITEM 8. LEGAL PROCEEDINGS
The Company is subject to routine litigation incidental to
its business. The Company is currently not involved in any legal
proceeding that it believes could have a material adverse effect upon
its financial condition or results of operations. See "Environmental
Matters" under Item 1 for information concerning legal proceedings
relating to certain environmental claims.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
There is no established trading market for any equity
securities of the Registrant. On the date hereof with respect to the
common equity of the Registrant (i) there are outstanding options or
warrants to purchase 291,488 shares of Class A Common Stock of the
Registrant, (ii) due to contractual restrictions and the limitations
of Rule 144 of the Securities Act, there are no shares that could be
sold without restriction or that the Registrant has agreed to register
under the Securities Act for sale by security holders, and (iii)
there are no shares that are being, or have been publicly proposed to
be, publicly offered by the Registrant. See Item 11, "Description of
Registrant's Securities to be Registered - Common Stock - Restrictions
on Transfer."
(b) Holders.
On the date hereof, there are approximately (i) 832 holders
of the Class A Common Stock of the Registrant, (ii) 9 holders of the
Class B Common Stock of the Registrant, and (iii) 843 holders of the
Class C Common Stock of the Registrant.
(c) Dividends.
The Registrant has never paid any dividends on its common
stock. Since the only assets of the Registrant are those resulting
from its ownership of 100% of the outstanding common stock of Mettler-
Toledo Holding Inc., which has no assets other than those resulting
from its ownership of 100% of the outstanding common stock of Mettler-
Toledo Inc., and since Mettler-Toledo, Inc. is prohibited from paying
dividends to Mettler-Toledo Holding, Inc., subject to certain limited
exceptions, the Registrant does not expect to have any assets to
distribute to its security holders in the foreseeable future. See
Item 2, "Financial Data" - "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
From the date of its incorporation until the issuances of
common stock which occurred beginning in October 1996, the Registrant
issued common stock to certain members of senior management, the
investor-participants of AEA Investors and AEA Investors for
approximately $.03 per share. In connection with the Acquisition,
the Registrant effected a recapitalization pursuant to which such
common stock was converted into Class B Common Stock or Class C
Common Stock, as the case may be.
1. In October 1996, the Registrant issued 1,803,489 shares
of Class A Common Stock for an aggregate consideration of
$180,348,900, 50 shares of Class B Common Stock for an aggregate
consideration of approximately $2, and 172,376 shares of Class C
Common Stock for an aggregate consideration of approximately
$5,171. The shares were offered and sold in reliance on Rule
506 of Regulation D and Section 4(2) under the Securities Act.
2. In October 1996, the Registrant issued 8,843 shares of
Class A Common Stock for an aggregate consideration of $884,300, and
2,526 shares of Class C Common Stock for an aggregate consideration of
approximately $76. The shares were offered and sold in
reliance on Rule 701 under the Securities Act and were sold pursuant
to a written compensatory benefit plan to employees of the Registrant
and its subsidiaries.
3. In October 1996, the Registrant issued 16,578 shares of
Class A Common Stock for an aggregate consideration of $1,657,800, and
4,738 shares of Class C Common Stock for an aggregate consideration of
approximately $142. The shares were offered and sold in
reliance on Rule 903 under the Securities Act outside the United
States to non U.S. persons.
4. In December 1996, the Registrant issued 25,750 shares
of Class A Common Stock for an aggregate consideration of $2,575,000,
and 11,885 shares of Class C Common Stock for an aggregate
consideration of approximately $357. The shares were
offered and sold in reliance on Rule 506 of Regulation D under the
Securities Act.
5. In December 1996, the Registrant issued 8,620 shares of
Class A Common Stock for an aggregate consideration of $862,000, and
2,472 shares of Class C Common Stock for an aggregate consideration of
approximately $74. The shares were offered and sold in
reliance on Rule 701 under the Securities Act and were sold pursuant
to a written compensatory benefit plan to employees of the Registrant
and its subsidiaries.
6. In December 1996, the Registrant issued 36,499 shares
of Class A Common Stock for an aggregate consideration of $3,649,900,
and 10,401 shares of Class C Common Stock for an aggregate
consideration of approximately $312. The shares were
offered and sold in reliance on Rule 903 under the Securities Act
outside the United States to non U.S. persons.
7. In April 1997, the Registrant issued 3,000 shares of
Class A Common Stock for an aggregate consideration of $300,000, and
857 shares of Class C Common Stock for an aggregate consideration of
approximately $26. The shares were offered and sold in
reliance on Rule 506 of Regulation D under the Securities Act.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The following brief description of the Registrant's capital
stock does not purport to be complete and is subject in all respects
to applicable Delaware law and to the provision of the Registrant's
Restated Certificate of Incorporation, as amended (the "Registrant's
Certificate of Incorporation") and By-Laws (the "Registrant's By-
Laws").
As of the date hereof, the authorized capital stock of the
Registrant consists of 2,778,755 shares of Common Stock, $.01 par
value, of which 2,235,896 shares are designated as Class A Common
Stock, 1,000 shares are designated as Class B Common Stock and 541,859
shares are designated as Class C Common Stock. As of the date hereof,
the Registrant had outstanding 1,902,779 shares of Class A Common
Stock, 1,000 shares of Class B Common Stock and 538,592 shares of
Class C Common Stock, and an additional 291,488 shares of Class A
Common Stock were issuable upon exercise of outstanding employee stock
options.
COMMON STOCK
Holders of common stock of the Registrant have no
preemptive, subscription or redemption rights. Except for the Class A
dividend and distribution preference and the Class B voting rights
(each as described below), the three classes of common stock of the
Registrant have identical rights under the Registrant's Certificate of
Incorporation and By-Laws.
PREFERENCE. Dividends or distributions in connection with
the liquidation, dissolution or winding up of the affairs of the
Registrant or not paid out of the current and accumulated earnings and
profits shall be paid in the following manner: First, exclusively to
the holders of the shares of Class A Common Stock, ratably to each
such holder, until the sum of all dividends and distributions to each
holder of Class A Common Stock equals $100 for each share of Class A
Common Stock held by such holder. After each holder of shares of
Class A Common Stock shall have received dividends and distributions
totaling $100, then exclusively to the holders of the shares of Class
B Common and Class C Common Stock ratably to each such holder until
the sum of all dividends and distributions to each holder of Class B
Common Stock and/or Class C Common Stock equals $100 for each share of
Class B Common Stock and/or Class C Common Stock held by such holder.
After each holder of Class B Common Stock and Class C Common Stock
shall have received such dividends and distributions, then to all
holders of Class A Common Stock, Class B Common Stock and/or Class C
Common Stock, ratably to each holder of such shares.
VOTING. The entire voting power of the Registrant's common
stock is vested exclusively in the Class B Common Stock. Each holder
of shares of the Class B Common Stock shall be entitled to one vote
for each share of the Class B Common Stock.
RESTRICTIONS ON TRANSFER. Transfers by holders of the
Registrant's common stock (the "Restricted Securities") are restricted
pursuant to subscription agreements entered into in connection with
such holder's purchase of such Restricted Securities. See Item 2,
"Financial Information - Forward Looking Statements and Associated
Risks - Transfer Restrictions."
SECTION 203 OF THE DGCL. The Registrant is a Delaware
corporation and is subject to Section 203 of the General Corporation
Law of the State of Delaware (the "DGCL"). In general, Section 203
prevents an "interested stockholder" (defined as a person who is the
owner of 15% or more of a corporation's voting stock, or who, as an
affiliate or associate of a corporation, was the owner of 15% or more
of that corporation's voting stock within the prior three years) from
engaging in a "business combination" (as defined under the DGCL) with
a Delaware corporation for three years following the date such
person became an interested stockholder unless: (i) before such person
became an interested stockholder, the board of directors of the
corporation approved the transaction or the business combination in
which the interested stockholder became an interested stockholder;
(ii) upon consummation of the transaction that resulted in the
interested stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced
(excluding shares owned by persons who are both officers and directors
of the corporation and shares held by certain employee stock ownership
plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer); or (iii) following the
transaction in which such person became an interested stockholder, the
business combination is approved by the board of directors of the
corporation and authorized at a meeting of stockholders by the
affirmative vote of the holders of at least two-thirds of the
outstanding voting stock of the corporation not owned by the
"interested stockholder." A "business combination" generally includes
mergers, stock or assets sales and other transactions resulting in a
financial benefit to the "interested stockholders."
CERTAIN CHARTER AND BY-LAW PROVISIONS
DIRECTOR'S LIABILITY. The Registrant's Certificate of
Incorporation provides that to the fullest extent permitted by the
DGCL as it currently exists or may be amended, a director of the
Registrant shall not be liable to the Registrant or its stockholders
for monetary damages for breach of fiduciary duty as a director. See
Item 12, "Indemnification of Officers and Directors."
REGISTRATION RIGHTS
Current holders of the Registrant's common stock (other than
certain members of senior management) have rights to require the
Registrant to register such shares of common stock for resale pursuant
to subscription agreements pursuant to which they acquired their
shares. If no securities of the Registrant have theretofore been sold
pursuant to a registration statement under the Securities Act, upon
the request of persons owning at least 51% of the sum of all
outstanding shares of the Class A Stock, the Class B Stock and the
Class C Stock which are then Restricted Securities, the Registrant
would be required to register the sale of such securities, subject to
certain limitations and requirements. After securities of the
Registrant have been sold pursuant to a registration statement under
the Securities Act, upon the request of persons owning at least 25% of
the sum of all outstanding shares of the Class A Stock, the Class B
Stock and the Class C Stock which are then Restricted Securities and
which have a value of at least $5,000,000, the Registrant would be
required to register the sale of such securities, subject to certain
limitations and requirements. The Registrant is not required to file
any registration statement within six months of the effective date of
any earlier registration statement and is not required to file more
than three registration statements pursuant to such requests. In
addition, under certain circumstances, should the Registrant file a
registration statement with the Securities and Exchange Commission
registering shares of the common stock of the Registrant, the owners
of Restricted Securities would be entitled to include their Restricted
Securities in such registration.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant, as a Delaware corporation, is empowered by
Section 145 of the DGCL, subject to the procedures and limitations
stated therein, to indemnify any person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding in which
such person is made or threatened to be made a party by reason of his
being or having been a director, officer, employee or agent of the
Registrant or his serving at the request of the Registrant as a
director, officer, employee or agent of another company or other
entity. The statute provides that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to
which a person may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise. The
Registrant's By-Laws provide for indemnification by the Registrant of
its directors and officers to the full extent authorized by the DGCL.
Pursuant to Section 145 of the DGCL, the Registrant has purchased
insurance on behalf of its present and former directors and officers
against liabilities asserted against and incurred by them in such
capacity or arising out of their status as such.
Pursuant to specific authority granted by Section 102 of the
DGCL, the Registrant's Certificate of Incorporation contains the
following provision regarding indemnification of directors:
"To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be
amended, a Director of the Corporation shall not be liable
to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director."
The Registrant's By-Laws contain the following provision
regarding indemnification of directors and officers:
"The Corporation shall indemnify to the full extent
authorized by law any person made or threatened to be made a
party to an action, suit or proceeding, whether criminal,
civil administrative or investigative, by reason of the fact
that he, his testator or intestate is or was a director,
officer, employee or agent of the Corporation or is or was
serving, at the request of the Corporation, as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise."
The Registrant has entered into agreements to provide
indemnification for their directors and certain officers in addition
to the indemnification provided for in the Registrant's By-Laws.
These agreements, among other things, indemnify the directors, to the
fullest extent provided by Delaware law, for certain expenses
(including attorneys' fees), losses, claims, liabilities, judgments,
fines and settlement amounts incurred by such indemnitee in any action
or proceeding, including any action by or in the right of the
Registrant, on account of services as a director or officer of any
affiliate of the Registrant, or as a director or officer of any other
company or enterprise that the indemnitee provides services to at the
request of the Registrant.
The Management Agreement between the Company and AEA
Investors provides for indemnification of employees of AEA Investors
who serve as directors of the Registrant.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this item are set forth
on pages F-1 through F-30 and the related financial schedules are set
forth on pages S-1 through S-8.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Not Applicable.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements Filed as Part of this Report:
1. Financial Statements. See Index to Consolidated
Financial Statements and Financial Statement Schedules
included on page F-1.
2. Financial Statements Schedules. See "Schedule I -
Condensed Financial Information of Registrant" and "Schedule
II - Valuation and Qualifying Accounts" included on pages S-
1 through S-8.
(b) Exhibits Filed as Part of this Report.
1. List of Exhibits. See Index of Exhibits included on
pages E-1 through E-2.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
MT Investors Inc.
(Registrant)
Date: April 30, 1997
By: /s/ Robert F. Spoerry
--------------------------
Robert F. Spoerry
President and Chief
Executive Officer
INDEX OF EXHIBITS
-----------------
PAGE NUMBER OR
INCORPORATION BY
EXHIBIT NO. DESCRIPTION REFERENCE
- ----------- ----------- ----------
2.1 Stock Purchase Agreement between Filed as Exhibit 2.1
AEA-MT Inc., AG fur to the Registration
prazisionsinstrumente and Ciba- Statement, as amended,
Geigy AG, as amended on Form S-1, of the
Company (Reg. No. 33-
09621) and
incorporated herein by
reference.
3.1.1 Restated Certificate of
Incorporation of MT Investors
Inc. dated October 11, 1996
3.1.2 Certificate of Amendment of
Restated Certificate of
Incorporation of MT Investors
Inc. dated October 15, 1996
3.1.3 Certificate of Amendment of
Restated Certificate of
Incorporation of MT Investors
Inc. dated April 1, 1997
3.2 By-laws of MT Investors Inc.
4.1 Indenture dated as of October 15, Filed as Exhibit 4.1
1996, among MT Acquisition Corp., to the Current Report
as Issuer, Mettler-Toledo Holding on Form 8-K of Mettler-
Inc., as Note Guarantor, and Toledo Holding Inc.
United States Trust Company of dated October 30, 1996
New York, as Trustee and incorporated
herein by reference.
4.2 First Supplemental Indenture Filed as Exhibit 4.2
dated as of October 15, 1996, to the Current Report
among Mettler-Toledo, Inc., on Form 8-K of Mettler-
Mettler-Toledo Holding Inc., as Toledo Holding Inc.
Note Guarantor, and United States dated October 30, 1996
Trust Company of New York, as and incorporated
Trustee herein by reference.
10.1 Credit Agreement, dated as of Filed as Exhibit 99.1
October 15, 1996, between MT to the Current Report
Acquisition Corp. and Mettler- on Form 8-K of Mettler-
Toledo Holding AG, as borrowers, Toledo Holding Inc.
and Merrill Lynch Capital dated October 30, 1996
Corporation, as document agent and incorporated
and the lenders party thereto herein by reference.
10.2 Credit Agreement Amendment No. 1 Filed as Exhibit 10.2
dated as of January 14, 1997 to the Annual Report
between MT Acquisition, Mettler- on Form 10-K of
Toledo Holding Inc. and Mettler- Mettler-Toledo Holding
Toledo Holding, AG, as borrowers, Inc. dated March 31,
and Merrill Lynch & Co., Merrill 1997 and incorporated
Lynch, Pierce Fenner & Smith herein by reference.
Inc., as document agent and the
lenders party thereto
10.3 Management Consulting Agreement Filed as Exhibit 10.3
dated as of October 15, 1996 to the Annual Report
between Mettler-Toledo, Inc. and on Form 10-K of
AEA Investors Inc. Mettler-Toledo Holding
Inc. dated March 31,
1997 and incorporated
herein by reference.
10.4 Employment Agreement between Filed as Exhibit 10.4
Robert F. Spoerry and Mettler- to the Annual Report
Toledo AG, dated as of October on Form 10-K of
30, 1996 Mettler-Toledo Holding
Inc. dated March 31,
1997 and incorporated
herein by reference.
10.5 Loan Agreement between Robert F. Filed as Exhibit 10.5
Spoerry and Mettler-Toledo AG, to the Annual Report
dated as of October 7, 1996 on Form 10-K of
Mettler-Toledo Holding
Inc. dated March 31,
1997 and incorporated
herein by reference.
10.6 MT Investors Inc. Stock Option Filed as Exhibit 10.6
Plan to the Annual Report
on Form 10-K of
Mettler-Toledo Holding
Inc. dated March 31,
1997 and incorporated
herein by reference.
10.7 Mettler Toledo Performance- Filed as Exhibit 10.7
Oriented Bonus System (POBS), to the Annual Report
effective as of 1993 on Form 10-K of
Mettler-Toledo Holding
Inc. dated March 31,
1997 and incorporated
herein by reference.
10.8 Mettler Toledo POBS Plus -- Filed as Exhibit 10.8
Incentive Scheme for Senior to the Annual Report
Management of Mettler Toledo, on Form 10-K of
dated as of November 4, 1996 Mettler-Toledo Holding
Inc. dated March 31,
1997 and incorporated
herein by reference.
21.1 Subsidiaries of the Registrant
27.1 Financial Data Schedule
MT INVESTORS INC.
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Independent Auditors' Report F-2
Consolidated Balance Sheets as of December 31,
1995 and 1996 F-3
Consolidated Statements of Operations for the
years ended December 31, 1994 and 1995 and for
the period January 1, 1996 to October 14, 1996
and for the period October 15, 1996 to
December 31, 1996 F-5
Consolidated Statements of Changes in Net
Assets / Shareholders' Equity for the years
ended December 31, 1994 and 1995 and for the
period January 1, 1996 to October 14, 1996 and
for the period October 15, 1996 to December 31, 1996 F-6
Consolidated Statements of Cash Flows for the
years ended December 31, 1994 and 1995 and
for the period January 1, 1996 to October 14,
1996 and for the period October 15, 1996 to
December 31, 1996 F-8
Notes to Consolidated Financial Statements F-10
Financial Statement Schedules:
Schedule I - Condensed Financial Information
of Registrant S-1
Schedule II - Valuation and Qualifying Accounts S-8
INDEPENDENT AUDITORS' REPORT
The Board of Directors
MT Investors Inc.
We have audited the accompanying consolidated balance sheets of
MT Investors Inc. and subsidiaries (as defined in Note 1 to the
consolidated financial statements) as of December 31, 1995 and
1996 and the related consolidated statements of operations, net
assets/shareholders' equity and cash flows for each of the
years ended December 31, 1994 and 1995 and for the period January
1, 1996 to October 14, 1996, the Predecessor periods, and for the
period October 15, 1996 to December 31, 1996, the Successor
period. In connection with our audits of the consolidated
financial statements, we also have audited the financial
statement schedules as listed in the accompanying index. These
consolidated financial statements and financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements and financial statement schedules based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of MT Investors Inc. and subsidiaries as of
December 31, 1995 and 1996, and the consolidated results of their
operations and their cash flows for each of the years ended
December 31, 1994 and 1995 and for the period January 1, 1996 to
October 14, 1996, the Predecessor periods, and for the period
October 15, 1996 to December 31, 1996, the Successor period, in
conformity with generally accepted accounting principles in the
United States of America. Also in our opinion, the related
financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set
forth therein.
As more fully described in Note 1 to the consolidated financial
statements, MT Investors Inc. acquired the Mettler-Toledo Group
as of October 15, 1996 in a business combination accounted for as
a purchase. As a result of the acquisition, the consolidated
financial statements for the Successor period are presented on a
different basis of accounting than that of the Predecessor
periods, and therefore are not directly comparable.
KPMG Fides Peat
Zurich, Switzerland
April 18, 1997
<TABLE>
MT INVESTORS INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31
1995 1996
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 41,402 $ 60,696
Due from Ciba and affiliates 33,072 --
Trade accounts receivable, less
allowances of $9,292 in 1995 and
$8,388 in 1996 159,218 151,161
Inventories 110,986 102,526
Deferred taxes 6,180 7,565
Other current assets 21,469 17,268
-------- --------
Total current assets 372,327 339,216
Property, plant and equipment, net 241,018 255,292
Excess of cost over net assets acquired,
net of accumulated amortization of
$17,268 in 1995 and $982 in 1996 84,425 135,490
Long-term deferred taxes 14,312 3,916
Other assets 12,012 37,974
-------- --------
Total assets $724,094 $771,888
======== ========
</TABLE>
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
LIABILITIES AND NET ASSETS / SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Trade accounts payable $ 34,389 $ 32,797
Accrued and other liabilities 107,118 115,314
Taxes payable 11,737 17,580
Deferred taxes 7,698 9,132
Bank and other loans 29,513 80,446
Notes payable to Ciba and affiliates 91,132 --
-------- --------
Total current liabilities 281,587 255,269
Long-term debt payable to Ciba and
affiliates 145,097 --
Long-term debt due to third parties 3,621 373,758
Long-term deferred taxes 13,502 30,467
Other long-term liabilities 84,303 96,810
-------- --------
Total liabilities 528,110 756,304
Minority interest 2,730 3,158
Net assets / shareholders' equity:
Common stock, $0.01 par value per share:
Class A non-voting, authorized
2,233,117 shares; issued 1,899,779
at December 31, 1996 -- 19
Class B voting, authorized 1,000 shares;
issued 1,000 at December 31, 1996 -- 1
Class C non-voting, authorized
541,859 shares; issued 537,735 at
December 31, 1996 -- 5
Additional paid-in capital -- 188,084
Accumulated deficit -- (159,046)
Capital employed 162,604 --
Currency translation adjustment 30,650 (16,637)
-------- --------
Total net assets/shareholders'
equity 193,254 12,426
-------- --------
Commitments and contingencies
Total liabilities and net assets /
shareholders' equity $724,094 $771,888
======== ========
</TABLE>
See the accompanying notes to the consolidated financial statements
<TABLE>
MT INVESTORS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<CAPTION>
PREDECESSOR SUCCESSOR
----------------------------------------------- ----------------
TWELVE MONTHS TWELVE MONTHS FOR THE PERIOD FOR THE PERIOD
ENDED ENDED JANUARY 1, 1996 OCTOBER 15, 1996
DECEMBER 31, DECEMBER 31, TO OCTOBER 14, TO DECEMBER 31,
1994 1995 1996 1996
------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net sales $ 769,136 $ 850,415 $ 662,221 $ 186,912
Cost of sales 461,629 508,089 395,239 136,820
--------- --------- --------- ---------
Gross profit 307,507 342,326 266,982 50,092
Research and development 47,994 54,542 40,244 9,805
Selling, general and
administrative 224,978 248,327 186,898 59,353
Amortization 6,437 2,765 2,151 1,065
Purchased research and
development -- -- -- 114,070
Other charges (income), net (2,852) (701) 1,872 9,892
--------- --------- --------- ---------
Earnings (loss) before
interest and taxes 30,950 37,393 35,817 (144,093)
Interest expense 13,307 18,219 13,868 8,738
Financial expense (income),
net (4,864) (8,630) (3,204) 7,245
--------- --------- --------- ---------
Earnings (loss) before
taxes and minority
interest 22,507 27,804 25,153 (160,076)
Provision for taxes 8,676 8,782 10,055 (938)
Minority interest 347 768 637 (92)
--------- --------- --------- ---------
Net earnings (loss) $ 13,484 $ 18,254 $ 14,461 $(159,046)
========= ========= ========= =========
Earnings (loss) per common
share:
Weighted average number
of common shares 2,438,514 2,438,514 1,930,490 499,165
Earnings (loss) per
common share $ 5.53 $ 7.49 $ 7.49 $ (318.62)
========= ========= ========= =========
</TABLE>
See the accompanying notes to the consolidated financial statements
<TABLE>
MT INVESTORS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS / SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
PREDECESSOR
-------------------------------------------------
FOR THE TWELVE PERIODS ENDED DECEMBER 31,
1994 AND 1995 AND FOR THE PERIOD JANUARY 1, 1996
TO OCTOBER 14, 1996
-------------------------------------------------
CURRENCY
CAPITAL TRANSLATION
EMPLOYED ADJUSTMENT TOTAL
-------- ---------- -----
<S> <C> <C> <C>
Net assets at December 31, 1993 $202,643 $ (9,122) $ 193,521
Capital transactions with Ciba
and affiliates 2,002 -- 2,002
Net earnings 13,484 -- 13,484
Change in currency translation
adjustment -- 19,187 19,187
-------- --------- ---------
Net assets at December 31, 1994 218,129 10,065 228,194
Capital transactions with Ciba
and affiliates (73,779) -- (73,779)
Net earnings 18,254 -- 18,254
Change in currency translation
adjustment -- 20,585 20,585
-------- --------- ---------
Net assets at December 31, 1995 162,604 30,650 193,254
Capital transactions with Ciba
and affiliates (88,404) -- (88,404)
Net earnings 14,461 -- 14,461
Change in currency translation
adjustment -- (6,538) (6,538)
-------- --------- ---------
Net assets at October 14, 1996 $ 88,661 $ 24,112 $ 112,773
======== ========= =========
</TABLE>
See the accompanying notes to the consolidated financial statements
<TABLE>
<CAPTION>
SUCCESSOR
-----------------------------------------------------------------------------------------------------
FOR THE PERIOD FROM OCTOBER 15, 1996 TO DECEMBER 31, 1996
-----------------------------------------------------------------------------------------------------
COMMON STOCK
---------------------------------------------------
CLASS A CLASS B CLASS C ADDITIONAL CURRENCY
---------------- --------------- --------------- PAID-IN ACCUMULATED TRANSLATION
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT TOTAL
--------- ------ ------ ------ -------- ------ ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at October
15, 1996 -- $ -- 1,000 $ 1 -- $ -- $ -- $ -- $ -- $ 1
New issuance of
shares 1,899,799 19 -- -- 537,735 5 188,084 -- -- 188,108
Net loss -- -- -- -- -- -- -- (159,046) -- (159,046)
Change in currency
translation
adjustment -- -- -- -- -- -- -- -- (16,637) (16,637)
--------- ------ ----- ----- ------- ------ ---------- ---------- --------- --------
Balance at
December 31,
1996 1,899,779 $ 19 1,000 $ 1 537,735 $ 5 $ 188,084 $ (159,046) $ (16,637) $ 12,426
========= ====== ===== ===== ======= ====== ========== ========== ========= ========
</TABLE>
See the accompanying notes to the consolidated financial statements
<TABLE>
MT INVESTORS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<CAPTION>
PREDECESSOR SUCCESSOR
----------------------------------------------- ----------------
TWELVE MONTHS TWELVE MONTHS FOR THE PERIOD FOR THE PERIOD
ENDED ENDED JANUARY 1, 1996 OCTOBER 15, 1996
DECEMBER 31, DECEMBER 31, TO OCTOBER 14, TO DECEMBER 31,
1994 1995 1996 1996
------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net earnings (loss) $ 13,484 $ 18,254 $ 14,461 $ (159,046)
Adjustments to reconcile net
earnings (loss) to net cash
provided by operating
activities:
Depreciation 27,681 30,598 19,512 7,925
Amortization 6,437 2,765 2,151 1,065
Write-off of purchased research
and development and cost of sales
associated with revaluation of
inventories -- -- -- 146,264
Net gain on disposal of long-term
assets (1,396) (1,053) (768) --
Deferred taxes 740 (551) (1,934) (4,563)
Minority interest 347 768 637 (92)
increase (decrease) in cash
resulting from changes in:
Trade accounts receivable,
net (7,410) (9,979) 9,569 (10,159)
Inventories (574) (607) 1,276 3,350
Other current assets 1,636 (3,058) 14,748 (10,605)
Trade accounts payable (1,123) 1,437 (3,065) 3,415
Accruals and other liabilities,
net (5,728) 13,095 5,948 32,030
------------ ----------- ------------- ---------------
Net cash provided by operating
activities 34,094 51,669 62,535 9,584
------------ ----------- ------------- ---------------
Cash flows from investing activities:
Proceeds from sale of property,
plant and equipment 12,454 4,000 1,606 736
Purchase of property, plant and
equipment (24,916) (25,858) (16,649) (11,928)
Acquisition of Mettler-Toledo
from Ciba -- -- -- (314,962)
Investments in other long term
assets, net 162 (7,484) (1,632) 4,857
------------ ----------- ------------- ---------------
Net cash used in investing
activities (12,300) (29,342) (16,675) (321,297)
------------ ----------- ------------- ---------------
Cash flows from financing
activities:
Borrowings of third party debt -- 3,983 -- 414,170
Repayments of third party debt (311) -- (13,464) --
Proceeds from issuance of common
stock -- -- -- 188,108
Ciba and affiliates borrowings
(repayments) (9,187) (15,693) (26,589) (184,666)
Capital transactions with Ciba
and affiliates 2,002 (37,361) (7,716) (80,687)
Net cash provided by (used in)
financing activities (7,496) (49,071) (47,769) 336,925
------------ ----------- ------------- ---------------
Effect of exchange rate changes
on cash and cash equivalents 10,040 4,344 (3,394) (615)
------------ ----------- ------------- ---------------
Net increase (decrease) in cash
and cash equivalents 24,338 (22,400) (5,303) 24,597
Cash and cash equivalents:
Beginning of period 39,464 63,802 41,402 36,099
------------ ----------- ------------- ---------------
End of period $ 63,802 $ 41,402 $ 36,099 $ 60,696
============ =========== ============= ===============
Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest $ 13,225 $ 18,927 $ 6,524 $ 17,874
Taxes 9,370 9,970 9,385 2,470
Non-cash financing and investing
activities:
Due to Ciba for capital transactions -- 36,418 -- --
</TABLE>
See the accompanying notes to the consolidated financial statements
MT INVESTORS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS UNLESS OTHERWISE STATED)
1. BASIS OF PRESENTATION AND ACQUISITION
MT Investors Inc. ("MT Investors") was incorporated by AEA
Investors Inc. ("AEA") in December 1991. It was recapitalized to
effect the acquisition of the Mettler-Toledo Group from Ciba-Geigy
AG ("Ciba") and its wholly owned subsidiary, AG fur
Prazisionsinstrumente ("AGP"). Pursuant to the terms of a stock
purchase agreement dated April 2, 1996 between MT Investors, AGP
and Ciba, on October 15, 1996 MT Investors acquired the
Mettler-Toledo Group in a transaction more fully described below.
Between the date of formation and October 15, 1996, MT Investors
had no substantive operations.
In the accompanying consolidated financial statements the
terms "Mettler-Toledo" or the "Company" when used in situations
pertaining to periods prior to October 15, 1996 refer to the
combined group of businesses sold by Ciba and when used in
situations pertaining to periods subsequent to October 15, 1996
refer to MT Investors Inc. and its consolidated subsidiaries. The
combined historical financial information of the business
acquired from Ciba prior to the acquisition on October 15, 1996
are referred to as "Predecessor" while the consolidated financial
information of the Company subsequent to the date of acquisition
are to as "Successor."
The accompanying consolidated financial statements have been
prepared in accordance with United Sates generally accepted
accounting principles.
MT Investors acquired the Company on October 15, 1996 from a
subsidiary of Ciba for cash consideration of SFr. 504,996
(approximately $402,000) including dividends of SFr. 109,406
(approximately $87,100) which were paid to Ciba by the Company in
conjunction with the acquisition. In addition, the Company
incurred expenses in connection with the acquisition and related
financing of approximately $29,000, including approximately
$5,500 paid to AEA, and paid approximately $185,000 to settle
amounts due to Ciba and affiliates. The Company has accounted
for the acquisition using the purchase method of accounting.
Accordingly, the costs of the acquisition were allocated to the
assets acquired and liabilities assumed based upon their
respective fair values. The excess of the cost of the
acquisition over the fair value of the net assets acquired of
approximately $137,500 is being amortized over 32 years. Because
of this purchase price allocation, the accompanying financial
statements of Successor are not directly comparable to those of
the Predecessor.
The following unaudited pro forma summary presents the
consolidated results of operations of the Company as if the
acquisition had been completed as of the beginning of each of the
periods presented, after giving effect to certain adjustments,
including the depreciation and amortization of the assets
acquired based upon their fair values, increased interest expense
from the financing of the acquisition and income tax effects. The
Company allocated a portion of the purchase price to (i) in-
process research and development projects, that have economic
value (see Note 2) and (ii) the revaluation of inventories (see
Note 4). These adjustments have not been reflected in the
following proforma summary due to their unusual and non-
recurring nature. This pro forma summary does not necessarily
reflect the results of operations as they would have been if the
acquisition had been completed as of the beginning of such
periods and is not necessarily indicative of the results which
may be obtained in the future.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1996
---- ----
<S> <C> <C>
Net sales $850,415 $ 849,133
Net loss $(5,396) $ (6,363)
</TABLE>
The foregoing pro forma financial information does not
reflect the anticipated benefits to be derived in the future from
the Company's 1996 employee reduction programs.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Mettler-Toledo is a manufacturer and marketer of weighing
instruments for use in laboratory, industrial and food retailing
applications. The Company also manufacturers and sells certain
related laboratory measurement instruments. The Company's
manufacturing facilities are located in Switzerland,
the United States, Germany and China. The Company's principal
executive offices are located in Greifensee, Switzerland.
Principles of Consolidation
The consolidated financial statements include all of the
entities of the Company. All intercompany transactions and
balances have been eliminated.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments
with original maturity dates of three months or less.
Inventories
Inventories are valued at the lower of cost or market. Cost,
which includes direct materials, labor and overhead plus indirect
overhead, is determined using the first in, first out (FIFO) or
weighted average cost methods and to a lesser extent the last in,
first out (LIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less
accumulated depreciation. Depreciation is charged on a straight
line basis over the estimated useful lives of the assets as
follows:
Buildings and improvements 15 to 50 years
Machinery and equipment 3 to 12 years
Computer software 3 years
Leasehold improvements Shorter of useful
life or lease term
Beginning January 1, 1996 the Company adopted Financial
Accounting Standards Board's Statement of Financial Accounting
Standards No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
SFAS 121 requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. In
addition, SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be disposed of be reported at the
lower of carrying amount or fair value less cost to sell.
Adoption of SFAS 121 had no material effect on the consolidated
financial statements.
Excess of cost over net assets acquired
The excess of purchase price over the fair value of net
assets acquired, is amortized on a straight-line basis over 32
years being the expected period to be benefited. The Company
assesses the recoverability of such amount by determining whether
the amortization of the balance over its remaining life can be
recovered from the undiscounted future operating cash flows of
the acquired operation. The amount of impairment, if any, is
measured based on projected discounted future operating cash
flows using a discount rate reflecting the Company's average cost
of funds. The assessment of the recoverability of the excess of
cost over net assets acquired will be impacted if estimated
future operating cash flows are not achieved.
Deferred Financing Costs
Debt financing costs, which were incurred by the Company in
connection with borrowings incurred in connection with the
acquisition discussed at Note 1, are deferred and amortized, over
the life of the underlying indebtedness using the interest
method.
Taxation
The Company files its own tax returns in each jurisdiction in
which it operates. Prior to the acquisition discussed in Note 1,
in certain jurisdictions the Company filed its tax returns
jointly with other Ciba subsidiaries. The Company had a tax
sharing arrangement with Ciba in these countries to share the tax
burden or benefits. Such arrangement resulted in each company's
tax burden or benefit equating to that which it would have
incurred or received if it had been filing a separate tax return.
Taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates in the respective jurisdictions
in which the Company operates that are expected to apply to
taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred
income tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.
Generally, deferred taxes are not provided on the unremitted
earnings of subsidiaries outside of the United States because it
is expected that these earnings are permanently reinvested. Such
earnings may become taxable upon the sale or liquidation of these
subsidiaries or upon the remittance of dividends. Deferred taxes
are provided in situations where the Company's subsidiaries plan
to make future dividend distributions.
Research and Development
Research and development costs are expensed as incurred.
Research and development costs, including customer engineering
(which represents research and development charged to customers
and, accordingly, is included in cost of sales), amounted to
approximately $55,600, $62,400, $45,100 and $11,100 for the years
ended 1994 and 1995 and for the period from January 1, 1996 to
October 14, 1996 and for the period from October 15, 1996 to
December 31, 1996, respectively. In connection with the
acquisition discussed in Note 1 the Company allocated, based upon
independent valuations, $114,070 of the purchase price to
purchased research and development in process. Such amount was
recorded as an expense in the period from October 15, 1996 to
December 31, 1996.
Currency Translation and Transactions
The reporting currency for the consolidated financial
statements of the Company is the United States dollar (USD). The
functional currency for the Company's operations is generally the
applicable local currency. Accordingly, the assets and
liabilities of companies whose functional currency is other than
the USD are included in the consolidation by translating the
assets and liabilities into the reporting currency at the
exchange rates applicable at the end of the reporting year. The
statements of operations and cash flows of such non-USD
functional currency operations are translated at the monthly
average exchange rates during the year. Translation gains or
losses are accumulated as a separate component of net
assets/shareholders' equity. Currency transaction gains or losses
arising from transactions of Mettler-Toledo companies in
currencies other than the functional currency are included in
operations at each reporting period.
Derivative Financial Instruments
The Company has only limited involvement with derivative
financial instruments and does not use them for trading purposes.
Derivative financial instruments in the form of currency forward
and option contracts are entered into by the Company primarily as
a hedge against anticipated currency exposures. Such contracts
limit the Company's exposure to both favorable and unfavorable
currency fluctuations. These contracts are adjusted to reflect
market values as of each balance sheet date, with the resulting
unrealized gains and losses being recognized in financial income
or expense, as appropriate.
Fair Value of Financial Instruments
The carrying amount of cash and cash equivalents, accounts
receivable, other current assets and current liabilities
approximates fair market value because of the short term maturity
of these financial instruments. It is not practical to determine
the fair value of balances with Ciba due to the related party
nature of these financial instruments. See Note 5 and Note 12 for
the fair values of the Company's derivative financial instruments
and third party debt, respectively. Other financial instruments
are not significant to the consolidated financial statements.
Stock Based Compensation
The Company applies Accounting Principles Board Opinion No.
25 "Accounting for Stock Issued to Employees" and related
interpretations in accounting for its stock option plan.
Earnings per Common Share
Earnings per common share has been computed using the
weighted average number of outstanding common shares during the
Successor period. Earnings per common share for the Predecessor
periods have been computed assuming the common shares issued in
the acquisition discussed in Note 1 were outstanding during each
of the periods presented.
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings per Share." The Company has yet to determine the effect
of this statement on its earnings per share.
Concentration of Credit Risk
The Company's revenue base is widely diversified by
geographic region and by individual customer. The Company's
products are utilized in many different industries, although
extensively in the pharmaceutical and chemical industries. The
Company performs ongoing credit evaluations of its customers'
financial condition and, generally, requires no collateral from
its customers.
Revenue Recognition
Revenue is recognized when title to a product has transferred
or services have been rendered. Revenues from service contracts
are recognized over the contract period.
Use of Estimates
The preparation of financial statements 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 period. Actual results may differ from those
estimates.
3. DUE FROM CIBA AND AFFILIATES, NET
The amount due from Ciba, net was comprised of the following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- -----------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Cash pool deposits $ 22,239 $ --
Due from AGP, 6.5%, revolving repayment
terms 10,833 $ --
-------- -------
$ 33,072 $ --
======== ========
</TABLE>
Prior to the acquisition discussed in Note 1, certain Mettler-
Toledo companies participated in an arrangement with Ciba whereby
excess cash was pooled into an account maintained by Ciba. The
net deposit with Ciba in connection with this arrangement bore
interest at the short-term money market rates available to Ciba.
Prior to the acquisition Ciba also performed certain limited
administrative services on behalf of the Company. The cost of
such services, which was not charged to the Company nor included
in the consolidated financial statements, was not significant.
4. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Raw materials and parts $ 45,523 $ 41,015
Work-in-progress 38,191 31,534
Finished goods 30,149 29,982
--------- ---------
113,863 102,531
LIFO reserve (2,877) (5)
--------- ---------
$110,986 $102,526
========= =========
</TABLE>
At December 31, 1995 and 1996, 8.8% and 13.2% respectively,
of the Company's inventories (certain U.S. companies only) were
valued using the LIFO method of accounting. There were no
material liquidations of LIFO inventories during the periods
presented.
In connection with the acquisition discussed in Note 1, the
Company allocated approximately $32,200 of the purchase price to
revalue certain inventories (principally work-in-process and
finished goods) to fair value (net realizable value).
Substantially all of such inventories were sold during the period
from October 15, 1996 to December 31, 1996.
5. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISKS
The Company may be exposed to credit losses in the event of
nonperformance by the counterparties to its currency forward and
option contracts. The Company has no reason to believe, however,
that such counterparties will not be able to fully satisfy their
obligations under these contracts.
At December 31, 1995, the Company had contracts maturing
during 1996 to purchase the equivalent of approximately $23,300
and to sell the equivalent of approximately $27,900 in various
currencies. At December 31, 1996, the Company had contracts
maturing during 1997 to sell the equivalent of approximately
$135,000 in various currencies in exchange for Swiss francs.
These contracts were used to limit its exposure to currency
fluctuations on anticipated future cash flows, primarily for the
delivery of United States dollars, German marks, French francs,
British pounds and Japanese yen in exchange for Swiss francs.
At December 31, 1995 and 1996, the fair value of such
financial instruments, which the Company recognized as net
unrealized gains (losses), was approximately $2,400 and $(5,100),
respectively.
6. OTHER CURRENT ASSETS
Other current assets consisted of the following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Prepaid expenses $ 4,703 $ 5,302
Other (including in 1995 net
gains on derivative financial
instruments) 16,766 11,966
---------- ----------
$ 21,469 $ 17,268
========== ==========
</TABLE>
7. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net, consisted of the
following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Land $ 31,535 $ 63,514
Buildings and leasehold improvements 186,608 120,173
Machinery and equipment 237,457 75,675
Computer software 5,373 3,067
---------- ----------
460,973 262,429
Less accumulated depreciation and
amortization (219,955) (7,137)
---------- ----------
$ 241,018 $ 255,292
========== ==========
</TABLE>
8. OTHER ASSETS
Other assets consisted of the following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Deferred financing fees, net of
accumulated amortization
of $820 in 1996 $ -- $ 22,015
Bank deposits-restricted cash 4,697 5,960
Secured loans 2,911 2,805
Other 4,404 7,194
---------- ----------
$ 12,012 $ 37,974
========== ==========
</TABLE>
Bank deposits-restricted cash at December 31, 1995 and 1996
principally represented deposits collateralizing a letter of
credit given by a financial institution in connection with one of
the Company's subsidiaries in the Peoples Republic of China.
9. BANK AND OTHER LOANS
Bank and other loans consisted of the following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Current maturities of long-term debt $ -- $ 8,968
Borrowings under revolving credit
facility -- 51,928
Other short-term borrowings 19,408 19,550
Borrowings under line of credit 10,105 --
---------- ---------
$ 29,513 $ 80,446
========== =========
</TABLE>
The weighted average interest rate at December 31, 1995 on
the borrowings under the line of credit was approximately 8.0%.
The weighted average interest rate at December 31, 1996 on the
borrowings under the revolving credit facility was approximately
4.1%. The Company had available revolving lines of credit and
swingline facilities for short-term financing of approximately
$75,000 at December 31, 1996 (See Note 12).
10. ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities consisted of the following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Accrued payroll and vacation $ 26,400 $ 26,239
Social benefits and payroll taxes 9,563 9,218
Severance and other cost provisions 1,890 12,783
Interest 4,731 6,858
Losses on derivative financial
instruments -- 5,137
Other taxes payable 8,190 5,402
Warranty 6,420 6,803
Other liabilities 49,924 42,874
----------- ---------
$ 107,118 $ 115,314
=========== =========
</TABLE>
Warranties on Mettler-Toledo products are generally for one
year. The Company provides for warranty costs, which have not
been significant, based on historical experience.
11. DEBT PAYABLE TO CIBA AND AFFILIATES
The Company's debt obligations to Ciba and affiliates
consisted of the following:
Short-term borrowings are summarized as follows:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Unsecured notes payable:
AGP, 4.25%, due February 29,1996 $ 26,517 $ --
Due to Ciba for capital
transactions 36,418 --
Other unsecured short-term debt
to Ciba, varying interest rates
and maturities 28,197 --
--------- --------
$ 91,132 $ --
========= ========
</TABLE>
Long-term obligations are summarized as follows:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Unsecured notes payable to Ciba and
affiliates:
AGP, 8.4%, due October 14, 1996 $ 122,000 $ --
AGP, 6%, due October 14, 1996 20,000 --
Other unsecured long-term debt to
Ciba, varying interest rates and
maturities 3,097 --
----------- ---------
$ 145,097 $ --
=========== =========
</TABLE>
Interest expense on debt payable to Ciba and affiliates for
the years ended December 31, 1994 and 1995 and for the period
January 1, 1996 to October 14, 1996 was $10,506, $15,693, and
$10,955, respectively.
12. DEBT PAYABLE TO THIRD PARTIES
Long-term debt payable to third parties consist of the
following:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
9.75% Senior Subordinated Notes due
October 1, 2006 $ -- $ 135,000
Credit Agreement:
Term A Loans, interest at LIBOR plus
2.5% (4.38% at December 31, 1996)
payable in quarterly installments
beginning March 31, 1997 due
December 31, 2002 -- 92,730
Term B Loans, interest at LIBOR
plus 3.00% (8.53% at December 31,
1996) payable in quarterly
installments beginning March 31,
1997 due December 31, 2003 -- 75,000
Term C(CH) and C(US) Loans, interest
at LIBOR plus 3.25% (8.78% at
December 31, 1996) payable in
quarterly installments beginning
March 31, 1997 due December
31, 2004 -- 72,000
Revolving credit facility -- 51,928
Other 3,621 27,546
---------- -----------
3,621 454,204
Less current maturities -- 80,446
---------- -----------
$ 3,621 $ 373,758
========== ===========
</TABLE>
To provide a portion of the financing required for the
acquisition and for working capital and for general corporate
purposes thereafter, in October, 1996 Mettler-Toledo Holding
Inc., a wholly owned subsidiary of the Company, entered into a
credit agreement with various banks.
Loans under the credit agreement consist of: (i) Term A Loans
in an aggregate principal amount of SFr. 125,000 ($92,730 at
December 31, 1996), (ii) Term B Loans in an aggregate principal
amount of $75,000, (iii) Term C(CH) loans in an aggregate
principal amount of $32,000, and (iv) Term C(US) Loans in an
aggregate principal amount of $40,000 (the Term A Loans, the Term
B Loans the Term C(CH) Loans and Term C(US) Loans are referred to
collectively as the "term loans"), and (v) a multi-currency
revolving credit facility that may be borrowed in an aggregate
principal amount of $140,000, and includes letter of credit and
swingline subfacilities available to certain subsidiaries (the
"revolving facility" and together with the term loans, the
"credit facilities").
Loans under the revolving facility may be repaid and
reborrowed and are due in full on February 18, 1997. The Company
is required to pay a facility fee equal to 0.05% per annum on the
amount of the revolving facility and letter of credit fees on the
aggregate face amount of letters of credit under the revolving
facility. At December 31, 1996 the Company had available
approximately $75,000 of additional borrowing capacity.
The credit agreement contains covenants that, among other
things, limit the Company's ability to incur liens; merge,
consolidate or dispose of assets; make loans and investments;
incur indebtedness; engage in certain transactions with
affiliates; incur certain contingent obligations; pay dividends
and other distributions; prepay the Notes; or make capital
expenditures. The credit agreement also requires the Company to
maintain a minimum net worth and a minimum fixed charge coverage
ratio, and to maintain a ratio of total debt to EBITDA below a
specified maximum.
The aggregate maturities of long-term obligations during each
of the years 1998 through 2001 are approximately $12,800,
$15,600, $19,300 and $23,000, respectively.
The estimated fair value of the Company's Senior Subordinated
Notes at December 31, 1996 was approximately $142,000. The
estimated fair value of the obligations under the credit
agreement approximate fair value due to the variable rate nature
of the obligations. Fair value estimates are made at a specific
point in time, based on relevant market information and
information about the financial instrument. Fair value estimates
were based on the amount of future cash flows discounted using
the Company's current borrowing rate for loans of comparable
maturity. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and, therefore,
cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.
13. SHAREHOLDERS' EQUITY
As of December 31, 1996 the authorized capital stock of the
Company consisted of 2,775,976 shares of Common Stock, $.01 par
value of which 2,233,117 shares were designated as Class A Common
Stock, 1,000 shares were designated as Class B Common Stock and
541,859 shares were designated as Class C Common Stock. As of
December 31, 1996, the Company had outstanding 1,899,779 shares of
Class A Common Stock, 1,000 shares of Class B Common Stock and
537,735 shares of Class C Common Stock. Additionally, 333,117 shares
of Class A Common Stock are reserved for the Company's stock option
plan (See Note 14).
Holders of the Company's common stock have no preemptive,
subscription or redemption rights. Except as described below, the
Company's three classes of common stock have identical rights
under the Company's Certificate of Incorporation and By-Laws.
Dividends or distributions in connection with the
liquidation, dissolution or winding up of the affairs of the
Company or not paid out of the current and accumulated earnings
and profits shall be paid in the following manner. First,
exclusively to the holders of the shares of Class A Common Stock,
ratably to each such holder, until the sum of all dividends and
distributions to each holder of Class A Common Stock equals $100
for each share of Class A Common Stock held by such holder. After
each holder of shares of Class A Common Stock shall have received
dividends and distributions totaling $100, then exclusively to
the holders of the shares of Class B Common and Class C Common
Stock ratably to each such holder until the sum of all dividends
and distributions to each holder of Class B Common Stock and/or
Class C Common Stock equals $100 for each share of Class B Common
Stock and/or Class C Common Stock held by such holder. After each
holder of Class B Common Stock and Class C Common Stock shall
have received such dividends and distributions, then to all
holders of Class A Common Stock, Class B Common Stock and/or
Class C Common Stock, ratably to each holder of such shares.
Class A and C Common Stock shareholders have no voting
rights.
14. STOCK OPTION PLAN
Effective October 15, 1996, MT Investors adopted a stock
option plan to provide certain key employees and/or directors of
the Company additional incentive to join and/or remain in the
service of the Company as well as to maintain and enhance the
long-term performance and profitability of the Company. The plan
reserves 333,117 shares of Class A non-voting common stock of MT
Investors.
Under the terms of the plan, options granted shall be
nonqualified and the exercise price, as determined by the
committee, shall not be less than 100% of the fair market value
of the share of such common stock on the date of grant. Options
may not be exercised until the fifth anniversary of the date of
grant, subject to certain acceleration clauses.
Stock option activity is shown below (per share average
option price amounts in whole dollars):
<TABLE>
<CAPTION>
Option Plan
--------------------
Number Per Share Total
of Shares Average Price
--------- ------- -----
<S> <C> <C> <C>
Granted during the period
October 15, 1996, to December
31, 1996 278,988 $ 100.00 $27,899
Exercised -- -- --
Forfeited -- -- --
------- --------- -------
Outstanding at December 31, 1996 278,988 $ 100.00 $27,899
======= ========= =======
Shares exerciseable at December
31, 1996 -- $ -- $ --
======= ========= =======
</TABLE>
The Company applies Accounting Standards Board Opinion No. 25
and related interpretations in accounting for its plans.
Accordingly, no compensation cost has been recognized for its
stock option plan as all options have been issued at fair market
value. The Company's net loss for the period October 15, 1996 to
December 31, 1996 would not have been materially different had
compensation cost been determined consistent with Financial
Accounting Standards Board's Statement of Financial Accounting
Standards No. 123 "Accounting for Stock Based Compensation".
15. BENEFIT PLANS
Mettler-Toledo maintains a number of retirement plans for the
benefit of its employees.
Certain companies sponsor defined contribution plans.
Benefits are determined and funded annually based upon the terms
of the plans. Contributions under these plans amounted to $9,042,
$9,413, $9,484 and $2,496 in 1994, 1995, for the period January
1, 1996 to October 14, 1996 and for the period October 15, 1996
to December 31, 1996, respectively.
Certain companies sponsor defined benefit plans. Benefits are
also provided to employees under defined benefit plans primarily
based upon years of service and employees' compensation for
certain periods during the last years of employment.
The following table sets forth the funded status and amounts
recognized in the consolidated financial statements for the
Company's principal defined benefit plans at December 31, 1995
and 1996:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
---------------------------- -----------------------------
DECEMBER 31, DECEMBER 31,
1995 1996
---------------------------- -----------------------------
ASSETS EXCEED ACCUMULATED ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS BENEFITS EXCEED ASSETS
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Actuarial present value of accumulated
benefit obligations:
Vested benefits $ 8,582 $90,698 $10,211 $97,639
Non-vested benefits 90 3,122 16 2,280
------- ------- ------- -------
8,672 93,820 10,227 99,919
------- ------- ------- -------
Projected benefit obligations 10,737 100,820 12,458 108,504
Plan assets at fair value 10,546 40,091 13,336 50,609
------- ------- ------- -------
Projected benefit obligations in excess
of (less than) plan assets 191 60,729 (878) 57,895
Unrecognized prior service (cost)
benefit (183) 252 -- --
Unrecognized net (losses) gains (188) (247) 22 1,479
Unrecognized transition obligations -- (3,851) -- --
------- ------- ------- -------
(Prepaid) accrued pension costs $ (180) $56,883 $ (856) $59,374
======= ======= ======= =======
</TABLE>
The (prepaid) accrued pension costs are recognized in the
accompanying consolidated financial statements as other long-term
assets and other long term liabilities, respectively.
The assumed discount rates and rates of increase in future
compensation level used in calculating the projected benefit
obligations vary according to the economic conditions of the
country in which the retirement plans are situated. The range of
rates used for the purposes of the above calculations are as
follows:
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Discount rates 6.5% to 8.0% 6.0% - 8.5%
Compensation increase rates 2.5% to 6.0% 2.0% - 6.5%
</TABLE>
The expected long term rates of return on plan assets ranged
between 9.5% and 11.0% in 1994, 9.5% and 10.0% for 1995, and 7.0%
and 10.0% for 1996.
The assumptions used above have a significant effect on the
reported amounts of projected benefit obligations and net
periodic pension cost. For example, increasing the assumed
discount rate would have the effect of decreasing the projected
benefit obligation and increasing unrecognized net gains.
Increasing the assumed compensation increase rate would
increase the projected benefit obligation and decrease
unrecognized net gains. Increasing the expected long-term rate of
return on investments would decrease unrecognized net gains.
Plan assets relate principally to the Company's U.S.
companies and consist of equity investments, obligations of the
U.S. Treasury or other governmental agencies, and other
interest-bearing investments.
Net periodic pension cost for all of the plans above includes
the following components:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------------------------------------------- ----------------
TWELVE MONTHS TWELVE MONTHS FOR THE PERIOD FOR THE PERIOD
ENDED ENDED JANUARY 1, 1996 OCTOBER 15, 1996
DECEMBER 31, DECEMBER 31, TO OCTOBER 14, TO DECEMBER 31,
1994 1995 1996 1996
------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Service cost (benefits earned
during the period) $ 3,833 $ 3,668 $ 3,850 $ 1,013
Interest cost on projected
benefit obligations 6,426 7,561 6,540 1,721
Actual return on plan assets (2,725) (8,653) (6,079) (1,600)
Net amortization and deferral (170) 5,137 2,485 --
---------- -------- -------- --------
Net periodic pension expense $ 7,364 $ 7,713 $ 6,796 $ 1,134
========== ======== ======== ========
</TABLE>
The Company's U.S. operations provide postretirement medical
benefits to their employees. Employee contributions for medical
benefits are related to employee years of service.
The following table sets forth the status of the U.S.
postretirement plans and amounts recognized in the Company's
consolidated financial statements at December 31, 1995 and 1996:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Accumulated postretirement benefit
obligations:
Retired $27,682 $25,894
Fully eligible 1,196 3,033
Other 2,361 3,098
------- -------
31,239 32,025
Unrecognized net loss (6,261) (540)
Unrecognized prior service benefit 692 --
Unrecognized transition obligation (1,389) --
------- -------
Accrued postretirement benefit cost $24,281 $31,485
======= =======
</TABLE>
Net periodic postretirement benefit cost for the above plans
includes the following components:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------------------------------------------- ----------------
TWELVE MONTHS TWELVE MONTHS FOR THE PERIOD FOR THE PERIOD
ENDED ENDED JANUARY 1, 1996 OCTOBER 15, 1996
DECEMBER 31, DECEMBER 31, TO OCTOBER 14, TO DECEMBER 31,
1994 1995 1996 1996
------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Service cost (benefits earned
during the period) $ 333 $ 285 $ 431
Interest cost on projected
benefit obligations 2,193 2,371 1,795 472
Net amortization and deferral 82 99 343 --
------- ------- ------- -------
Net periodic postretirement
benefit cost $ 2,608 $ 2,755 $ 2,569 $ 586
======= ======= ======= =======
</TABLE>
The accumulated postretirement benefit obligation and net
periodic postretirement benefit cost were principally determined
using discount rates of 7.3% in 1994 and 1995, and 7.6% in 1996,
and health care cost trend rates ranging from 9.5% to 12.25% in
1994, 1995, and 1996 decreasing to 5.0% in 2005.
The health care cost trend rate assumption has a significant
effect on the accumulated postretirement benefit obligation and
net periodic postretirement benefit cost. For example, in 1996
the effect of a one-percentage-point increase in the assumed
health care cost trend rate would be an increase of $3,064 on the
accumulated postretirement benefit obligations and an increase of
$71 on the aggregate of the service and interest cost components
of the net periodic benefit cost.
16. TAXES
The sources of the Company's earnings (loss) before taxes and
minority interest were as follows:
<TABLE>
<CAPTION>
PREDECESSOR
-----------------------------------------------
TWELVE MONTHS TWELVE MONTHS FOR THE PERIOD
ENDED ENDED JANUARY 1, 1996
DECEMBER 31, DECEMBER 31, TO OCTOBER 14,
1994 1995 1996
------------- ------------- ---------------
<S> <C> <C> <C>
Switzerland $ 9,855 $ 11,431 $ 21,241
Non-Switzerland 12,652 16,373 3,912
----------- ----------- ----------
Earnings before taxes and
minority interest $ 22,507 $ 27,804 $ 25,153
=========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
SUCCESSOR
----------------
FOR THE PERIOD
October 15, 1996
TO December 31,
1996
---------------
<S> <C>
United States $ (37,293)
Non-United States (122,783)
-----------
Earnings before taxes and
minority interest $ (160,076)
===========
</TABLE>
The provision (benefit) for taxes consists of:
<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- -----
<S> <C> <C> <C>
Predecessor:
Year ended December 31, 1994:
Switzerland Federal $ 1,182 $ (32) $ 1,150
Switzerland Canton (State) and
Local 1,215 (53) 1,162
Non-Switzerland 5,538 826 6,364
------- -------- -------
$ 7,935 $ 741 $ 8,676
======= ======== =======
Year ended December 31, 1995:
Switzerland Federal $ 513 $ (92) $ 421
Switzerland Canton (State) and
Local 481 (505) (24)
Non-Switzerland 8,339 46 8,385
------- -------- -------
$ 9,333 $ (551) $ 8,782
======= ======== =======
For the period January 1, 1996
to October 14, 1996:
Switzerland Federal $ 2,152 $ (172) $ 1,980
Switzerland Canton (State) and
Local 4,305 (344) 3,961
Non-Switzerland 5,532 (1,418) 4,114
------- -------- -------
$11,989 $ (1,934) $10,055
======= ======== =======
Successor:
For the period October 15, 1996
to December 31, 1996:
United States Federal $ 475 $ (1,556) $(1,081)
United States State and Local 696 (183) 513
Non-United States 2,454 (2,824) (370)
------- -------- -------
$ 3,625 $ (4,563) $ (938)
======= ======== =======
</TABLE>
The provision for tax expense (benefit) for the years ended
December 31, 1994 and 1995 and for the period January 1, 1996 to
October 14, 1996 where the Company operated as a group of
businesses owned by Ciba differed from the amounts computed by
applying the Switzerland federal income tax rate of 9.8% to
earnings before taxes and minority interest as a result of the
following:
<TABLE>
<CAPTION>
PREDECESSOR
-----------------------------------------------
TWELVE MONTHS TWELVE MONTHS FOR THE PERIOD
ENDED ENDED JANUARY 1, 1996
DECEMBER 31, DECEMBER 31, TO OCTOBER 14,
1994 1995 1996
------------- ------------- ---------------
<S> <C> <C> <C>
Expected tax $2,206 $2,725 $ 2,465
Switzerland Canton (state) and
local income taxes, net of
federal income tax benefit 1,048 (21) 3,573
Non-deductible intangible
amortization 249 248 205
Change in valuation allowance (716) 1,603 1,235
Non-Switzerland income taxes in
excess of 9.8% 5,591 4,968 2,291
Other, net 298 (741) 286
------- ------- -------
Total provision for taxes $8,676 $8,782 $10,055
======= ======= =======
</TABLE>
The provision for tax expense (benefit) for the period
October 15, 1996 to December 31, 1996, subsequent to the
reorganization of the Company under MT Investors Inc. and the
acquisition described in Note 1, differed from the amounts
computed by applying the United States federal income tax rate of
35% to the loss before taxes and minority interest.
<TABLE>
<CAPTION>
SUCCESSOR
----------------
FOR THE PERIOD
October 15, 1996
TO December 31,
1996
---------------
<S> <C>
Expected tax $(56,027)
United States state and local
income taxes, net of federal
income tax benefit 333
Non-deductible purchased research
and development 39,925
Non-deductible intangible
amortization 336
Change in valuation allowance 4,662
Benefits of Non-United States
income taxes less than 35% 10,037
Other, net (204)
--------
Total provision for taxes $ (938)
========
</TABLE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities are presented below:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Deferred tax assets:
Inventory $ 9,706 $ 7,974
Accrued and other liabilities 6,129 7,046
Deferred loss on sale of subsidiaries 7,807 7,907
Accrued postretirement benefit costs 9,227 11,334
Accrued pension costs 6,276 7,709
Net operating loss carryforwards 10,140 15,817
Other 3,000 408
------- -------
Total deferred tax assets 52,285 58,195
Less valuation allowance (21,166) (46,714)
------- -------
Total deferred tax assets less
valuation allowance 31,119 11,481
------- -------
Deferred tax liabilities:
Inventory 5,952 5,618
Property, plant and equipment 21,675 31,123
Other 4,200 2,858
------- -------
Total deferred tax liabilities 31,827 39,599
Net deferred tax liability $ 708 $28,118
======= =======
</TABLE>
The net change in the total valuation allowance, including
changes resulting from translation of such amounts from the local
functional currencies to the reporting currency and the effect of
the acquisition discussed in Note 1, for the years ended December
31, 1994 and 1995 and for the period January 1, 1996 to October
14, 1996 and for the period October 15, 1996 to December 31, 1996
was a decrease of $716 for the year ended December 31, 1994, an
increase of $1,603 for the year ended December 31, 1995, an
increase of $1,111 for the period January 1, 1996 to October 14,
1996 and an increase of $24,437 for the period October 15, 1996
to December 31, 1996. Of the increase in the valuation allowance
of $24,437 during the period October 15, 1996 to December 31,
1996, $19,882 was recognized as an increase in goodwill resulting
from the acquisition discussed in Note 1. Should a reduction of
such valuation allowance be justified in the future, the amount
of any reduction would accordingly reduce goodwill.
The Company has established valuation allowances primarily
for net operating losses, deferred losses on the sale of
subsidiaries as well as postretirement and pension costs as
follows:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------- ---------
DECEMBER 31, DECEMBER 31,
1995 1996
---- ----
<S> <C> <C>
Summary of valuation allowances:
Cumulative net operating losses $10,140 $15,817
Deferred losses on sale of
subsidiaries 7,807 7,907
Accrued postretirement benefit costs - 10,786
Accrued pension costs - 7,336
Other 3,219 4,868
------- -------
Total valuation allowance $21,166 $46,714
======= =======
</TABLE>
At December 31, 1996, the Company had net operating loss
carryforwards in various countries for income tax purposes of
$59,076. Of this amount, $25,131 had no expiration date, relating
to subsidiaries in Sweden, Belgium, Australia, United Kingdom,
Austria, Brazil and France. Additionally, there were operating
losses at that date in various other countries in the amount of
$33,945 which expire in varying amounts through 2011.
In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
The ultimate realization of deferred tax assets is dependent upon
the generation of future taxable income during the periods in
which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities,
projected future taxable income, and tax planning strategies in
making this assessment.
17. OTHER CHARGES (INCOME), NET
Other income in 1994 and 1995 primarily relates to gains from
sales of property, and in 1994 to a gain on sale of a cost basis
investment.
Other charges for the period January 1, 1996 to October 14,
1996 of $1,872 represent employee severance of $1,545 and other
exit costs of $327 associated with the closing of its
Westerville, Ohio facility. Other charges for the period October
15, 1996 to December 31, 1996 principally represent employee
severance benefits associated with (i) the Company's general
headcount reduction programs, in Europe and North America, of
$4,557 which were announced during such period, and (ii) the
realignment of the analytical and precision balance business in
Switzerland of $6,205 which was internally announced in December,
1996. In connection with such programs the Company reduced its
workforce by 168 employees in 1996 and intends to further reduce
its workforce by approximately 70 employees.
18. FINANCIAL INCOME, NET
Financial income (expense) consists of the following for the
years ended December 31:
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
----------------------------------------------- ----------------
TWELVE MONTHS TWELVE MONTHS FOR THE PERIOD FOR THE PERIOD
ENDED ENDED ENDED OCTOBER 15, 1996
DECEMBER 31, DECEMBER 31, OCTOBER 14, TO DECEMBER 31,
1994 1995 1996 1996
------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Interest income $ 4,386 $ 5,388 $ 3,424 $ 1,079
Foreign currency transactions,
net 478 3,242 (220) (8,324)
------- ------- ------- -------
Total $ 4,864 $ 8,630 $ 3,204 $(7,245)
------- ------- ------- -------
</TABLE>
19. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Company leases certain of its facilities and equipment
under operating leases. The future minimum lease payments under
non-cancelable operating leases are as follows at December 31,
1996:
<TABLE>
<CAPTION>
<S> <C>
1997 $11,582
1998 8,521
1999 5,494
2000 2,236
2001 1,298
Thereafter 1,447
------
Total $30,578
=======
</TABLE>
Rent expense for operating leases amounted to $16,493,
$13,034 and $3,430 in 1995 and for the period January 1, 1996 to
October 14, 1996 and for the period October 15, 1996 to December
31, 1996, respectively.
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
will have a material adverse effect on the Company's financial
condition or results of operations.
20. GEOGRAPHIC SEGMENT INFORMATION
The tables below shows the Company's operations by geographic
region. Transfers between geographic regions are priced to
reflect consideration of market conditions and the regulations of
the countries in which the transferring entities are located.
<TABLE>
<CAPTION>
TRANSFERS EARNINGS
BETWEEN TOTAL NET BEFORE
TWELVE MONTHS ENDED NET SALES BY NET SALES BY GEOGRAPHIC SALES BY INTEREST AND
DECEMBER 31,1994 DESTINATION ORIGIN AREAS ORIGIN TAXES
- ------------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Switzerland (1) $ 31,992 $ 89,495 $ 133,583 $ 223,078 $ 10,516
Germany 126,527 133,772 37,056 170,828 10,034
Other Europe 215,230 192,557 776 193,333 1,665
-------------- -------------- -------------- -------------- --------------
Total Europe 373,749 415,824 171,415 587,239 22,215
United States 269,034 300,244 29,877 330,121 10,111
Other Americas 56,628 33,204 64 33,268 939
-------------- -------------- -------------- -------------- --------------
Total Americas 325,662 333,448 29,941 363,389 11,050
Asia and other 69,725 19,864 75 19,939 238
Eliminations -- -- (201,431) (201,431) (2,553)
-------------- -------------- -------------- -------------- --------------
Totals $ 769,136 $ 769,136 $ -- $ 769,136 $ 30,950
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
TRANSFERS EARNINGS
BETWEEN TOTAL NET BEFORE
TWELVE MONTHS ENDED NET SALES BY NET SALES BY GEOGRAPHIC SALES BY INTEREST AND TOTAL
DECEMBER 31,1995 DESTINATION ORIGIN AREAS ORIGIN TAXES ASSETS
- ------------------- -------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Switzerland (1) $ 41,820 $ 102,712 $ 159,453 $ 262,165 $ 6,316 $ 593,955
Germany 151,974 158,393 47,379 205,772 14,799 196,460
Other Europe 247,802 228,939 799 229,738 2,080 123,431
-------------- -------------- -------------- -------------- -------------- -------------
Total Europe 441,596 490,044 207,631 697,675 23,195 913,846
United States 263,945 298,053 29,578 327,631 7,363 257,956
Other Americas 52,966 32,732 131 32,863 950 14,474
-------------- -------------- -------------- -------------- -------------- -------------
Total Americas 316,911 330,785 29,709 360,494 8,313 272,430
Asia and other 91,908 29,586 97 29,683 2,331 31,777
Eliminations -- -- (237,437) (237,437) 3,554 (493,959)
-------------- -------------- -------------- -------------- -------------- -------------
Totals $ 850,415 $ 850,415 $ -- $ 850,415 $ 37,393 $ 724,094
============== ============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
TRANSFERS EARNINGS
FOR THE PERIOD BETWEEN TOTAL NET BEFORE
JANUARY 1, 1996 TO NET SALES BY NET SALES BY GEOGRAPHIC SALES BY INTEREST AND
OCTOBER 14, 1996 DESTINATION ORIGIN AREAS ORIGIN TAXES
- ------------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Switzerland (1) $ 32,282 $ 74,303 $ 126,423 $ 200,726 $ 17,299
Germany 104,961 114,015 35,583 149,598 9,631
Other Europe 186,823 171,061 840 171,901 1,928
-------------- -------------- -------------- -------------- --------------
Total Europe 324,066 359,379 162,846 522,225 28,858
United States 217,636 246,180 22,753 268,933 8,508
Other Americas 47,473 25,925 3 25,928 618
-------------- -------------- -------------- -------------- --------------
Total Americas 265,109 272,105 22,756 294,861 9,126
Asia and other 73,046 30,737 265 31,002 1,241
Eliminations -- -- (185,867) (185,867) (3,408)
-------------- -------------- -------------- -------------- --------------
Totals $ 662,221 $ 662,221 $ -- $ 662,221 $ 35,817
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
TRANSFERS EARNINGS
FOR THE PERIOD BETWEEN TOTAL NET BEFORE
OCTOBER 15, 1996 TO NET SALES BY NET SALES BY GEOGRAPHIC SALES BY INTEREST AND TOTAL
DECEMBER 31, 1996 DESTINATION ORIGIN AREAS ORIGIN TAXES ASSETS
- ------------------- -------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Switzerland (1) $ 8,415 $ 15,892 $ 39,570 $ 55,462 $ (99,233) $ 432,387
Germany 29,688 29,117 10,965 40,082 (5,209) 170,845
Other Europe 58,598 59,688 485 60,173 (4,971) 126,063
-------------- -------------- -------------- -------------- -------------- -------------
Total Europe 96,701 104,697 51,020 155,717 (109,413) 729,295
United States 56,405 64,109 6,731 70,840 (32,519) 477,762
Other Americas 13,436 7,371 3 7,374 (753) 17,730
-------------- -------------- -------------- -------------- -------------- -------------
Total Americas 69,841 71,480 6,734 78,214 (33,327) 495,492
Asia and other 20,370 10,735 28 10,763 (1,919) 48,245
Eliminations -- -- (57,782) (57,782) 511 (501,144)
-------------- -------------- -------------- -------------- -------------- -------------
Totals $ 186,912 $ 186,912 $ -- $ 186,912 $ (144,093) $ 771,888
============== ============== ============== ============== ============== =============
<FN>
(1) Includes Corporate.
</TABLE>
Schedule I
Schedule I - Condensed Financial Information of the Registrant
MT INVESTORS INC.
BALANCE SHEET
(in thousands, except per share data)
<TABLE>
<CAPTION>
December 31,
1996
----
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1
-------
Total current assets 1
Investment in Mettler-Toledo Holding Inc. 29,062
-------
Total assets $29,063
=======
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity:
Common stock, $0.01 par value per share:
Class A non-voting, authorized
2,233,117 shares; issued 1,899,779 $ 19
Class B voting, authorized
1,000 shares; issued 1,000 1
Class C non-voting, authorized
541,859 shares; issued 537,735 5
Additional paid-in capital 188,084
Accumulated deficit (159,046)
---------
Total shareholders' equity 29,063
--------
Total liabilities and shareholders' equity $ 29,063
========
</TABLE>
See the accompanying notes to the financial statements
<TABLE>
<CAPTION>
For the period
October 15, 1996
to December 31,
1996
------------------
<S> <C>
Equity in loss of
Mettler-Toledo Holding Inc. $(159,046)
----------
Net loss $(159,046)
==========
Loss per common share:
Weighted average number
of common shares 499,165
Loss per common share $(318.62)
===========
</TABLE>
See the accompanying notes to the financial statements
<TABLE>
<CAPTION>
For the period from October 15, 1996 to December 31, 1996
----------------------------------------------------------------------------------------------
Common Stock
-------------------------------------------------------- Additional
Class A Class B Class C Paid-in Accumulated
Shares Amount Shares Amount Shares Amount Capital Deficit Total
--------- ------- -------- -------- ------- ------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
October 15,
1996 -- $ -- 1,000 $ 1 -- $ -- $ -- $ -- $ 1
New Issuance
of shares 1,899,779 19 -- -- 537,735 5 188,084 -- 188,108
Net loss -- -- -- -- -- -- -- (159,046) (159,046)
---------- ------- -------- -------- ------- ------- ---------- ----------- ---------
Balance at
December 31,
1996 1,899,779 $ 19 1,000 $ 1 537,735 $ 5 $ 188,084 $ (159,046) $ 29,063
========== ======= ======== ======== ======= ======= ========== =========== =========
See the accompanying notes to the financial statements
</TABLE>
MT INVESTORS INC.
STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the period
October 15,
1996
to December 31,
1996
---------------
<S> <C>
Cash flows from operating activities:
Net loss $ (159,046)
Adjustments to reconcile net
loss to net cash provided
by operating activities:
Equity in loss of Mettler-Toledo
Holding Inc. 159,046
-----------
Net cash provided by
operating activities --
-----------
Cash flows from investing activities:
Investments in Mettler-Toledo Holding Inc. (188,108)
-----------
Net cash used in investing
activities (188,108)
-----------
Cash flows from financing activities:
Proceeds from issuance of common stock 188,108
-----------
Net cash provided by financing
activities 188,108
-----------
Net change in cash and cash equivalents --
Cash and cash equivalents:
Beginning of period 1
-----------
End of period $ 1
===========
</TABLE>
See the accompanying notes to the financial statements
MT INVESTORS INC.
NOTES TO THE FINANCIAL STATEMENTS
(in thousands unless otherwise stated)
1. BASIS OF PRESENTATION AND ACQUISITION
MT Investors Inc. ("MT Investors") was
incorporated by AEA Investors Inc. ("AEA") in December
1991. It was recapitalized to effect the acquisition
of the Mettler-Toledo Group from Ciba-Geigy AG ("Ciba")
and its wholly owned subsidiary, AG fur
Praisionsinstrumente ("AGP"). Pursuant to the terms of
a stock purchase agreement dated April 2, 1996 between
MT Investors, AGP and Ciba, on October 15, 1996 MT
Investors acquired the Mettler-Toledo Group in a
transaction accounted for as a purchase. Between the
date of formation and October 15, 1996, MT Investors
has no substantive operations.
The accompanying financial statements have been
prepared in accordance with United Sates generally
accepted accounting principles.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid
investments with original maturity dates of three
months or less.
Investment
The Company accounts for its investment in Mettler-
Toledo Holding Inc. under the equity method of
accounting.
Stock Based Compensation
The Company applies Accounting Principles Board
Opinion No. 25 "Accounting for Stock Issued to
Employees" and related interpretations in accounting
for its stock option plan.
Earnings per Common Share
Earnings per common share has been computed using
the weighted average number of outstanding common
shares during the period.
In February 1997, the Financial Accounting
Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings per Share." The
Company has yet to determine the effect of this
statement on its earnings per share.
Use of Estimates
The preparation of financial statements 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 period. Actual results may differ from
those estimates.
3. SHAREHOLDERS' EQUITY
The authorized capital stock of the Company
consists of 2,775,976 shares of Common Stock, $.01 par
value of which 2,233,117 shares are designated as Class
A Common Stock, 1,000 shares are designated Class B
Common Stock and 541,859 shares are designated Class C
Common Stock. As of December 31, 1996, the Company had
outstanding 1,899,779 shares of Class A Common Stock,
1,000 shares of Class B Common Stock and 537,735 shares
of Class C Common Stock. Additionally, 333,117 shares
of Class A Common Stock are reserved for the Company's
stock option plan (See Note 4).
Holders of the Company's common stock have no
preemptive, subscription or redemption rights. Except
as described below, the Company's three classes of
common stock have identical rights under the Company's
Certificate of Incorporation and By-Laws.
Dividends or distributions in connection with the
liquidation, dissolution or winding up of the affairs
of the Company or not paid out of the current and
accumulated earnings and profits shall be paid in the
following manner. First, exclusively to the holders of
the shares of Class A Common Stock, ratably to each
such holder, until the sum of all dividends and
distributions to each holder of Class A Common Stock
equals $100 for each share of Class A Common Stock held
by such holder. After each holder of shares of Class A
Common Stock shall have received dividends and
distributions totaling $100, then exclusively to the
holders of the shares of Class B Common and Class C
Common Stock ratably to each such holder until the sum
of all dividends and distributions to each holder of
Class B Common Stock and/or Class C Common Stock equals
$100 for each share of Class B Common Stock and/or
Class C Common Stock held by such holder. After each
holder of Class B Common Stock and Class C Common Stock
shall have received such dividends and distributions,
then to all holders of Class A Common Stock, Class B
Common Stock and/or Class C Common Stock, ratably to
each holder of such shares.
Class A and C Common Stock shareholders have no
voting rights.
4. STOCK OPTION PLAN
Effective October 15, 1996, MT Investors adopted a
stock option plan to provide certain key employees
and/or directors of the Company additional incentive to
join and/or remain in the service of the Company as
well as to maintain and enhance the long-term
performance and profitability of the Company. The plan
reserves 333,117 shares of Class A non-voting common
stock of MT Investors.
Under the terms of the plan, options granted shall
be nonqualified and the exercise price, as determined
by the committee, shall not be less than 100% of the
fair market value of the share of such common stock on
the date of grant. Options may not be exercised until
the fifth anniversary of the date of grant, subject to
certain acceleration clauses.
Stock option activity is shown below (per share
average option price amounts in whole dollars):
Option Price
-------------------
Number of Per Share Total
Shares Average Price
------- ------- --------
Granted during the period
October 15, 1996 to December
31, 1996 278,988 $100.00 $27,899
Exercised -- -- --
Forfeited -- -- --
------- ------- -------
Outstanding at December 31,
1996 278,988 $100.00 $27,899
======= ======= =======
Shares exerciseable at
December 31, 1996 -- $ -- $ --
======= ======= =======
The Company applies Accounting Standards Board
Opinion No. 25 and related interpretations in
accounting for its plans. Accordingly, no compensation
cost has been recognized for its stock option plan as
all options have been issued at fair market value. The
Company's net loss for the period October 15, 1996 to
December 31, 1996 would not have been materially
different had compensation cost been determined
consistent with Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 123
"Accounting for Stock Based Compensation".
SCHEDULE II
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- --------------- --------- --------------------- -------- ---------
Additions
---------------------
(1) (2)
Balance Charged Charged to Balance
at the to other at end of
beginning costs and accounts Deductions end of
Description of period expenses describe describe period
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Note (A)
Accounts
Receivable-
allowance for
doubtful
accounts:
For the period
October 15,
1996 to
December 31,
1996 $9,429 $ 97 -- $1,138 $8,388
For the period
January 1, 1996
to
October 14,
1996 9,292 370 -- 233 9,429
Year ended
December 31,
1995 7,411 3,287 -- 1,406 9,292
1994 5,926 2,342 -- 857 7,411
</TABLE>
Note A
Represents excess of uncollectable balances written off over
recoveries of accounts previously written off. Additionally,
amounts are net of foreign currency translation effect of $(462),
$(409), $(375) and $(159) for the years ended 1994 and 1995 and
for the period from January 1, 1996 to October 14, 1996 and for
the period from October 15, 1996 to December 31, 1996,
respectively.
Exhibit 3.1.1
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE RESTATED CERTIFICATE OF "MT INVESTORS INC.", FILED IN
THIS OFFICE ON THE ELEVENTH DAY OF OCTOBER, A.D. 1996, AT 12:30
O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
(Corporate Seal of /s/ Edward J. Freel
the Secretary's Office -----------------------------------
of the State Edward J. Freel, Secretary of State
of Delaware)
AUTHENTICATION: 8146625
2281086 8100 DATE: 10-15-96
960297810
RESTATED CERTIFICATE OF INCORPORATION
OF
MT INVESTORS INC.
(PURSUANT TO SECTIONS 242 AND 245 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE)
The undersigned Vice President and Secretary of MT
Investors Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certify as follows:
1. The Corporation's present name is MT Investors
Inc. It was originally incorporated under the name of Delta Four
Holdings Inc. The date of filing of its original Certificate of
Incorporation with the Secretary of State was December 6, 1991.
2. The Restated Certificate of Incorporation further
amends the Certificate of Incorporation of the Corporation, as
heretofore amended and now in effect, to increase its authorized
capital stock, to create new classes of stock, to set forth the
relative rights, privileges and preferences and the limitations
of the various classes of stock, to reclassify the outstanding
10,000 shares of its Common Stock into 950 shares of Class B
Common Stock and 341,908 shares of Class C Common Stock, and
restates and integrates into a single instrument all of the
provisions thereof as so amended. The Restated Certificate of
Incorporation was proposed by the Board of Directors and adopted
by the stockholders of the Corporation in the manner and by the
vote prescribed by Section 242 of the General Corporation Law of
the State of Delaware, the written consent of the stockholders
having been given in accordance with Section 228 of such Law and
written notice having been given as provided in such Section 228,
and is as follows:
FIRST: The name of the Corporation is MT
Investors Inc.
SECOND: The address of the Corporation's
registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name of
its registered agent as such address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is
to engage in any lawful act or activity for which
corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of all
classes of stock which the Corporation shall have
authority to issue is Two Million Five Hundred Seventy-
Five Thousand Nine Hundred Seventy-Five (2,575,975)
shares, par value $.0l per share, of which Two Million
Two Hundred Thirty-Three Thousand One Hundred Seventeen
(2,233,117) shares shall be designated as Class A
Common Stock, Nine Hundred Fifty (950) shares shall be
designated as Class B Common Stock and Three Hundred
Forty-One Thousand Nine Hundred Eight (341,908) shares
shall be designated as Class C Common Stock.
A statement of the powers, preferences, and
rights, and the qualifications, limitations or
restrictions thereof, in respect of each class of stock
is as follows:
1. Dividends and Distributions:
---------------------------
1.01 The holders of the Class A Common Stock,
the Class B Common Stock and the Class C Common Stock
shall be entitled to receive dividends and
distributions, including distributions in connection
with the liquidation, dissolution or winding up of the
affairs of the Corporation, when and as declared or
made by the Board of Directors of the Corporation, out
of funds of the Corporation legally available therefor,
payable on such dividend or distribution payment dates
to stockholders of record on such record dates, not
exceeding 60 days preceding the dividend or
distribution payment dates, as shall be fixed for the
purpose by the Board of Directors of the Corporation,
upon the following terms:
1.01(a). Dividends or distributions in
connection with the liquidation, dissolution or winding
up of the affairs of the Corporation, or not paid out
of the current and accumulated earnings and profits
(which as used herein shall mean earnings and profits
as referred to in the Internal Revenue Code of 1986, as
amended, (the "Code")) of the Corporation, shall be
paid in accordance with Sections 1.01(a)(i),
1.01(a)(ii), 1.01(a)(iii) and 1.01(a)(iv). A dividend
or distribution shall be deemed as "not paid out of the
current and accumulated earnings and profits of the
Corporation" to the extent the amount of such dividend
or distribution exceeds the amount of current and
accumulated earnings and profits which the Corporation
would have at the end of the fiscal year in which such
dividend or distribution is declared (not taking into
account such dividend or distribution) as estimated in
good faith by the Board of Directors at the time of
declaration.
1.01(a)(i). First, exclusively to the holders
of the shares of Class A Common Stock, ratably to each
such holder in the proportion that the number of shares
of Class A Common Stock held by such holder bears to
the total outstanding shares of Class A Common Stock,
until the sum of all dividends and distributions under
this Section 1.01(a)(i) to each holder of Class A
Common Stock in cash or in kind (valued in the manner
set forth in Section 1.01(c) below) equals One Hundred
Dollars ($100) for each share of Class A Common Stock
held by such holder.
1.01(a)(ii). After each holder of shares of
Class A Common Stock shall have received dividends and
distributions under Section 1.01(a)(i) totaling One
Hundred Dollars ($100), then exclusively to the holders
of the shares of Class B Common Stock and Class C
Common Stock ratably to each such holder in the
proportion that the number of shares of Class B Common
Stock and Class C Common Stock held by such holder
bears to the sum of the total outstanding shares of
Class B Common Stock and Class C Common Stock until the
sum of all dividends and distributions under this
Section 1.01(a)(ii) to each holder of Class B Common
Stock and/or Class C Common Stock in cash or in kind
(valued in the manner set forth in Section 1.01(c)
below) equals One Hundred Dollars ($100) for each share
of Class B Common Stock and/or Class C Common Stock
held by such holder.
1.01(a)(iii). After each holder of shares of
Class B Common Stock and Class C Common Stock shall
have received dividends and distributions under Section
1.01(a)(ii) totaling One Hundred Dollars ($100) for
each share of Class B Common Stock and/or Class C
Common Stock held by such holder, then to all of the
holders of shares of Class A Common Stock, Class B
Common Stock and Class C Common Stock, ratably to each
such holder in the proportion that the number of shares
of Class A Common Stock, Class B Common Stock and/or
Class C Common Stock held by such holder bears to the
total number of outstanding shares of all such classes
of stock of the Corporation.
1.01(b). Dividends or distributions not
covered by Section 1.01(a) shall be paid ratably to all
of the holders of the Class A Common Stock, Class B
Common Stock and Class C Common Stock in the proportion
that the number of shares of Class A Common Stock,
Class B Common Stock and/or Class C Common Stock held
by such holder bears to the total number of outstanding
shares of all such classes of stock of the Corporation.
1.01(c). Dividends or distributions of any
property of the Corporation shall be made as follows:
1.01(c)(i). The value of such property
shall be determined in the manner set forth in Section
1.01(c)(ii) on the last business day prior to the date
of declaration of such distribution; and such property
shall be deemed to have been sold with the resulting
net proceeds being equal to such value and shall be
distributed to the holders of shares of stock of the
Corporation in accordance with Sections 1.01(a) and
1.01(b).
1.01(c)(ii). For the purpose of determining
the value of any property of the Corporation, freely
marketable securities which are listed on a national
securities exchange shall be valued at the average of
their last sales prices on each of the last 20 trading
days ending on and including the date of determination.
If no sales occurred on any such trading day, such
sales price shall be deemed to be the mean between the
"bid" and "ask" prices on such day. Freely marketable
securities which are not so listed shall be valued at
the average of their last closing "bid" and "ask"
prices on each of the last 20 trading days ending on
and including the date of determination on the basis of
quotations furnished by the National Association of
Securities Dealers Incorporated, if available. Any
security which is held under the representation that it
has been acquired for investment and not with a view to
public sale or distribution or which is held subject to
any other restriction affecting marketability shall be
valued at such discount from the value determined under
the applicable provisions above as the Board of
Directors of the Corporation deems necessary to reflect
properly the restricted marketability of such
securities. Notwithstanding the foregoing, securities
which are not freely marketable securities and all
other property may be assigned such value as the Board
of Directors of the Corporation determines to be the
fair value. All matters concerning the valuation of
the property of the Corporation, the determination of
earnings and profits and accounting procedures not
specifically and expressly provided for by the terms of
this Certificate of Incorporation shall be determined
by the Board of Directors of the Corporation, whose
determination shall, when made in good faith and with
due care to the performance of its duties, be final and
conclusive as to all of the holders of outstanding
shares of the Corporation.
2. Voting Rights:
-------------
2.01. Except as expressly required by
statute, the entire voting power and all voting rights
shall be vested exclusively in the Class B Common
Stock. Each holder of shares of the Class B Common
Stock shall be entitled to one (1) vote for each share
of the Class B Common Stock standing in such holder's
name on the books of the Corporation.
2.02. As permitted by Section 242(b)(2)
of the Delaware General Corporation Law, the number of
authorized shares of any class of the Corporation's
Common Stock may be increased at any time and from time
to time by the affirmative vote of the holders of a
majority of the shares of Class B Common Stock.
FIFTH: Elections of directors need not be
by ballot unless the By-Laws of the Corporation so
provide.
SIXTH: The Board of Directors of the
Corporation may make By-Laws and from time to time may
alter, amend or repeal By-Laws.
SEVENTH: To the fullest extent permitted by
the Delaware General Corporation Law as the same exists
or may hereafter be amended, a Director of the
Corporation shall not be liable to the Corporation or
its stockholders for monetary damages for breach of
fiduciary duty as a Director.
3. On the date this Restated Certificate of
Incorporation becomes effective, the presently outstanding 10,000
shares of Common Stock, par value $1.00 per share, of the
Corporation shall, without any action on the part of the
respective holders thereof, be reclassified and changed into 950
shares of the Class B Common Stock, par value $.01 per share, and
341,908 shares of the Class C Common Stock, par value $.01 per
share, of the Corporation.
IN WITNESS WHEREOF, the undersigned have signed this
instrument the 11th day of October, 1996.
/s/ Thomas P. Salice
------------------------
Thomas P. Salice
Vice President
Attest: /s/ Christine J. Smith
------------------------
Christine J. Smith
Secretary
EXHIBIT 3.1.2
State of Delaware
Office of the Secretary of State
--------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF "MT INVESTORS INC.",
FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF OCTOBER, A.D. 1996,
AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
(Corporate Seal of /s/ Edward J. Freel
the Secretary's Office -----------------------------------
of the State Edward J. Freel, Secretary of State
of Delaware)
AUTHENTICATION: 8151190
2281086 8100 DATE: 10-17-96
960299137
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
MT INVESTORS INC.
(Pursuant to Section 242 of the General Corporation Law
of the State of Delaware)
The undersigned Vice President and Secretary of MT
Investors Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certify as follows:
FIRST: The Restated Certificate of Incorporation of
the Corporation, as heretofore amended and restated, is further
amended to increase the authorized capital stock of the
Corporation by an additional 50 shares of Class B Common Stock
and an additional 199,951 shares of Class C Common Stock. To
effect the same, the first paragraph of ARTICLE FOURTH is deleted
in its entirety and the following is inserted in place thereof:
"FOURTH: The total number of shares of
all classes of stock which the Corporation
shall have authority to issue is Two Million
Seven Hundred Seventy-Five Thousand Nine
Hundred Seventy-Six (2,775,976) shares, all
with a par value of One Cent ($.01) per
share, of which Two Million Two Hundred
Thirty-Three Thousand One Hundred Seventeen
(2,233,117) shares shall be designated as
Class A Common Stock, One Thousand (1,000)
shares shall be designated as Class B Common
Stock and Five Hundred Forty-One Thousand
Eight Hundred Fifty-Nine (541,859) shares
shall be designated as Class C Common Stock."
The remaining provisions of ARTICLE FOURTH shall remain
in full force and effect subject to the provisions hereof.
SECOND: This Amendment to the Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the
State of Delaware. Consent of stockholders was given in
accordance with Section 228 of such Law and written notice has
been given as provided in such Section 228.
IN WITNESS WHEREOF, the undersigned have signed this
instrument this 15th day of October, 1996.
/s/ Thomas P. Salice
-----------------------------------
Thomas P. Salice
Vice President
Attest:
/s/ Christine J. Smith
- ------------------------------------
Christine J. Smith
Secretary
Exhibit 3.1.3
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
MT INVESTORS INC.
(Pursuant to Section 242 of the General Corporation Law
of the State of Delaware)
The undersigned Vice President and Secretary of MT
Investors Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certify as follows:
FIRST: The Restated Certificate of Incorporation of
the Corporation, as heretofore amended and restated, is further
amended to increase the authorized capital stock of the
Corporation by an additional 2,779 shares of Class A Common
Stock. To effect the same, the first paragraph of ARTICLE FOURTH
is deleted in its entirety and the following is inserted in place
thereof:
"FOURTH: The total number of shares of all
classes of stock which the Corporation shall have
authority to issue is Two Million Seven Hundred
Seventy-Eight Thousand Seven Hundred Fifty-Five
(2,778,755) shares, all with a par value of One
Cent ($.01) per share, of which Two Million Two
Hundred Thirty-Five Thousand Eight Hundred Ninety-
Six (2,235,896) shares shall be designated as
Class A Common Stock, One Thousand (1,000) shares
shall be designated as Class B Common Stock and
Five Hundred Forty-One Thousand Eight Hundred
Fifty-Nine (541,859) shares shall be designated as
Class C Common Stock."
The remaining provisions of ARTICLE FOURTH shall remain
in full force and effect subject to the provisions hereof.
SECOND: This Amendment to the Certificate of
Incorporation has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the
State of Delaware. Consent of stockholders was given in
accordance with Section 228 of such Law and written notice has
been given as provided in such Section 228.
IN WITNESS WHEREOF, the undersigned have signed this
instrument this 1st day of April, 1997.
/s/ Thomas P. Salice
------------------------------
Thomas P. Salice
Vice President
Attest:
/s/ Christine J. Smith
- -------------------------------
Christine J. Smith
Secretary
Exhibit 3.2
BY-LAWS
OF
MT INVESTORS INC.
ARTICLE I
---------
STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the
stockholders of the Corporation shall be held on such date, at
such time and at such place within or without the State of
Delaware as may be designated by the Board of Directors, for the
purpose of electing Directors and for the transaction of such
other business as may be properly brought before the meeting.
SECTION 2. SPECIAL MEETING. Except as otherwise
provided in the Certificate of Incorporation, a special meeting
of the stockholders of the Corporation may be called at any time
by the Board of Directors, the Chairman of the Board or the
President and shall be called by the Chairman of the Board, the
President or the Secretary at the request in writing of
stockholders holding together at least twenty-five percent of the
number of shares of stock outstanding and entitled to vote at
such meeting. Any special meeting of the stockholders shall be
held on such date, at such time and at such place within or
without the State of Delaware as the Board of Directors or the
officer calling the meeting may designate. At a special meeting
of the stockholders, no business shall be transacted and no
corporate action shall be taken other than that stated in the
notice of the meeting unless all of the stockholders are present
in person or by proxy, in which case any and all business may be
transacted at the meeting even though the meeting is held without
notice.
SECTION 3. NOTICE OF MEETINGS. Except as otherwise
provided in these BY-LAWS or by law, a written notice of each
meeting of the stockholders shall be given not less than ten (10)
nor more than sixty (60) days before the date of the meeting to
each stockholder of the Corporation entitled to vote at such
meeting at his address as it appears on the records of the
Corporation. The notice shall state the place, date and hour of
the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called.
SECTION 4. QUORUM. At any meeting of the
stockholders, the holders of a majority in number of the total
outstanding shares of stock of the Corporation entitled to vote
at such meeting, present in person or represented by proxy, shall
constitute a quorum of the stockholders for all purposes, unless
the representation of a larger number of shares shall be required
by law, by the Certificate of Incorporation or by these By-Laws,
in which case the representation of the number of shares so
required shall constitute a quorum; provided that at any meeting
of the stockholders at which the holders of any class of stock of
the Corporation shall be entitled to vote separately as a class,
the holders of a majority in number of the total outstanding
shares of such class, present in person or represented by proxy,
shall constitute a quorum for purposes of such class vote unless
the representation of a larger number of shares of such class
shall be required by law, by the Certificate of Incorporation or
by these By-Laws.
SECTION 5. ADJOURNED MEETINGS. Whether or not a
quorum shall be present in person or represented at any meeting
of the stockholders, the holders of a majority in number of the
shares of stock of the Corporation present in person or
represented by proxy and entitled to vote at such meeting may
adjourn from time to time; provided, however, that if the holders
of any class of stock of the Corporation are entitled to vote
separately as a class upon any matter at such meeting, any
adjournment of the meeting in respect of action by such class
upon such matter shall be determined by the holders of a majority
of the shares of such class present in person or represented by
proxy and entitled to vote at such meeting. When a meeting is
adjourned to another time or place, notice need not be given of
the adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken. At the
adjourned meeting the stockholders, or the holders of any class
of stock entitled to vote separately as a class, as the case may
be, may transact any business which might have been transacted by
them at the original meeting. If the adjournment is for more
than thirty days, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to
vote at the adjourned meeting.
SECTION 6. ORGANIZATION. The Chairman of the Board
or, in his absence, the President shall call all meetings of the
stockholders to order, and shall act as Chairman of such
meetings. In the absence of the Chairman of the Board and the
President, the holders of a majority in number of the shares of
stock of the Corporation present in person or represented by
proxy and entitled to vote at such meeting shall elect a
Chairman.
The Secretary of the Corporation shall act as Secretary
of all meetings of the stockholders; but in the absence of the
Secretary, the Chairman may appoint any person to act as
Secretary of the meeting. It shall be the duty of the Secretary
to prepare and make, at least ten days before every meeting of
stockholders, a complete list of stockholders entitled to vote at
such meeting, arranged in alphabetical order and showing the
address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open, either
at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held, for
the ten days next preceding the meeting, to the examination of
any stockholder, for any purpose germane to the meeting, during
ordinary business hours, and shall be produced and kept at the
time and place of the meeting during the whole time thereof and
subject to the inspection of any stockholder who may be present.
SECTION 7. VOTING. Except as otherwise provided in
the Certificate of Incorporation or by law, each stockholder
shall be entitled to one vote for each share of the capital stock
of the Corporation registered in the name of such stockholder
upon the books of the Corporation. Each stockholder entitled to
vote at a meeting of stockholders or to express consent or
dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by proxy, but
no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period. When
directed by the presiding officer or upon the demand of any
stockholder, the vote upon any matter before a meeting of
stockholders shall be by ballot. Except as otherwise provided by
law or by the Certificate of Incorporation, Directors shall be
elected by a plurality of the votes cast at a meeting of
stockholders by the stockholders entitled to vote in the election
and, whenever any corporate action, other than the election of
Directors is to be taken, it shall be authorized by a majority of
the votes cast at a meeting of stockholders by the stockholders
entitled to vote thereon.
Shares of the capital stock of the Corporation
belonging to the Corporation or to another corporation, if a
majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or
indirectly, by the Corporation, shall neither be entitled to vote
nor be counted for quorum purposes.
SECTION 8. INSPECTORS. When required by law or
directed by the presiding officer or upon the demand of any
stockholder entitled to vote, but not otherwise, the polls shall
be opened and closed, the proxies and ballots shall be received
and taken in charge, and all questions touching the qualification
of voters, the validity of proxies and the acceptance or
rejection of votes shall be decided at any meeting of the
stockholders by two or more Inspectors who may be appointed by
the Board of Directors before the meeting, or if not so
appointed, shall be appointed by the presiding officer at the
meeting. If any person so appointed fails to appear or act, the
vacancy may be filled by appointment in like manner.
SECTION 9. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING.
Unless otherwise provided in the Certificate of Incorporation,
any action required to be taken or which may be taken at any
annual or special meeting of the stockholders of the Corporation,
may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice
of the taking of any such corporate action without a meeting by
less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE II
----------
BOARD OF DIRECTORS
------------------
SECTION 1. NUMBER AND TERM OF OFFICE. The business
and affairs of the Corporation shall be managed by or under the
direction of eight (8) Directors, who need not be stockholders of
the Corporation. The Directors shall, except as hereinafter
otherwise provided for filling vacancies, be elected at the
annual meeting of stockholders, and shall hold office until their
respective successors are elected and qualified or until their
earlier resignation or removal. The number of Directors may be
altered from time to time by amendment of these By-Laws.
SECTION 2. REMOVAL, VACANCIES AND ADDITIONAL
DIRECTORS. The stockholders may, at any special meeting the
notice of which shall state that it is called for that purpose,
remove, with or without cause, any Director and fill the vacancy;
provided that whenever any Director shall have been elected by
the holders of any class of stock of the Corporation voting
separately as a class under the provisions of the Certificate of
Incorporation, such Director may be removed and the vacancy
filled only by the holders of that class of stock voting
separately as a class. Vacancies caused by any such removal and
not filled by the stockholders at the meeting at which such
removal shall have been made, or any vacancy caused by the death
or resignation of any Director or for any other reason, and any
newly created directorship resulting from any increase in the
authorized number of Directors, may be filled by the affirmative
vote of a majority of the Directors then in office, although less
than a quorum, and any Director so elected to fill any such
vacancy or newly created directorship shall hold office until his
successor is elected and qualified or until his earlier
resignation or removal.
When one or more Directors shall resign effective at a
future date, a majority of the Directors then in office,
including those who have so resigned, shall have power to fill
such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective, and each
Director so chosen shall hold office as herein provided in
connection with the filling of other vacancies.
SECTION 3. PLACE OF MEETING. The Board of Directors
may hold its meetings in such place or places in the State of
Delaware or outside the State of Delaware as the Board from time
to time shall determine.
SECTION 4. REGULAR MEETINGS. Regular meetings of the
Board of Directors shall be held at such times and places as the
Board from time to time by resolution shall determine. No notice
shall be required for any regular meeting of the Board of
Directors; but a copy of every resolution fixing or changing the
time or place of regular meetings shall be mailed to every
Director at least five days before the first meeting held in
pursuance thereof.
SECTION 5. SPECIAL MEETINGS. Special meetings of the
Board of Directors shall be held whenever called by the direction
of the Chairman of the Board, the President or by any two of the
Directors then in office.
Notice of the day, hour and place of holding of each
special meeting shall be given by mailing the same at least two
days before the meeting or by causing the same to be delivered
personally or transmitted by telegraph, facsimile, telex or sent
by certified, registered or overnight mail at least one day
before the meeting to each Director. Unless otherwise indicated
in the notice thereof, any and all business other than an
amendment of these By-Laws may be transacted at any special
meeting, and an amendment of these By-Laws may be acted upon if
the notice of the meeting shall have stated that the amendment of
these By-Laws is one of the purposes of the meeting. At any
meeting at which every Director shall be present, even though
without any notice, any business may be transacted, including the
amendment of these By-Laws.
SECTION 6. QUORUM. Subject to the provisions of
Section 2 of this Article II, a majority of the members of the
Board of Directors in office (but in no case less than one-third
of the total number of Directors nor less than two Directors)
shall constitute a quorum for the transaction of business and the
vote of the majority of the Directors present at any meeting of
the Board of Directors at which a quorum is present shall be the
act of the Board of Directors. If at any meeting of the Board
there is less than a quorum present, a majority of those present
may adjourn the meeting from time to time.
SECTION 7. ORGANIZATION. The Chairman of the Board
or, in his absence, the President shall preside at a meetings of
the Board of Directors. In the absence of the Chairman of the
Board and the President, a Chairman shall be elected from the
Directors present. The Secretary of the Corporation shall act as
Secretary of all meetings of the Directors; but in the absence of
the Secretary, the Chairman may appoint any person to act as
Secretary of the meeting.
SECTION 8. COMMITTEES. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one
or more committees, each committee to consist of one or more of
the Directors of the Corporation. The Board may designate one or
more Directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any
such absent or disqualified member. Any such committee, to the
extent provided by resolution passed by a majority of the whole
Board, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and
the affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but
no such committee shall have the power or authority in reference
to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially
all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of
a dissolution, or amending these By-Laws; and unless such
resolution, these By-Laws, or the Certificate of Incorporation
expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of
stock.
SECTION 9. CONFERENCE TELEPHONE MEETINGS. Unless
otherwise restricted by the Certificate of Incorporation or by
these By-Laws, the members of the Board of Directors or any
committee designated by the Board, may participate in a meeting
of the Board or such committee, as the case may be, by means of
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other, and such participation shall constitute presence in person
at such meeting.
SECTION 10. CONSENT OF DIRECTORS OR COMMITTEE IN LIEU
OF MEETING. Unless otherwise restricted by the Certificate of
Incorporation or by these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors,
or of any committee thereof, may be taken without a meeting if
all members of the Board or committee, as the case may be,
consent thereto in writing and the writing or writings are filed
with the minutes of proceedings of the Board or committee, as the
case may be.
ARTICLE III
-----------
OFFICERS
--------
SECTION 1. OFFICERS. The officers of the Corporation
shall be a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary and a Treasurer, and such additional
officers, if any, as shall be elected by the Board of Directors
pursuant to the provisions of Section 7 of this Article III. The
Chairman of the Board, the President, one or more Vice
Presidents, the Secretary and the Treasurer shall be elected by
the Board of Directors at its first meeting after each annual
meeting of the stockholders. The failure to hold such election
shall not of itself terminate the term of office of any officer.
All officers shall hold office at the pleasure of the Board of
Directors. Any officer may resign at any time upon written
notice to the Corporation. Officers may, but need not, be
Directors. Any number of offices may be held by the same person.
All officers, agents and employees shall be subject to
removal, with or without cause, at any time by the Board of
Directors. The removal of an officer without cause shall be
without prejudice to his contract rights, if any. The election
or appointment of an officer shall not of itself create contract
rights. All agents and employees other than officers elected by
the Board of Directors shall also be subject to removal, with or
without cause, at any time by the officers appointing them.
Any vacancy caused by the death of any officer, his
resignation, his removal, or otherwise, may be filled by the
Board of Directors, and any officer so elected shall hold office
at the pleasure of the Board of Directors.
In addition to the powers and duties of the officers of
the Corporation as set forth in these By-Laws, the officers shall
have such authority and shall perform such duties as from time to
time may be determined by the Board of Directors.
SECTION 2. POWERS AND DUTIES OF THE CHAIRMAN OF THE
BOARD. The Chairman of the Board shall preside at all meetings
of the stockholders and at all meetings of the Board of Directors
and shall have such other powers and perform such other duties as
may from time to time be assigned to him by these By-Laws or by
the Board of Directors.
SECTION 3. POWERS AND DUTIES OF THE PRESIDENT. The
President shall be the chief executive officer of the Corporation
and, subject to the control of the Board of Directors and the
Chairman of the Board, shall have general charge and control of
all its operations and shall perform all duties incident to the
office of President. In the absence of the Chairman of the
Board, he shall preside at all meetings of the stockholders and
at all meetings of the Board of Directors and shall have such
other powers and perform such other duties as may from time to
time be assigned to him by these By-Laws or by the Board of
Directors or the Chairman of the Board.
SECTION 4. POWERS AND DUTIES OF THE VICE PRESIDENTS.
Each Vice President shall perform all duties incident to the
office of Vice President and shall have such other powers and
perform such other duties as may from time to time be assigned to
him by these By-Laws or by the Board of Directors, the Chairman
of the Board or the President.
SECTION 5. POWERS AND DUTIES OF THE SECRETARY. The
Secretary shall keep the minutes of all meetings of the Board of
Directors and the minutes of all meetings of the stockholders in
books provided for that purpose; he shall attend to the giving or
serving of all notices of the Corporation; he shall have custody
of the corporate seal of the Corporation and shall affix the same
to such documents and other papers as the Board of Directors, the
Chairman of the Board or the President shall authorize and
direct; he shall have charge of the stock certificate books,
transfer books and stock ledgers and such other books and papers
as the Board of Directors, the Chairman of the Board or the
President shall direct, all of which shall at all reasonable
times be open to the examination of any Director, upon
application, at the office of the Corporation during business
hours; and he shall perform all duties incident to the office of
Secretary and shall also have such other powers and shall perform
such other duties as may from time to time be assigned to him by
these By-Laws or the Board of Directors, the Chairman of the
Board or the President.
SECTION 6. POWERS AND DUTIES OF THE TREASURER. The
Treasurer shall have custody of, and when proper shall pay out,
disburse or otherwise dispose of, all funds and securities of the
Corporation which may have come into his hands; he may endorse on
behalf of the Corporation for collection checks, notes and other
obligations and shall deposit the same to the credit of the
Corporation in such bank or banks or depositary or depositories
as the Board of Directors may designate; he shall sign all
receipts and vouchers for payments made to the Corporation; he
shall enter or cause to be entered regularly in the books of the
Corporation kept for the purpose full and accurate accounts of
all moneys received or paid or otherwise disposed of by him and
whenever required by the Board of Directors or the President
shall render statements of such accounts; he shall, at all
reasonable times, exhibit his books and accounts to any Director
of the Corporation upon application at the office of the
Corporation during business hours; and he shall perform all
duties incident to the office of Treasurer and shall also have
such other powers and shall perform such other duties as may from
time to time be assigned to him by these By-Laws or by the Board
of Directors, the Chairman of the Board or the President.
SECTION 7. ADDITIONAL OFFICERS. The Board of
Directors may from time to time elect such other officers (who
may but need not be Directors), including a Controller, Assistant
Treasurers, Assistant Secretaries and Assistant Controllers, as
the Board may deem advisable and such officers shall have such
authority and shall perform such duties as may from time to time
be assigned to them by the Board of Directors, the Chairman of
the Board or the President.
The Board of Directors may from time to time by
resolution delegate to any Assistant Treasurer or Assistant
Treasurers any of the powers or duties herein assigned to the
Treasurer; and may similarly delegate to any Assistant Secretary
or Assistant Secretaries any of the powers or duties herein
assigned to the Secretary.
SECTION 8. GIVING OF BOND BY OFFICERS. All officers
of the Corporation, if required to do so by the Board of
Directors, shall furnish bonds to the Corporation for the
faithful performance of their duties, in such penalties and with
such conditions and security as the Board shall require.
SECTION 9. VOTING UPON STOCKS. Unless otherwise
ordered by the Board of Directors, the Chairman of the Board, the
President or any Vice President shall have full power and
authority on behalf of the Corporation to attend and to act and
to vote, or in the name of the Corporation to execute proxies to
vote, at any meetings of stockholders of any corporation in which
the Corporation may hold stock, and at any such meetings shall
possess and may exercise, in person or by proxy, any and all
rights, powers and privileges incident to the ownership of such
stock. The Board of Directors may from time to time, by
resolution, confer like powers upon any other person or persons.
SECTION 10. COMPENSATION OF OFFICERS. The officers of
the Corporation shall be entitled to receive such compensation
for their services as shall from time to time be determined by
the Board of Directors.
ARTICLE IV
----------
STOCK-SEAL-FISCAL YEAR
----------------------
SECTION 1. CERTIFICATES FOR SHARES OF STOCK. The
certificates for shares of stock of the Corporation shall be in
such form, not inconsistent with the Certificate of Incorporation
as shall be approved by the Board of Directors. All certificates
shall be signed by the Chairman of the Board, the President or a
Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer, and shall not be valid
unless so signed.
In case any officer or officers who shall have signed
any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates
had not ceased to be such officer or officers of the Corporation.
All certificates for shares of stock shall be
consecutively numbered as the same are issued. The name of the
person owning the shares represented thereby with the number of
such shares and the date of issue thereof shall be entered on the
books of the Corporation.
Except as hereinafter provided, all certificates
surrendered to the Corporation for transfer shall be cancelled,
and no new certificates shall be issued until former certificates
for the same number of shares have been surrendered and
cancelled.
SECTION 2. LOST, STOLEN OR DESTROYED CERTIFICATES.
Whenever a person owning a certificate for shares of stock of the
Corporation alleges that it has been lost, stolen or destroyed,
he shall file in the office of the Corporation an affidavit
setting forth, to the best of his knowledge and belief, the time,
place and circumstances of the loss, theft or destruction, and,
if required by the Board of Directors, a bond of indemnity or
other indemnification sufficient in the opinion of the Board of
Directors to indemnify the Corporation and its agents against any
claim that may be made against it or them on account of the
alleged loss, theft or destruction of any such certificate or the
issuance of a new certificate in replacement therefor. Thereupon
the Corporation may cause to be issued to such person a new
certificate in replacement for the certificate alleged to have
been lost, stolen or destroyed. Upon the stub of every new
certificate so issued shall be noted the fact of such issue and
the number, date and the name of the registered owner of the
lost, stolen or destroyed certificate in lieu of which the new
certificate is issued.
SECTION 3. TRANSFER OF SHARES. Shares of stock of the
Corporation shall be transferred on the books of the Corporation
by the holder thereof, in person or by his attorney duly
authorized in writing, upon surrender and cancellation of
certificates for the number of shares of stock to be transferred,
except as provided in the preceding section.
SECTION 4. REGULATIONS. The Board of Directors shall
have power and authority to make such rules and regulations as it
may deem expedient concerning the issue, transfer and
registration of certificates for shares of stock of the
Corporation.
SECTION 5. RECORD DATE. In order that the Corporation
may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting
or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, as the case
may be, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) nor less than ten
(10) days before the date of such meeting, nor more than sixty
(60) days prior to any other action.
If no record date is fixed, the record date for
determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; the record date
for determining stockholders entitled to express consent to
corporate action in writing without a meeting, when no prior
action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed; and the record
date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
SECTION 6. DIVIDENDS. Subject to the provisions of
the Certificate of Incorporation, the Board of Directors shall
have power to declare and pay dividends upon shares of stock of
the Corporation, but only out of funds available for the payment
of dividends as provided by law.
Subject to the provisions of the Certificate of
Incorporation, any dividends declared upon the stock of the
Corporation shall be payable on such date or dates as the Board
of Directors shall determine. If the date fixed for the payment
of any dividend shall in any year fall upon a legal holiday, then
the dividend payable on such date shall be paid on the next day
not a legal holiday.
SECTION 7. CORPORATE SEAL. The Board of Directors
shall provide a suitable seal, containing the name of the
Corporation, which seal shall be kept in the custody of the
Secretary. A duplicate of the seal may be kept and be used by
any officer of the Corporation designated by the Board of
Directors, the Chairman of the Board or the President.
SECTION 8. FISCAL YEAR. The fiscal year of the
Corporation shall be such fiscal year as the Board of Directors
from time to time by resolution shall determine.
ARTICLE V
---------
MISCELLANEOUS PROVISIONS
------------------------
SECTION 1. CHECKS, NOTES, ETC. All checks, drafts,
bills of exchange, acceptances, notes or other obligations or
orders for the payment of money shall be signed and, if so
required by the Board of Directors, countersigned by such
officers of the Corporation and/or other persons as the Board of
Directors from time to time shall designate.
Checks, drafts, bills of exchange, acceptances, notes,
obligations and orders for the payment of money made payable to
the Corporation may be endorsed for deposit to the credit of the
Corporation with a duly authorized depositary by the Treasurer,
or otherwise as the Board of Directors may from time to time, by
resolution, determine.
SECTION 2. LOANS. No loans and no renewals of any
loans shall be contracted on behalf of the Corporation except as
authorized by the Board of Directors. When authorized so to do,
any officer or agent of the Corporation may effect loans and
advances for the Corporation from any bank, trust company or
other institution or from any firm, corporation or individual,
and for such loans and advances may make, execute and deliver
promissory notes, bonds or other evidences of indebtedness of the
Corporation. When authorized so to do, any officer or agent of
the Corporation may pledge, hypothecate or transfer, as security
for the payment of any and all loans, advances, indebtedness and
liabilities of the Corporation, any and all stocks, securities
and other personal property at any time held by the Corporation,
and to that end may endorse, assign and deliver the same. Such
authority may be general or confined to specific instances.
SECTION 3. WAIVERS OF NOTICE. Whenever any notice
whatever is required to be given by law, by the Certificate of
Incorporation or by these By-Laws to any person or persons, a
waiver thereof in writing, signed by the person or persons
entitled to the notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
SECTION 4. OFFICES OUTSIDE OF DELAWARE. Except as
otherwise required by the laws of the State of Delaware, the
Corporation may have an office or offices and keep its books,
documents and papers outside of the State of Delaware at such
place or places as from time to time may be determined by the
Board of Directors, the Chairman of the Board or the President.
SECTION 5. INDEMNIFICATION OF DIRECTORS, OFFICERS AND
EMPLOYEES. The Corporation shall indemnify to the full extent
authorized by law any person made or threatened to be made a
party to an action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he,
his testator or intestate is or was a director, officer, employee
or agent of the Corporation or is or was serving, at the request
of the Corporation, as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise.
ARTICLE VI
----------
AMENDMENTS
----------
These By-Laws and any amendment thereof may be altered,
amended or repealed, or new By-Laws may be adopted, by the Board
of Directors at any regular or special meeting by the affirmative
vote of a majority of all of the members of the Board, provided
in the case of any special meeting at which all of the members of
the Board are not present, that the notice of such meeting shall
have stated that the amendment of these By-Laws was one of the
purposes of the meeting; but these By-Laws and any amendment
thereof, including the By-Laws adopted by the Board of Directors,
may be altered, amended or repealed and other By-Laws may be
adopted by the holders of a majority of the total outstanding
stock of the Corporation entitled to vote at any annual meeting
or at any special meeting, provided, in the case of any special
meeting, that notice of such proposed alteration, amendment,
repeal or adoption is included in the notice of the meeting.
Exhibit 21.1
Subsidiaries of the Company
---------------------------
Austria
- -------
Mettler-Toledo Ges.m.b.H.
Australia
- ---------
Mettler-Toledo Limited
Belgium
- ---------
N.V. Mettler-Toledo S.A.
Bermuda
- -------
Mettler-Toledo Finance Ltd.
Brazil
- ------
Mettler-Toledo Industria e Commercio Ltda.
Canada
- ------
Mettler-Toledo Inc.
China
- -----
Changzhou Toledo Electronic Scale Ltd.
Mettler-Toledo Instruments (Shanghai) Ltd.
Mettler-Toledo Int. Trading (Shanghai) Corp.
Panzhihua Toledo Electronic Scale Ltd.
Xinjiang Toledo Electronic Scale Ltd.
Croatia
- -------
Mettler-Toledo d.o.o.
Czech Republic
- --------------
Mettler-Toledo spol. s.r.o.
Denmark
- -------
Mettler-Toledo A/S
France
- ------
Mettler-Toledo SA
Mettler-Toledo Analyse Industrielle S.a.r.l.
Ohaus S.a.r.l.
Germany
- -------
Mettler-Toledo (Albstadt) GmbH
Garvens Automation GmbH
Mettler-Toledo GmbH
Getmore Gesell fur Marketing & Media Service GmbH
Ohaus Waagen Vertriebsgesellschaft GmbH
Mettler-Toledo Management Holding Deutschland GmbH]
Hong Kong
- ---------
Mettler-Toledo (HK) Ltd.
Hungary
- -------
Mettler-Toledo Kereskedelml Kft.
Italy
- -----
Mettler-Toldeo grandi impianti S.r.l.
Mettler-Toledo S.p.A.
Japan
- -----
Mettler-Toledo K.K.
Korea
- -----
Mettler-Toledo (Korea) Ltd.
Malaysia
- --------
Mettler-Toledo (M) Sdn. Bhd.
Mexico
- ------
Mettler-Toledo S.A. de C.V.
Ohaus de Mexico S.A. de C.V.
Netherlands
- -----------
Mettler-Toledo B.V.
Mettler-Toledo Holding B.V.
Norway
- ------
Mettler-Toledo A/S
Cargoscan A/S
Cargoscan Holding A/S
Poland
- ------
Mettler-Toledo Sp.z.o.o.
Russia
- ------
3A0 Mettler-Toledo Vostok
Singapore
- ---------
Mettler-Toledo (S) Pte Ltd.
Slovak Republic
- ---------------
Mettler-Toledo Service s.r.o.
Mettler-Toledo spol. s.r.o.
Slovenia
- --------
Mettler-Toledo d.o.o.
Spain
- -----
Mettler-Toledo S.A.E.
Sweden
- ------
Mettler-Toledo AB
Switzerland
- -----------
Mettler-Toledo Holding AG
Mettler-Toledo GmbH
Mettler-Toledo Logistik AG
Mettler-Toledo Pac Rim AG
Mettler-Toledo (Schweiz) AG
Microwa Prazisionswaagen AG
Pivott Instrumente AG
Taiwan
- ------
Mettler-Toledo Pac Rim AG-Taiwan Branch
Thailand
- --------
Mettler-Toledo (Thailand) Ltd.
United Kingdom
- --------------
Mettler-Toledo Ltd.
Ohaus Europe Ltd.
United States of America
- ------------------------
ACME Scale & Supply Inc. (PA)
Hi-Speed Checkweigher Co., Inc. (NY)
Mettler-Toledo Holding Inc. (DE)
Mettler-Toledo, Inc. (DE)
Mettler-Toledo Process Analytical, Inc. (MA)
Ohaus Corp. (NJ)
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