UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(MARK ONE)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION FILE NUMBER 0-22493
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METTLER-TOLEDO INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3668641
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
IM LANGACHER
P.O. BOX MT-100
CH 8606 GREIFENSEE, SWITZERLAND --------------------
(Address of principal executive offices) (Zip Code)
011-41-1-944-22-11
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (ss. 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of Registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K.[ ]
As of March 5, 1998 there were 38,336,015 shares of the
Registrant's Common Stock, $0.01 par value per share, outstanding. The
aggregate market value of the shares of common stock held by non-affiliates
of the Registrant (based on the closing price for the Common Stock on the
New York Stock Exchange on March 5, 1998) was approximately $738,502,073.
For purposes of this computation, shares held by affiliates and by
directors of the Registrant have been excluded. Such exclusion of shares
held by directors is not intended, nor shall it be deemed, to be an
admission that such persons are affiliates of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT
-------- PART OF FORM 10-K
PROXY STATEMENT FOR 1998 INTO WHICH INCORPORATED
ANNUAL MEETING OF STOCKHOLDERS -----------------------
PART III
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<PAGE>
EXPLANATORY NOTE
This Annual Report on Form 10-K is being amended only with
respect to exhibit 99.1 filed in response to Item 14(a)(3).
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents Filed as Part of this Report:
1. Financial Statements. See Index to Consolidated Financial
Statements included on page F-1 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, which was filed with the Securities
and Exchange Commission on March 13, 1998.
2. Financial Statement Schedule and related Audit Report. See
Schedule I - included on pages S-1 and S-2 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1997, which was filed with the
Securities and Exchange Commission on March 13, 1998.
3. List of Exhibits. See Index of Exhibits included on page E-1.
(b) Reports on Form 8-K:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Mettler-Toledo International Inc.
(Registrant)
Date: December 23, 1998 By:/s/ William P. Donnelly
-----------------------------
William P. Donnelly
Vice President and Chief
Financial Officer
(signing in the capacity
of a duly authorized
officer of the registrant)
<PAGE>
INDEX TO EXHIBITS
PAGE NUMBER OR
EXHIBIT NO. DESCRIPTION INCORPORATION BY REFERENCE
- ----------- ----------- --------------------------
2.1 Stock Purchase Agreement Filed as Exhibit 2.1 to the
between AEA-MT Inc., AG fur Registration Statement as, amended
Prazisionsinstrumente and on Form S-1 of the Company (Reg. No.
Ciba-Geigy AG, as amended 33-09621) and incorporated herein by
reference
2.2 Share Sale and Purchase Filed as Exhibit 2 to the Current
Agreement relating to the Report on Form 8-K of Mettler-Toledo
acquistition of the entire Holding Inc. dated June 3, 1997 and
issued share capital of incorporated herein by reference
Safeline Limited
3.1 * Amended and Restated
Certificate of Incorporation
of the Company
3.2 * Amended By-laws of the Company
4.1 Specimen Form of the Filed as Exhibit 4.3 to the
Company's Stock Certificate Registration Statement, as amended,
on Form S-1 of the Company (Reg. No.
333-35597) and incorporated herein
by reference
10.1 Employment Agreement between Filed as Exhibit 10.4 to the Annual
Robert F. Spoerry and Report on Form 10-K of
Mettler-Toledo AG, dated as Mettler-Toledo Holding Inc. dated
of October 30, 1996 March 31, 1997 and incorporated
herein by reference
10.2* Employment Agreement between
Lukas Braunschweiler and
Mettler-Toledo GmbH dated as
of November 10, 1997
10.3* Employment Agreement between
William P. Donnelly and
Mettler-Toledo GmbH dated as
of November 10, 1997
10.4* Employment Agreement between
Karl M. Lang and
Mettler-Toledo GmbH dated as
of November 10, 1997
10.5* Employment Agreement between
John D. Robechek and
Mettler-Toledo, Inc. dated as
of November 10, 1997
10.6 Loan Agreement between Robert Filed as Exhibit 10.5 to the Annual
F. Spoerry and Mettler-Toledo Report on Form 10-K of
AG, dated as of October 7, Mettler-Toledo Holding Inc. dated
1996 March 31, 1997 and incorporated
herein by reference
10.7 Mettler Toledo Performance - Filed as Exhibit 10.7 to the Annual
Oriented Bonus System (POBS), Report on Form 10-K of
effective as of 1993 Mettler-Toledo Holding Inc. dated
March 31, 1997 and incorporated
herein by reference
10.8 Mettler Toledo POBS Plus - Filed as Exhibit 10.8 to the Annual
Incentive Scheme for Senior Report on Form 10-K of
Management of Mettler Toledo, Mettler-Toledo Holding Inc. dated
dated as of November 4, 1996 March 31, 1997 and incorporated
herein by reference
10.9 * Credit Agreement, dated as of
November 19, 1997, between
Mettler-Toledo International
Inc., as Guarantor,
Mettler-Toledo, Inc.,
Mettler-Toledo AG, as
Borrowers, Safeline Holding
Company as UK Borrower,
Mettler-Toledo, Inc., as
Canadian Borrower and Merrill
Lynch & Co. as Arranger and
Documentation Agent, and the
Lenders thereto
10.10 * Agreement of Merger, dated
November 13, 1997, between MT
Investors Inc. and
Mettler-Toledo Holding Inc.
10.11 1997 Amended and Restated Filed as Exhibit 10.10 to the
Stock Option Plan Registration Statement on Form S-1
of the Company (Reg. No. 333-35597)
and incorporated herein by
reference)
10.12 Form of Participants' Filed as Exhibit 10.11 to the
Subscription Agreement Registration Statement, as amended,
on Form S-1 of the Company (Reg. No.
333-35597) and incorporated herein
by reference
10.13 Form of GMC Subscription Filed as Exhibit 10.12 to the
Agreement Registration Statement, as amended,
on Form S-1 of the Company (Reg. No.
333-35597) and incorporated herein
by reference
11* Statements regarding
computation of per share
earnings
21 Subsidiaries of the Company Filed as Exhibit 21 to the
Registration Statement, as amended,
on Form S-1 of the Company (Reg. No.
333-35597) and incorporated herein
by reference
27.1* Financial Data Schedule
99.1** Factors Affecting Future Page 6
Operating Results
- -----------
* PREVIOUSLY FILED WITH THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1997, WHICH WAS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1998.
** FILED HEREWITH.
<PAGE>
EXHIBIT 99.1
FACTORS AFFECTING FUTURE OPERATING RESULTS
Certain statements contained in the Company's public filings,
press releases and other documents and materials as well as certain
statements in written or oral statements made by or on behalf of the
Company are forward-looking statements based on the Company's current
expectations and projections about future events, including:
o strategic plans
o potential growth, including penetration of developed markets and
opportunities in emerging markets
o planned product introductions
o planned operational changes and research and development efforts
o Year 2000 issues
o Euro conversion issues
o future financial performance, including expected capital
expenditures
o research and development expenditures
o estimated proceeds from and the timing of asset sales
o potential acquisitions
o future cash sources and requirements
o potential cost savings from planned employee reductions and
restructuring programs
These forward-looking statements are subject to a number of risks
and uncertainties, including those discussed below, which could cause
actual results to differ materially from historical results or those
anticipated and certain of which are beyond the Company's control. The
words "believe," "expect," "anticipate" and similar expressions identify
forward-looking statements. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
The risks included here are not exhaustive. Other sections of
this report may describe additional factors that could adversely impact the
Company's business and financial performance. Moreover, the Company
operates in a very competitive and rapidly changing environment. New risk
factors emerge from time to time and it is not possible for the Company to
predict all such risk factors, nor can the Company assess the impact of all
such risk factors on its business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results.
The following factors could cause actual results to differ
materially from historical results or anticipated results:
EFFECT OF SUBSTANTIAL INDEBTEDNESS ON OPERATIONS AND LIQUIDITY
The Company has a significant amount of indebtedness. At December 31,
1997, the Company's consolidated indebtedness (excluding unused
commitments) was $396.8 million, and the Company had additional borrowing
capacity of approximately $220.0 million. Term loans under the Company's
credit agreement comprise $196.8 million of its consolidated indebtedness.
The Company is required to make scheduled quarterly principal payments on
these term loans. The Company's ability to comply with the terms of its
credit agreement and its other debt obligations, to make cash payments with
respect to its debt obligations and to refinance any of its debt
obligations will depend on the Company's future performance. The Company's
future performance is subject to prevailing economic and competitive
conditions and certain financial, business and other factors beyond the
Company's control.
Having a high degree of leverage has significant consequences for the
Company. For instance, high leverage might impair the Company's ability to
obtain additional financing for acquisitions, capital expenditures, working
capital or general corporate purposes. In addition, the Company uses a
substantial portion of its cash flow from operations to pay principal and
interest on its borrowings. This use of cash flows reduces the funds
available to the Company for its operations and other purposes, including
investments in research and development and capital spending. Some 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. Finally, the Company may be substantially more leveraged than some
of its competitors. This may place it at a relative competitive
disadvantage and may make the Company more vulnerable to a downturn in
general economic conditions, a slowdown in its business or changing market
conditions and regulations.
Covenants in the Company's debt obligations restrict its ability to
incur additional indebtedness, dispose of certain assets and make capital
expenditures. The covenants also restrict the Company's other corporate
activities. The Company's ability to comply with these covenants may be
affected by events beyond its control, including economic, financial and
industry conditions. A failure to comply with the covenants and
restrictions contained in its debt obligations or any other agreements with
respect to any additional financing could result in an acceleration of the
amount the Company owes under its debt agreements.
RISKS ASSOCIATED WITH CURRENCY FLUCTUATIONS
Because the Company conducts operations in many countries, its
operating income can be significantly affected by fluctuations in currency
exchange rates. Swiss franc-denominated expenses represent a much greater
percentage of the Company's operating expenses than Swiss franc-denominated
sales represent of its net sales. In part, this is because most of the
Company's manufacturing costs in Switzerland relate to products that are
sold outside of Switzerland. Moreover, a substantial percentage of the
Company's research and development expenses and general and administrative
expenses are incurred in Switzerland. Therefore, if the Swiss franc
strengthens against all or most of the Company's major trading currencies
(e.g., the U.S. dollar, the Euro (beginning in January 1999), other major
European currencies and the Japanese Yen) the Company's operating profit is
reduced. The Company also has significantly more sales in European
currencies (other than the Swiss franc) than it has expenses in those
currencies. Therefore, when European currencies weaken against the U.S.
dollar and the Swiss franc, it also decreases the Company's operating
profits. In recent years, the Swiss franc and other European currencies
have generally moved in a consistent manner versus the U.S. dollar.
Therefore, because the two effects previously described have offset each
other, the Company's operating profits have not been materially affected by
movements in the U.S. dollar exchange rate versus European currencies.
However, there can be no assurance that these currencies will continue to
move in a consistent manner in the future. In addition to the effects of
exchange rate movements on operating profits, the Company's debt levels can
fluctuate due to changes in exchange rates, particularly between the U.S.
dollar and the Swiss franc.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS; DETERIORATING CONDITIONS IN
EMERGING MARKETS
The Company does business in many countries, including emerging
markets in Asia, Latin America and Eastern Europe. In addition to the
currency risks discussed above, international operations pose substantial
other risks and problems for the Company. For instance, various local
jurisdictions in which the Company operates may revise or alter their
respective legal and regulatory requirements. In addition, the Company may
encounter one or more of the following obstacles or risks:
o tariffs and trade barriers
o difficulties in staffing and managing local operations
o credit risks arising from financial difficulties facing local
customers and distributors
o difficulties in protecting intellectual property
o nationalization of private enterprises
o restrictions on investments and/or limitations regarding foreign
ownership
o adverse tax consequences, including imposition or increase of
withholding and other taxes on remittances and other payments by
subsidiaries
o uncertain local economic, political and social conditions,
including hyper-inflationary conditions
The Company must also comply with a variety of regulations regarding
the conversion and repatriation of funds earned in local currencies. For
example, converting earnings from the Company's operations in China into
other currencies and repatriating such funds requires governmental
approvals. If the Company cannot comply with these or other applicable
regulations, it may face increased difficulties in utilizing cash flow
generated by these operations outside of China.
Recently, economic conditions in emerging markets have deteriorated
significantly and some emerging markets are experiencing recessionary
trends, severe currency devaluations and inflationary prices. Moreover,
economic problems in individual markets are increasingly spreading to other
economies, adding to the adverse conditions facing nearly all emerging
markets. The Company remains committed to emerging markets, particularly
those in Asia, Latin America and Eastern Europe. However, the Company
expects current economic conditions will affect its financial results in
these markets for the foreseeable future.
HIGHLY COMPETITIVE MARKETS; DIFFICULT TO MAINTAIN TECHNOLOGICAL ADVANTAGE
The Company's markets are highly competitive. Weighing instruments
markets are also fragmented both geographically and by application,
particularly the industrial and food retailing market. As a result, the
Company faces numerous regional or specialized competitors, many of which
are well established in their markets. In addition, some of the Company's
competitors are divisions of larger companies with potentially greater
financial and other resources than its own. Taken together, the competitive
forces present in the Company's markets can impair its operating margins in
certain product lines and geographic markets.
The Company expects its competitors to continue to improve the design
and performance of their products and to introduce new products with
competitive prices. Although the Company believes that it has certain
technological and other advantages over its competitors, it may not be able
to realize and maintain these advantages. In any event, to remain
competitive the Company must continue to invest in research and
development, sales and marketing and customer service and support. The
Company cannot be sure that it will have sufficient resources to continue
to make these investments or that it will be successful in identifying,
developing and maintaining any competitive advantages.
SIGNIFICANT SALES TO PHARMACEUTICAL AND CHEMICALS INDUSTRIES
The Company's products are used extensively in the pharmaceutical,
chemicals and food and beverage industries. Consolidation in the
pharmaceutical and chemicals industries hurt the Company's sales in prior
years. A prolonged downturn or additional consolidation in any of these
industries could adversely affect the Company's operating results.
RISKS RELATING TO FUTURE ACQUISITIONS
The Company plans to pursue acquisitions of complementary product
lines, technologies or businesses. Acquisitions involve numerous risks,
including:
o difficulties in the assimilation of the acquired operations,
technologies and products
o diversion of management's attention from other business concerns
o potential departures of key employees of the acquired company
If the Company successfully identifies acquisitions in the future,
completing such acquisitions may result in:
o new issuances of its stock that may be dilutive to current owners
o increases in its debt and contingent liabilities
o additional amortization expenses related to goodwill and other
intangible assets
Any of these risks could materially adversely affect the Company's
profitability. The Company continues to explore potential acquisitions, but
currently has no agreements with respect to any material acquisition. The
Company may not be able to identify, successfully complete or integrate
potential acquisitions in the future. However, even if the Company can, it
cannot be sure that such acquisitions will have a positive impact on its
business or operating results.
RELIANCE ON KEY EMPLOYEES
The Company has employment contracts with each of its key employees.
In addition, its key employees own shares of the Company's common stock and
have options to purchase additional shares. Nonetheless, such individuals
could leave the Company. If any key employees stopped working for the
Company, its operations could be harmed. The Company has no key man life
insurance policies with respect to any of its senior executives.
ENVIRONMENTAL MATTERS AND LIABILITIES
The Company is subject to various environmental laws and regulations,
including those relating to:
o air emissions
o wastewater discharges
o the handling and disposal of solid and hazardous wastes
o the remediation of contamination associated with the use and
disposal of hazardous substances
The Company incurs capital and operating expenditures in complying
with environmental laws and regulations both in the United States and
abroad. The Company is currently involved in, or has potential liability
with respect to, the remediation of past contamination in facilities both
in the United States and abroad. In addition, some of these facilities have
or had been in operation for many decades and may have used substances or
generated and disposed of wastes that are hazardous or may be considered
hazardous in the future. Such sites and disposal sites owned by others to
which the Company sent waste may in the future be identified as
contaminated and require remediation. Accordingly, it is possible that the
Company could become subject to additional environmental liabilities in the
future that may harm its results of operations or financial condition.
RESTRICTIONS ON PAYMENT OF DIVIDENDS; ABSENCE OF DIVIDENDS
The Company's credit agreement restricts its ability to pay dividends.
In any event, the Company does not intend to pay cash dividends on its
common stock in the foreseeable future.
RISKS RELATING TO CERTAIN ANTI-TAKEOVER PROVISIONS
The Company's certificate of incorporation and by-laws contain
provisions that could make it more difficult for a third-party to acquire
the Company. The Company's certificate of incorporation authorizes the
Board of Directors to issue preferred stock without shareholder approval
and upon such terms as it may determine. The rights of the holders of the
Company's common stock are subject to, and may be adversely affected by,
the rights of future holders of preferred stock. In addition, the Company's
by-laws require shareholders to provide advance notice to nominate
candidates for election as directors and to submit proposals for
consideration at shareholder meetings. Section 203 of the Delaware General
Corporation Law makes it more difficult for an "interested stockholder"
(generally a 15% stockholder) to effect various business combinations with
a corporation for a three-year period after he becomes an "interested
stockholder." In general, these provisions may discourage a third party
from attempting to acquire the Company and therefore may inhibit a change
of control of the Company under circumstances that could give shareholders
an opportunity to realize a premium over then-prevailing market prices.
YEAR 2000 ISSUE
The Year 2000 issue is the result of computer logic that was written
using two digits rather than four to define the applicable year. Any
computer logic or microprocessor that uses only two digits to recognize
dates may recognize a date specifying "00" as the year 1900 rather than the
year 2000 which could result in miscalculations or system or equipment
failures.
The Company relies on information technology systems and
non-information technology systems (e.g., equipment with embedded
microprocessors) in connection with manufacturing, sales and financial and
human resources. Certain of the Company's products also involve computer or
non-information technology systems that could be affected by the Year 2000
issue. In addition, the Company relies on the proper functioning of the
computer and non-information technology systems of its major suppliers.
The Company believes that it is taking reasonable steps to identify
and address those matters that could cause serious interruptions in its
business and operations due to Year 2000 issues. The Company's efforts
include detailed programs to address its internal Year 2000 readiness as
well as the readiness of its key suppliers. In addition, the Company has
reviewed its current products, as well as products sold in recent years, to
determine if they are Year 2000 compliant. However, any of the following
could have a material adverse effect on the Company's business, financial
condition and results from operations:
o a failure to fully identify all Year 2000 dependencies in its
systems
o a failure to fully identify all Year 2000 dependencies in the
systems of its suppliers of components, customers and financial
institutions
o a failure of its suppliers of components, customers and financial
institutions to adequately address their Year 2000 issues
o the failure of any contingency plans developed to protect its
business and operations from Year 2000-related interruptions
o any material increase in warranty claims or other claims of
product liability arising out of Year 2000 non-compliance
o delays in the implementation of new systems resulting from Year
2000 problems
RISKS FROM INTRODUCTION OF THE EUROPEAN MONETARY UNION
The European Economic and Monetary Union (the "EMU") will introduce a
new currency, the Euro, within Europe on January 1, 1999. The new currency
is in response to the EMU's policy of economic convergence to harmonize
trade policy, eliminate business costs associated with currency exchange
and to promote the free flow of capital, goods and services. Switzerland is
not part of the EMU.
On January 1, 1999, the participating countries are scheduled to adopt
the Euro as their local currency, initially available for currency trading
on currency exchanges and for noncash (banking) transactions. The existing
local currencies, or legacy currencies, will remain legal tender through
January 1, 2002. Beginning on January 1, 2002, Euro-denominated bills and
coins will be issued for cash transactions. For a period of six months from
this date, both legacy currencies and the Euro will be legal tender. On or
before July 1, 2002, the participating countries will withdraw all legacy
currency and use exclusively the Euro.
The Company has committed resources to conduct risk assessments and
take corrective actions, where required, to ensure that it is prepared for
the introduction of the Euro. The Company is reviewing Euro implementation
and its pricing strategy in both participating and non-participating
countries where it operates. In addition, the Company is reviewing existing
legacy accounting and business systems and other business assets for Euro
compliance and assessing the risks posed by non-compliance by third
parties. Despite these efforts, it is possible that the Company or third
parties on whom it depends will not have in place in a timely manner the
systems necessary to process Euro-denominated transactions. Such a failure
could adversely affect the Company's business (e.g., by causing delays in
order processing and shipment). Moreover, increased price transparency or
disruption of activity in the markets in which the Company operates
resulting from the conversion to the Euro could hurt its business in those
markets, resulting in lost revenues.
