SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A-2
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1996, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM TO
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Commission File Number 333-09621
Mettler-Toledo, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 34-1538688
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
Im Langacher, P.O. Box MT-100
CH 8608 Greifensee, Switzerland
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(Address of principal executive offices) (Zip Code)
41-1-944-22-11
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(Registrant's telephone number, including area code)
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
for 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 No X
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The Registrant has 1,000 shares of Common Stock outstanding as of
September 30, 1996.
METTLER-TOLEDO, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q/A-2
Page No.
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Part I. FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
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MT ACQUISITION CORP.
Balance Sheet as of September 30, 1996 3
Notes to the Balance Sheet as of September 30, 1996 4
METTLER-TOLEDO GROUP
Unaudited Interim Combined Financial Statements:
Interim Combined Statements of Net Assets as of
December 31, 1995 and September 30, 1996 5
Interim Combined Statements of Operations for the
nine months ended September 30, 1995 and 1996 7
Interim Combined Statements of Operations for the
three months ended September 30, 1995 and 1996 8
Interim Combined Statements of Changes in Net Assets
for the nine months ended September 30, 1995 and 1996 9
Interim Combined Statements of Cash Flows for the
nine months ended September 30, 1995 and 1996 10
Notes to the Interim Combined Financial Statements 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
-----------------------------------
Part II. OTHER INFORMATION 17
Item 5. Other Information 17
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Unaudited Pro Forma Financial Information for the
nine months ended September 30, 1995 and 1996 17
Item 6. Exhibits and Reports on Form 8-K 18
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Signature 19
Exhibit Index 20
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
MT ACQUISITION CORP.
BALANCE SHEET
September 30, 1996
Assets
Cash..................................... $1,000
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Total assets............................. $1,000
=========
Stockholder's Equity
Common Stock, $1.00 par value;
1,000 shares authorized, issued and outstanding $1,000
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Total stockholder's equity $1,000
=========
See accompanying notes to the Balance Sheet
MT ACQUISITION CORP.
NOTES TO THE BALANCE SHEET
September 30, 1996
Basis of Presentation
The accompanying interim financial statement has been prepared in
accordance with United States generally accepted accounting
principles on a basis which reflects the interim financial
statement of MT Acquisition Corp., which was incorporated under the
laws of the State of Delaware on July 16, 1996 for the purpose of
effecting the acquisition of the Mettler-Toledo Group from Ciba-
Geigy AG ("Ciba").
Between July 16, 1996 and September 30, 1996, MT Acquisition Corp.
did not conduct any operations.
Acquisition
On April 2, 1996, MT Investors Inc. entered into a Stock Purchase
Agreement, as amended, to acquire the business of the Mettler-
Toledo Group from Ciba and its wholly owned subsidiary, AG fur
Prazisionsinstrumente. The acquisition of the Mettler-Toledo Group
was consummated on October 15, 1996 through the purchase of all of
the outstanding capital stock of Mettler-Toledo, Inc. and Mettler-
Toledo Holding AG, which, together with their respective
subsidiaries, constituted the entire Mettler-Toledo Group.
Management Representation
The accompanying unaudited interim financial statement has been
prepared by management, pursuant to the rules and regulations of
the Securities and Exchange Commission, and reflects all
adjustments (consisting of only normal recurring adjustments)
which, in the opinion of management, are necessary for a fair
presentation of the financial statement.
Subsequent Event
On October 15, 1996, MT Acquisition Corp. was merged with Mettler-
Toledo, Inc., with Mettler-Toledo, Inc. being the surviving
corporation.
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF NET ASSETS
December 31, 1995 and September 30, 1996
(In thousands)
December 31, September 30,
1995 1996
(unaudited)
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ASSETS
Current assets
Cash and cash equivalents $ 41,402 33,078
Due from Ciba-Geigy and affiliates 33,072 34,145
Trade accounts receivable, net 159,218 139,959
Inventories 110,986 109,492
Deferred taxes 6,180 6,847
Other current assets 21,469 55,195
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Total current assets 372,327 378,716
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Property, plant and equipment, net 241,018 224,741
Goodwill, net 84,425 84,268
Long-term deferred taxes 14,312 15,856
Other assets 12,012 21,524
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Total assets $ 724,094 725,105
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See accompanying notes to the Interim Combined Financial Statements
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF NET ASSETS (CONTINUED)
December 31, 1995 and September 30, 1996
(In thousands)
December 31, September 30,
1995 1996
(unaudited)
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LIABILITIES AND NET ASSETS
Current liabilities
Trade accounts payable $ 34,389 30,271
Accrued and other liabilities 107,118 124,560
Taxes payable 11,737 21,511
Deferred taxes 7,698 8,183
Bank and other loans 29,513 35,371
Notes and dividends payable to Ciba-Geigy
and affiliates 91,132 136,097
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Total current liabilities 281,587 355,993
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Long-term debt payable to
Ciba-Geigy and affiliates 145,097 142,000
Long-term debt due to third parties 3,621 8,042
Long-term deferred taxes 13,502 14,354
Other long-term liabilities 84,303 90,063
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Total liabilities 528,110 610,452
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Minority interest 2,730 2,968
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Net assets
Capital employed 162,604 87,336
Currency translation adjustment 30,650 24,349
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Total net assets 193,254 111,685
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Total liabilities and net assets $ 724,094 725,105
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See accompanying notes to the Interim Combined Financial Statements
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1995 and 1996
(In thousands)
September 30,
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1995 1996
(unaudited) (unaudited)
- -----------------------------------------------------------------------
Net sales $ 615,444 624,733
Cost of sales 371,480 374,121
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Gross profit 243,964 250,612
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Research and development expenses 40,366 37,930
Marketing and selling expenses 121,539 119,240
General and administrative expenses 53,516 56,405
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Total research and development, marketing
and selling, and general and administrative
expenses 215,421 213,575
Amortization of goodwill 1,937 2,038
Other charges - 1,505
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Income from operations 26,606 33,494
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Interest expense 13,479 12,579
Financial income, net 5,128 1,731
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Income before taxes and minority interest 18,255 22,646
Provision for taxes 5,767 8,901
Minority interest 846 609
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Net income $ 11,642 13,136
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See accompanying notes to the Interim Combined Financial Statements
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF OPERATIONS
Three Months Ended September 30, 1995 and 1996
(In thousands)
September 30,
- -----------------------------------------------------------------------
1995 1996
(unaudited) (unaudited)
- -----------------------------------------------------------------------
Net sales $ 208,451 200,931
Cost of sales 127,836 121,918
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Gross profit 80,615 79,013
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Research and development expenses 13,361 12,876
Marketing and selling expenses 40,574 37,862
General and administrative expenses 15,607 17,251
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Total research and development, marketing
and selling, and general and administrative
expenses 69,542 67,989
Amortization of goodwill 649 768
Other charges - 1,505
Income from operations 10,424 8,751
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Interest expense 4,762 4,233
Financial income, net 2,726 764
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Income before taxes and minority interest 8,388 5,282
Provision for taxes 2,650 2,071
Minority interest 576 82
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Net income $ 5,162 3,129
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See accompanying notes to the Interim Combined Financial Statements
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF CHANGES IN NET ASSETS
Nine Months Ended September 30, 1995 and 1996
(In thousands)
Currency
Capital Translation
Employed Adjustment Total
- -----------------------------------------------------------------------
Net assets at January 1, 1995 $ 218,129 10,065 228,194
Capital transactions with
Ciba-Geigy and affiliates (18,542) - (18,542)
Net income 11,642 - 11,642
Change in currency translation
adjustment - 23,715 23,715
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Net assets at September 30, 1995 211,229 33,780 245,009
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Net assets at January 1, 1996 162,604 30,650 193,254
Capital transactions with
Ciba-Geigy and affiliates (88,404) - (88,404)
Net income 13,136 - 13,136
Change in currency translation
adjustment - (6,301) (6,301)
- -----------------------------------------------------------------------
Net assets at September 30,
1996 $ 87,336 24,349 111,685
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See accompanying notes to the Interim Combined Financial Statements
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1995 and 1996
(In thousands)
September 30,
- -----------------------------------------------------------------------
1995 1996
(unaudited) (unaudited)
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Cash flows from operating activities:
Net income $ 11,642 13,136
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 20,708 18,630
Amortization of goodwill 1,865 1,972
Amortization and write-down of
other intangibles 72 66
Net (gain) loss on disposal of
long-term assets 271 (768)
Deferred taxes (3,038) (1,211)
Minority interest 620 272
Increase (decrease) in cash resulting from changes in:
Trade accounts receivable, net 1,502 9,707
Inventories (7,567) (502)
Other current assets (4,202) (29,261)
Trade accounts payable (970) (3,525)
Accruals and other liabilities, net 16,230 49,408
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Net cash provided by operating activities 37,133 57,924
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Cash flows from investing activities:
Proceeds from sale of property, plant
and equipment 1,340 1,254
Purchase of property, plant and equipment (11,723) (14,985)
Investments in other long term assets, net (562) (2,869)
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Net cash used in investing activities (10,945) (16,600)
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Cash flows from financing activities:
Repayment of third party debt (2,653) (13,464)
Ciba-Geigy debt (139) (26,589)
Capital transactions with Ciba-Geigy (11,830) (7,716)
- -----------------------------------------------------------------------
Net cash used in financing activities $ (14,622) (47,769)
- -----------------------------------------------------------------------
See accompanying notes to the Interim Combined Financial Statements
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
Nine Months Ended September 30, 1995 and 1996
(In thousands)
September 30,
- -----------------------------------------------------------------------
1995 1996
(unaudited) (unaudited)
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Effect of exchange rate changes on cash
and cash equivalents $ 4,913 (1,879)
- -----------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents 16,479 (8,324)
Cash and cash equivalents:
Beginning of period 63,802 41,402
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End of period $ 80,281 33,078
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See accompanying notes to the Interim Combined Financial Statements
METTLER-TOLEDO GROUP
NOTES TO THE INTERIM COMBINED FINANCIAL STATEMENTS
(In thousands unless otherwise stated)
BASIS OF PRESENTATION
The accompanying interim combined financial statements have
been prepared in accordance with United States generally
accepted accounting principles on a basis which reflects the
interim combined financial statements of the companies
constituting the Mettler-Toledo Group ("Mettler-Toledo" or
the "Group") assuming that the Group, which at September 30,
1996 was a business unit of Ciba-Geigy AG ("Ciba-Geigy"),
was organized for all periods presented as a separate legal entity.
Pursuant to the terms of the Stock Purchase Agreement dated
April 2, 1996 between MT Investors Inc., AG fur Prazisionsinstrumente,
and Ciba-Geigy, on October 15, 1996 Ciba-Geigy sold to MT
Acquisition Corp. all of the capital stock and other equity
instruments in the entities representing the Group.
Footnote disclosure which would substantially duplicate the
disclosure contained in the December 31, 1995 Mettler-Toledo
Group combined financial statements has not been included
herein. The accompanying interim combined financial
statements as of September 30, 1996 and for the nine month
and three month periods ended September 30, 1995 and 1996
should be read in conjunction with the December 31, 1994 and
1995 combined financial statements and the notes thereto
filed by Mettler-Toledo Holding Inc. and Mettler-Toledo,
Inc. under the cover of a Form 8-K dated October 30, 1996.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
The Mettler-Toledo Group is a manufacturer and marketer of
weighing instruments for use in laboratory, industrial and
food retailing applications. The Group also manufactures
and sells certain related laboratory measurement
instruments. The Group's manufacturing facilities are
located in Switzerland, the United States, Germany and
China.
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 either the first
in, first out (FIFO) or weighted average cost method. Two
Companies in the U.S. use the last in, first out (LIFO) cost
method.
Inventories consisted of the following at December 31, 1995
and September 30, 1996:
December 31, September 30,
1995 1996
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Raw materials and parts $ 45,523 44,563
Work in progress 38,191 37,102
Finished goods 30,149 30,278
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113,863 111,943
LIFO reserve (2,877) (2,451)
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$ 110,986 109,492
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METTLER-TOLEDO GROUP
NOTES TO THE INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)
Reclassifications
Certain reclassifications have been made to the prior year
amounts to conform with the 1996 presentation.
Management representation
The accompanying unaudited interim combined financial
statements have been prepared by management, pursuant to the
rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments (consisting of only
normal recurring adjustments) which, in the opinion of
management, are necessary for a fair statement of the results
of the interim periods presented. Operating results for the
nine month and three month periods ending September 30, 1996
are not necessarily indicative of the results to be expected
for the full year ending December 31, 1996.
Item 2. 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 Unaudited Interim Combined Financial Statements included
herein. The "Company" as used herein means Mettler-Toledo, Inc.
and its subsidiaries, after giving effect on a pro forma basis to
the acquisition of the Mettler-Toledo Group (the "Acquisition"),
which was consummated on October 15, 1996.
General
On October 15, 1996, MT Investors Inc. ("MT Investors") through its
indirect wholly owned subsidiary, MT Acquisition Corp., acquired
the Mettler-Toledo Group from Ciba-Geigy AG ("Ciba") and its wholly
owned subsidiary, AG fur Prazisionsinstrumente. The Acquisition of
the Mettler-Toledo Group was accomplished through the purchase of
all of the outstanding capital stock of Mettler-Toledo, Inc. and
Mettler-Toledo Holding AG, which, together with their respective
subsidiaries, constituted the entire Mettler-Toledo Group. See
"Effect of Acquisition on Results of Operations." MT Acquisition
Corp. merged into Mettler-Toledo, Inc. on October 15, 1996 and
Mettler-Toledo, Inc. thereby became a wholly owned subsidiary of
Mettler-Toledo Holding Inc. Mettler-Toledo Holding Inc. 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, Inc.
The Company's results of operations reflect the combined operations
of the Mettler-Toledo Group of companies owned by Ciba which have
been acquired by MT Investors. Financial information is presented
in accordance with United States generally accepted accounting
principles ("U.S. GAAP").
Results of Operations
Net sales were $624.7 million and $200.9 million for the nine and
three month periods ended September 30, 1996, respectively,
compared to $615.4 million and $208.5 million for the corresponding
periods in the prior year, an increase of 2% for the nine month
period and a decrease of 4% for the three month period. Results
were negatively impacted in part by the strengthening of the U.S.
dollar against other currencies. Net sales during the nine month
period in local currencies increased 3%, primarily due to increased
sales of laboratory products, while sales of industrial and food
retailing products were consistent with prior year levels. Net
sales in local currencies for the three month period decreased 2%,
due to weak sales in Europe.
Net sales during the nine month period in Europe in local
currencies decreased 1%. The weighing instrument market in Europe
in 1996 was depressed, especially during the third quarter. The
Company believes, however, based upon market information available
to it, that it gained market share in a competitive market,
especially in the industrial and food retailing markets. Net sales during
the nine month period in the Americas in local currencies increased
2%. Net sales in the nine month period in Asia and other markets
in local currencies increased 11%, primarily as a result of the
growing market economy in Asia. Sales in Japan, China and
Singapore were above average.
Gross profit as a percentage of net sales increased to 40.1% for
the nine months ended September 30, 1996, compared to 39.6% for the
corresponding period in the prior year. Gross profit as a
percentage of net sales increased to 39.3% for the three months
ended September 30, 1996, compared to 38.7% for the corresponding
period in the prior year. These results reflect the Company's
ongoing productivity improvements.
In total, research and development expenses, marketing and selling
expenses and general and administrative expenses as a percentage of
net sales decreased to 34.2% for the nine months ended September
30, 1996, compared to 35.0% for the corresponding period in the
prior year, as a result of the Company's continuing efforts to
control costs. In total, research and development expenses,
marketing and selling expenses and general and administrative
expenses increased to 33.8% for the three month period ended
September 30, 1996, compared to 33.4% for the corresponding period
in the prior year, as a result of lower sales. Income from
operations was $33.5 million for the nine months ended September
30, 1996, compared to $26.6 million for the corresponding period in
the prior year. Income from operations was $8.8 million for the
three months ended September 30, 1996, compared to $10.4 million
for the corresponding period in the prior year. In the third
quarter of 1996, the Company recorded a charge of approximately
$1.5 million to reflect the costs associated with the closing of
its Westerville, Ohio facility.
Interest expense decreased to $12.6 million for the nine months
ended September 30, 1996, compared to $13.5 million for the
corresponding period in the prior year. Interest expense decreased
to $4.2 million for the three months ended September 30, 1996,
compared to $4.8 million for the corresponding period in the prior
year. Interest expense following the Acquisition will be
materially different. See "Effect of Acquisition on Results of
Operations." Net financial income decreased to $1.7 million for
the nine months ended September 30, 1996, compared to $5.1 million
for the corresponding period in the prior year principally as a result
of foreign currency transactions. Net financial income decreased to
$0.8 million for the three months ended September 30, 1996, compared to
$2.7 million for the corresponding period in the prior year as a result
of lower interest income.
Net income increased to $13.1 million for the nine months ended
September 30, 1996, compared to $11.6 million for the corresponding
period in the prior year. Net income decreased to $3.1 million for
the three months ended September 30, 1996, compared to $5.2 million
for the corresponding period in the prior year. The 1996 figure
reflects the $1.5 million charge associated with the closing of the
Westerville, Ohio facility.
Liquidity and Capital Resources
The Company's cash and other liquidity has historically been used
to fund capital expenditures, working capital requirements, debt
service and dividends to Ciba. Following the Acquisition, annual
interest expense of approximately $38.0 million associated with
borrowings of approximately $315.0 million under the Credit
Agreement (as defined below) and $135.0 million under the Company's
9 3/4% Senior Subordinated Notes due 2006 (the "Notes"), as well as
scheduled principal payments of term loans under the Credit
Agreement, will significantly increase liquidity requirements. See
"Effect of Acquisition on Results of Operations."
The Credit Agreement entered into in connection with the
Acquisition (the "Credit Agreement") provides for term loan
borrowings in an aggregate principal amount of approximately $147.0
million and SFr 125.0 million ($99.6 million at September 30, 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.
An additional $90.0 million is available to the Company thereafter
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 assets sales or issuances 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 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 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 rates between the U.S. dollar and other
currencies described in the preceding paragraph. If the prior
periods' currency exchange rates had remained in effect, income
from operations would have been $0.6 million lower in the first
nine months of 1996 and $0.8 million lower in the three month
period ended September 30, 1996.
Effect of Acquisition on Results of Operations
As a result of 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 estimated to
be $2.4 million for the first nine months of 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 $15.0 million for the first nine months of 1996, on a
pro forma basis. The Company estimates that it will incur
approximately $2.3 million annually in additional 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. The Acquisition would have resulted in
a decrease in the Company's provision for income taxes of $4.6
million for the first nine months of 1996, on a pro forma basis.
As a result of the above adjustments, on a pro forma basis, the
Company would have reported net income of $1.1 million for the
first nine months of 1996, as compared to its historical net income
of $13.1 million. See Part II, Item 5 for an unaudited pro forma
statement of operations.
Cautionary Statement
Statements in this discussion which are not historical facts may be
considered forward looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. The words
"believe," "expect," "anticipate" and similar expressions identify
forward looking statements. Any forward looking statements involve
risks and uncertainties that could cause actual events or results
to differ, perhaps materially, from the events or results described
in the forward looking statements. Readers are cautioned not to
place undue reliance on these forward looking statements, which
speak only as of their dates. 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.
Risks associated with the Company's forward looking statements
include, but are not limited to, risks associated with the
Company's international operations, such as currency fluctuations,
the risk of new and different legal and regulatory requirements,
governmental approvals, tariffs and trade barriers; risks
associated with competition and technological innovation by
competitors; general economic conditions and conditions in
industries that use the Company's products, especially the
pharmaceutical and chemical industries, and risks associated with
the Company's growth strategy, including investments in emerging
markets. For a more detailed discussion of these factors, see the
Company's Prospectus dated October 4, 1996.
Part II. OTHER INFORMATION
Item 5. Other Information
- --------------------------
The following table presents the unaudited pro forma combined statement
of operations of the Mettler-Toledo Group for the nine months ended
September 30, 1995 and 1996, assuming the Acquisition occurred on January 1,
1995.
Pro Forma
Nine Months Ended
September 30
(In thousands)
1995 1996
----------- -----------
Net sales............................. $ 615,444 624,733
Cost of sales......................... 369,530 372,171
----------- -----------
Gross profit....................... 245,914 252,562
----------- -----------
Research and development expenses..... 39,466 37,030
Marketing and selling expenses........ 119,664 117,365
General and administrative expenses... 53,741 56,630
----------- -----------
Total research and development,
marketing and selling, and general
and administrative expenses........ 212,871 211,025
Amortization of goodwill.............. 4,436 4,436
Other charges......................... - 1,505
----------- -----------
Income from operations............. 28,607 35,596
Interest expense...................... 28,469 28,469
Financial income (expense), net....... 1,316 (1,082)
----------- -----------
Income before taxes and minority
interest............................ 1,454 6,045
Provision for taxes................... 2,419 4,336
Minority interest..................... 846 609
----------- -----------
Net income (loss)................... $ (1,811) 1,100
=========== ===========
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
inventories. Approximately $120.0 million has been allocated to in-
process research and development and has been charged to expense in
the fourth quarter of 1996. Approximately $21.0 million has been
allocated to the revaluation of inventories and will be charged to
cost of sales over the period in which the inventories are sold,
which is expected to be in the fourth quarter of 1996. These
charges are not reflected in the above table due to their unusual,
non-recurring nature.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
3(i) Articles of Incorporation of Mettler-Toledo,
Inc., filed October 15, 1996
27. Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on October 30, 1996
to report the consummation of the acquisition of the Mettler-
Toledo Group on October 15, 1996. The Form 8-K attached and
incorporated by reference to the Company's final prospectus
filed pursuant to Rule 424(b) and consistituting part of the
Registration Statement, as amended on Form S-1 (Commission
File No. 333-09621), the financial statements and pro forma
financial information required by Item 7(a) -- "Financial
Statements" and Item 7(b) -- "Pro Forma Financial
Information."
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereto duly authorized.
Mettler-Toledo, Inc.
Date: November 21, 1996 By: /s/ Robert F. Spoerry
-------------------------
Robert F. Spoerry
President and Chief
Executive Officer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT SEQUENTIAL PAGE NO.
- ----------- ---------------------- --------------------
Item 3(i) Articles of Incorporation of
Mettler-Toledo, Inc., filed
October 15, 1996 21
Item 27. Financial Data Schedule 23
EXHIBIT 3(i)
CERTIFICATE OF INCORPORATION
OF
METTLER-TOLEDO, INC.
Mettler-Toledo, Inc., a corporation organized and
existing under the laws of the State of Delaware, does hereby
certify:
FIRST: The name of the Corporation is
METTLER-TOLEDO, 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 at 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 stock which the
Corporation shall have authority to issue is One Thousand (1,000)
shares of Common Stock, and the par value of each such share is One
Dollar ($1.00).
FIFTH: Elections of directors need not be by ballot
unless the By-Laws of the Corporation shall 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.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-END> DEC-31-1995 SEP-30-1996
<CASH> 41,402 33,078
<SECURITIES> 0 0
<RECEIVABLES> 168,510 168,776
<ALLOWANCES> (9,292) (9,558)
<INVENTORY> 110,986 109,492
<CURRENT-ASSETS> 373,327 378,716
<PP&E> 460,970 434,318
<DEPRECIATION> (219,955) (209,577)
<TOTAL-ASSETS> 724,094 725,105
<CURRENT-LIABILITIES> 282,587 355,993
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 193,254 111,685
<TOTAL-LIABILITY-AND-EQUITY> 724,094 725,105
<SALES> 850,415 624,733
<TOTAL-REVENUES> 850,415 624,733
<CGS> 508,089 374,121
<TOTAL-COSTS> 508,089 374,121
<OTHER-EXPENSES> 304,933 217,118
<LOSS-PROVISION> 3,287 1,643
<INTEREST-EXPENSE> 18,219 12,579
<INCOME-PRETAX> 27,804 22,646
<INCOME-TAX> 8,782 8,901
<INCOME-CONTINUING> 18,254 13,136
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 18,254 13,136
<EPS-PRIMARY> 0.000 0.000
<EPS-DILUTED> 0.000 0.000
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