Mettler Toledo International Inc.

11/06/2026 | Press release | Distributed by Public on 11/06/2026 09:00

Quarterly Report for Quarter Ending SEPTEMBER 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Interim Consolidated Financial Statements included herein.
General
Our interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026.
Changes in local currencies exclude the effect of currency exchange rate fluctuations. Local currency amounts are determined by translating current and previous year consolidated financial information at an index utilizing historical currency exchange rates. We believe local currency information provides a helpful assessment of business performance and a useful measure of results between periods. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We present non-GAAP financial measures in reporting our financial results to provide investors with an additional analytical tool to evaluate our operating results.
We also include in the discussion below disclosures of immaterial qualitative factors that are not quantified. Although the impact of such factors is not considered material, we believe these disclosures can be useful in evaluating our operating results.
- 26 -
Results of Operations - Consolidated
The following tables set forth certain items from our interim consolidated statements of operations and comprehensive income for the three and nine month periods ended September 30, 2026 and 2025 (amounts in thousands).
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 2025
(unaudited) % (unaudited) % (unaudited) % (unaudited) %
Net sales $ 1,094,294 100.0 $ 1,029,699 100.0 $ 3,068,735 100.0 $ 2,896,664 100.0
Cost of sales 440,070 40.2 420,243 40.8 1,208,477 39.4 1,181,453 40.8
Gross profit 654,224 59.8 609,456 59.2 1,860,258 60.6 1,715,211 59.2
Research and development 53,613 4.9 51,143 5.0 157,877 5.1 146,774 5.1
Selling, general and administrative 267,159 24.4 248,391 24.1 788,819 25.7 738,488 25.5
Amortization 19,374 1.8 20,022 1.9 58,412 1.9 54,796 1.9
Interest expense 15,675 1.4 17,695 1.7 49,928 1.6 51,127 1.7
Restructuring charges 3,944 0.4 5,972 0.6 16,664 0.5 13,296 0.5
Other charges (income), net (5,741) (0.5) (3,003) (0.2) (10,698) (0.2) (9,105) (0.4)
Earnings before taxes 300,200 27.4 269,236 26.1 799,256 26.0 719,835 24.9
Provision for taxes 54,247 4.9 51,743 5.0 150,950 4.9 136,407 4.8
Net earnings $ 245,953 22.5 $ 217,493 21.1 $ 648,306 21.1 $ 583,428 20.1
Note: As further described below, our operating results for the nine months ended September 30, 2026 include a one-time benefit of $52 million from IEEPA tariff-related refunds that reduced cost of sales, offset in part by related customer refunds of $28 million that reduced net sales.
Recent developments in global trade disputes/tariffs
In 2025, the U.S. government enacted incremental tariff rates on U.S. imports from certain foreign countries. In response to the U.S. tariffs, the Chinese government implemented an additional tariff on imports from the U.S. We estimate that we incurred costs before mitigation actions from the 2025 incremental tariff rates of approximately $50 million in 2025, and we implemented various actions to fully offset the effect of the current incremental tariffs in 2026. At the beginning of 2026, incremental tariff rates were 15% on imports from Switzerland, 25% on non-USMCA imports from Mexico, 30% on imports from China, 15% on imports from the European Union, and 10% on imports from the United Kingdom.
In February 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). We received refunds, including interest, from the U.S. Customs and Border Protection of $52 million, which resulted in a one-time gross benefit that reduced cost of sales for the nine months ended September 30, 2026. In addition, we committed to issue $28 million to customers for tariff related refunds, which reduced net sales for the nine months ended September 30, 2026. We distributed $3 million in refunds to our customers during the three months ended September 30, 2026, and we anticipate distributing additional refunds during the fourth quarter of 2026.
Following the U.S. Supreme Court's decision in February 2026, the U.S. government effectively replaced IEEPA tariffs with a temporary Section 122 tariff that included a 10% tariff on imports from most countries that expired near the end of July 2026. In April 2026, the U.S. government also issued an update to the definition of Section 232 tariffs, which is not expected to have a significant effect on our ongoing tariff obligations.
On July 23, 2026, the U.S. government imposed new Section 301 tariffs to effectively replace the expired Section 122 tariffs. The new Section 301 tariffs include a 12.5% rate on imports from Switzerland and China, and a 10% rate on imports from the European Union, United Kingdom, and non-USMCA imports from Mexico. The U.S. government has also discussed the potential of additional tariffs on certain countries, as well as a potential ending of USMCA on imports from Mexico that are currently not subject to tariffs. Any additional changes to tariff rates in the future could adversely impact our financial results.
- 27 -
Global trade disputes/tariffs create economic uncertainty in our end markets and the overall global economic environment and market conditions may change quickly.
Recent developments in Iran
In February 2026, tensions between the U.S. and Iran escalated to an armed conflict (the "Iran War") that has expanded to include much of the Middle East region. This has led to transportation restrictions in the region, resulting in volatility in global energy markets, commodities pricing, transportation costs, and foreign currency exchange rates. While we do not have significant direct exposure to the Middle East, recent events have increased global economic uncertainty and may affect customer demand in certain markets and contribute to higher global inflation.
While it is difficult to estimate the impact of the Iran War on the global economy, including increased inflation and higher energy and transportation costs, the Iran War could adversely impact our financial results and presents several risks to our business as further described in Part I, Item 1A, "Risk Factors" of our Annual Report for the year ended December 31, 2025. Uncertainties remain related to the Iran War and the resulting impact on the global economy, and market conditions can change quickly.
Net sales
Net sales were $1.1 billion and $1.0 billion for the three months ended September 30, 2026, and 2025, respectively, and $3.1 billion and $2.9 billion for the nine months ended September 30, 2026 and 2025, respectively. Sales in U.S. dollars increased 6% for both the three months and nine months ended September 30, 2026. Excluding the effect of currency exchange fluctuations, or in local currencies, net sales increased 6% for the three months and 5% for the nine months ended September 30, 2026, respectively, before the previously described one-time tariff-related customer refunds. Organic local currency net sales, which exclude acquisitions and the one-time tariff-related customer refunds, increased 4% for the nine months ended September 30, 2026.
Market conditions have improved during 2026, and we continue to benefit from the execution of our global sales and marketing programs, our innovative product portfolio, and investments in our field organization, particularly surrounding digital tools and techniques. However, ongoing developments in Iran and the Middle East, as well as global trade disputes/tariffs, create uncertainty in our end markets and the global economic environment and market conditions may change quickly. The ongoing developments related to global trade disputes/tariffs, Ukraine, and the conflicts in Iran and the Middle East also present several risks to our business as further described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. These topics could adversely impact our financial results in future periods.
Net sales by geographic destination for the three months ended September 30, 2026 in U.S. dollars increased 3% in the Americas, were flat in Europe, and increased 16% Asia/Rest of World. In local currencies, our net sales by geographic destination increased 3% in the Americas, 2% in Europe, and 14% in Asia/Rest of World, which reflected organic growth of 13%. Local currency net sales in Asia/Rest of World includes an increase of 13% in China during the three months ended September 30, 2026.
Net sales by geographic destination for the nine months ended September 30, 2026 in U.S. dollars increased 1% in the Americas, 6% in Europe, and 13% Asia/Rest of World. Local currency net sales by geographic destination increased 3% in the Americas, 2% in Europe, and 10% in Asia/Rest of World before the effect of one-time tariff-related customer refunds. Organic local currency net sales by geographic destination increased 1% in the Americas, 2% in Europe and 8% in Asia/Rest of World. Organic local currency net sales in Asia/Rest of World includes an increase of 9% in China during the nine months ended September 30, 2026. A discussion of sales by operating segment is included below.
- 28 -
As described in Note 18 to our consolidated financial statements for the year ended December 31, 2025, our net sales comprise product sales of precision instruments and related services. Service revenues are primarily derived from repair and other services, including regulatory compliance qualification, calibration, certification, preventative maintenance, and spare parts.
Net sales of products increased 6% and 5% in U.S. dollars for the three and nine months ended September 30, 2026, respectively. Local currency product net sales increased 6% and 4% for the three and nine months ended September 30, 2026, respectively, before the one-time tariff-related customer refunds. Organic local currency product net sales increased 5% and 3% for the three and nine months ended September 30, 2026, respectively, compared to the corresponding periods in 2025.
Service net sales (including spare parts) increased 6% and 10% in U.S. dollars for the three and nine months ended September 30, 2026, respectively. Local currency service net sales increased 7% and 8% for the three and nine months ended September 30, 2026, respectively, before the one-time tariff-related customer refunds. Organic local currency service net sales increased 7% and 6% for both the three and nine months ended September 30, 2026, compared to the corresponding periods in 2025.
Net sales of our laboratory products and services, which represented approximately 55% of our total net sales, increased 6% and 5% in U.S. dollars for the three and nine months ended September 30, 2026, respectively. Local currency laboratory net sales increased 6% and 4% for the three and nine months ended September 30, 2026, respectively, before the one-time tariff-related customer refunds. Organic local currency laboratory net sales increased 6% and 3% for the three and nine months ended September 30, 2026, respectively. The organic local currency increase in laboratory net sales for the three months ended September 30, 2026 includes solid growth in most product categories, with strong growth in pipettes as compared to the nine month results.
Net sales of our industrial products and services, which represented approximately 40% of our total net sales, increased 8% in U.S. dollars for both the three and nine months ended September 30, 2026. Local currency industrial net sales increased 7% and 6% for the three and nine months ended September 30, 2026, respectively, before the one-time tariff-related customer refunds. Organic local currency industrial net sales increased 6% and 3% for the three and nine months ended September 30, 2026, respectively. The organic local currency increase in industrial net sales for the three and nine months ended September 30, 2026 includes growth in most product categories, especially in product inspection.
Net sales of our food retailing products and services, which represented approximately 5% of our total net sales, decreased 1% and increased 7% in U.S. dollars for the three and nine months ended September 30, 2026, respectively. Local currency food retailing net sales decreased 2% and increased 5% for the three and nine months ended September 30, 2026, respectively, before the one-time tariff-related customer refunds. The local currency decrease in food retail net sales for the three months ended September 30, 2026 includes a significant decline in the Americas, offset in part by very strong growth in Asia/Rest of World. Net sales for the nine months ended September 30, 2026 also includes strong project activity in Europe.
Gross profit
Gross profit as a percentage of net sales was 59.8% and 59.2% for the three months ended September 30, 2026 and 2025, respectively, and 60.6% and 59.2% for the nine months ended September 30, 2026 and 2025, respectively. Excluding the effect of both the one-time tariff-related U.S. government and customer refunds, gross profit as a percentage of net sales was 59.3% for the nine months ended September 30, 2026.
Gross profit as a percentage of net sales for products was 62.2% and 61.0% for the three months ended September 30, 2026 and 2025, respectively, and 63.1% and 61.0% for the nine months ended September 30, 2026 and 2025, respectively. Excluding the effect of both the one-time
- 29 -
tariff-related U.S. government and customer refunds, gross profit as a percentage of product net sales was 61.6% for the nine months ended September 30, 2026.
Gross profit as a percentage of net sales for services (including spare parts) was 52.9% and 53.9% for the three months ended September 30, 2026 and 2025, respectively, and 53.7% and 53.9% for the nine months ended September 30, 2026 and 2025, respectively. Excluding the effect of both the one-time tariff-related U.S. government and customer refunds, gross profit as a percentage of service net sales was 52.9% for the nine months ended September 30, 2026.
The increase in gross profit as a percentage of net sales for the three months ended September 30, 2026 primarily reflects favorable price realization, lower tariff costs, and increased sales volume, partially offset by higher material and transportation costs.
Research and development and selling, general and administrative expenses
Research and development expenses as a percentage of net sales was 4.9% and 5.0% for the three months ended September 30, 2026 and 2025, respectively, and was 5.1% for both the nine months ended September 30, 2026 and 2025. Research and development expenses increased 5% in U.S. dollars and 4% in local currencies for the three months ended September 30, 2026, and increased 8% in U.S. dollars and 3% in local currencies for the nine months ended September 30, 2026, respectively, compared to the corresponding periods in 2025.
Selling, general and administrative expenses as a percentage of net sales were 24.4% and 24.1% for the three months ended September 30, 2026 and 2025, respectively, and were 25.7% and 25.5% for the nine months ended September 30, 2026 and 2025, respectively. Selling, general and administrative expenses increased 8% in both U.S. dollars and local currencies for the three months ended September 30, 2026, and increased 7% in U.S. dollars and 4% local currencies for the nine months ended September 30, 2026. The local currency increase for the three and nine months ended September 30, 2026 includes sales and marketing investments and higher variable compensation, offset in part by our cost savings initiatives.
Amortization, interest expense, restructuring charges, other charges (income), net and taxes
Amortization expense was $19.4 million and $20.0 million for the three months ended September 30, 2026 and 2025, respectively, and $58.4 million and $54.8 million for the nine months ended September 30, 2026 and 2025, respectively.
Interest expense was $15.7 million and $17.7 million for the three months ended September 30, 2026 and 2025, respectively, and $49.9 million and $51.1 million for the nine months ended September 30, 2026 and 2025, respectively.
Restructuring charges were $3.9 million and $6.0 million for the three months ended September 30, 2026 and 2025, respectively, and $16.7 million and $13.3 million for the nine months ended September 30, 2026 and 2025, respectively. Restructuring expenses are primarily comprised of employee-related costs.
Other charges (income), net includes non-service pension costs (benefits), net (gains) losses from foreign currency transactions and hedging activities, interest income and other items. Non-service pension benefits were $5.8 million and $3.5 million for the three months ended September 30, 2026 and 2025, respectively, and $17.7 million and $10.1 million for the nine months ended September 30, 2026 and 2025, respectively. Other charges (income), net also includes a net expense of $8.4 million related to additional contingent consideration associated with previous acquisitions for the nine months ended September 30, 2026.
Our reported tax rate was 18.1% and 19.2% during the three months ended September 30, 2026 and 2025, respectively, and 18.9% during both the nine months ended September 30, 2026 and 2025. The provision for taxes is based upon our projected annual effective tax rate of 19.0% before non-recurring discrete tax items for the periods ended September 30, 2026 and 2025. The
- 30 -
difference between our projected annual effective tax rate and the reported tax rate is related to the timing of excess tax benefits associated with stock option exercises. The difference for the nine months ended September 30, 2026 also includes the impact of the one-time tariff related U.S. government and customer refunds.
Results of Operations - by Operating Segment
The following is a discussion of the financial results of our operating segments. We currently have five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other Operations. A more detailed description of these segments is outlined in Note 18 to our consolidated financial statements for the year ended December 31, 2025.
U.S. Operations (amounts in thousands)
Three months ended September 30, Nine months ended September 30,
2026 2025 % 2026 2025 %
Net sales to external customers $ 390,425 $ 385,850 1% $ 1,091,449 $ 1,104,124 (1)%
Net sales to other segments 41,624 35,784 16% 115,807 109,050 6%
Segment net sales 432,049 421,634 2% 1,207,256 1,213,174 0%
Segment cost of sales 178,315 186,632 (4)% 460,492 536,803 (14)%
Segment period expense 141,624 135,097 5% 417,264 399,470 4%
Segment profit $ 112,110 $ 99,905 12% $ 329,500 $ 276,901 19%
Total net sales increased 2% and were flat for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods in 2025. Net sales to external customers increased 1% and decreased 1% for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods in 2025. Organic total net sales and Organic net sales to external customers were flat for both the three and nine months ended September 30, 2026. Organic net sales to external customers for the three months ended September 30, 2026 includes strong growth in most product categories, offset in part by significant declines in project activity in transportation and logistics and food retail.
Segment profit increased $12.2 million and $52.6 million for the three and nine months ended September 30, 2026, compared to the corresponding periods in 2025. Segment profit during the nine months ended September 30, 2026 includes a net benefit of $24.6 million related to one-time tariff-related refunds. Excluding the net tariff refund benefit, segment profit during the three and nine months ended September 30, 2026 includes benefits from lower tariff rates, favorable mix, and our margin expansion initiatives, offset in part by higher transportation costs.
Swiss Operations (amounts in thousands)
Three months ended September 30, Nine months ended September 30,
2026 2025
%1)
2026 2025
%1)
Net sales to external customers $ 55,262 $ 52,072 6% $ 162,497 $ 148,929 9%
Net sales to other segments 227,692 218,605 4% 630,462 594,434 6%
Segment net sales 282,954 270,677 5% 792,959 743,363 7%
Segment cost of sales 134,419 126,308 6% 383,131 345,338 11%
Segment period expense 65,989 62,336 6% 203,335 184,416 10%
Segment profit $ 82,546 $ 82,033 1% $ 206,493 $ 213,609 (3)%
1)Represents U.S. dollar growth (decline).
- 31 -
Total net sales increased 5% in U.S. dollars and 6% in local currency for the three months ended September 30, 2026, and increased 7% in U.S. dollars and 2% in local currency for the nine months ended September 30, 2026, respectively, compared to the corresponding periods in 2025. Net sales to external customers increased 6% in U.S. dollars and 7% in local currency for the three months ended September 30, 2026 and increased 9% in U.S. dollars and 6% in local currency for the nine months ended September 30, 2026, compared to the corresponding periods in 2025. Net sales to external customers for the three and nine months ended September 30, 2026 includes growth in most product categories, especially laboratory products.
Segment profit increased $0.5 million and decreased $7.1 million for the three and nine months ended September 30, 2026, respectively, compared to the corresponding periods in 2025. Segment profit during the nine months ended September 30, 2026 was negatively impacted by unfavorable foreign currency translation and inter-segment sales mix.
Western European Operations (amounts in thousands)
Three months ended September 30, Nine months ended September 30,
2026 2025
%1)
2026 2025
%1)
Net sales to external customers $ 228,862 $ 227,176 1% $ 671,222 $ 629,461 7%
Net sales to other segments 54,217 52,029 4% 154,236 147,663 4%
Segment net sales 283,079 279,205 1% 825,458 777,124 6%
Segment cost of sales 130,871 126,898 3% 377,301 345,947 9%
Segment period expense 96,561 95,061 2% 294,648 279,006 6%
Segment profit $ 55,647 $ 57,246 (3)% $ 153,509 $ 152,171 1%
1)Represents U.S. dollar growth (decline).
Total net sales increased 1% in U.S. dollars and 3% in local currencies for the three months ended September 30, 2026 and increased 6% in U.S. dollars and 2% in local currencies for the nine months ended September 30, 2026, compared to the corresponding periods in 2025. Net sales to external customers increased 1% in U.S. dollars and 2% in local currencies for the three months ended September 30, 2026, and increased 7% in U.S. dollars and 3% in local currencies for the nine months ended September 30, 2026, compared to the corresponding periods in 2025. Net sales to external customers for the three and nine months ended September 30, 2026 includes growth in most product categories, offset in part by a decline in food retail during the three months ended September 30, 2026.
Segment profit decreased $1.6 million and increased $1.3 million for the three and nine month periods ended September 30, 2026, respectively, compared to the corresponding periods in 2025. Segment profit during the three and nine months ended September 30, 2026 includes higher sales offset in part by unfavorable inter-segment sales mix and higher transportation costs. Segment profit during the three months ended September 30, 2026 includes unfavorable foreign currency translation, while the nine months ended September 30, 2026 includes favorable foreign currency translation.
- 32 -
Chinese Operations (amounts in thousands)
Three months ended September 30, Nine months ended September 30,
2026 2025
%1)
2026 2025
%1)
Net sales to external customers $ 200,771 $ 166,964 20% $ 541,543 $ 470,149 15%
Net sales to other segments 102,815 87,272 18% 271,676 247,664 10%
Segment net sales 303,586 254,236 19% 813,219 717,813 13%
Segment cost of sales 139,390 112,946 23% 364,373 323,415 13%
Segment period expense 54,513 47,034 16% 152,162 134,787 13%
Segment profit $ 109,683 $ 94,256 16% $ 296,684 $ 259,611 14%
1)Represents U.S. dollar growth (decline).
Total net sales increased 19% in U.S. dollars and 13% in local currency for the three months ended September 30, 2026 and increased 13% in U.S. dollars and 7% in local currency for the nine months ended September 30, 2026, compared to the corresponding periods in 2025. Net sales to external customers increased 20% in U.S. dollars and 13% in local currency by origin for the three months ended September 30, 2026 and increased 15% in U.S. dollars and 9% in local currency during the nine months ended September 30, 2026, compared to the corresponding periods in 2025. Net sales to external customers for the three months ended September 30, 2026 includes strong growth in most product categories, especially industrial products.
Segment profit increased $15.4 million and $37.1 million for the three and nine month periods ended September 30, 2026, respectively, compared to the corresponding periods in 2025. The increase in segment profit during the three months ended September 30, 2026 includes higher sales and favorable foreign currency translation, offset in part by higher material costs.
Other Operations (amounts in thousands)
Three months ended September 30, Nine months ended September 30,
2026 2025
%1)
2026 2025
%1)
Net sales to external customers $ 218,974 $ 197,637 11% $ 602,024 $ 544,001 11%
Net sales to other segments 10,939 11,213 (2)% 32,595 28,899 13%
Segment net sales 229,913 208,850 10% 634,619 572,900 11%
Segment cost of sales 127,715 113,874 12% 345,482 308,978 12%
Segment period expense 63,120 58,292 8% 189,339 171,644 10%
Segment profit $ 39,078 $ 36,684 7% $ 99,798 $ 92,278 8%
1)Represents U.S. dollar growth (decline).
Total net sales increased 10% in U.S. dollars and 12% in local currency for the three months ended September 30, 2026 and increased 11% in U.S. dollars and 10% in local currency for the nine months ended September 30, 2026, compared to the corresponding periods in 2025. Net sales to external customers increased 11% in U.S. dollars and 13% in local currencies for the three months ended September 30, 2026 and increased 11% in U.S. dollars and 10% in local currencies for the nine months ended September 30, 2026, compared to the corresponding periods in 2025. Local currency net sales to external customers excluding acquisitions increased 11% and 7% for the three and nine months ended September 30, 2026, respectively. Net sales to external customers for the three and nine months ended September 30, 2026 includes strong growth in most product categories.
Segment profit increased $2.4 million and $7.5 million for the three and nine months ended September 30, 2026, respectively, compared to the corresponding periods in 2025. The increase in segment profit for the three and nine months ended September 30, 2026 is primarily related to
- 33 -
increased sales and benefits from our margin expansion initiatives, offset in part by unfavorable foreign currency translation.
Liquidity and Capital Resources
Liquidity is our ability to generate sufficient cash flows from operating activities to meet our obligations and commitments. In addition, liquidity includes available borrowings under our Credit Agreement, the ability to obtain appropriate financing and our cash and cash equivalent balances. Currently, our liquidity needs are primarily driven by working capital requirements, capital expenditures, share repurchases and acquisitions. Global market conditions can be uncertain, and our ability to generate cash flows could be reduced by a deterioration in global markets.
We currently believe that cash flows from operating activities, together with liquidity available under our Credit Agreement, local working capital facilities, and cash balances, will be sufficient to fund currently anticipated working capital needs and spending requirements for at least the foreseeable future.
Cash provided by operating activities totaled $758.8 million during the nine months ended September 30, 2026, compared to $730.2 million in the corresponding period in 2025, and includes a net benefit of $49.6 million related to one-time tariff related U.S. government refunds and associated refunds to customers. Excluding the one-time tariff related U.S. government refunds, the decrease for the nine months ended September 30, 2026 is primarily related to the timing of tax payments.
In October 2026, we entered into a buy-in agreement to convert substantially all assets of the U.S. Defined Benefit Pension Plan to an insurance contract which is held in the pension trust at fair value. We remain primarily responsible for benefit payments to plan participants. We expect, but are not obligated, to terminate the plan and subsequently enter into a buy-out agreement to transfer responsibility for future benefit payments to an insurance company in 2027, subject to regulatory approvals and customary administrative procedures. We do not anticipate making a significant employer contribution to the plan related to the termination. Upon completion of the buy-out, we expect to recognize a one-time non-cash charge in net earnings related to the deferred actuarial loss included in accumulated other comprehensive income. As of September 30, 2026, the deferred actuarial loss related to the plan was approximately $28 million.
Capital expenditures are made primarily for investments in information systems and technology, machinery, equipment and the purchase and expansion of facilities. Our capital expenditures totaled $72.3 million for the nine months ended September 30, 2026 compared to $65.6 million in the corresponding period in 2025.
In December 2025, we entered into an agreement with the government of Xuhui, China to increase production automation and capacity and improve logistics. We will receive proceeds of approximately $31 million, of which approximately $18 million is expected to offset future purchases of property, plant, and equipment and approximately $13 million is expected to offset future operating expenses. We expect to receive proceeds and make payments related to the agreement through 2030. We have received cumulative proceeds of $12.4 million, including $6.2 million during the nine months ended September 30, 2026. No proceeds were received during the three months ended September 30, 2026. We have cumulatively incurred $1.7 million, including $0.6 million of capital expenditures and $1.1 million of operating expense, related to the agreement through September 30, 2026. Proceeds are recorded in accrued and other liabilities and are reduced as amounts related to the agreement are paid.
We paid contingent consideration of $6.9 million and $9.4 million, respectively, during the three and nine months ended September 30, 2026. During the three months ended September 30, 2026 contingent consideration was paid related to the 2025 North American distribution acquisitions, of which $3.0 million is included in financing activities for the amount accrued at the acquisition date and $3.9 million is included in operating activities for the amount not accrued at the acquisition date on the Consolidated Statement of Cash Flows in accordance with U.S. GAAP.
- 34 -
Cash flows used in financing activities are primarily comprised of share repurchases. In accordance with our share repurchase program, we spent $638.7 million and $656.2 million on the repurchase of 490,368 shares and 542,416 shares, during the nine months ended September 30, 2026 and 2025, respectively.
Senior Notes and Credit Facility Agreement
Our debt consisted of the following at September 30, 2026:
U.S. Dollar Other Principal Trading Currencies Total
3.91% $75 million ten-year Senior Notes due June 25, 2029 75,000 - 75,000
5.45% $150 million ten-year Senior Notes due March 1, 2033 150,000 - 150,000
2.83% $125 million twelve-year Senior Notes due July 22, 2033 125,000 - 125,000
3.19% $50 million fifteen-year Senior Notes due January 24, 2035 50,000 - 50,000
2.81% $150 million fifteen-year Senior Note due March 17, 2037 150,000 - 150,000
2.91% $150 million fifteen-year Senior Note due September 1, 2037 150,000 - 150,000
1.47% Euro 125 million fifteen-year Senior Notes due June 17, 2030 - 142,197 142,197
1.30% Euro 135 million fifteen-year Senior Notes due November 6, 2034 - 153,573 153,573
1.06% Euro 125 million fifteen-year Senior Notes due March 19, 2036 - 142,197 142,197
3.80% Euro 100 million 10 1/2-year Senior Notes due July 9, 2035 - 113,758 113,758
Debt issuance costs, net (1,882) (1,606) (3,488)
Total Senior Notes 698,118 550,119 1,248,237
$1.35 billion Credit Agreement, interest at benchmark plus 87.5 basis points (a)
325,868 377,997 703,865
Other local arrangements 16,108 55,474 71,582
Total debt 1,040,094 983,590 2,023,684
Less: current portion (5,117) (55,128) (60,245)
Total long-term debt $ 1,034,977 $ 928,462 $ 1,963,439
(a) The benchmark interest rate is determined by the borrowing currency. The benchmark rates by borrowing currency are as follows: SOFR for U.S. dollars (plus a 10 basis points spread adjustment), SARON for Swiss franc, EURIBOR for Euro and SONIA for Great British pounds.
As of September 30, 2026, we had $641.6 million of additional borrowings available under our Credit Agreement, and we maintained $52.2 million of cash and cash equivalents.
Changes in exchange rates between the currencies in which we generate cash flows and the currencies in which our borrowings are denominated affect our liquidity. In addition, because we borrow in a variety of currencies, our debt balances fluctuate due to changes in exchange rates. Further, we do not have any downgrade triggers relating to ratings from rating agencies that would accelerate the maturity dates of our debt. We were in compliance with our debt covenants as of September 30, 2026.
In January 2025, we entered into an agreement to issue and sell EUR 100 million 10 1/2-year Senior Notes with a fixed interest rate of 3.8% (3.8% Euro Senior Notes) in a private placement, which will mature in July 2035. The 3.8% Euro Senior Notes are unsecured obligations of the Company and the terms are consistent with the previous Notes as disclosed in Note 10 to our consolidated financial statements for the year ended December 31, 2025. We used the proceeds from the sale of the Notes to refinance existing indebtedness and for other general corporate purposes.
- 35 -
Other Local Arrangements
In April 2018, two of our non-U.S. pension plans issued loans totaling $39.6 million (Swiss franc 38 million) to a wholly owned subsidiary of the Company. The loans have the same terms and conditions which include an interest rate of SARON plus 87.5 basis points. The loans were renewed for one year in April 2026.
Share Repurchase Program
We have $3.0 billion of remaining availability for our share repurchase program as of September 30, 2026. The share repurchases are expected to be funded from cash generated from operating activities, borrowings, and cash balances. Repurchases will be made through open market transactions, and the amount and timing of purchases will depend on business and market conditions, the stock price, trading restrictions, the level of acquisition activity, and other factors.
We have purchased 33.5 million shares at an average price per share of $335.28 since the inception of the program in 2004 through September 30, 2026. During the nine months ended September 30, 2026 and 2025, we spent $638.7 million and $656.2 million on the repurchase of 490,368 and 542,416 shares at an average price per share of $1,302.57 and $1,209.84, respectively. We also reissued 21,420 shares and 21,400 shares held in treasury upon the exercise of stock options and vesting of restricted stock units during the nine months ended September 30, 2026 and 2025, respectively. In addition, we incurred $2.1 million and $2.2 million of excise tax during the three months ended September 30, 2026 and 2025, respectively, and $6.2 million and $6.3 million of excise tax during the nine months ended September 30, 2026 and 2025, respectively related to the Inflation Reduction Act which is reflected as a reduction in shareholders' equity in our consolidated financial statements.
Effect of Currency on Results of Operations
Our earnings are affected by changing exchange rates. We are most sensitive to changes in the exchange rates between the Swiss franc, euro, Chinese renminbi, and U.S. dollar. We have more Swiss franc expenses than we do Swiss franc sales because we develop and manufacture products in Switzerland that we sell globally, and have a number of corporate functions located in Switzerland. When the Swiss franc strengthens against our other trading currencies, particularly the U.S. dollar and euro, our earnings decrease. We also have significantly more sales in the euro than we do expenses. When the euro weakens against the U.S. dollar and Swiss franc, our earnings also decrease. We estimate a 1% strengthening of the Swiss franc against the euro would reduce our earnings before tax by approximately $2.6 million to $2.9 million annually.
We also conduct business in many geographies throughout the world, including Asia Pacific, the United Kingdom, Eastern Europe, Latin America, and Canada. Fluctuations in these currency exchange rates against the U.S. dollar can also affect our operating results. The most significant of these currency exposures is the Chinese renminbi. The impact on our earnings before tax of the Chinese renminbi weakening 1% against the U.S. dollar is a reduction of approximately $2.2 million to $2.6 million annually.
In addition to the effects of exchange rate movements on operating profits, our debt levels can fluctuate due to changes in exchange rates, particularly between the U.S. dollar, the Swiss franc and the euro. Based on our outstanding debt at September 30, 2026, we estimate that a 5% weakening of the U.S. dollar against the currencies in which our debt is denominated would result in an increase of approximately $51.9 million in the reported U.S. dollar value of our debt.
- 36 -
Forward-Looking Statements Disclaimer
You should not rely on forward-looking statements to predict our actual results. Our actual results or performance may be materially different than reflected in forward-looking statements because of various risks and uncertainties, including statements about expected revenue growth, inflation, ongoing developments related to global trade disputes/tariffs, and the conflicts in Ukraine and the Middle East. You can identify forward-looking statements by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," or "continue."
We make forward-looking statements about future events or our future financial performance, including earnings and sales growth, earnings per share, strategic plans and contingency plans, growth opportunities or economic downturns, our ability to respond to changes in market conditions, planned research and development efforts and product introductions, adequacy of facilities, access to and the costs of raw materials, shipping and supplier costs, gross margins, customer demand, our competitive position, pricing, capital expenditures, cash flow, tax-related matters, the impact of foreign currencies, compliance with laws, effects of acquisitions, the impact of inflation, ongoing developments related to global trade disputes/tariffs, and the conflicts in Ukraine, Iran, and the Middle East on our business.
Our forward-looking statements may not be accurate or complete, and we do not intend to update or revise them in light of actual results. New risks also periodically arise. Please consider the risks and factors that could cause our results to differ materially from what is described in our forward-looking statements, including ongoing developments related to global trade disputes/tariffs, inflation, and the ongoing conflicts in Ukraine, Iran, and the Middle East. See in particular "Factors Affecting Our Future Operating Results" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025 and other reports filed with the SEC from time to time.
Mettler Toledo International Inc. published this content on November 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 06, 2026 at 15:00 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]