Mettler-Toledo International Inc. (NYSE:MTD) Q1 2017 Earnings Conference Call - Final Transcript

May 04, 2017 • 05:00 pm ET

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Mettler-Toledo International Inc. (NYSE:MTD) Q1 2017 Earnings Conference Call - Final Transcript

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Q & A
Executive
Olivier Filliol

and we see that also now with results. I would also add also, I feel we have benefit from the strong pipeline, product pipeline that we build up. And we had many new products launched in recent years, and they all play well to -- in the market that get good reception by customers.

Analyst
Tycho Peterson

And then I guess on incremental investments, you flagged some of the R&D projects and continued investments in Field Turbo. Can you talk a little bit -- just with the top line upside, how you're thinking about maybe expanding on some of these incremental investments?

Executive
Olivier Filliol

Yes. So the additional R&D investment often is a question out of timing when we launch products. And we have quite a couple of important launches, not just in lab, across all the product portfolio in Q1, partially also in Q2. And probably the more important is the investment in Field Turbos. The Field Turbos and they -- typically, we say the first year is really the investment. It's about recruiting, onboarding, training, building up a pipeline. And then we want to see that in typically in the second year, the turbo or the individual breaks even.

And then in year two, three, we start to have the payback also on the initial investment. And I certainly see that this is happening. I would say the expectations, we exceed even our own expectations at right now. But that's more a reflection that the markets offer more growth than we originally planned.

Analyst
Tycho Peterson

Okay. And then last one on repos, you guys have been very consistent with your additional capital deployment going back to share repurchases. Just any thoughts on, given where valuation is, whether the returns there would impact maybe the pace of buybacks going forth?

Executive
Bill Donnelly

Sure. I'll take that one. So the way we look at it, Tycho, is that we generate a lot of free cash flow. We look at the efficiency of different things. We certainly see that our intrinsic value calculations for how we think we could build the business over time, it still makes complete sense to continue the share repurchase program. I think there could be periods of time in the future where we have one or the other acquisition that might be bigger than some of these, more like Troemner's or whatever, a little bit bigger than the small bolt-ons where we might think about our balance sheet and choose one or the other.

But sitting here today, our -- we feel comfortable with the share repurchase program. We intend to continue with it, as described earlier in the year. And we think that makes a lot of financial sense for shareholders, given where we see the intrinsic value.

Operator
operator

Dan Arias, Citi.

Analyst
Bryan Kipp

This is actually Bryan Kipp on behalf of Dan. Congrats on the quarter. Just want to take a step back. You highlighted some of the new products and how they were contributing to overall momentum that we're seeing here. Can you give a