MTS Delivers Record Full Year 2012 Financial Results And Strong
Fourth Quarter
EDEN PRAIRIE, Minn.,
Nov. 15, 2012 /PRNewswire/ -- MTS
Systems Corporation (NASDAQ: MTSC), a leading global supplier of
high-performance test systems and position sensors, today reported
fiscal 2012 fourth quarter and fiscal year financial results.
(Logo:
http://photos.prnewswire.com/prnh/20121115/AQ14468LOGO)
"MTS' full fiscal year results illustrate the overall strength
of our operating model in terms of geographies and technology
applications. Despite negative currency impacts, the Company set
records in several key measures such as orders, backlog, revenue
and income from operations. Additionally, we are pleased to have
delivered on our revenue and EPS guidance projections for the
year," said Dr. Jeffrey Graves,
President and Chief Executive Officer of MTS. "Much of the market
dynamic we experienced earlier in fiscal 2012 continued in the
fourth quarter, with the Test segment benefiting from strength in
the structures and ground vehicles markets. Although our Sensors
segment faced continued economic headwinds, overall we carry a
record backlog into fiscal 2013, continue to make growth
investments toward new revenue streams and are cautiously
optimistic for a strong year ahead."
Fourth Quarter Results
Orders totaled $146.9 million, an
11 percent increase, net of 3 percent negative currency translation
compared to fiscal 2011 fourth quarter. There was one large
$20 million Test structures order in
the quarter compared to no large orders (>$5 million) in last year's fourth quarter. Test
orders improved 15 percent on strong growth in Asia. Sensors orders declined 8 percent
compared to the prior year. Approximately two-thirds of the Sensors
decline was due to currency. Backlog of $299
million is a record high, increasing 4 percent versus the
prior year.
Revenue was $137.8 million, up 5
percent compared to the prior year, including 8 percent growth in
Test, fueled by a higher volume of standard short-cycle products,
partially offset by a 10 percent decrease in Sensors. The gross
margin rate was 41.7 percent, down 1.3 percentage points, primarily
from lower Sensors volume.
Income from operations totaled $21.6
million, relatively flat compared to the prior year.
Operating expenses as a percentage of revenue declined 1 percent
from a year ago as reduced legal costs were partially offset by
planned research and development projects and continued investment
in productivity and growth initiatives. Earnings per share were
$0.94, flat compared to the prior
year.
Uses of Cash and Other Matters
Cash and cash equivalents at the end of the fourth quarter
totaled $79.9 million, down
sequentially compared to $145.5
million at the end of the third quarter. During the fourth
quarter, operating activities generated cash of $12.8 million, driven by earnings and reduced
working capital requirements, partially offset by the previously
disclosed $7.8 million payment to
settle the U.S. Government matters.
Additionally, the Company repaid $40.0
million of debt and used $35.0
million to purchase shares in connection with the previously
announced accelerated share purchase agreement. In addition,
$4.0 million of cash was used
for capital expenditures and $3.9
million in dividends were paid to shareholders. In the
fourth quarter, the Board of Directors announced a 20 percent
increase in the quarterly dividend to $0.30 per share.
Fourth Quarter Segment Results
Test Segment:
Dr. Graves said, "The performance of our Test segment in the
fourth quarter was the result of our pursuit of applications with
significant ongoing growth potential, such as seismic, automotive
and materials testing. We finished fiscal 2012 with a very strong
backlog that will help create momentum throughout fiscal 2013."
Orders were $123.8 million, up 15
percent compared to the prior year. Geographically, orders were
driven by 58 percent growth in Asia from the previously mentioned
$20 million key seismic test system
win in the structures market, and increased demand in both the
ground vehicles and materials markets. These gains were partially
offset by a 22 percent decline in the Americas due to general
softness across all markets. Currency translation had a 2 percent
negative impact. Backlog of $285
million was up $14 million compared to the fiscal 2011
fourth quarter.
Revenue grew 8 percent to $114.1
million, the result of higher standard short-cycle product
volume. Currency translation had a 3 percent negative impact.
Gross profit was $44.6 million, an
increase of $3.2 million, or 8
percent, and the gross margin rate was 39.1 percent, a decrease of
0.3 percentage points, largely due to a lower-margin product mix,
partially offset by leveraging of fixed costs on higher volume.
Income from operations totaled $16.2
million, up $1.5 million
compared to the prior year, due to higher revenue. Operating
expenses rose by $1.7 million,
primarily from the investments in productivity and growth
initiatives to capitalize on global marketplace opportunities.
Sensors Segment:
Dr. Graves continued, "Sensors faced continued challenges in the
fourth quarter related to lower demand for industrial machinery.
However, we continue to invest in R&D and other initiatives
that will allow MTS to better exploit future opportunities among
industrial equipment makers, especially in China where manufacturers are putting a
priority on technological differentiation."
Orders were $23.1 million, down 8
percent compared to the prior year, of which 5 percentage points
was from an unfavorable impact of currency translation. Sensors
experienced weaker demand in the Americas and Europe in the industrial markets, which was
partially offset by an 11 percent increase in the mobile hydraulics
market. Backlog of $14 million was
down $3 million compared to the prior
year.
Revenue declined 10 percent to $23.7
million, driven by a 6 percent unfavorable impact of
currency translation and lower order volume in the Americas and
Europe.
Gross profit was $12.8 million,
down $2.3 million or 16 percent, and
the gross margin rate was 54.0 percent, a decrease of 3.5
percentage points on lower volume. Income from operations was
$5.4 million, down 18 percent,
resulting chiefly from lower gross profit. This was partially
offset by reduced operating expenses due principally both to a
favorable impact of currency translation and lower variable
compensation.
Full Year Results
"With revenue up 16 percent and EPS gaining 14 percent excluding
the government settlement, 2012 was a very strong year for MTS,"
said Dr. Graves.
Total company orders for fiscal 2012 reached a record high of
$565.3 million, an increase of 5
percent. Excluding currency, orders growth was 7 percent. This
reflects strong base-order expansion in the Test segment across all
markets, which rose 13 percent year-over-year. Sensor orders were
$97.3 million, down 6 percent
compared to the prior year driven by weak demand in the industrial
markets. Backlog rose 4 percent in the fiscal year to a record high
$299 million.
Revenue climbed 16 percent to $542.3
million – also a record - including 21 percent growth in
Test. This resulted from higher beginning backlog and strength in
standard short-cycle orders, partially offset by a 3 percent
decline in Sensors. The gross margin rate rose to 43.6 percent, up
0.4 percentage points compared to the prior year, reflecting
leverage from higher volume and productivity improvements in
Test.
Income from operations reached a record high of $80.5 million, an increase of $7.3 million or approximately 10 percent compared
to the prior fiscal year, reflecting the higher revenue and gross
profit rate. On a Non-GAAP basis, income from operations was
$88.3 million, an increase of 21
percent. See "Non-GAAP Financial Measures" below. Operating
expenses of $155.7 million rose
$26.9 million in the fiscal year,
including the U.S. Government settlement, as well as planned
investment in growth and productivity initiatives, and research and
development projects.
Earnings per share for the year were $3.21, compared to $3.24 in the prior year. This decrease was
primarily from the $0.48 per share
negative impact of the U.S. Government settlement, partially offset
by higher income from operations. Excluding the settlement cost,
earnings per share increased 14 percent to a record $3.69. See "Non-GAAP Financial Measures"
below.
The tax rate rose to 35.4 percent from 30.5 percent mainly due
to the impact of the settlement costs and the prior-year benefit of
the R&D tax legislation. The settlement costs are not
deductible for income tax purposes and resulted in an increase in
the tax rate of 3.6 percentage points. Additionally, more shares
outstanding negatively impacted earnings per share by $0.07.
For fiscal 2012, MTS generated a strong return on invested
capital (ROIC) of 25 percent, excluding the costs associated with
the settlement of the U.S. Government matters. See "Non-GAAP
Financial Measures" below for further information.
Long-Term Growth Goal and Outlook for Fiscal 2013
Dr. Graves continued, "Driven by our leadership position in the
research and development, product development and industrial
equipment global end-markets, and the investments we continue to
make in both businesses, the stage is set for a very promising
future for MTS. Over the last six months, we have assessed the
growth potential of our core end-markets and determined how to
capitalize on the exciting opportunities. We are well-positioned in
both Sensors and Test to deliver significant revenue growth in the
years ahead and have set a goal of $1
billion in revenue in fiscal 2018.
Our three priorities to achieve this goal are:
- accelerating innovation
- capturing the opportunities in the rapidly changing emerging
markets
- realizing the potential of the Test service business
The key market drivers of this growth include the need for more
productive industrial machinery and mobile equipment and energy
efficient ground and air vehicles," continued Dr. Graves. "Also
important is the rapid introduction of new materials to support
advanced system designs and the opportunity we have to provide more
customer value to our estimated $3.5
billion installed base. While these market factors alone are
significant, there are also rapidly changing demographics in
Asia and other emerging markets
that are leading to significant increased demand for new product
development by our customers. These converging market dynamics give
us confidence in setting this goal. Our business model supports
achieving this milestone largely through organic growth, assuming
we move aggressively to build our infrastructure, expand our
offerings and execute on our opportunities with our key customers
around the world. Importantly, we have a healthy balance sheet and
annual operating cash flow capability to make the required
investments to deliver this growth. However, we recognize that the
global economic environment is uncertain so we will be closely
monitoring it for changes which may affect our outlook."
Dr. Graves concluded, "In order to accelerate our top-line
growth to over 10 percent per year over the next few years,
investment is essential in infrastructure, sales support and field
service capacity and capability. We began investing in earnest in
fiscal 2012 and will continue in fiscal 2013. Based on our market
opportunities and our strong backlog, we expect fiscal 2013 revenue
and EPS growth rates in the 5 to 10 percent range. We also
anticipate revenue and EPS performance to be more back-half loaded
than in recent years because of the nature of the Test backlog and
the timing of planned investments. More specifically, for the first
quarter, we expect a modest 1 to 3 percent revenue increase and EPS
of $0.72 to $0.82."
"Strong investments will continue through the remainder of the
year but we anticipate an increasing benefit of order growth and
backlog conversion in revenue and earnings in the second half of
the year. While the investments are significant, given our market
potential and strong organic growth opportunities, we believe they
will yield meaningful shareholder value in the years ahead. We are
excited about the future for MTS."
Non-GAAP Financial Measures
We believe that disclosing the income from operations and the
earnings per share excluding the impact of the cost related to the
settlement of the U.S. Government's investigation of the Company is
useful to investors as a measure of operating performance. We use
these measures to monitor and evaluate the Company's operating
performance. Income from operations and earnings per share
excluding this cost are financial measures that do not reflect
GAAP. We calculate revised income from operations by adding back
the cost of the settlement to the reported income from operations.
We calculate revised earnings per share by adding back the
after-tax effect of the cost to net income and dividing the result
by the weighted average shares outstanding. Investors should
consider these non-GAAP financial measures in addition to, not as a
substitute for or better than, financial measures prepared in
accordance with GAAP. A reconciliation of the components of these
measures to the most directly comparable GAAP financial measures is
included in Exhibit C to this release.
We believe that return on invested capital ("ROIC") is useful to
investors as a measure of operating performance and of the
effectiveness of the use of capital in our operations. We use ROIC
as one measure to monitor and evaluate operating performance. ROIC
is a financial measure that does not reflect generally accepted
accounting principles (GAAP). We calculate ROIC by dividing net
income, excluding after-tax interest expense, by average invested
capital. Average invested capital is defined as the aggregate of
average interest bearing debt and average shareholder's investment
and is calculated as the sum of current and prior year ending
amounts divided by two. Investors should consider this non-GAAP
financial measure in addition to, not as a substitute for or better
than, financial measures prepared in accordance with GAAP. A
reconciliation of the components of ROIC to the most directly
comparable GAAP financial measures is included in Exhibit D to this
release.
Fiscal Year 2012 Conference Call
A conference call will be held on November 16, 2012, at 10
a.m. EST (9 a.m. CST). Call
+1‑719‑325‑4794 (Toll Free: +1-877-857-6173); and reference the
conference passcode "1040191". Telephone replay will be available
until 12 p.m. CST, November 23, 2012. Call +1-719-457-0820 (Toll
Free: +1-888-203-1112); and reference the conference passcode
"1040191".
A transcript of the call can also be accessed from the MTS
website at http://www.mts.com/en/Investor/index.htm. It will
be available on November 21,
2012.
About MTS Systems Corporation
MTS Systems Corporation is a leading global supplier of
high-performance test systems and position sensors. The Company's
testing hardware and software solutions help customers accelerate
and improve their design, development, and manufacturing processes
and are used for determining the mechanical behavior of materials,
products, and structures. MTS' high-performance position sensors
provide controls for a variety of industrial and vehicular
applications. MTS had 2,147 employees and revenue of $542 million for the fiscal year ended
September 29, 2012. Additional
information on MTS can be found on the worldwide web at
http://www.mts.com.
This release contains "forward-looking statements" including
financial projections made pursuant to the safe harbor provision of
the Private Securities Litigation Reform Act of 1995 that are
subject to certain risks and uncertainties, as well as assumptions,
that could cause actual results to differ materially from
historical results and those presently anticipated or projected.
Words such as "may," "will," "should," "expects," "intends,"
"projects," "plans," "believes," "estimates," "targets,"
"anticipates," and similar expressions are used to identify these
forward-looking statements.
Forward-looking statements are based on our current
expectations and assumptions, which may not prove to be accurate.
Many factors could cause actual results to differ materially and
adversely from these forward-looking statements. Among these
factors are risks related to: the Company's significant
international business; volatility in the global economy;
competition; failure to achieve the Company's growth plans for the
expansion of its business; difficulties obtaining the services of
skilled employees; failure to protect its intellectual property
effectively or infringement upon the intellectual property of
others; product liability and commercial litigation; difficulty
obtaining materials or components for its products; government
regulation; the irregularity and development of sales, delivery and
acceptance cycle for the Company's products; the Company's
customers are in cyclical industries; interest rate fluctuations;
and the Company may be required to recognize impairment charges for
long-lived assets. For a more thorough discussion of the risks
associated with our business, see the "Risk Factors" section in the
Company's most recent SEC Form 10-K, 10-Q and 8-K filings. Except
as required by law, the Company does not undertake any obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
MTS SYSTEMS CORPORATION
|
Consolidated Statements of
Income
|
(unaudited - in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Year
Ended
|
|
September 29,
|
|
October
1,
|
|
September 29,
|
|
October
1,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Revenue
|
$
137,843
|
|
$
131,599
|
|
$
542,256
|
|
$
467,368
|
Cost
of sales
|
80,422
|
|
75,018
|
|
306,064
|
|
265,378
|
Gross profit
|
57,421
|
|
56,581
|
|
236,192
|
|
201,990
|
Gross margin
|
41.7%
|
|
43.0%
|
|
43.6%
|
|
43.2%
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
30,071
|
|
31,107
|
|
133,788
|
|
114,011
|
Research and development
|
5,769
|
|
4,247
|
|
21,893
|
|
14,785
|
Total operating expenses
|
35,840
|
|
35,354
|
|
155,681
|
|
128,796
|
|
|
|
|
|
|
|
|
Income from operations
|
21,581
|
|
21,227
|
|
80,511
|
|
73,194
|
Operating margin
|
15.7%
|
|
16.1%
|
|
14.8%
|
|
15.7%
|
|
|
|
|
|
|
|
|
Interest expense, net
|
(151)
|
|
(91)
|
|
(305)
|
|
(915)
|
Other (expense) income, net
|
(85)
|
|
53
|
|
(426)
|
|
1,026
|
|
|
|
|
|
|
|
|
Income before income taxes
|
21,345
|
|
21,189
|
|
79,780
|
|
73,305
|
Provision for income taxes
|
6,094
|
|
6,297
|
|
28,224
|
|
22,363
|
Net
income
|
$
15,251
|
|
$
14,892
|
|
$
51,556
|
|
$
50,942
|
|
|
|
|
|
|
|
|
Earnings
per share:
|
|
|
|
|
|
|
|
Basic-
|
|
|
|
|
|
|
|
Earnings per share
|
$
0.95
|
|
$
0.95
|
|
$
3.24
|
|
$
3.29
|
Weighted average number of common shares
outstanding - basic
|
16,018
|
|
15,643
|
|
15,913
|
|
15,487
|
|
|
|
|
|
|
|
|
Diluted-
|
|
|
|
|
|
|
|
Earnings per share
|
$
0.94
|
|
$
0.94
|
|
$
3.21
|
|
$
3.24
|
Weighted average number of common shares
outstanding - diluted
|
16,175
|
|
15,802
|
|
16,077
|
|
15,739
|
MTS SYSTEMS CORPORATION
|
Consolidated Balance Sheets
|
(unaudited - in thousands, except per share
data)
|
|
|
|
|
|
September 29,
|
|
October
1,
|
|
2012
|
|
2011
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
Cash
and cash equivalents
|
$
79,852
|
|
$104,095
|
Accounts receivable, net
|
84,119
|
|
82,510
|
Unbilled accounts receivable
|
51,306
|
|
54,554
|
Inventories
|
67,979
|
|
65,987
|
Other current assets
|
17,647
|
|
16,910
|
Total current assets
|
300,903
|
|
324,056
|
|
|
|
|
Property and equipment, net
|
61,653
|
|
56,252
|
|
|
|
|
Goodwill
|
16,239
|
|
16,027
|
Intangibles, net
|
23,077
|
|
25,843
|
Other assets
|
7,566
|
|
5,681
|
Total Assets
|
$
409,438
|
|
$427,859
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
Short-term borrowings
|
$
230
|
|
$
40,285
|
Accounts payable
|
33,744
|
|
27,794
|
Advance payments from
customers
|
65,833
|
|
63,307
|
Other accrued liabilities
|
60,425
|
|
64,228
|
Total current liabilities
|
160,232
|
|
195,614
|
|
|
|
|
Other long-term liabilities
|
22,487
|
|
21,397
|
Total Liabilities
|
182,719
|
|
217,011
|
|
|
|
|
Shareholders' Investment:
|
|
|
|
Common
stock, $0.25 par; 64,000 shares authorized: 15,640 and 15,632
shares issued and outstanding as of September 29, 2012 and October
1, 2011, respectively
|
3,910
|
|
3,908
|
Additional paid-in capital
|
652
|
|
5,319
|
Retained earnings
|
211,256
|
|
185,332
|
Accumulated other comprehensive
income
|
10,901
|
|
16,289
|
Total shareholders' investment
|
226,719
|
|
210,848
|
Total Liabilities and Shareholders'
Investment
|
$
409,438
|
|
$427,859
|
Exhibit A
|
MTS SYSTEMS CORPORATION
|
Segment Financial Information
|
(unaudited - in thousands)
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
September 29,
|
|
October
1,
|
|
|
Test Segment
|
2012
|
|
2011
|
|
%
Variance
|
|
|
|
|
|
|
Orders
|
$
123,825
|
|
$
107,522
|
|
15%
|
|
|
|
|
|
|
Revenue
|
$
114,133
|
|
$
105,269
|
|
8%
|
Cost
of Sales
|
69,506
|
|
63,829
|
|
9%
|
Gross profit
|
44,627
|
|
41,440
|
|
8%
|
Gross margin
|
39.1%
|
|
39.4%
|
|
|
|
|
|
|
|
|
Operating expenses
|
28,424
|
|
26,765
|
|
6%
|
|
|
|
|
|
|
Income from operations
|
$
16,203
|
|
$
14,675
|
|
10%
|
|
|
|
|
|
|
Sensors Segment
|
|
|
|
|
|
|
|
|
|
|
|
Orders
|
$
23,071
|
|
$
24,983
|
|
-8%
|
|
|
|
|
|
|
Revenue
|
$
23,710
|
|
$
26,330
|
|
-10%
|
Cost
of Sales
|
10,916
|
|
11,189
|
|
-2%
|
Gross profit
|
12,794
|
|
15,141
|
|
-16%
|
Gross margin
|
54.0%
|
|
57.5%
|
|
|
|
|
|
|
|
|
Operating expenses
|
7,416
|
|
8,589
|
|
-14%
|
|
|
|
|
|
|
Income from operations
|
$
5,378
|
|
$
6,552
|
|
-18%
|
|
|
|
|
|
|
Total Company
|
|
|
|
|
|
|
|
|
|
|
|
Orders
|
$
146,896
|
|
$
132,505
|
|
11%
|
|
|
|
|
|
|
Revenue
|
$
137,843
|
|
$
131,599
|
|
5%
|
Cost
of Sales
|
80,422
|
|
75,018
|
|
7%
|
Gross profit
|
57,421
|
|
56,581
|
|
1%
|
Gross margin
|
41.7%
|
|
43.0%
|
|
|
|
|
|
|
|
|
Operating expenses
|
35,840
|
|
35,354
|
|
1%
|
|
|
|
|
|
|
Income
from operations
|
$
21,581
|
|
$
21,227
|
|
2%
|
Exhibit B
|
MTS SYSTEMS CORPORATION
|
Segment Financial Information
|
(unaudited - in thousands)
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
September 29,
|
|
October
1,
|
|
|
Test Segment
|
2012
|
|
2011
|
|
%
Variance
|
|
|
|
|
|
|
Orders
|
$
467,992
|
|
$
436,661
|
|
7%
|
|
|
|
|
|
|
Revenue
|
$
442,012
|
|
$
363,918
|
|
21%
|
Cost
of Sales
|
262,131
|
|
221,322
|
|
18%
|
Gross profit
|
179,881
|
|
142,596
|
|
26%
|
Gross margin
|
40.7%
|
|
39.2%
|
|
|
|
|
|
|
|
|
Operating expenses
|
121,537
|
|
96,385
|
|
26%
|
|
|
|
|
|
|
Income from operations
|
$
58,344
|
|
$
46,211
|
|
26%
|
|
|
|
|
|
|
Sensors Segment
|
|
|
|
|
|
|
|
|
|
|
|
Orders
|
$
97,335
|
|
$
103,362
|
|
-6%
|
|
|
|
|
|
|
Revenue
|
$
100,244
|
|
$
103,450
|
|
-3%
|
Cost
of Sales
|
43,933
|
|
44,056
|
|
0%
|
Gross profit
|
56,311
|
|
59,394
|
|
-5%
|
Gross margin
|
56.2%
|
|
57.4%
|
|
|
|
|
|
|
|
|
Operating expenses
|
34,144
|
|
32,411
|
|
5%
|
|
|
|
|
|
|
Income from operations
|
$
22,167
|
|
$
26,983
|
|
-18%
|
|
|
|
|
|
|
Total Company
|
|
|
|
|
|
|
|
|
|
|
|
Orders
|
$
565,327
|
|
$
540,023
|
|
5%
|
|
|
|
|
|
|
Revenue
|
$
542,256
|
|
$
467,368
|
|
16%
|
Cost
of Sales
|
306,064
|
|
265,378
|
|
15%
|
Gross profit
|
236,192
|
|
201,990
|
|
17%
|
Gross margin
|
43.6%
|
|
43.2%
|
|
|
|
|
|
|
|
|
Operating expenses
|
155,681
|
|
128,796
|
|
21%
|
|
|
|
|
|
|
Income
from operations
|
$
80,511
|
|
$
73,194
|
|
10%
|
Exhibit
C
|
MTS
SYSTEMS CORPORATION
|
Reconciliation of Income from Operations
and
|
Earnings
Per Share Excluding Settlement Cost to GAAP Measure
|
For the
Year Ended September 29, 2012
|
(unaudited
- in thousands)
|
|
|
Income
from operations
|
$
80,511
|
Expense to
settle U.S. Government investigation
|
7,750
|
Income
from operations excluding settlement *
|
$
88,261
|
|
|
|
|
Net
income
|
$
51,556
|
Expense to
settle U.S. Government investigation
|
7,750
|
Net income
excluding settlement *
|
$
59,306
|
|
|
Earnings
Per Share
|
$
3.21
|
Earnings
Per Share - Impact of settlement
|
0.48
|
Earnings
per share excluding settlement *
|
$
3.69
|
|
|
* Denotes
Non-GAAP financial measure
|
|
Exhibit
D
|
MTS
SYSTEMS CORPORATION
|
Reconciliation of Return on Invested Capital to GAAP
Measures
|
For the
Year Ended September 29, 2012
|
(unaudited
- in thousands)
|
|
|
|
|
Net
income
|
$
51,556
|
Expense to
settle U.S. Government investigation
|
7,750
|
After-tax
interest expense
|
535
|
Net income
excluding after-tax interest expense and
|
|
expense to settle U.S. Government
investigation *
|
$
59,841
|
|
|
Total
shareholders' investment as of October 1, 2011
|
210,848
|
Total
shareholders' investment as of September 29, 2012
|
226,719
|
Interest
bearing debt as of October 1, 2011
|
40,000
|
Interest
bearing debt as of September 29, 2012
|
-
|
Sum of
invested capital
|
$
477,567
|
|
|
Average
invested capital *
|
$
238,784
|
|
|
Return on
invested capital *
|
25.1%
|
|
|
* Denotes
Non-GAAP financial measure
|
|
SOURCE MTS Systems Corporation