WATERS CORP /DE/ NYSE false 0001000697 0001000697 2024-11-01 2024-11-01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 1, 2024

 

 

Waters Corporation

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   01-14010   13-3668640
(State or other jurisdiction
of incorporation)		   (Commission
File Number)		   (IRS Employer
Identification No.)

34 Maple Street

Milford, Massachusetts 01757

(Address of Principal Executive Offices) (Zip Code)

(508) 478-2000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading
Symbol(s)

  

Name of each exchange
on which registered

Common stock, par value $0.01 per share   WAT   New York Stock Exchange, Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02

Results of Operations and Financial Condition

On November 1, 2024, Waters Corporation (“Waters” or the “Company”) announced its results of operations for the quarter ended September 28, 2024. A copy of the related press release is attached hereto as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference in its entirety.

The information contained in Item 2.02 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibits

     
99.1    Waters Corporation press release dated November 1, 2024, for the quarter ended September 28, 2024.
104    Cover page Interactive Date File (embedded within the Inline XBRL document).

Signatures

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 hereunto duly authorized.

 

    WATERS CORPORATION
Dated: November 1, 2024     By:  

/s/ Amol Chaubal

    Name:   Amol Chaubal
    Title:   Senior Vice President and Chief Financial Officer
      (Principal Financial Officer and Principal Accounting Officer)

Exhibit 99.1

For Immediate Release

Contact: Caspar Tudor, Head of Investor Relations – (508) 482-2429

Waters Corporation (NYSE: WAT) Reports Third Quarter 2024 Financial Results

Highlights

 

  •  

Sales of $740 million exceeded guidance, grew 4% as reported and 4% in constant currency

 

  •  

Instruments returned to growth; recurring revenue grew high single-digits in constant currency

 

  •  

All reported regions returned to growth in the quarter; sales grew across all end markets, led by Pharma & Industrial

 

  •  

GAAP EPS of $2.71 and non-GAAP EPS of $2.93 significantly exceeded guidance, led by strong operational performance and better-than-expected market conditions

 

  •  

Raised full-year sales and EPS guidance, with 5% to 7% constant currency growth expected in the fourth quarter

Third Quarter 2024

MILFORD, Mass., November 1, 2024 - Waters Corporation (NYSE: WAT) today announced its financial results for the third quarter of 2024.

Sales for the third quarter of 2024 were $740 million, an increase of 4% as reported, compared to sales of $712 million for the third quarter of 2023. Currency translation had minimal impact on sales.

On a GAAP basis, diluted earnings per share (EPS) for the third quarter of 2024 was $2.71, compared to $2.27 for the third quarter of 2023. On a non-GAAP basis, EPS was $2.93, compared to $2.84 for the third quarter of 2023. This includes a headwind of approximately 2% due to unfavorable foreign exchange.

“We delivered exceptional third quarter results, fueled by new product adoption and improved customer spending trends,” said Dr. Udit Batra, President & CEO, Waters Corporation. “Instruments returned to growth sooner than expected, as liquid chromatography sales to pharma and industrial customers turned positive.”

Dr. Batra continued, “Looking ahead, our strong commercial execution, competitive product portfolio, and excellent operational performance give us confidence in the long-term outlook for Waters.”

Other Highlights

During the third quarter of 2024, sales into the pharmaceutical market increased 2% as reported and 3% in constant currency. Sales into the industrial market increased 9% as reported and 7% in constant currency. Sales into the academic and government market increased 2% as reported and were flat in constant currency.

During the quarter, instrument system sales increased 1% as reported and in constant currency. Recurring revenues, which represent the combination of service and precision chemistries, increased 6% as reported and 7% in constant currency.

Geographically, sales in Asia during the quarter increased 5% as reported and 6% in constant currency. Sales in the Americas increased 1% as reported and in constant currency. Sales in Europe increased 6% as reported and 4% in constant currency.

Unless otherwise noted, sales growth and decline percentages are presented on an as-reported basis. A description and reconciliation of GAAP to non-GAAP results appear in the tables below and can be found on the Company’s website www.waters.com in the Investor Relations section.

Full-Year and Fourth Quarter 2024 Financial Guidance

Full-Year 2024 Financial Guidance

The Company is raising its full-year 2024 sales guidance, and now expects organic constant currency sales growth to be in the range of -0.9% to -0.3%. Currency translation is expected to decrease full-year sales growth by 1.2%. M&A contribution from the Wyatt transaction covering the first four-and-a-half months of the year has added 1.3% to full-year reported sales. The resulting full-year 2024 reported sales growth is expected in the range of -0.8% to -0.2%.

The Company is also raising its full-year 2024 non-GAAP EPS guidance to now be in the range of $11.67 to $11.87, which includes an estimated headwind of approximately 3% due to unfavorable foreign exchange.

Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full year.

Fourth Quarter 2024 Financial Guidance

The Company expects fourth quarter 2024 constant currency sales growth to be in the range of +5.0% to +7.0%. Currency translation is expected to decrease fourth quarter sales growth by 1.7%. The resulting fourth quarter 2024 reported sales growth is expected in the range of +3.3% to +5.3%.

The Company expects fourth quarter 2024 non-GAAP EPS to be in the range of $3.90 to $4.10, which includes an estimated headwind of approximately 3% due to unfavorable foreign exchange.

Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the fourth quarter.

Conference Call Details

Waters Corporation will webcast its third quarter 2024 financial results conference call today, November 1, 2024, at 8:00 a.m. Eastern Time. To listen to the call and see the accompanying slide presentation, please visit www.waters.com, select “Investor Relations” under the “About Waters” section, navigate to “Events & Presentations,” and click on the “Webcast.” A replay will be available through November 29, 2024, on the same website by webcast and also by phone at (888) 282-0031.

About Waters Corporation

Waters Corporation (NYSE:WAT), a global leader in analytical instruments and software, has pioneered chromatography, mass spectrometry, and thermal analysis innovations serving the life, materials, food, and environmental sciences for more than 65 years. With approximately 7,500 employees worldwide, Waters operates directly in 35 countries, including 15 manufacturing facilities, and with products available in more than 100 countries. For more information, visit www.waters.com.

Non-GAAP Financial Measures

This press release contains financial measures, such as organic constant currency growth rates, adjusted operating income, adjusted net income, adjusted earnings per diluted share and free cash flow, among others, which are considered “non-GAAP” financial measures under applicable U.S. Securities and Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP). The Company’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. The non-GAAP financial measures used in this press release adjust for specified items that can be highly variable or difficult to predict. The Company generally uses these non-GAAP financial measures to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results, comparison to competitors’ operating results and determination of management incentive compensation. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting the Company’s business. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables accompanying this release.

Cautionary Statement

This release contains “forward-looking” statements regarding future results and events. For this purpose, any statements that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words “feels”, “believes”, “anticipates”, “plans”, “expects”, “intends”, “suggests”, “appears”, “estimates”, “projects” and similar expressions, whether in the negative or affirmative, are intended to identify forward-looking statements. The Company’s actual future results may differ significantly from the results discussed in the forward- looking

statements within this release for a variety of reasons, including and without limitation, risks related to, and expectations or ability to realize commercial success of the Wyatt transaction; the impact of this transaction on the Company’s business, anticipated progress on Waters’ research programs, development of new analytical instruments and associated software or consumables, manufacturing development and capabilities; the increased indebtedness of the Company as a result of the Wyatt transaction, the repayment of which could impact the Company’s future results, market prospects for its products and sales and earnings guidance; foreign currency exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results, particularly when a foreign currency weakens against the U.S. dollar; current global economic, sovereign and political conditions and uncertainties, including the effect of new or proposed tariff or trade regulations as well as other new or changed domestic and foreign laws, regulations and policies; changes in inflation and interest rates; the impacts and costs of war, in particular as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East, and the possibility of further escalation resulting in new geopolitical and regulatory instability; the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers; the Company’s ability to access capital, maintain liquidity and service the Company’s debt in volatile market conditions; risks related to the effects of any pandemic on our business, financial condition, results of operations and prospects; changes in timing and demand for the Company’s products among the Company’s customers and various market sectors, particularly as a result of fluctuations in their expenditures or ability to obtain funding; the ability to realize the expected benefits related to the Company’s various cost-saving initiatives, including workforce reductions and organizational restructurings; the introduction of competing products by other companies and loss of market share, as well as pressures on prices from competitors and/or customers; changes in the competitive landscape as a result of changes in ownership, mergers and continued consolidation among the Company’s competitors; regulatory, economic and competitive obstacles to new product introductions; lack of acceptance of new products and inability to grow organically through innovation; rapidly changing technology and product obsolescence; risks associated with previous or future acquisitions, strategic investments, joint ventures and divestitures, including risks associated with achieving the anticipated financial results and operational synergies; contingent purchase price payments and expansion of our business into new or developing markets; risks associated with unexpected disruptions in operations; failure to adequately protect the Company’s intellectual property, infringement of intellectual property rights of third parties and inability to obtain licenses on commercially reasonable terms; the Company’s ability to acquire adequate sources of supply and its reliance on outside contractors for certain components and modules, as well as disruptions to its supply chain; risks associated with third-party sales intermediaries and resellers; the impact and costs of changes in statutory or contractual tax rates in jurisdictions in which the Company operates as well as shifts in taxable income among jurisdictions with different effective tax rates, the outcome of ongoing and future tax examinations and changes in legislation affecting the Company’s effective tax rate; the Company’s ability to attract and retain qualified employees and management personnel; risks associated with cybersecurity and technology, including attempts by third parties to defeat the security measures of the Company and its third-party partners; increased regulatory burdens as the Company’s business evolves, especially with respect to the U.S. Food and Drug Administration and U.S. Environmental Protection Agency, among others, and in connection with government contracts; regulatory, environmental and logistical obstacles affecting the distribution of the Company’s products, completion of purchase order documentation and the ability of customers to obtain letters of credit or other financing alternatives; risks associated with litigation and other legal and regulatory proceedings; and the impact and costs incurred from changes in accounting principles and practices. Such factors and others are discussed more fully in the sections entitled “Forward-Looking Statements” and “Risk Factors” of the Company’s annual report

on Form 10-K for the year ended December 31, 2023, as well as in the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” of the Company’s quarterly reports on Form 10-Q for the quarterly periods ended March 30, 2024 and June 29, 2024, as filed with the Securities and Exchange Commission (“SEC”), which discussions are incorporated by reference in this release, as updated by the Company’s future filings with the SEC. The forward-looking statements included in this release represent the Company’s estimates or views as of the date of this release and should not be relied upon as representing the Company’s estimates or views as of any date subsequent to the date of this release. Except as required by law, the Company does not assume any obligation to update any forward-looking statements.

Waters Corporation and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 28,
2024		     September 30,
2023		     September 28,
2024		     September 30,
2023		  

Net sales

    $ 740,305     $ 711,692     $ 2,085,673     $ 2,136,942  

Costs and operating expenses:

         

Cost of sales

      301,655       291,407       851,685       876,863  

Selling and administrative expenses

      169,097       186,748       516,880       555,657  

Research and development expenses

      45,336       41,995       136,113       130,559  

Purchased intangibles amortization

      11,759       12,116       35,337       20,410  

Litigation provision

      1,326       —        11,568       —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

      211,132       179,426       534,090       553,453  

Other (expense) income, net

      (338 )      328       1,619       1,364  

Interest expense, net

      (17,177 )      (26,559 )      (57,824 )      (56,174 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations before income taxes

      193,617       153,195       477,885       498,643  

Provision for income taxes

      32,114       18,643       71,449       72,614  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 161,503     $ 134,552     $ 406,436     $ 426,029  

Net income per basic common share

    $ 2.72     $ 2.28     $ 6.85     $ 7.21  

Weighted-average number of basic common shares

      59,367       59,093       59,314       59,061  

Net income per diluted common share

    $ 2.71     $ 2.27     $ 6.83     $ 7.19  

Weighted-average number of diluted common shares and equivalents

      59,504       59,255       59,471       59,262  

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

Net Sales by Operating Segments, Products & Services, Geography and Markets

Three Months Ended September 28, 2024 and September 30, 2023

(In thousands)

 

                               Constant  
     Three Months Ended      Percent     Impact of     Currency  
     September 28, 2024      September 30, 2023      Change     Currency     Growth Rate (a)  

NET SALES - OPERATING SEGMENTS

             

Waters

    $ 655,652      $ 629,348        4 %      0 %      4 % 

TA

      84,653        82,344        3 %      1 %      2 % 
  

 

 

     

 

 

         

Total

    $ 740,305      $ 711,692        4 %      0 %      4 % 
  

 

 

     

 

 

         

NET SALES - PRODUCTS & SERVICES

             

Instruments

    $ 323,076      $ 319,431        1 %      0 %      1 % 

Service

      278,294        263,611        6 %      0 %      6 % 

Chemistry

      138,935        128,650        8 %      0 %      8 % 
  

 

 

     

 

 

         

Total Recurring

      417,229        392,261        6 %      (1 %)      7 % 

Total

    $ 740,305      $ 711,692        4 %      0 %      4 % 
  

 

 

     

 

 

         

NET SALES - GEOGRAPHY

             

Asia

    $ 251,329      $ 238,228        5 %      (1 %)      6 % 

Americas

      279,136        275,479        1 %      0 %      1 % 

Europe

      209,840        197,985        6 %      2 %      4 % 
  

 

 

     

 

 

         

Total

    $ 740,305      $ 711,692        4 %      0 %      4 % 
  

 

 

     

 

 

         

NET SALES - MARKETS

             

Pharmaceutical

    $ 430,138      $ 421,535        2 %      (1 %)      3 % 

Industrial

      227,740        209,449        9 %      2 %      7 % 

Academic & Government

      82,427        80,708        2 %      2 %      0 % 
  

 

 

     

 

 

         

Total

    $ 740,305      $ 711,692        4 %      0 %      4 % 
  

 

 

     

 

 

         

 

(a)

The Company believes that referring to comparable constant currency growth rates is a useful way to evaluate the underlying performance of Waters Corporation’s net sales. Constant currency growth, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, excluding the impact of foreign currency exchange rates during the current period. See description of non-GAAP financial measures contained in this release.

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

Net Sales by Operating Segments, Products & Services, Geography and Markets

Nine Months Ended September 28, 2024 and September 30, 2023

(In thousands)

 

                                     Organic  
                                     Constant  
     Nine Months Ended      Percent     Impact of     Impact of     Currency  
     September 28, 2024      September 30, 2023      Change     Currency     Acquisitions     Growth Rate (a)  

NET SALES - OPERATING SEGMENTS

               

Waters

    $ 1,840,112      $ 1,884,658        (2 %)      (1 %)      2 %      (3 %) 

TA

      245,561        252,284        (3 %)      (1 %)      0 %      (2 %) 
  

 

 

     

 

 

           

Total

    $ 2,085,673      $ 2,136,942        (2 %)      (1 %)      2 %      (3 %) 
  

 

 

     

 

 

           

NET SALES - PRODUCTS & SERVICES

               

Instruments

    $ 859,079      $ 964,380        (11 %)      0 %      3 %      (14 %) 

Service

      812,367        774,478        5 %      (1 %)      1 %      5 % 

Chemistry

      414,227        398,084        4 %      (1 %)      0 %      5 % 
  

 

 

     

 

 

           

Total Recurring

      1,226,594        1,172,562        5 %      (1 %)      1 %      5 % 

Total

    $ 2,085,673      $ 2,136,942        (2 %)      (1 %)      2 %      (3 %) 
  

 

 

     

 

 

           

NET SALES - GEOGRAPHY

               

Asia

    $ 696,319      $ 745,932        (7 %)      (3 %)      1 %      (5 %) 

Americas

      794,775        804,827        (1 %)      0 %      3 %      (4 %) 

Europe

      594,579        586,183        1 %      2 %      2 %      (3 %) 
  

 

 

     

 

 

           

Total

    $ 2,085,673      $ 2,136,942        (2 %)      (1 %)      2 %      (3 %) 
  

 

 

     

 

 

           

NET SALES - MARKETS

               

Pharmaceutical

    $ 1,220,092      $ 1,233,177        (1 %)      (1 %)      2 %      (2 %) 

Industrial

      644,459        648,754        (1 %)      0 %      1 %      (2 %) 

Academic & Government

      221,122        255,011        (13 %)      1 %      2 %      (16 %) 
  

 

 

     

 

 

           

Total

    $ 2,085,673      $ 2,136,942        (2 %)      (1 %)      2 %      (3 %) 
  

 

 

     

 

 

           

 

(a)

The Company believes that referring to comparable organic constant currency growth rates is a useful way to evaluate the underlying performance of Waters Corporation’s net sales. Organic constant currency growth, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, excluding the impact of foreign currency exchange rates during the current period and excluding the impact of acquisitions made within twelve months of the acquisition close date. See description of non-GAAP financial measures contained in this release.

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP Financials

Three and Nine Months Ended September 28, 2024 and September 30, 2023

(In thousands, except per share data)

 

    Selling &
Administrative
Expenses(a)		     Research &
Development
Expenses		     Operating
Income		      Operating
Income
Percentage		     Other
(Expense)
Income		     Income from
Operations
before
Income
Taxes		      Provision
for
Income
Taxes		      Net
Income		      Diluted
Earnings
per Share		  

Three Months Ended September 28, 2024

                                                          

GAAP

   $ 182,182     $ 45,336     $ 211,132        28.5 %    $ (338 )    $ 193,617      $ 32,114      $ 161,503      $ 2.71  

Adjustments:

                      

Purchased intangibles amortization (b)

     (11,759 )      —        11,759        1.6 %      —        11,759        2,814        8,945        0.15  

Litigation provision (c)

     (1,326 )      —        1,326        0.2 %      —        1,326        318        1,008        0.02  

Restructuring costs and certain other items (d)

     (1,194 )      —        1,194        0.2 %      —        1,194        282        912        0.02  

Retention bonus obligation (f)

     (1,909 )      (636 )      2,545        0.3 %      —        2,545        611        1,934        0.03  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Non-GAAP

   $ 165,994     $ 44,700     $ 227,956        30.8 %    $ (338 )    $ 210,441      $ 36,139      $ 174,302      $ 2.93  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Three Months Ended September 30, 2023

                                                          

GAAP

   $ 198,864     $ 41,995     $ 179,426        25.2 %    $ 328     $ 153,195      $ 18,643      $ 134,552      $ 2.27  

Adjustments:

                      

Purchased intangibles amortization (b)

     (12,116 )      —        12,116        1.7 %      —        12,116        2,901        9,215        0.16  

Restructuring costs and certain other items (d)

     (24,057 )      —        24,057        3.4 %      (651 )      23,406        5,387        18,019        0.30  

Acquisition related costs (e)

     (1,263 )      —        1,263        0.2 %      —        1,263        303        960        0.02  

Retention bonus obligation (f)

     (5,725 )      (1,909 )      7,634        1.1 %      —        7,634        1,832        5,802        0.10  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Non-GAAP

   $ 155,703     $ 40,086     $ 224,496        31.5 %    $ (323 )    $ 197,614      $ 29,066      $ 168,548      $ 2.84  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Nine Months Ended September 28, 2024

                                                          

GAAP

   $ 563,785     $ 136,113     $ 534,090        25.6 %    $ 1,619     $ 477,885      $ 71,449      $ 406,436      $ 6.83  

Adjustments:

                      

Purchased intangibles amortization (b)

     (35,337 )      —        35,337        1.7 %      —        35,337        8,456        26,881        0.45  

Litigation provision and settlement (c)

     (11,568 )      —        11,568        0.6 %      —        11,568        2,776        8,792        0.15  

Restructuring costs and certain other items (d)

     (10,680 )      —        10,680        0.5 %      —        10,680        2,617        8,063        0.14  

Retention bonus obligation (f)

     (11,451 )      (3,817 )      15,268        0.7 %      —        15,268        3,664        11,604        0.20  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Non-GAAP

   $ 494,749     $ 132,296     $ 606,943        29.1 %    $ 1,619     $ 550,738      $ 88,962      $ 461,776      $ 7.76  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Nine Months Ended September 30, 2023

                                                          

GAAP

   $ 576,067     $ 130,559     $ 553,453        25.9 %    $ 1,364     $ 498,643      $ 72,614      $ 426,029      $ 7.19  

Adjustments:

                      

Purchased intangibles amortization (b)

     (20,410 )      —        20,410        1.0 %      —        20,410        4,852        15,558        0.26  

Restructuring costs and certain other items (d)

     (28,881 )      —        28,881        1.4 %      (651 )      28,230        6,860        21,370        0.36  

Acquisition related costs (e)

     (13,298 )      —        13,298        0.6 %      —        13,298        3,191        10,107        0.17  

Retention bonus obligation (f)

     (8,368 )      (2,790 )      11,158        0.5 %      —        11,158        2,678        8,480        0.14  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Non-GAAP

   $ 505,110     $ 127,769     $ 627,200        29.4 %    $ 713     $ 571,739      $ 90,195      $ 481,544      $ 8.13  
 

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

  

 

(a)

Selling & administrative expenses include purchased intangibles amortization and litigation provisions and settlements.

(b)

The purchased intangibles amortization, a non-cash expense, was excluded to be consistent with how management evaluates the performance of its core business against historical operating results and the operating results of competitors over periods of time.

(c)

Litigation provisions and settlement gains were excluded as these items are isolated, unpredictable and not expected to recur regularly.

(d)

Restructuring costs and certain other items were excluded as the Company believes that the cost to consolidate operations, reduce overhead, and certain other income or expense items are not normal and do not represent future ongoing business expenses of a specific function or geographic location of the Company.

(e)

Acquisition related costs include all incremental expenses incurred, such as advisory, legal, accounting, tax, valuation, and other professional fees. The Company believes that these costs are not normal and do not represent future ongoing business expenses.

(f)

In connection with the Wyatt acquisition, the Company started to recognize a two-year retention bonus obligation that is contingent upon the employee’s providing future service and continued employment with Waters. The Company believes that these costs are not normal and do not represent future ongoing business expenses.

Waters Corporation and Subsidiaries

Preliminary Condensed Unclassified Consolidated Balance Sheets

(In thousands and unaudited)

 

     September 28, 2024      December 31, 2023  

Cash, cash equivalents and investments

    $ 331,458      $ 395,974  

Accounts receivable

      669,534        702,168  

Inventories

      518,994        516,236  

Property, plant and equipment, net

      642,627        639,073  

Intangible assets, net

      591,883        629,187  

Goodwill

      1,306,593        1,305,446  

Other assets

      450,531        438,770  

Total assets

    $ 4,511,620      $ 4,626,854  

Notes payable and debt

    $ 1,826,248      $ 2,355,513  

Other liabilities

      1,082,273        1,121,000  

Total liabilities

      2,908,521        3,476,513  

Total stockholders’ equity

      1,603,099        1,150,341  

Total liabilities and stockholders’ equity

    $ 4,511,620      $ 4,626,854  

Waters Corporation and Subsidiaries

Preliminary Condensed Consolidated Statements of Cash Flows

Three and Nine Months Ended September 28, 2024 and September 30, 2023

(In thousands and unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 28, 2024     September 30, 2023     September 28, 2024     September 30, 2023  

Cash flows from operating activities:

         

Net income

    $ 161,503     $ 134,552     $ 406,436     $ 426,029  

Adjustments to reconcile net income to net cash provided by operating activities:

         

Stock-based compensation

      10,647       8,490       32,993       32,224  

Depreciation and amortization

      47,507       47,807       143,250       117,845  

Change in operating assets and liabilities and other, net

      (15,077 )      (33,031 )      (60,695 )      (203,411 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net cash provided by operating activities

      204,580       157,818       521,984       372,687  

Cash flows from investing activities:

         

Additions to property, plant, equipment and software capitalization

      (25,618 )      (38,047 )      (90,377 )      (119,044 ) 

Business acquisitions, net of cash acquired

      —        —        —        (1,285,907 ) 

(Investments in) proceeds from unaffiliated companies

      (425 )      651       (1,489 )      651  

Net change in investments

      (8 )      (5 )      (44 )      (21 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net cash used in investing activities

      (26,051 )      (37,401 )      (91,910 )      (1,404,321 ) 

Cash flows from financing activities:

         

Net change in debt

      (180,000 )      (125,181 )      (530,000 )      929,601  

Proceeds from stock plans

      3,237       9,464       25,073       18,092  

Purchases of treasury shares

      (141 )      (692 )      (13,475 )      (70,433 ) 

Other cash flow from financing activities, net

      20       2,884       15,305       8,178  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net cash used in financing activities

      (176,884 )      (113,525 )      (503,097 )      885,438  

Effect of exchange rate changes on cash and cash equivalents

      2,442       (171 )      8,461       2,081  
  

 

 

    

 

 

    

 

 

    

 

 

  

Increase (decrease) in cash and cash equivalents

      4,087       6,721       (64,562 )      (144,115 ) 

Cash and cash equivalents at beginning of period

      326,427       329,693       395,076       480,529  
  

 

 

    

 

 

    

 

 

    

 

 

  

Cash and cash equivalents at end of period

    $ 330,514     $ 336,414     $ 330,514     $ 336,414  
  

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a)

 

Net cash provided by operating activities – GAAP

    $  204,580     $ 157,818     $ 521,984     $ 372,687  

Adjustments:

         

Additions to property, plant, equipment

         

and software capitalization

      (25,618 )      (38,047 )      (90,377 )      (119,044 ) 

Tax reform payments

      —        —        95,645       72,101  

Litigation settlements (received) paid, net

      —        (375 )      9,250       (1,125 ) 

Major facility renovations

      —        3,291       —        12,151  

Payment of acquired Wyatt liabilities (b)

      —        —        —        25,617  

Payment of Wyatt retention bonus obligation (c)

      —        —        19,770       —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Free Cash Flow - Adjusted Non-GAAP

    $ 178,962     $ 122,687     $ 556,272     $ 362,387  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(a)

The Company defines free cash flow as net cash flow from operations accounted for under GAAP less capital expenditures and software capitalizations plus or minus any unusual and non recurring items. Free cash flow is not a GAAP measurement and may not be comparable to free cash flow reported by other companies.

(b)

In connection with the Wyatt acquisition, the Company assumed certain obligations of Wyatt and paid those obligations immediately upon closing the transaction. The Company believes that the assumed obligations do not represent future ongoing business expenses.

(c)

During the nine months ended September 28, 2024, the Company made its first retention payment under the Wyatt retention bonus program. The Company believes that these payments are not normal and do not represent future ongoing business expenses.

Waters Corporation and Subsidiaries

Reconciliation of Projected GAAP to Adjusted Non-GAAP Financial Outlook

 

     Twelve Months Ended
December 31, 2024		     Three Months Ended
December 31, 2024		  
     Range     Range  

Projected Sales

               

Organic constant currency sales growth rate (a)

      (0.9 %)      —         (0.3 %)      5.0 %      —         7.0 % 

Impact of:

               

Currency translation

      (1.2 %)      —         (1.2 %)      (1.7 %)      —         (1.7 %) 

Acquisitions

      1.3 %      —         1.3 %      —        —         —   
  

 

 

       

 

 

    

 

 

       

 

 

  

Sales growth rate as reported

      (0.8 %)      —         (0.2 %)      3.3 %      —         5.3 % 
  

 

 

       

 

 

    

 

 

       

 

 

  
     Range     Range  

Projected Earnings Per Diluted Share

               

GAAP earnings per diluted share

    $ 10.55       —       $ 10.75     $ 3.72       —       $ 3.92  

Adjustments:

               

Purchased intangibles amortization

    $ 0.60       —       $ 0.60     $ 0.15       —       $ 0.15  

Litigation settlement

    $ 0.15       —       $ 0.15     $ —        —       $ —   

Restructuring costs and certain other items

    $ 0.14       —       $ 0.14     $ —        —       $ —   

Retention bonus obligation

    $ 0.23       —       $ 0.23     $ 0.03       —       $ 0.03  
  

 

 

       

 

 

    

 

 

       

 

 

  

Adjusted non-GAAP earnings per diluted share

    $ 11.67       —       $ 11.87     $ 3.90       —       $ 4.10  
  

 

 

       

 

 

    

 

 

       

 

 

  

 

(a)

Organic constant currency growth rates are a non-GAAP financial measure that measures the change in net sales between current and prior year periods, excluding the impact of foreign currency exchange rates during the current period and excluding the impact of acquisitions made within twelve months of the acquisition close date. These amounts are estimated at the current foreign currency exchange rates and based on the forecasted geographical sales in local currency, as well as an assessment of market conditions as of today, and may differ significantly from actual results.

These forward-looking adjustment estimates do not reflect future gains and charges that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance.

v3.24.3
Document and Entity Information
Nov. 01, 2024
Cover [Abstract]  
Entity Registrant Name WATERS CORP /DE/
Security Exchange Name NYSE
Amendment Flag false
Entity Central Index Key 0001000697
Document Type 8-K
Document Period End Date Nov. 01, 2024
Entity Incorporation State Country Code DE
Entity File Number 01-14010
Entity Tax Identification Number 13-3668640
Entity Address, Address Line One 34 Maple Street
Entity Address, City or Town Milford
Entity Address, State or Province MA
Entity Address, Postal Zip Code 01757
City Area Code (508)
Local Phone Number 478-2000
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common stock, par value $0.01 per share
Trading Symbol WAT
Entity Emerging Growth Company false
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