Highlights
- First quarter sales of $685
million declined 1% as reported and grew 3% in constant
currency
- Growth in broader Asia and
Europe offset by weakness in
China and the U.S.
- Instrument revenues declined 3% in constant currency as
Pharma customers recalibrated and delayed spending
- Recurring revenues grew high-single-digits in constant
currency, with continued strength supported by commercial
initiatives
- Strong two-year compound annual sales growth rate of 6.1% as
reported and 9.4% in constant currency
First Quarter 2023
MILFORD,
Mass., May 9, 2023 /PRNewswire/ -- Waters
Corporation (NYSE: WAT) today announced its financial results
for the first quarter of 2023.
Sales for the first quarter of 2023 were $685 million, a decrease of 1% as reported and an
increase of 3% in constant currency, compared to sales of
$691 million for the first quarter of
2022.
On a GAAP basis, diluted earnings per share (EPS) for the first
quarter of 2023 decreased to $2.38,
compared to $2.62 for the first
quarter of 2022. On a non-GAAP basis, EPS was $2.49, compared to $2.80 for the first quarter of 2022. This
includes a headwind of approximately 8% due to unfavorable foreign
exchange.
"While the first quarter came in below our expectations, our
results reflect a healthy two-year stacked growth rate of 9.4%, and
our end-markets are resilient," said Dr. Udit Batra, President & CEO, Waters
Corporation. "Our team continues to execute well, and our
revitalized portfolio has been further strengthened with the launch
of Alliance iS, which we believe is the most significant
innovation to hit pharma QA/QC labs in the past decade."
Dr. Batra continued, "The acceleration of our growth strategy
remains on track, with our pending acquisition of Wyatt Technology
anticipated to close in the second quarter of this year. The
transaction is expected to deliver immediate growth and adjusted
operating margin accretion to Waters and will increase our exposure
to large molecule applications."
Other Highlights
During the first quarter of 2023, sales into the pharmaceutical
market decreased 7% as reported and 4% in constant currency, sales
into the industrial market were flat as reported and increased 3%
in constant currency and sales into the academic and government
markets increased 38% as reported and 45% in constant currency.
During the quarter, instrument system sales decreased 7% as
reported and 3% in constant currency, while recurring revenues,
which represent the combination of service and precision
chemistries, increased 4% as reported and 8% in constant
currency.
Geographically, sales in Asia
during the quarter were flat as reported and increased 6% in
constant currency (with China
sales declining 4%), sales in the Americas decreased 1% (with U.S.
sales declining 3%) and sales in Europe decreased 1% as reported and increased
3% in constant currency.
Unless otherwise noted, sales growth and decline percentages are
presented on an as-reported basis and are the same as the sales
growth and decline percentages presented on a constant currency
basis as compared with the same period in the prior year, each of
which is detailed in the reconciliation of sales growth rates to
constant currency growth rates in the tables below.
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 Second Quarter 2023 Financial Guidance
Full-Year 2023 Financial Guidance
The Company now expects full-year 2023 organic constant currency
sales growth in the range of 3% to 5%. Currency translation is
expected to have minimal impact on full-year organic sales growth.
The Wyatt transaction is expected to increase full-year reported
sales growth by approximately 2.5%. The resulting full-year 2023
reported sales growth is expected in the range of 5.5% to 7.5%.
The Company continues to expect full-year 2023 non-GAAP EPS in
the range of $12.55 to $12.75, which includes an estimated headwind of
approximately 1% due to unfavorable foreign exchange. This also
includes the impact of the Wyatt transaction, which is expected to
temporarily decrease full-year 2023 non-GAAP EPS by approximately
1%. The Company expects the transaction to become accretive to
non-GAAP EPS starting in the first quarter of 2024.
Please refer to the tables below for a reconciliation of the
projected GAAP to non-GAAP financial outlook for the full-year.
Second Quarter 2023 Financial Guidance
The Company expects second quarter 2023 organic constant
currency sales growth in the range of 1% to 3%. Currency
translation is expected to decrease second quarter sales
growth by approximately 1%. Assuming a mid-May close, the Wyatt
transaction is expected to increase second quarter reported sales
growth by approximately 1.5%. The resulting second quarter 2023
reported sales growth is expected in the range of 1.5% to 3.5%.
The Company expects second quarter 2023 non-GAAP EPS in the
range of $2.52 to $2.62, which includes an estimated headwind of
approximately 3% due to unfavorable foreign exchange. This also
includes the impact of the Wyatt transaction, which is expected to
decrease second quarter 2023 non-GAAP EPS by approximately 3%.
Please refer to the tables below for a reconciliation of the
projected GAAP to non-GAAP financial outlook for the
second quarter.
Conference Call Details
Waters Corporation will webcast its first quarter 2023 financial
results conference call today, May 9,
2023, at 8:00 a.m. Eastern
Time. To listen to the call and see the accompanying slide
presentation, please visit www.waters.com, select "Investors" under
the "About Waters" section, navigate to "Events &
Presentations," and click on the "Webcast." A replay will be
available through at least May 23,
2023, at midnight Eastern Time
on the same website by webcast and also by phone at (888)
566-0474.
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 and food sciences for more than 60 years. With more than
8,200 employees worldwide, Waters operates directly in 35
countries, including 14 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 constant
currency growth rate, adjusted operating income, adjusted net
income, adjusted earnings per diluted share and adjusted 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 the
timing of the closing of the transaction, expectations or ability
to realize commercial success after the transaction is complete,
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, that the acquisition
will result in an increase in the indebtedness of the Company 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, changes in inflation and interest rates, the
impacts and costs of war, in particular as a result of the ongoing
conflict between Russia and
Ukraine, and the possibility of
further escalation resulting in new geopolitical and regulatory
instability, the United
Kingdom's exit from the European Union and 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 the
ongoing COVID-19 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 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 contingent purchase
price payments and expansion of our business into 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, 2022, 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
|
|
April 1,
2023
|
|
April 2,
2022
|
|
|
|
|
Net sales
|
$
684,674
|
|
$
690,572
|
|
|
|
|
Costs and operating
expenses:
|
|
|
|
Cost of
sales
|
284,380
|
|
285,685
|
Selling and
administrative expenses
|
181,956
|
|
157,475
|
Research and
development expenses
|
42,691
|
|
40,472
|
Purchased intangibles
amortization
|
1,479
|
|
1,673
|
Acquired in-process
research and development
|
-
|
|
9,797
|
|
|
|
|
Operating
income
|
174,168
|
|
195,470
|
|
|
|
|
Other income,
net
|
1,388
|
|
170
|
Interest expense,
net
|
(10,383)
|
|
(8,945)
|
|
|
|
|
Income from operations
before income taxes
|
165,173
|
|
186,695
|
|
|
|
|
Provision for income
taxes
|
24,250
|
|
26,864
|
|
|
|
|
Net income
|
$
140,923
|
|
$
159,831
|
|
|
|
|
|
|
|
|
Net income per basic
common share
|
$
2.39
|
|
$
2.64
|
|
|
|
|
Weighted-average number
of basic common shares
|
59,023
|
|
60,580
|
|
|
|
|
|
|
|
|
Net income per diluted
common share
|
$
2.38
|
|
$
2.62
|
|
|
|
|
Weighted-average number
of diluted common shares and equivalents
|
59,317
|
|
60,952
|
Waters Corporation
and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segments, Products & Services,
Geography and Markets
Three Months Ended April 1, 2023 and April 2, 2022
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Constant
|
|
|
|
|
|
Three Months
Ended
|
|
Percent
|
|
Currency
|
|
Currency
|
|
|
|
|
|
April 1,
2023
|
|
April 2,
2022
|
|
Change
|
|
Impact
|
|
Growth Rate
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES - OPERATING
SEGMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waters
|
|
|
$
|
602,075
|
|
$
|
613,156
|
|
|
(2 %)
|
|
$
|
(23,206)
|
|
|
2 %
|
TA
|
|
|
|
|
82,599
|
|
|
77,416
|
|
|
7 %
|
|
|
(2,619)
|
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
684,674
|
|
$
|
690,572
|
|
|
(1 %)
|
|
$
|
(25,825)
|
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES - PRODUCTS
& SERVICES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments
|
|
|
$
|
302,942
|
|
$
|
325,222
|
|
|
(7 %)
|
|
$
|
(11,185)
|
|
|
(3 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
|
|
|
248,217
|
|
|
239,732
|
|
|
4 %
|
|
|
(10,538)
|
|
|
8 %
|
Chemistry
|
|
|
|
133,515
|
|
|
125,618
|
|
|
6 %
|
|
|
(4,102)
|
|
|
10 %
|
Total
Recurring
|
|
|
|
381,732
|
|
|
365,350
|
|
|
4 %
|
|
|
(14,640)
|
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
684,674
|
|
$
|
690,572
|
|
|
(1 %)
|
|
$
|
(25,825)
|
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES -
GEOGRAPHY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
|
|
|
$
|
253,081
|
|
$
|
254,334
|
|
|
-
|
|
$
|
(16,399)
|
|
|
6 %
|
Americas
|
|
|
|
246,421
|
|
|
248,837
|
|
|
(1 %)
|
|
|
(781)
|
|
|
(1 %)
|
Europe
|
|
|
|
185,172
|
|
|
187,401
|
|
|
(1 %)
|
|
|
(8,645)
|
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
684,674
|
|
$
|
690,572
|
|
|
(1 %)
|
|
$
|
(25,825)
|
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES -
MARKETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical
|
|
|
$
|
384,898
|
|
$
|
415,772
|
|
|
(7 %)
|
|
$
|
(15,554)
|
|
|
(4 %)
|
Industrial
|
|
|
|
209,650
|
|
|
209,397
|
|
|
-
|
|
|
(5,762)
|
|
|
3 %
|
Academic &
Government
|
|
|
90,126
|
|
|
65,403
|
|
|
38 %
|
|
|
(4,509)
|
|
|
45 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
684,674
|
|
$
|
690,572
|
|
|
(1 %)
|
|
$
|
(25,825)
|
|
|
3 %
|
___________________________________
|
(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 rate, a non-GAAP
financial measure, measures the change in net sales between current
and prior year periods, ignoring the impact of foreign currency
exchange rates during the current period. See description of
non-GAAP financial measures contained in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Two-year compound
annual sales growth rate of 9.4% compares total as reported sales
for the three months ended April 1, 2023 and the three months ended
April 3, 2021 after adding back the negative foreign currency
exchange impact of $43 million during the two-year
period.
|
|
|
Waters Corporation
and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP Financials
Three Months Ended April 1, 2023 and April 2, 2022
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired
|
|
|
|
|
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPR&D
and
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
&
|
|
|
Research
&
|
|
|
|
|
|
Operating
|
|
|
Other
|
|
|
before
|
|
|
Provision
for
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
Administrative
|
|
|
Development
|
|
|
Operating
|
|
|
Income
|
|
|
Income
|
|
|
Income
|
|
|
Income
|
|
|
Net
|
|
|
Earnings
|
|
|
|
|
|
Expenses(a)
|
|
|
Expenses
|
|
|
Income
|
|
|
Percentage
|
|
|
(Expense)
|
|
|
Taxes
|
|
|
Taxes
|
|
|
Income
|
|
|
per
Share
|
Three Months Ended
April 1, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
$
|
183,435
|
|
$
|
42,691
|
|
$
|
174,168
|
|
|
25.4 %
|
|
$
|
1,388
|
|
$
|
165,173
|
|
$
|
24,250
|
|
$
|
140,923
|
|
$
|
2.38
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased intangibles
amortization (b)
|
|
|
(1,479)
|
|
|
-
|
|
|
1,479
|
|
|
0.2 %
|
|
|
-
|
|
|
1,479
|
|
|
335
|
|
|
1,144
|
|
|
0.02
|
|
Restructuring costs and
certain other items (d)
|
|
|
405
|
|
|
-
|
|
|
(405)
|
|
|
(0.1 %)
|
|
|
-
|
|
|
(405)
|
|
|
256
|
|
|
(661)
|
|
|
(0.01)
|
|
Acquisition related
costs (e)
|
|
|
(8,342)
|
|
|
-
|
|
|
8,342
|
|
|
1.2 %
|
|
|
-
|
|
|
8,342
|
|
|
2,002
|
|
|
6,340
|
|
|
0.11
|
Adjusted
Non-GAAP
|
|
$
|
174,019
|
|
$
|
42,691
|
|
$
|
183,584
|
|
|
26.8 %
|
|
$
|
1,388
|
|
$
|
174,589
|
|
$
|
26,843
|
|
$
|
147,746
|
|
$
|
2.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 2, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
$
|
159,148
|
|
$
|
50,269
|
|
$
|
195,470
|
|
|
28.3 %
|
|
$
|
170
|
|
$
|
186,695
|
|
$
|
26,864
|
|
$
|
159,831
|
|
$
|
2.62
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased intangibles
amortization (b)
|
|
|
(1,673)
|
|
|
-
|
|
|
1,673
|
|
|
0.2 %
|
|
|
-
|
|
|
1,673
|
|
|
383
|
|
|
1,290
|
|
|
0.02
|
|
Acquired in-process
research and development (c)
|
|
|
-
|
|
|
(9,797)
|
|
|
9,797
|
|
|
1.4 %
|
|
|
-
|
|
|
9,797
|
|
|
2,351
|
|
|
7,446
|
|
|
0.12
|
|
Restructuring costs and
certain other items (d)
|
|
|
(2,375)
|
|
|
-
|
|
|
2,375
|
|
|
0.3 %
|
|
|
(416)
|
|
|
1,959
|
|
|
461
|
|
|
1,498
|
|
|
0.02
|
|
Certain income tax
items (f)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(488)
|
|
|
488
|
|
|
0.01
|
Adjusted
Non-GAAP
|
|
$
|
155,100
|
|
$
|
40,472
|
|
$
|
209,315
|
|
|
30.3 %
|
|
$
|
(246)
|
|
$
|
200,124
|
|
$
|
29,571
|
|
$
|
170,553
|
|
$
|
2.80
|
|
|
(a)
|
Selling &
administrative expenses include purchased intangibles amortization,
litigation provisions and settlements and asset
impairments.
|
(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)
|
Acquired in-process
research and development was excluded as it relates to the cost of
a licensing arrangement for charge detection mass spectrometry that
the Company believes is unusual and not indicative of its normal
business operations.
|
(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 diligence
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)
|
Certain income tax
items were excluded as these non-cash expenses and benefits
represent updates in management's assessment of ongoing
examinations or other tax items that are not indicative of the
Company's normal or future income tax expense.
|
Waters Corporation
and Subsidiaries
Preliminary Condensed Unclassified Consolidated Balance
Sheets
(In thousands and unaudited)
|
|
|
|
|
|
|
April 1,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
Cash, cash equivalents
and investments
|
|
$
486,955
|
|
$
481,391
|
Accounts
receivable
|
|
|
683,341
|
|
722,892
|
Inventories
|
|
|
|
499,422
|
|
455,710
|
Property, plant and
equipment, net
|
|
590,207
|
|
582,217
|
Intangible assets,
net
|
|
|
232,715
|
|
227,399
|
Goodwill
|
|
|
|
431,642
|
|
430,328
|
Other assets
|
|
|
|
382,538
|
|
381,516
|
Total
assets
|
|
|
|
$
3,306,820
|
|
$
3,281,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable and
debt
|
|
|
$
1,480,170
|
|
$
1,574,878
|
Other
liabilities
|
|
|
|
1,226,827
|
|
1,202,087
|
Total
liabilities
|
|
|
|
2,706,997
|
|
2,776,965
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
599,823
|
|
504,488
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
3,306,820
|
|
$
3,281,453
|
|
|
|
Waters Corporation
and Subsidiaries
Preliminary Condensed Consolidated Statements of Cash
Flows
Three Months Ended April 1, 2023 and April 2, 2022
(In thousands and unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
April 1,
2023
|
|
April 2,
2022
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
140,923
|
|
$
159,831
|
|
Adjustments to
reconcile net income to net
|
|
|
|
|
|
|
cash provided by
operating activities:
|
|
|
|
|
|
Stock-based
compensation
|
12,805
|
|
10,933
|
|
|
Depreciation and
amortization
|
31,154
|
|
32,664
|
|
|
Change in operating
assets and liabilities and other, net
|
11,869
|
|
(5,468)
|
|
|
|
Net cash provided by
operating activities
|
196,751
|
|
197,960
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Additions to property,
plant, equipment
|
|
|
|
|
|
|
and software
capitalization
|
(34,390)
|
|
(27,751)
|
|
Proceeds from equity
investments, net
|
-
|
|
6,785
|
|
Payments for
intellectual property licenses
|
-
|
|
(4,897)
|
|
Net change in
investments
|
(16)
|
|
44,855
|
|
|
|
Net cash (used in)
provided by investing activities
|
(34,406)
|
|
18,992
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net change in
debt
|
(94,960)
|
|
(70,000)
|
|
Proceeds from stock
plans
|
2,378
|
|
12,832
|
|
Purchases of treasury
shares
|
(69,505)
|
|
(170,136)
|
|
Other cash flow from
financing activities, net
|
2,876
|
|
(107)
|
|
|
|
Net cash used in
financing activities
|
(159,211)
|
|
(227,411)
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
2,407
|
|
(10,705)
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
5,541
|
|
(21,164)
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
480,529
|
|
501,234
|
|
|
|
Cash and cash
equivalents at end of period
|
$
486,070
|
|
$
480,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Cash Flows from Operating Activities to Free Cash Flow
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities - GAAP
|
$
196,751
|
|
$
197,960
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Additions to property,
plant, equipment
|
|
|
|
|
|
|
and software
capitalization
|
(34,390)
|
|
(27,751)
|
|
|
Litigation settlements
paid, net
|
(375)
|
|
(584)
|
|
|
Major facility
renovations
|
4,466
|
|
5,927
|
Free Cash Flow -
Adjusted Non-GAAP
|
$
166,452
|
|
$
175,552
|
|
(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.
|
Waters Corporation
and Subsidiaries
Reconciliation of Projected GAAP to Adjusted Non-GAAP Financial
Outlook
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
July 1,
2023
|
|
December 31,
2023
|
|
|
|
|
Range
|
|
|
|
Range
|
|
Projected
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic constant
currency sales growth rate (a)
|
1.0 %
|
-
|
3.0 %
|
|
3.0 %
|
-
|
5.0 %
|
Impact of:
|
|
|
|
|
|
|
|
|
|
Currency
translation
|
(1.0 %)
|
-
|
(1.0 %)
|
|
-
|
-
|
-
|
|
Acquisitions
|
1.5 %
|
-
|
1.5 %
|
|
2.5 %
|
-
|
2.5 %
|
Sales growth rate as
reported
|
1.5 %
|
-
|
3.5 %
|
|
5.5 %
|
-
|
7.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range
|
|
|
|
Range
|
|
Projected Earnings
Per Diluted Share (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per
diluted share
|
$ 2.57
|
-
|
$ 2.67
|
|
$
12.46
|
-
|
$
12.66
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Purchased intangibles
amortization
|
$ 0.02
|
-
|
$ 0.02
|
|
$ 0.08
|
-
|
$ 0.08
|
|
Acquisition related
costs
|
$ 0.01
|
-
|
$ 0.01
|
|
$ 0.16
|
-
|
$ 0.16
|
Adjusted non-GAAP
earnings per diluted share
Excluding impact of recently announced acquisitions
|
$ 2.60
|
-
|
$ 2.70
|
|
$
12.70
|
-
|
$
12.90
|
|
Acquisitions
|
$
(0.08)
|
-
|
$
(0.08)
|
|
$
(0.15)
|
-
|
$
(0.15)
|
Adjusted non-GAAP
earnings per diluted share
Including impact of recently announced acquisitions
|
$ 2.52
|
-
|
$ 2.62
|
|
$
12.55
|
-
|
$
12.75
|
|
(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, ignoring the impact of foreign currency exchange rates and
revenue from recently announced acquisitions during the current
period. 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.
|
|
|
|
|
|
|
|
|
|
|
(b) Projected earnings
per diluted share estimates exclude the impact of amortization of
purchased intangibles related to recently announced acquisitions as
the amounts cannot be reasonably estimated as of the date of this
press release.
|
|
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.
|
Contact: Caspar
Tudor, Head of Investor Relations – (508) 482-2429
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SOURCE Waters Corporation