MILFORD, Mass.--(BUSINESS WIRE)--April 28, 2004--Waters Corporation (NYSE:WAT) reported today first quarter 2004 sales of $255 million, an increase of 15% over the $221 million in sales reported for the first quarter of 2003. This growth is comprised of 8% organic growth (prior to currency effects) and a 7% benefit from foreign exchange in the quarter. Earnings per diluted share (E.P.S.) for the first quarter were $0.33 compared to $0.26 for the comparable period in 2003. On an adjusted basis, E.P.S. were $0.37 compared to $0.30 in 2003. Free cash flow for the quarter was strong at approximately $71 million before an $18 million litigation payment.
Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "We are very pleased with the strong and geographically balanced growth of our HPLC business. Our pharmaceutical customers appear to have returned to more typical levels of capital expenditures and our recurring revenue businesses, service and chromatography chemicals, continue to accelerate our sales growth. Mass spectrometry sales, though reduced from first quarter 2003, are rebounding and grew sequentially from the fourth quarter of 2003 as the new Quattro Premier(TM) tandem quadrupole MS system, used in drug development labs, gained sales traction.
These results are especially encouraging as they do not yet include the impact of our exciting new chromatography platform, the Acquity UPLC (TM) system that was introduced in March. On the mass spectrometry front, we see improving conditions for sales growth during the remainder of the year and are excited about our new system offerings scheduled for introduction at this year's ASMS conference in May. In addition, we plan to aggressively pursue opportunities in lab informatics with new products from our recent acquisition of NuGenesis."
As communicated in a prior press release, Waters Corporation will webcast its first quarter 2004 financial results conference call this morning, April 28, 2004, at 8:30 a.m. eastern time. To listen to the call, connect to www.waters.info , choose Investor Relations and click on the Live Webcast. A replay of the call will be available from today through May 4, 2004, similarly by webcast, and also by phone at 402-998-1290.
Waters Corporation holds worldwide leading positions in three complementary analytical technologies - high performance liquid chromatography (HPLC), mass spectrometry (MS) and thermal analysis (TA). These markets account for $4.4 billion of the overall $20 billion analytical instrument market.
This release contains "forward-looking" statements regarding future results and events, including statements regarding expected financial results, future growth and customer demand that involve a number of risks and uncertainties. For this purpose, any statements contained herein that are not statements of historical fact may be deemed forward looking statements. Without limiting the foregoing, the words, "believes", "anticipates", "plans", "expects", "intends", "appears", "estimates", "projects", and similar expressions 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 discussed in this release for a variety of reasons, including, without limitation, loss of market share through competition, introduction of competing products by other companies, pressures on prices from competitors and/or customers, regulatory obstacles to new product introductions, lack of acceptance of new products, changes in the demands of the Company's healthcare and pharmaceutical company customers, changes in the healthcare market and the pharmaceutical industry, changes in distribution of the Company's products, the short-term effect on sales and expenses as a result of the formerly announced combination of the Waters and Micromass sales, service and distribution organizations, and foreign exchange fluctuations. Such factors and others are discussed more fully in the section entitled "Risk Factors" of the Company's Form 10-K for the year ended December 31, 2003, as filed with the Securities and Exchange Commission, which "Risk Factors" discussion is incorporated by reference in this press release. The forward-looking statements included in this press release represent the Company's estimates as of the date of this press 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 press release. The Company specifically disclaims any obligation to update these forward-looking statements in the future.
Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) (Unaudited) Three Months Ended April 3, March 29, 2004 2003 Net sales 255,086 220,999 Cost of sales 107,474 94,211 Gross profit 147,612 126,788 Selling, general and administrative expenses 71,427 61,611 Research and development expenses 16,071 13,560 Purchased intangibles amortization 1,354 1,028 Litigation provisions (A) 7,847 1,500 Loss on disposal of business (B) - 5,031 Restructuring and other unusual charges, net (C) 104 1,214 Operating income 50,809 42,844 Interest income, net 231 825 Income from operations before income taxes 51,040 43,669 Provision for income taxes 10,195 9,692 Net income 40,845 33,977 Net income per basic common share 0.34 0.27 Weighted average number of basic common shares 120,180 126,308 Net income per diluted common share 0.33 0.26 Weighted average number of diluted common shares and equivalents 123,987 130,785 (A) The results for the quarters ended April 3, 2004 and March 29, 2003 include provisions of $7.8 million and $0.3 million, respectively, for ongoing patent litigation with Hewlett-Packard Company. The results for the quarter ended March 29, 2003 include a $1.2 million provision for an environmental matter with the Commonwealth of Massachusetts. (B) The results for the quarter ended March 29, 2003 include a loss on disposal of the inorganic mass spectrometry product line. (C) The results for quarters ended April 3, 2004 and March 29, 2003 include restructuring and other incremental costs and adjustments recorded in relation to the Company's reorganization of the HPLC and mass spectrometry businesses. Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended April 3, March 29, 2004 2003 Reconciliation of income per diluted share, in accordance with generally accepted accounting principles, with adjusted results: Income per diluted share 0.33 0.26 ----------- ---------- Adjustment for litigation provisions, net of tax 5,100 1,155 Income per diluted share effect 0.04 0.01 ----------- ---------- Adjustment for restructuring and other unusual charges, net of tax 68 935 Income per diluted share effect 0.00 0.01 ----------- ---------- Loss on disposal of business, net of tax - 3,522 Income per diluted share effect - 0.03 ----------- ---------- Adjusted income per diluted share: 0.37 0.30 =========== ========== The adjusted income per diluted share presented above is used by the management of the Company to measure operating performance with prior periods and is not in accordance with generally accepted accounting principles (GAAP). The above reconciliation identifies those items management has excluded as non- operational activities or transactions. Management feels these transactions are not indicative of understanding the ongoing operations of the business or its future outlook. Waters Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In thousands and unaudited) April 3, 2004 December 31, 2003 Cash and cash equivalents 408,605 356,781 Accounts receivable 222,500 214,260 Inventories 132,402 128,810 Other current assets 16,140 15,548 Total current assets 779,647 715,399 Property, plant and equipment, net 109,038 108,162 Other assets 355,846 307,300 Total assets 1,244,531 1,130,861 Notes payable and debt 235,429 121,309 Accounts payable and accrued expenses 279,475 257,212 Total current liabilities 514,904 378,521 Other long-term liabilities 156,659 161,863 Total liabilities 671,563 540,384 Total equity 572,968 590,477 Total liabilities and equity 1,244,531 1,130,861