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Waters Corporation Fourth Quarter 1999 Sales Up 15% Before Currency Effects, Earnings Per Diluted Share Up 29%

MILFORD, Mass.--(BUSINESS WIRE)--Jan. 24, 2000--Waters Corporation (NYSE/WAT) reported today that fourth quarter 1999 sales increased by 15% over prior year levels before unfavorable currency effects. After currency effects, reported sales growth was 12%. Earnings per diluted share (E.P.S.) were $0.63 for the quarter, representing a 29% increase over prior year E.P.S. of $0.49.

For the full year 1999, sales grew by 14% and E.P.S., at $1.84, represented a 32% increase over 1998 excluding a nonrecurring charge in that year. Currency effects were negligible on a full year basis.

Free cash flow, before financing activities and acquisition expenditures, was $31.9 million for the fourth quarter and $126.7 million for the full year 1999.

Douglas A. Berthiaume, Chairman and Chief Executive Officer, said: "The fourth quarter was a fitting way to conclude 1999, an impressive year overall for the Company. Fourth quarter sales growth was strong and broadbased across the geographic areas in which we operate. From a technology perspective, our high performance liquid chromatography and mass spectrometry lines led the growth. Most notably, sales of our time-of-flight mass spectrometry products grew in excess of 40% in the quarter, reflecting the increasing demand from life science customers for our drug discovery and proteomics tools. These tools enable the precise analysis and characterization of proteins in life science research and the pursuit of new drug discovery. From a market perspective, demand from our pharmaceutical customer segment was most robust.

Our financial results reflected the power of our business performance as operating margins continued to expand, earnings grew faster than sales and cash flow continued to be healthy.

We enter the year 2000 with an excellent foundation of existing products which, coupled with an encouraging research and development pipeline of new products, prepares us well for the future."

Waters Corporation holds worldwide leading positions in three complementary analytical technologies-- high performance liquid chromatography, thermal analysis and mass spectrometry --which account for $3.5 billion in annual revenues of the $16 billion analytical instrument industry total.

CAUTIONARY STATEMENT

Certain statements contained herein are forward looking. Many factors could cause actual results to differ from these statements, including 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 healthcare market and the pharmaceutical industry, changes in distribution of the Company's products, and interest rate and foreign exchange fluctuations. Such factors are discussed in detail in the Company's filings with the Securities and Exchange Commission. -0-

                 Waters Corporation and Subsidiaries
                 Consolidated Statements of Operations
                ( In thousands, except per share data)
                              (Unaudited)


                                    Three Months                 Year
                               Ended December 31    Ended December 31
                                  1999      1998       1999      1998

Net sales                       200,668   178,984    704,400   618,813
Cost of sales                    70,899    66,897    257,136   232,497
Revaluation of
 acquired inventory(A)                0         0          0    16,500
 Gross profit                   129,769   112,087    447,264   369,816

Selling, general and
 administrative expenses         59,477    54,995    226,593   206,211
Research and development
 expenses                         9,753     9,303     36,094    34,433
Goodwill and purchased
 technology amortization          1,990     2,304      8,068     9,347
 Operating income                58,549    45,485    176,509   119,825

Interest expense, net             1,742     3,911      8,948    18,278
 Income from operations
  before income taxes            56,807    41,574    167,561   101,547

Provision for income taxes       15,339     9,488     45,243    27,148
 Net income                      41,468    32,086    122,318    74,399

Less: preferred stock dividend
 and accretion, net of gain        (294)      243        442       963
 Net income available
  to common stockholders         41,762    31,843    121,876    73,436


Net income per basic
 common share                      0.67      0.53       1.98      1.23

Net income per diluted
 common share                      0.63      0.49       1.84      1.14


Weighted average number
 of basic common shares          62,204    60,330     61,506    59,860

Weighted avg. number of diluted
 common shares and equivalents   66,621    65,228     66,316    64,642

(A) Nonrecurring first quarter 1998 charge, no associated tax effects

                 Waters Corporation and Subsidiaries
                 Condensed Consolidated Balance Sheets
                            (In Thousands)

                                  December 31, 1999
                                      (Unaudited)   December 31, 1998

Cash and cash equivalents                 3,803           5,497
Accounts receivable                     149,271         136,806
Inventories                              80,363          80,281
Other current assets                     13,893          16,448
   Total current assets                 247,330         239,032

Property, plant and equipment, net       91,841          89,029
Other assets                            246,159         249,640
   Total assets                         585,330         577,701


Notes payable                             4,189           4,259
Accounts payable and accrued expenses   184,570         181,314
   Total current liabilities            188,759         185,573

Loans payable                            91,080         218,250
Redeemable preferred stock                    0           9,058
Other liabilities                        13,329          14,701
   Total liabilities                    293,168         427,582

 Total equity                           292,162         150,119
   Total liabilities and equity         585,330         577,701



     CONTACT: Waters Corporation
              Brian Mazar, 508/482-2193