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Waters Corporation Fourth Quarter 2001 Sales Up 11% Before Currency Effects, Earnings Per Diluted Share Up 16% Before Impairment Charge

MILFORD, Mass.--(BUSINESS WIRE)--Jan. 24, 2002--Waters Corporation (NYSE/WAT) reported today that fourth quarter 2001 sales increased by 11% over prior year levels before unfavorable currency effects. After currency effects, reported sales growth was 10%. Earnings per diluted share (E.P.S.) were $0.43 for the quarter before the after-tax impact of an impairment charge for certain equity investments of $0.04, representing a 16% increase over prior year E.P.S. of $0.37. Earnings after the impairment charge were $0.39 for the quarter.

Sales for the full year 2001 grew by 11% over 2000 before unfavorable currency effects, 8% after currency effects. E.P.S. were $1.27 for the full year before the impact of the fourth quarter impairment charge, and represented an 11% increase over full year 2000 E.P.S. of $1.14 before the cumulative effect of a change in accounting principle. Earnings after the impairment charge were $1.23 for 2001.

Douglas A. Berthiaume, Chairman and Chief Executive Officer, said: "Fourth quarter results met our expectations for sales and exceeded expectations for earnings before the impairment charge; and all-in cash flow was especially strong, exceeding $63 million, with enhanced operating performance and asset management. Customer demand for HPLC and mass spectrometry products was strong throughout the period while our thermal analysis business slowed with conditions in the industrial marketplace. Our business and financial positions are very strong entering 2002. It is interesting to note that our net cash position has increased by $155 million during 2001 alone and stands at $226 million at the beginning of 2002. We are confident in our ability to capitalize on business opportunities over the upcoming year."

As communicated in a prior press release, Waters Corporation will webcast its fourth quarter 2001 financial results conference call this morning, January 24, 2002, at 8:30 a.m. eastern time. To listen to the call, connect to www.waters.com and access the investor relations section. A replay of the call will be available from today through January 30, 2002 similarly by webcast, and also by phone at 402-998-0857.

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 $4.2 billion of the overall $19 billion analytical instrument market.

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 foreign exchange fluctuations. Such factors are discussed in detail in the Company's filings with the Securities and Exchange Commission.

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

                               Three Months Ended       Year Ended
                                   December 31          December 31
                                 2001       2000      2001       2000

Net sales                     248,679    225,508   859,208    795,071
Cost of sales                  89,269     79,854   311,232    288,264

  Gross profit                159,410    145,654   547,976    506,807

Selling, general and
 administrative expenses       69,717     65,223   269,706    246,390
Research and
 development expenses          12,029     11,200    46,602     42,513
Goodwill and purchased
 technology amortization        1,867      1,751     7,141      7,077

  Operating income             75,797     67,480   224,527    210,827

Other expense (A)              (7,066)      --      (7,066)      --
Interest income, net            1,117        857     4,965        135
  Income before income taxes   69,848     68,337   222,426    210,962

Provision for income taxes     16,764     17,768    53,383     54,849
  Income before cumulative
   effect of change in
   accounting principle        53,084     50,569   169,043    156,113

Cumulative effect of change 
 in accounting principle (B)     --         --        --      (10,771)
  Net income                   53,084     50,569   169,043    145,342


Income per basic common share:
  Net income before cumulative 
   effect of accounting
   principle change              0.41       0.39      1.29       1.22
  Cumulative effect of change 
   in accounting principle (B)   --         --        --        (0.08)
    Net income                   0.41       0.39      1.29       1.14


Income per diluted common share:
  Net income before cumulative 
   effect of accounting
    principle change             0.39       0.37      1.23       1.14
  Cumulative effect of change 
   in accounting principle (B)   --         --        --        (0.08)
    Net income                   0.39       0.37      1.23       1.06


Weighted average number of 
 basic common shares          130,815    129,347   130,559    127,568

Weighted average number of 
 diluted common shares
 and equivalents              137,299    137,795   137,509    136,743



(A)  Impairment charge for certain equity investments

(B)   Effect at January 1, 2000 of adopting Securities and Exchange
      Commission Staff Accounting Bulletin #101, recorded in first
      quarter 2000


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

                                     December 31,    December 31, 
                                         2001            2000
                                     (Unaudited)

Cash and cash equivalents               226,798          75,509
Accounts receivable                     182,164         167,713
Inventories                             102,718          87,275
Other current assets                     12,910          13,299
   Total current assets                 524,590         343,796

Property, plant and equipment, net      114,207         102,608
Other assets                            249,960         245,941
   Total assets                         888,757         692,345


Notes payable                             1,140           4,879
Accounts payable and accrued expenses   228,209         215,654
   Total current liabilities            229,349         220,533

Other liabilities                        21,163          20,031
   Total liabilities                    250,512         240,564

Total equity                            638,245         451,781
   Total liabilities and equity         888,757         692,345

--30--dp/bos*

CONTACT: Waters Corporation
Brian Mazar
Vice President of Investor Relations
508-482-2193