MILFORD, Mass.--(BUSINESS WIRE)--Jan. 29, 2004--Waters Corporation (NYSE/WAT) reported today fourth quarter 2003 sales of $275.1 million, an increase of 7 % over reported sales of $256.4 million in the fourth quarter of 2002. Foreign currency translation benefited revenue growth by approximately 7%. Reported GAAP quarterly earnings per diluted share (E.P.S.) were $0.47, compared to $0.30 for the fourth quarter in 2002. On a pro-forma basis, E.P.S. were $0.48 compared to fourth quarter 2002 E.P.S. of $0.41. Free cash flow for the quarter was approximately $81 million.
Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, " Our HPLC products did very well in the fourth quarter growing 10% on a constant currency basis and responding to an improvement in pharmaceutical industry spending, particularly in the United States. Our TA Instruments division continued to show good results with sales growth in the double digits. Our mass spectrometry business remained weak with demand for proteomics-focused Q-Tof systems particularly soft compared to the prior year's result.
Looking ahead to the first quarter and full year 2004, we are encouraged by the trends that we see in customer demand and by our plans for exciting new HPLC and mass spectrometry product introductions during the first half of the year."
As communicated in a prior press release, Waters Corporation will webcast its fourth quarter 2003 financial results conference call this morning, January 29, 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 February 4, 2004 similarly by webcast, and also by phone at 402-220-9680.
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 within this release for a variety of reasons including and 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, 2002, 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 Condensed Consolidated Balance Sheets (In thousands and unaudited) December 31, December 31, 2003 2002 Cash and cash equivalents 356,781 263,312 Restricted cash 0 49,944 Accounts receivable 213,894 201,309 Inventories 128,724 130,241 Other current assets 14,898 13,341 Total current assets 714,297 658,147 Property, plant and equipment, net 108,162 100,329 Other assets 308,134 255,478 Total assets 1,130,593 1,013,954 Notes payable and debt 120,921 7,701 Accounts payable and accrued expenses 247,797 313,758 Total current liabilities 368,718 321,459 Other long-term liabilities 171,381 27,185 Total liabilities 540,099 348,644 Total equity 590,494 665,310 Total liabilities and equity 1,130,593 1,013,954 Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) (Unaudited) Three Months Ended Year Ended December 31 December 31 2003 2002 2003 2002 Net sales 275,073 256,389 958,205 889,967 Cost of sales 113,104 108,402 397,848 373,468 Gross profit 161,969 147,987 560,357 516,499 Selling, general and administrative expenses 67,219 62,920 264,252 246,816 Research and development expenses 16,786 13,424 59,242 51,923 Purchased intangibles amortization 1,008 903 4,242 3,600 Litigation provisions(A) - 5,100 1,500 7,900 Loss on disposal of business(B) - - 5,031 - Impairment of long-lived asset(C) - 2,445 - 2,445 Restructuring and other unusual charges(D) (161) 7,404 918 7,404 Expensed in-process research and development(E) 840 - 6,000 - Operating income 76,277 55,791 219,172 196,411 Other expense, net(F) (250) (6,113) (250) (5,997) Interest income, net 485 458 4,764 4,997 Income from operations before income taxes 76,512 50,136 223,686 195,411 Provision for income taxes 18,110 9,892 52,795 43,193 Income before cumulative effect of change in accounting principle 58,402 40,244 170,891 152,218 Cumulative effect of change in accounting principle(G) - - - (4,506) Net income 58,402 40,244 170,891 147,712 Income per basic common share: Net income before cumulative effect of accounting principle change 0.48 0.31 1.39 1.17 Cumulative effect of change in accounting principle(G) - - - (0.03) Net income 0.48 0.31 1.39 1.13 Income per diluted common share: Net income before cumulative effect of accounting principle change 0.47 0.30 1.34 1.12 Cumulative effect of change in accounting principle(G) - - - (0.03) Net income 0.47 0.30 1.34 1.09 Weighted average number of basic common shares 120,961 128,752 123,189 130,489 Weighted average number of diluted common shares and equivalents 124,784 133,573 127,579 135,762 (A) The results for the year ended December 31, 2003 include a $1.2 million provision for an environmental matter with the Commonwealth of Massachusetts. (B) The results for the year ended December 31, 2003 include a loss on disposal of the inorganic mass spectrometry product line. (C) Charges recorded for full write-down of a technology licensed asset. (D) The results for the three months and year ended December 31, 2003 include restructuring and other incremental costs and adjustments recorded in relation to the Company's reorganization of the HPLC and mass spectrometry businesses. (E) The results for the year ended December 31, 2003 include charges for expensed in-process research and development relating to the acquisition of Creon Lab Control, AG. (F) Includes write-down of certain non-affiliate investments. (G) Effect at January 1, 2002 of a change in accounting method for patent related costs. Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Year Ended December 31 December 31 2003 2002 2003 2002 Reconciliation of income per diluted share, in accordance with generally accepted accounting principles, with pro-forma results: Income per diluted share before cumulative effect of change in accounting principle 0.47 0.30 1.34 1.12 Adjustment for litigation provisions, net of tax - 3,315 1,155 5,359 Income per diluted share effect - 0.03 0.01 0.04 Adjustment for restructuring and other unusual charges, net of tax (124) 5,701 707 5,701 Income per diluted share effect (0.00) 0.04 0.01 0.04 Loss on disposal of business, net of tax - - 3,522 - Income per diluted share effect - - 0.03 - Impairment of long-lived asset, net of tax - 1,589 - 1,589 Income per diluted share effect - 0.01 - 0.01 Other expense, write down of certain investments, net of tax 220 4,063 - 3,974 Income per diluted share effect 0.00 0.03 - 0.03 Expensed in-process research and development 840 - 6,000 - Income per diluted share effect 0.01 - 0.05 - Pro-forma income per diluted share: 0.48 0.41 1.44 1.24 The pro-forma 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.