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Waters Corporation (NYSE: WAT) Reports Second Quarter 2019 Financial Results
  • Salesof $599 million were flat as reported and grew 2% in constant currency
  • Strong pharmaceutical growth, partially offset by softness in industrial
  • Strength in U.S. and improvement in China, partially offset by other areas
  • GAAP EPS of $2.08; non-GAAP EPS of $2.14, a 10% increase from prior year

MILFORD, Mass.--(BUSINESS WIRE)--Jul. 30, 2019-- Waters Corporation (NYSE: WAT)today announced second quarter 2019 sales of $599 million, which were flat as reported, compared to sales of $596 million for the second quarter of 2018. Foreign currency translation negatively impacted sales growth by approximately 2% for the quarter.

On a GAAP basis, diluted earnings per share (EPS) for the second quarter of 2019 increased to $2.08, compared to $1.98 for the second quarter of 2018. On a non-GAAP basis, EPS increased to $2.14, compared to $1.95 for the second quarter of 2018. A description and reconciliation of GAAP to non-GAAP results appear in the tables below and can be found on the Company’s website at http://www.waters.com under the caption “Investors.”

On a GAAP basis, net cash provided by operating activities was $127 million for the second quarter of 2019, compared to $101 million for the second quarter of 2018. On a non-GAAP basis, adjusted free cash flow for the second quarter of 2019 was $136 million versus $144 million for the second quarter of 2018.

For the first half of 2019, the Company’s sales were $1,113 million, a decrease of 1% as reported, compared to sales of $1,127 million for the first half of 2018. Foreign currency translation negatively impacted sales growth by approximately 2% for the first half of 2019.

On a GAAP basis, diluted EPS for the first half of 2019 increased to $3.57, compared to $3.39 for the first half of 2018. On a non-GAAP basis, EPS increased to $3.73, compared to $3.54 in the first half of 2018.

On a GAAP basis, net cash provided by operating activities was $303 million for the first half of 2019, compared to $277 million for the first half of 2018. On a non-GAAP basis, adjusted free cash flow for the first half of 2019 was $294 million versus $304 million for the first half of 2018.

“While sales in the quarter came in at the low end of our guidance range and there is more work to be done, we experienced improvements in key areas of our business, including high-single-digit growth in the U.S., growth in China, and pharmaceutical strength across all geographies,commented Chris O’Connell, Chairman and Chief Executive Officer of Waters Corporation. “The progress we made in the second quarter is encouraging, and we remain focused on improving our performance in the back half of the year. Stabilizing end markets, as well as our accelerating cadence of new product introductions, provide us with confidence that we will be able to achieve continued improvement over the course of the year.”

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.

During the second quarter of 2019, sales into the pharmaceutical market increased 3% as reported and 6% in constant currency, sales into the industrial market declined 4% as reported and 3% in constant currency, and sales into the academic and governmental markets declined 2% as reported and were flat in constant currency. For the first half of 2019, sales into the pharmaceutical market were flat as reported and grew 3% in constant currency, sales into the industrial market declined 4% as reported and 3% in constant currency, and sales into the academic and governmental markets were flat as reported and grew 2% in constant currency.

During the second quarter, recurring revenues, which represent the combination of service and precision chemistries revenues, grew 2% as reported and 4% in constant currency, while instrument system sales declined 1% as reported and were flat in constant currency. For the first half of 2019, recurring revenues grew 1% as reported and 4% in constant currency, while instrument system sales declined 4% as reported and 2% in constant currency.

Geographically, sales in Asia during the quarter grew 1% as reported and 3% in constant currency, sales in the Americas grew 4% as reported and 5% in constant currency (with U.S. sales growing 8%), and sales in Europe declined 5% as reported and 2% in constant currency. For the first half of 2019, sales in Asia were flat as reported and increased 3% in constant currency, sales in the Americas grew 2% as reported and 3% in constant currency (with U.S. sales growing 5%), and sales in Europe declined 8% as reported and 3% in constant currency.

Third Quarter and Fiscal Year 2019 Financial Outlook

The Company expects third quarter 2019 constant-currency sales growth in the range of 2% to 4%. As of today, currency translation is expected to decrease third quarter sales growth by approximately one percentage point. The Company also expects third quarter 2019 non-GAAP earnings per fully diluted share in the range of $2.05 to $2.15. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the third quarter.

In addition, the Company is updating its previously issued full-year guidance, and currently expects full-year 2019 constant-currency sales growth in the range of 1% to 3%, compared to the prior range of 2% to 4%. As of today, currency translation is expected to decrease full-year sales growth by approximately one to two percentage points. The Company also expects full-year 2019 non-GAAP earnings per fully diluted share in the range of $8.95 to $9.10, compared to our prior range of $9.05 to $9.25. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full year.

Conference Call

Waters Corporation will webcast its second quarter 2019 financial results conference call today, July 30, 2019 at 8:00 a.m. Eastern Time. To listen to the call, please visit www.waters.com, choose “Investors,” and click on the “Live Webcast.” A replay will be available through August 6, 2019 at midnight Eastern Time on the same website by webcast and also by phone at 402-998-0587.

About Waters Corporation

Waters Corporation (NYSE: WAT), the world's leading specialty measurement company, has pioneered chromatography, mass spectrometry and thermal analysis innovations serving the life, materials and food sciences for more than 60 years. With approximately 7,200 employees worldwide, Waters operates directly in 35 countries, including 15 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 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 generally accepted accounting principles (GAAP). The Company’s definition 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 Waters Corporation’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 Waters Corporation’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 may contain “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, foreign exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results; the impact on demand for the Company’s products among the Company’s various market sectors or geographies from economic, sovereign and political uncertainties, particularly regarding the effect of new or proposed tariff or trade regulations or changes in the interpretation or enforcement of existing regulations; the effect on the Company’s financial results from the United Kingdom voting to exit the European Union; fluctuations in expenditures by the Company’s customers, in particular large pharmaceutical companies; introduction of competing products by other companies and loss of market share; pressures on prices from competitors and/or customers; regulatory, economic and competitive obstacles to new product introductions; other changes in demand for the Company’s products from the effect of mergers and acquisitions by the Company’s customers; 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; impact of the newly enacted tax reform legislation in the U.S.; shifts in taxable income in jurisdictions with different effective tax rates; the outcome of tax examinations or changes in respective country legislation affecting the Company’s effective tax rate; the effect of the adoption of new accounting standards; the ability to access capital, maintain liquidity and service the Company’s debt in volatile market conditions, particularly in the U.S., as a large portion of the Company’s cash is held and operating cash flows are generated outside the U.S.; environmental and logistical obstacles affecting the distribution of products and risks associated with lawsuits and other legal actions, particularly involving claims for infringement of patents and other intellectual property rights. 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/A for the year ended December 31, 2018 as filed with the Securities and Exchange Commission, which “Forward-Looking Statements” and “Risk Factors” discussions are incorporated by reference in this release. 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.

 
Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended Six Months Ended
June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018
 
Net sales

$

599,162

 

$

596,219

 

$

1,113,024

 

$

1,126,889

 

 
Costs and operating expenses:
Cost of sales

 

249,546

 

 

243,135

 

 

470,577

 

 

464,556

 

Selling and administrative expenses

 

133,208

 

 

136,645

 

 

267,547

 

 

267,052

 

Research and development expenses

 

36,490

 

 

35,644

 

 

71,550

 

 

70,124

 

Purchased intangibles amortization

 

2,264

 

 

1,602

 

 

4,545

 

 

3,261

 

Litigation settlement

 

-

 

 

-

 

 

-

 

 

(1,672

)

 
Operating income

 

177,654

 

 

179,193

 

 

298,805

 

 

323,568

 

 
Other expense

 

(342

)

 

(1,828

)

 

(867

)

 

(1,482

)

Interest expense, net

 

(5,577

)

 

(2,804

)

 

(8,825

)

 

(6,976

)

 
Income from operations before income taxes

 

171,735

 

 

174,561

 

 

289,113

 

 

315,110

 

 
Provision for income taxes(a)

 

27,325

 

 

18,884

 

 

35,717

 

 

47,482

 

 
Net income

$

144,410

 

$

155,677

 

$

253,396

 

$

267,628

 

 
 
Net income per basic common share

$

2.09

 

$

2.00

 

$

3.60

 

$

3.42

 

 
Weighted-average number of basic common shares

 

68,989

 

 

77,833

 

 

70,331

 

 

78,330

 

 
 
Net income per diluted common share

$

2.08

 

$

1.98

 

$

3.57

 

$

3.39

 

 
Weighted-average number of diluted common shares and equivalents

 

69,494

 

 

78,438

 

 

70,904

 

 

79,041

 

 

(a) The provision for income taxes for the six months ended June 29, 2019 included a $3 million benefit related to the finalization of tax regulations under tax reform during the first quarter of 2019. The provision for income taxes for the three and six months June 30, 2018 included a $9 million benefit and a $4 million expense, respectively, related to the tax on the change in foreign currency exchange rates on the earnings taxed in December 31, 2017 under the Tax Cuts and Jobs Act. The difference is due to the change from the foreign currency exchange rates required by the U.S. Department of the Treasury on December 31, 2017 to the foreign currency exchange rates on either the date of distribution of assets into the U.S. or the foreign currency exchange rates as of June 29, 2019 and June 30, 2018, respectively.

 
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segment, Products & Services, Geography and Markets
Three Months Ended June 29, 2019 and June 30, 2018
(In thousands)
Current
Period Constant
Three Months Ended Percent Currency Currency
June 29, 2019 June 30, 2018 Change Impact Growth Rate (a)
 
NET SALES - OPERATING SEGMENT
 
Waters

$

531,117

$

527,305

1

%

$

(9,645

)

3

%

TA

68,045

68,914

(1

%)

(759

)

0

%

 
Total

$

599,162

$

596,219

0

%

$

(10,404

)

2

%

 
 
NET SALES - PRODUCTS & SERVICES
 
Instruments

$

286,973

$

289,740

(1

%)

$

(2,954

)

0

%

 
Service

211,897

207,350

2

%

(4,990

)

5

%

Chemistry

100,292

99,129

1

%

(2,460

)

4

%

Total Recurring

312,189

306,479

2

%

(7,450

)

4

%

 
Total

$

599,162

$

596,219

0

%

$

(10,404

)

2

%

 
 
NET SALES - GEOGRAPHY
 
Asia

$

238,835

$

236,905

1

%

$

(5,000

)

3

%

Americas

206,775

198,126

4

%

(370

)

5

%

Europe

153,552

161,188

(5

%)

(5,034

)

(2

%)

 
Total

$

599,162

$

596,219

0

%

$

(10,404

)

2

%

 
 
NET SALES - MARKETS
 
Pharmaceutical

$

350,145

$

338,354

3

%

$

(7,542

)

6

%

Industrial

176,109

183,664

(4

%)

(1,414

)

(3

%)

Academic & Governmental

72,908

74,201

(2

%)

(1,448

)

0

%

 
Total

$

599,162

$

596,219

0

%

$

(10,404

)

2

%

 
 

(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.

 
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segment, Products & Services, Geography and Markets
Six Months Ended June 29, 2019 and June 30, 2018
(In thousands)
Current
Period Constant
Six Months Ended Percent Currency Currency
June 29, 2019 June 30, 2018 Change Impact Growth Rate (a)
 
NET SALES - OPERATING SEGMENT
 
Waters

$

991,031

$

998,451

(1

%)

$

(23,602

)

2

%

TA

121,993

128,438

(5

%)

(1,637

)

(4

%)

 
Total

$

1,113,024

$

1,126,889

(1

%)

$

(25,239

)

1

%

 
 
NET SALES - PRODUCTS & SERVICES
 
Instruments

$

508,223

$

530,147

(4

%)

$

(8,823

)

(2

%)

 
Service

405,256

398,903

2

%

(10,838

)

4

%

Chemistry

199,545

197,839

1

%

(5,578

)

4

%

Total Recurring

604,801

596,742

1

%

(16,416

)

4

%

 
Total

$

1,113,024

$

1,126,889

(1

%)

$

(25,239

)

1

%

 
 
NET SALES - GEOGRAPHY
 
Asia

$

439,347

$

437,185

0

%

$

(9,197

)

3

%

Americas

388,643

379,836

2

%

(855

)

3

%

Europe

285,034

309,868

(8

%)

(15,187

)

(3

%)

 
Total

$

1,113,024

$

1,126,889

(1

%)

$

(25,239

)

1

%

 
 
NET SALES - MARKETS
 
Pharmaceutical

$

644,657

$

643,682

0

%

$

(18,064

)

3

%

Industrial

331,327

345,994

(4

%)

(4,620

)

(3

%)

Academic & Governmental

137,040

137,213

0

%

(2,555

)

2

%

 
Total

$

1,113,024

$

1,126,889

(1

%)

$

(25,239

)

1

%

 
 

(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.

 
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP Financials
Three & Six Months Ended June 29, 2019 and June 30, 2018
(In thousands, except per share data)
 
Income from
Operations
Selling & Operating Other before Provision for Diluted
Administrative Operating Income (Expense) Income Income Net Earnings
Expenses(a) Income Percentage Income Taxes Taxes Income per Share
Three Months Ended June 29, 2019
GAAP

$

135,472

 

$

177,654

 

29.7

%

$

(342

)

$

171,735

 

$

27,325

 

$

144,410

 

$

2.08

 

Adjustments:
Purchased intangibles amortization (b)

(2,264

)

2,264

 

0.4

%

-

 

2,264

 

491

 

1,773

 

0.03

 

Restructuring costs and certain other items (c)

(2,725

)

2,725

 

0.5

%

-

 

2,725

 

640

 

2,085

 

0.03

 

Certain income tax items (d)

-

 

-

 

-

 

-

 

-

 

(634

)

634

 

0.01

 

Adjusted Non-GAAP

$

130,483

 

$

182,643

 

30.5

%

$

(342

)

$

176,724

 

$

27,822

 

$

148,902

 

$

2.14

 

 
Three Months Ended June 30, 2018
GAAP

$

138,247

 

$

179,193

 

30.1

%

$

(1,828

)

$

174,561

 

$

18,884

 

$

155,677

 

$

1.98

 

Adjustments:
Purchased intangibles amortization (b)

(1,602

)

1,602

 

0.3

%

-

 

1,602

 

304

 

1,298

 

0.02

 

Restructuring costs and certain other items (c)

(1,189

)

1,189

 

0.2

%

-

 

1,189

 

260

 

929

 

0.01

 

Pension termination (e)

-

 

-

 

-

 

2,165

 

2,165

 

520

 

1,645

 

0.02

 

Tax reform (f)

-

 

-

 

-

 

-

 

-

 

8,573

 

(8,573

)

(0.11

)

Certain income tax items (d)

-

 

-

 

-

 

-

 

-

 

(1,993

)

1,993

 

0.03

 

Adjusted Non-GAAP

$

135,456

 

$

181,984

 

30.5

%

$

337

 

$

179,517

 

$

26,548

 

$

152,969

 

$

1.95

 

 
Six Months Ended June 29, 2019
GAAP

$

272,092

 

$

298,805

 

26.8

%

$

(867

)

$

289,113

 

$

35,717

 

$

253,396

 

$

3.57

 

Adjustments:
Purchased intangibles amortization (b)

(4,545

)

4,545

 

0.4

%

-

 

4,545

 

985

 

3,560

 

0.05

 

Restructuring costs and certain other items (c)

(12,786

)

12,786

 

1.1

%

-

 

12,786

 

3,273

 

9,513

 

0.13

 

Tax reform (f)

-

 

-

 

-

 

-

 

-

 

3,229

 

(3,229

)

(0.05

)

Certain income tax items (d)

-

 

-

 

-

 

-

 

-

 

(1,308

)

1,308

 

0.02

 

Adjusted Non-GAAP

$

254,761

 

$

316,136

 

28.4

%

$

(867

)

$

306,444

 

$

41,896

 

$

264,548

 

$

3.73

 

 
Six Months Ended June 30, 2018
GAAP

$

268,641

 

$

323,568

 

28.7

%

$

(1,482

)

$

315,110

 

$

47,482

 

$

267,628

 

$

3.39

 

Adjustments:
Purchased intangibles amortization (b)

(3,261

)

3,261

 

0.3

%

-

 

3,261

 

506

 

2,755

 

0.03

 

Restructuring costs and certain other items (c)

(1,757

)

1,757

 

0.2

%

-

 

1,757

 

392

 

1,365

 

0.02

 

Pension termination (e)

-

 

-

 

-

 

2,165

 

2,165

 

520

 

1,645

 

0.02

 

Litigation settlement (g)

1,672

 

(1,672

)

(0.1

%)

-

 

(1,672

)

(401

)

(1,271

)

(0.02

)

Stock award modification (h)

(1,014

)

1,014

 

0.1

%

-

 

1,014

 

243

 

771

 

0.01

 

Tax reform (f)

-

 

-

 

-

 

-

 

-

 

(3,877

)

3,877

 

0.05

 

Certain income tax items (d)

-

 

-

 

-

 

-

 

-

 

(2,685

)

2,685

 

0.03

 

Adjusted Non-GAAP

$

264,281

 

$

327,928

 

29.1

%

$

683

 

$

321,635

 

$

42,180

 

$

279,455

 

$

3.54

 

 

(a) Selling & administrative expenses include purchased intangibles amortization and litigation provisions.
(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) Restructuring costs and certain other items were excluded as the Company believes that the cost to consolidate operations and 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.
(d) 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.
(e) The pension expense associated with terminating a frozen defined benefit pension plan was excluded as the Company believes these expenses are not indicative of normal operating costs.
(f) The provision for income taxes for the six months ended June 29, 2019 included a $3 million benefit related to the finalization of tax regulations under tax reform during the first quarter of 2019. The provision for income taxes for the three and six months June 30, 2018 included a $9 million benefit and a $4 million expense, respectively, related to the tax on the change in foreign currency exchange rates on the earnings taxed in December 31, 2017 under the Tax Cuts and Jobs Act. The difference is due to the change from the foreign currency exchange rates required by the U.S. Department of the Treasury on December 31, 2017 to the foreign currency exchange rates on either the date of distribution of assets into the U.S. or the foreign currency exchange rates as of June 29, 2019 and June 30, 2018, respectively.

(g) Litigation settlement gains were excluded as these items are isolated, unpredictable and not expected to recur regularly.
(h) The non-cash expense associated with accelerating the vesting of certain stock awards was excluded as the Company believes these expenses are not indicative of normal operating costs.

 
Waters Corporation and Subsidiaries
Preliminary Condensed Unclassified Consolidated Balance Sheets
(In thousands and unaudited)
 
 
 
June 29, 2019 December 31, 2018
 
Cash, cash equivalents and investments

$

675,773

$

1,735,224

Accounts receivable

 

518,520

 

568,316

Inventories

 

351,552

 

291,569

Property, plant and equipment, net

 

368,878

 

343,083

Intangible assets, net

 

244,094

 

246,902

Goodwill

 

355,890

 

355,614

Other assets

 

308,215

 

186,718

Total assets

$

2,822,922

$

3,727,426

 
 
Notes payable and debt

$

1,148,689

$

1,148,350

Other liabilities

 

1,117,988

 

1,011,818

Total liabilities

 

2,266,677

 

2,160,168

 
Total equity

 

556,245

 

1,567,258

Total liabilities and equity

$

2,822,922

$

3,727,426

Waters Corporation and Subsidiaries
Preliminary Condensed Consolidated Statements of Cash Flows
Three and Six Months Ended June 29, 2019 and June 30, 2018
(In thousands and unaudited)
 
Three Months Ended Six Months Ended
June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018
 
Cash flows from operating activities:
Net income

$

144,410

 

$

155,677

 

$

253,396

 

$

267,628

 

Adjustments to reconcile net income to net
cash provided by operating activities:
Stock-based compensation

 

9,314

 

 

9,079

 

 

19,255

 

 

18,971

 

Depreciation and amortization

 

28,851

 

 

27,196

 

 

53,615

 

 

55,836

 

Change in operating assets and liabilities, net

 

(55,551

)

 

(91,236

)

 

(23,463

)

 

(65,878

)

Net cash provided by operating activities

 

127,024

 

 

100,716

 

 

302,803

 

 

276,557

 

 
Cash flows from investing activities:
Additions to property, plant, equipment
and software capitalization

 

(39,522

)

 

(20,839

)

 

(65,188

)

 

(36,831

)

Investment in unaffiliated companies

 

(4,750

)

 

-

 

 

(4,750

)

 

(3,215

)

Net change in investments

 

395,296

 

 

331,382

 

 

855,001

 

 

1,246,428

 

Net cash provided by investing activities

 

351,024

 

 

310,543

 

 

785,063

 

 

1,206,382

 

 
Cash flows from financing activities:
Net change in debt

 

32

 

 

(99,855

)

 

118

 

 

(849,774

)

Proceeds from stock plans

 

2,498

 

 

10,558

 

 

30,129

 

 

34,845

 

Purchases of treasury shares

 

(576,530

)

 

(270,774

)

 

(1,329,635

)

 

(553,144

)

Other cash flow from financing activities, net

 

2,400

 

 

(4,095

)

 

4,654

 

 

(2,158

)

Net cash used in financing activities

 

(571,600

)

 

(364,166

)

 

(1,294,734

)

 

(1,370,231

)

 
Effect of exchange rate changes on cash and cash equivalents

 

(3,420

)

 

(21,411

)

 

(1,414

)

 

(12,823

)

(Decrease) increase in cash and cash equivalents

 

(96,972

)

 

25,682

 

 

(208,282

)

 

99,885

 

 
Cash and cash equivalents at beginning of period

 

684,970

 

 

716,522

 

 

796,280

 

 

642,319

 

Cash and cash equivalents at end of period

$

587,998

 

$

742,204

 

$

587,998

 

$

742,204

 

 
 
 
 
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a)
 
 
 
Net cash provided by operating activities - GAAP

$

127,024

 

$

100,716

 

$

302,803

 

$

276,557

 

 
Adjustments:
Additions to property, plant, equipment
and software capitalization

 

(39,522

)

 

(20,839

)

 

(65,188

)

 

(36,831

)

Tax reform payments

 

29,109

 

 

46,700

 

 

29,109

 

 

46,700

 

Litigation settlement payment

 

-

 

 

15,400

 

 

-

 

 

15,400

 

Major facility renovations

 

19,779

 

 

1,801

 

 

27,275

 

 

1,801

 

 
Free Cash Flow - Adjusted Non-GAAP

$

136,390

 

$

143,778

 

$

293,999

 

$

303,627

 

 

(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
(In thousands, except per share data)
 
 
Three Months Ended Twelve Months Ended
September 28, 2019 December 31, 2019
Range Range
Projected Sales
 
Projected constant-currency sales growth rate (a)

 

2

%

-

 

4

%

 

1

%

-

 

3

%

 

Projected currency impact

 

(1

%)

-

 

(1

%)

 

(2

%)

-

 

(1

%)

 
Projected sales growth rate as reported

 

1

%

-

 

3

%

 

(1

%)

-

 

2

%

 
 
Projected Earnings Per Diluted Share Range Range
 
 
Projected GAAP earnings per diluted share

$

2.01

 

-

$

2.11

 

$

8.71

 

-

$

8.86

 

Adjustments:
Purchased intangibles amortization

$

0.03

 

-

$

0.03

 

$

0.11

 

-

$

0.11

 

Certain other items

$

-

 

-

$

-

 

$

0.14

 

-

$

0.14

 

Certain income tax items

$

0.01

 

-

$

0.01

 

$

(0.01

)

-

$

(0.01

)

Projected adjusted non-GAAP earnings per diluted share

$

2.05

 

-

$

2.15

 

$

8.95

 

-

$

9.10

 

 

(a) 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 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.

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.

Source: Waters Corporation

Bryan Brokmeier, CFA, Senior Director, Investor Relations, 508-482-3448