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Waters Corporation Reports 5% Sales Growth for First Quarter 2005

MILFORD, Mass.--(BUSINESS WIRE)--April 26, 2005--Waters Corporation (NYSE/WAT) reported today first quarter 2005 sales of $268.3 million, an increase of 5% over sales of $255.1 million in the first quarter of 2004 with a foreign currency translation benefit accounting for approximately 2% of that growth. Quarterly earnings per diluted share (E.P.S.) were $0.38, compared to $0.33 for the first quarter in 2004. On a non-GAAP basis, excluding a charge for patent litigation expense in the first quarter of 2004, adjusted E.P.S. grew approximately 3% from $0.37 in the first quarter of 2004 to $0.38 in the first quarter of 2005.

Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "A decline in our business in Europe, slower growth in Asia and softer than anticipated global pharmaceutical spending tempered our growth in the first quarter. Sales to industrial customer segments for our Waters and TA Instruments Divisions grew at a healthy rate while ACQUITY UPLC(TM) and QTof Premier(TM) sales continued their positive momentum. Although sales and earnings growth rates for the quarter were weaker than we had anticipated in January, we are optimistic that stronger top-line growth will return as we move through the year."

As communicated in a prior press release, Waters Corporation will webcast its first quarter 2005 financial results conference call this morning, April 26, 2005 at 8:30 a.m. eastern time. To listen to the call, connect to , choose Investor Relations and click on the Live Webcast. A replay of the call will be available through May 3, 2005, similarly by webcast and also by phone at 402-220-9772.

Waters Corporation holds worldwide leading positions in three complementary analytical technologies - liquid chromatography, mass spectrometry and thermal analysis. These markets account for $4.5 - $5.0 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: reduced capital expenditures by our customers, in particular large pharmaceutical companies, loss of market share through competition, introduction of competing products, such as improved research-grade mass spectrometers, by other companies, pressures on prices from competitors and/or customers, regulatory obstacles to new product introductions, lack of acceptance of new products, other 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 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, 2004, 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)

                                                  Three Months Ended
                                                  April 2,    April 3,
                                                    2005        2004

Net sales                                          268,305    255,086
Cost of sales                                      111,801    107,474

  Gross profit                                     156,504    147,612

Selling and administrative expenses                 80,595     71,427
Research and development expenses                   16,747     16,071
Purchased intangibles amortization                   1,282      1,354
Litigation provisions (A)                                -      7,847
Restructuring and other charges, net (B)                 -        104

  Operating income                                  57,880     50,809

Interest income, net                                   364        231
  Income from operations before income taxes        58,244     51,040

Provision for income taxes                          11,649     10,195

  Net income                                        46,595     40,845

Net income per basic common share                    $0.39      $0.34

Weighted average number of basic common shares     118,719    120,180

Net income per diluted common share                  $0.38      $0.33

Weighted average number of diluted common shares
  and equivalents                                  121,156    123,987

(A) The results for the three months ended April 3, 2004 include
    provisions of $7.8 million for ongoing patent litigation with
    Hewlett-Packard Company.

(B) The results for the three months ended April 3, 2004 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)

                                                   Three Months Ended
                                                  April 2,    April 3,
                                                    2005        2004

Reconciliation of income per diluted share,
 in accordance with generally accepted
 accounting principles, with adjusted results:

Income per diluted share                            $0.38       $0.33
                                                  --------    --------

Adjustment for litigation settlement, net of
 tax                                                    -       5,100
Income per diluted share effect                         -        0.04
                                                  --------    --------

Adjustment for restructuring and other
 charges, net of tax                                    -          68
Income per diluted share effect                         -        0.00
                                                  --------    --------

Adjusted income per diluted share:                  $0.38       $0.37
                                                  ========    ========

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 2,   December 31,
                                                 2005           2004

Cash and cash equivalents                       586,912       539,077
Accounts receivable                             239,634       271,731
Inventories                                     148,140       139,900
Other current assets                             22,749        23,176
   Total current assets                         997,435       973,884

Property, plant and equipment, net              137,364       135,908
Other assets                                    347,562       350,634
   Total assets                               1,482,361     1,460,426

Notes payable and debt                          335,935       206,663
Accounts payable and accrued expenses           277,924       286,327
   Total current liabilities                    613,859       492,990

Other long-term liabilities                     289,913       288,750
   Total liabilities                            903,772       781,740

Total equity                                    578,589       678,686
   Total liabilities and equity               1,482,361     1,460,426

Waters Corporation
Gene Cassis, 508-482-2349
Vice President of Investor Relations