MILFORD, Mass.--(BUSINESS WIRE)--July 26, 2005--Waters Corporation (NYSE:WAT) reported today second quarter 2005 sales of $284.6 million, an increase of 9% over sales of $260.5 million in the second quarter of 2004 with a foreign currency translation benefit accounting for approximately 1% of that growth. Quarterly earnings per diluted share (E.P.S.) were $0.46, compared to $0.49 for the second quarter in 2004. On a non-GAAP basis, excluding the benefit of a patent litigation settlement in the second quarter of 2004, adjusted E.P.S. grew 15% to $0.46 in the second quarter of 2005 from $0.40 in the second quarter of 2004.
Through the first six months of 2005 reported sales for the Company were $552.9 million, a 7% increase over 2004 first half-year sales of $515.6 million with a foreign currency benefit accounting for approximately 1% of that growth. E.P.S. through the first six months of 2005 were $0.84 compared to $0.81 for the comparable period in 2004. On a non-GAAP basis and including the adjustments in the attached reconciliation, E.P.S. grew 9% in the first six months of 2005 from $0.77 in 2004 to $0.84 in 2005.
Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "Our business in Europe and overall sales to pharmaceutical accounts improved during the second quarter. Shipments of ACQUITY UPLC(TM) and QTof Premier(TM) continued to gain traction with strong sequential growth compared to the first quarter 2005 sales. We are optimistic that this positive sales momentum will continue into the second half of the year. We also believe that despite a less favorable foreign currency environment, the strength of our product portfolio in combination with improving market demand will allow us to deliver profitable sales growth in 2005."
As communicated in a prior press release, Waters Corporation will webcast its second quarter 2005 financial results conference call this morning, July 26, 2005 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 through August 2, 2005, similarly by webcast and also by phone at 402-220-9682.
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: fluctuations in capital expenditures by our customers, in particular large pharmaceutical companies, 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 distribution of the Company's products, changes in the healthcare market and the pharmaceutical industry, loss of market share through competition, potential product liability or other claims against the Company as a result of the use of its products, risks associated with lawsuits and other legal actions particularly involving claims for infringement of patents and other intellectual property rights, and foreign exchange rate fluctuations potentially adversely affecting translation of the Company's future non-U.S. operating results. 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) (Unaudited) (Unaudited) (Unaudited) Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2005 2004 2005 2004 Net sales 284,630 260,488 552,935 515,574 Cost of sales 117,066 106,180 228,867 213,654 Gross profit 167,564 154,308 324,068 301,920 Selling and administrative expenses 82,861 75,840 163,456 147,267 Research and development expenses 16,485 15,694 33,232 31,765 Purchased intangibles amortization 1,266 996 2,548 2,350 Litigation settlement and provisions (A) - (17,124) - (9,277) Restructuring and other unusual charges, net - - - 104 Operating income 66,952 78,902 124,832 129,711 Interest (expense) income, net (463) 995 (99) 1,226 Income from operations before income taxes 66,489 79,897 124,733 130,937 Provision for income taxes 12,424 20,146 24,073 30,341 Net income 54,065 59,751 100,660 100,596 Net income per basic common share $0.47 $0.50 $0.86 $0.84 Weighted average number of basic common shares 116,092 118,691 117,405 119,439 Net income per diluted common share $0.46 $0.49 $0.84 $0.81 Weighted average number of diluted common shares and equivalents 117,722 122,820 119,456 123,434 (A) The results for the six months ended July 3, 2004 include a charge of $7.8 million for ongoing patent litigation with Hewlett-Packard Company. The results for the three months and six months ended July 3, 2004 include settlement income of $17.1 million related to patent litigation with Perkin-Elmer Corporation. Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) (Unaudited) Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2005 2004 2005 2004 Reconciliation of income per diluted share, in accordance with generally accepted accounting principles, with adjusted results: Income per diluted share $0.46 $0.49 $0.84 $0.81 ----------- -------- ---------- ------- Adjustment for litigation settlement and provisions, net of tax (10,788) (5,688) Income per diluted share effect - (0.09) - (0.05) ----------- -------- ---------- ------- Adjusted income per diluted share: $0.46 $0.40 $0.84 $0.77 =========== ======== ========== ======= 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 items management has excluded as non-operational 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) July 2, December 31, 2005 2004 Cash and cash equivalents 615,234 539,077 Accounts receivable 228,245 271,731 Inventories 140,481 139,900 Other current assets 25,903 23,176 Total current assets 1,009,863 973,884 Property, plant and equipment, net 139,243 135,908 Other assets 343,288 350,634 Total assets 1,492,394 1,460,426 Notes payable and debt 407,439 206,663 Accounts payable and accrued expenses 275,142 286,327 Total current liabilities 682,581 492,990 Long-term debt 250,000 250,000 Other long-term liabilities 40,612 38,750 Total liabilities 973,193 781,740 Total equity 519,201 678,686 Total liabilities and equity 1,492,394 1,460,426CONTACT: Waters Corporation
Gene Cassis, 508-482-2349
Vice President of Investor Relations
SOURCE: Waters Corporation