MILFORD, Mass., Mar 25, 2002 (BUSINESS WIRE) -- Waters Corporation (NYSE:WAT) revised its 2001 results and updated its earnings outlook for 2002 first quarter and full year as a result of an unfavorable ruling in the patent litigation involving certain mass spectrometry products sold in the United States.
The judgement is specific to the Company's Quattro Ultima(TM) product offerings. However, because the high-end Q-TOF family of products uses similar technology, the Company has decided to hold shipment of these products as well in the United States. Affected products are the Quattro Ultima(TM), Q-TOF API(TM), Q-TOF Maldi(TM) and Q-TOF Global(TM). All other mass spectrometry products including the Q-TOF Micro(TM) and Quattro Micro(TM) are not affected.
Even though the Company plans to aggressively appeal this verdict, it has revised its 2001 results, previously reported in a January 2002 press release, to include a $75 million pre-tax provision for estimated costs related to this matter. This has reduced earnings per share for the year from $1.23 per diluted share to $.83 per diluted share. Adjusted financial statements are attached.
In light of the current litigation status facing the Company, it has reforecasted its view of 2002 and the Company now estimates that sales growth in Q1 and full year to be 5% and 9% respectively before currency impacts and 2% and 7% respectively at actual rates. Earnings per diluted share are now estimated to be between $.27 to $.29 for Q1 and $1.37 to $1.45 for the full year.
Douglas A. Berthiaume, Chairman and Chief Executive Officer, said, "The result of the recent litigation involving several of our mass spectrometry offerings has been a significant disappointment. We still believe that we have a strong defense and we will pursue the appeals process while we proceed with our efforts to introduce new products in the second half of this year that incorporate pre-existing technology."
The Company will webcast its conference call to discuss this update this morning at 9:00 a.m. eastern time. To listen to the call, connect to www.waters.com and access the investor relations section. A replay will be available through March 28, 2002 similarly by webcast and also by phone at 402-998-1463.
Most statements contained herein are forward looking. All such statements reflect only current expectations and actual results may differ materially. The Company does not obligate or commit itself, by providing the guidance above, to update predictions. Many factors could cause results to differ from these statements, including actual results for the balance of the quarter, loss of market share through competition, introduction of competing products by other companies, changes in the healthcare market and the pharmaceutical industry, changes in distribution of the Company's products and foreign exchange fluctuations. Many of these factors are discussed in detail in the Company's Securities and Exchange Commission filings.
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 Patent litigation provision 75,000 -- 75,000 -- Goodwill and purchased technology amortization 1,867 1,751 7,141 7,077 Operating income 797 67,480 149,527 210,827 Other expense (A) (7,066) -- (7,066) -- Interest income, net 1,117 857 4,965 135 Income (loss) before income taxes (5,152) 68,337 147,426 210,962 Provision for income taxes (3,736) 17,768 32,883 54,849 Income (loss) before cumulative effect of change in accounting principle (1,416) 50,569 114,543 156,113 Cumulative effect of change in accounting principle (B) -- -- -- (10,771) Net income (loss) (1,416) 50,569 114,543 145,342 Income (loss) per basic common share: Net income (loss) before cumulative effect of accounting principle change (0.01) 0.39 0.88 1.22 Cumulative effect of change in accounting principle (B) -- -- -- (0.08) Net income (loss) (0.01) 0.39 0.88 1.14 Income (loss) per diluted common share: Net income (loss) before cumulative effect of accounting principle change (0.01) 0.37 0.83 1.14 Cumulative effect of change in accounting principle (B) -- -- -- (0.08) Net income (loss) (0.01) 0.37 0.83 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 130,815 137,795 137,509 136,743 (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 Cash and cash equivalents 226,798 75,509 Accounts receivable 182,164 167,713 Inventories 102,718 87,275 Other current assets 11,064 13,299 Total current assets 522,744 343,796 Property, plant and equipment, net 114,207 102,608 Other assets 249,960 245,941 Total assets 886,911 692,345 Notes payable 1,140 4,879 Accounts payable and accrued expenses 279,866 212,902 Total current liabilities 281,006 217,781 Other liabilities 24,160 22,783 Total liabilities 305,166 240,564 Total equity 581,745 451,781 Total liabilities and equity 886,911 692,345
CONTACT: Waters Corporation Brian Mazar, 508-482-2193