Waters Corporation Second Quarter 2002 Sales Up 3% Before Currency Effects, Earnings Per Diluted Share Down 3%. Year to Date Earnings Per Diluted Share Restated to Reflect a $0.03 Charge for a Change in Accounting PrincipleMILFORD, Mass., Jul 23, 2002 (BUSINESS WIRE) --Waters Corporation (NYSE:WAT) reported today that second quarter 2002 sales increased by 3% over prior year levels before favorable currency effects. After currency effects, reported sales growth was up 5% over the prior year. Earnings per diluted share (E.P.S.) were $0.28 for the quarter. Year to date earnings per diluted share were adjusted to reflect the after-tax impact of a change in accounting principle resulting from a revised policy to immediately expense all patent related defense costs.
Douglas A. Berthiaume, Chairman and Chief Executive Officer, said, "Sales for the second quarter met our latest projection and earnings per share were within our expectation range. Free cash flow remained strong during the quarter as we generated $40 million of cash flow for the quarter and $79 million of cash flow though mid-year. We continue our efforts to reintroduce certain mass spectrometry products in the United States impacted by the recent unfavorable patent litigation ruling and are now shipping our Q-Tof Ultima(TM) and Q-Tof Maldi(TM) products as planned.
As announced earlier this month, we have undertaken a reorganization of our field sales, service and distribution groups within our HPLC and Mass Spectrometry product lines to take full advantage of market synergies. This will create a customer centric organization that will more effectively leverage our resources and support sales growth over the next several years. We remain optimistic about our future business prospects and continued success of our reorganization and new product introduction programs."
As communicated in a prior press release, Waters Corporation will webcast its second quarter 2002 financial results conference call this morning, July 23, 2002, 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 July 29, 2002 similarly by webcast, and also by phone at 402-220-0283.
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 $4.2 billion of the overall $19 billion analytical instrument market.
Certain statements contained herein are forward looking. Many factors could cause actual results to differ from these statements, including 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 healthcare market and the pharmaceutical industry, changes in distribution of the Company's products, and foreign exchange fluctuations. Such factors are discussed in detail in the Company's filings with the Securities and Exchange Commission.
Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended June 30 June 30 2002 2001 2002 2001 Net sales 217,192 206,803 417,533 407,835 Cost of sales 75,980 75,545 147,412 148,843 Gross profit 141,212 131,258 270,121 258,992 Selling, general and administrative expenses 80,041 67,169 148,959 133,076 Research and development expenses 12,643 11,741 24,923 22,779 Patent litigation provision - - 2,800 - Goodwill and purchased technology amortization 922 1,771 1,837 3,519 Operating income 47,606 50,577 91,602 99,618 Other income, net 116 - 116 - Interest income, net 1,500 1,151 2,878 2,637 Income from operations before income taxes 49,222 51,728 94,596 102,255 Provision for income taxes 11,321 12,415 21,645 24,542 Income before cumulative effect of change in accounting principle 37,901 39,313 72,951 77,713 Cumulative effect of change in accounting principle (A) - - (4,506) - Net income 37,901 39,313 68,445 77,713 Income per basic common share: Net income before cumulative effect of accounting principle change 0.29 0.30 0.56 0.60 Cumulative effect of change in accounting principle (A) - - (0.03) - Net income 0.29 0.30 0.52 0.60 Income per diluted common share: Net income before cumulative effect of accounting principle change 0.28 0.29 0.53 0.56 Cumulative effect of change in accounting principle (A) - - (0.03) - Net income 0.28 0.29 0.50 0.56 Weighted average number of basic common shares 131,510 130,564 131,264 130,363 Weighted average number of diluted common shares and equivalents 136,778 137,564 137,004 137,785 (A) Effect at January 1, 2002 of a change in accounting method for patent related costs. Waters Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) June 30, 2002 Dec. 31, 2001 (Unaudited) Cash and cash equivalents 306,408 226,798 Accounts receivable 179,990 182,164 Inventories 119,341 102,718 Other current assets 15,047 11,064 Total current assets 620,786 522,744 Property, plant and equipment, net 116,452 114,207 Other assets 260,990 249,960 Total assets 998,228 886,911 Notes payable 910 1,140 Accounts payable and accrued expenses 291,163 279,866 Total current liabilities 292,073 281,006 Other liabilities 26,750 24,160 Total liabilities 318,823 305,166 Total equity 679,405 581,745 Total liabilities and equity 998,228 886,911
CONTACT: Waters Corporation Brian Mazar, 508/482-2193