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Waters Corporation Reports Strong 17% Second Quarter 2007 Sales Growth
MILFORD, Mass., Jul 24, 2007 (BUSINESS WIRE) -- Waters Corporation (NYSE/WAT) reported today second quarter 2007 sales of $353 million, an increase of 17% over sales of $302 million in the second quarter of 2006. Foreign currency translation contributed 2% to this reported sales growth rate. On a GAAP basis, earnings per diluted share (E.P.S.) for the second quarter were $0.59, compared to $0.46 for the second quarter in 2006. On a non-GAAP basis, including the adjustments noted in the attached reconciliation, E.P.S. grew 22% to $0.60 in the second quarter of 2007 from $0.49 in the second quarter of 2006.

Through the first six months of 2007, sales for the Company were $683 million, a 15% increase over sales in the first six months of 2006 of $592 million. Foreign currency translation contributed 2% to this reported sales growth rate. E.P.S. through the first six months of 2007 were $1.13 compared to $0.87 for the comparable period in 2006. On a non-GAAP basis and including adjustments on the attached reconciliation, E.P.S. grew 22% in the first six months of 2007 to $1.16 from $0.95 in 2006.

Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "The generally broad-based growth that we experienced in the first quarter accelerated with continued rapid uptake of our new products and strengthening demand from life science customers, including our large pharmaceutical accounts. Our first half results are very encouraging and we are optimistic that our new system offerings will continue to stimulate demand going forward."

As communicated in a prior press release, Waters Corporation will webcast its second quarter 2007 financial results conference call this morning, July 24, 2007 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 July 31, 2007, similarly by webcast and also by phone at 203-369-2024

Waters Corporation holds worldwide leading positions in three complementary analytical technologies - liquid chromatography, mass spectrometry, and thermal analysis. These markets account for approximately $5.0 billion of the estimated $20 - $25 billion analytical instrumentation market. CAUTIONARY STATEMENT

This release may contain "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 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 the Company's customers, in particular large pharmaceutical companies, regulatory and/or administrative obstacles to the timely completion of purchase order documentation, introduction of competing products by other companies, such as improved research-grade mass spectrometers, and/or higher speed and/or more sensitive liquid chromatographs, 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, 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 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 annual report on Form 10-K for the year ended December 31, 2006 and quarterly report on Form 10-Q for the period ended March 31, 2007, as filed with the Securities and Exchange Commission (the "SEC"), which "Risk Factors" discussion is 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 report 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)

                                   (Unaudited)         (Unaudited)
                               Three Months Ended   Six Months Ended
                               June 30,  July 1,   June 30,  July 1,
                                  2007      2006      2007      2006

Net sales                       352,630   301,899   683,407   592,117
Cost of sales                   152,219   126,004   295,451   246,632

  Gross profit                  200,411   175,895   387,956   345,485

Selling and administrative
 expenses                       102,223    88,968   196,130   174,506
Research and development
 expenses                        19,115    19,655    37,837    38,698
Purchased intangibles
 amortization                     2,133     1,383     4,258     2,577
Restructuring and other
 unusual charges (1)                  -     2,974         -     7,326

  Operating income               76,940    62,915   149,731   122,378

Interest expense, net            (6,396)   (6,272)  (13,231)  (12,408)
  Income from operations
   before income taxes           70,544    56,643   136,500   109,970

Provision for income taxes       10,635     8,863    20,654    18,035

  Net income                     59,909    47,780   115,846    91,935


Net income per basic common
 share                         $   0.60  $   0.46  $   1.15  $   0.89

Weighted average number of
 basic common shares            100,327   103,010   100,880   103,795


Net income per diluted common
 share                         $   0.59  $   0.46  $   1.13  $   0.87

Weighted average number of
 diluted common shares and
 equivalents                    102,130   104,337   102,702   105,192

(1) The results for the three and six months ended July 1, 2006
 include restructuring and other incremental costs in relation to a
 cost reduction plan implemented in February 2006.


                                   (Unaudited)         (Unaudited)
                               Three Months Ended   Six Months Ended
                               June 30,  July 1,   June 30,  July 1,
                                  2007      2006      2007      2006
Reconciliation of income per
 diluted share, in accordance
 with generally accepted
 accounting principles, with
 adjusted results:

Income per diluted share       $   0.59  $   0.46  $   1.13  $   0.87
                               --------- --------- --------- ---------

Adjustment for purchased
 intangibles amortization, net
 of tax                           1,648     1,201     3,286     2,208
Income per diluted share
 effect                            0.02      0.01      0.03      0.02
                               --------- --------- --------- ---------

Adjustment for restructuring
 and other unusual charges,
 net of tax                           -     2,477         -     6,037
Income per diluted share
 effect                               -      0.02         -      0.06
                               --------- --------- --------- ---------

Adjusted income per diluted
 share:                        $   0.60  $   0.49  $   1.16  $   0.95
                               ========= ========= ========= =========

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
 has excluded the restructuring charges and purchased intangibles
 amortization from its non-GAAP adjusted amounts since management
 believes that these charges are not directly related to ongoing
 operations thereby providing investors with information that helps to
 compare ongoing operating performance.

                 Waters Corporation and Subsidiaries
                Condensed Consolidated Balance Sheets
                     (In thousands and unaudited)

                                       June 30, 2007 December 31, 2006


Cash and cash equivalents                    544,304           514,166
Accounts receivable                          270,015           272,157
Inventories                                  178,491           168,437
Other current assets                          41,597            44,920
   Total current assets                    1,034,407           999,680

Property, plant and equipment, net           151,967           149,262
Other assets                                 480,367           468,371
   Total assets                            1,666,741         1,617,313


Notes payable and debt                       389,418           403,461
Accounts payable and accrued expenses        254,433           282,373
   Total current liabilities                 643,851           685,834

Long-term debt                               500,000           500,000
Other long-term liabilities                  144,211            69,096
   Total liabilities                       1,288,062         1,254,930

Total equity                                 378,679           362,383
   Total liabilities and equity            1,666,741         1,617,313

SOURCE: Waters Corporation

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