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Waters Corporation Second Quarter 2001 Sales Up 9% Before Currency Effects, Earnings Per Diluted Share Up 4%
MILFORD, Mass., Jul 24, 2001 (BUSINESS WIRE) -- Waters Corporation (NYSE:WAT) reported today that second quarter 2001 sales increased by 9% over prior year levels before unfavorable currency effects. After currency effects, reported sales growth was 5%. Earnings per diluted share (E.P.S.) were $0.29 for the quarter, representing a 4% increase over prior year E.P.S. of $0.28.

Douglas A. Berthiaume, Chairman and Chief Executive Officer, said: "Consistent with our mid-June update, second quarter sales growth slowed from recent historical levels principally in our mass spectrometry product line. Demand for our quadrupole time-of-flight mass spectrometry products grew very strongly during the quarter, reflecting expanding interest from proteomics customers. However sales of our triple quadrupole products were flat and sales of other mass spectrometry products declined, resulting from both difficult prior year comparisons and slowed customer purchase decisions, particularly within large pharmaceutical accounts. Our HPLC product line continued to perform well with growth in the low double digits. Thermal analysis sales were down slightly as the industrial chemical customer base for this product line continued to be weak. Although second quarter results didn't achieve our original expectations, our profitability and financial position remain substantial, and we are optimistic about our future business prospects. We anticipate steady improvement in sales growth rates and profitability going forward."

As communicated in a prior press release, Waters Corporation will webcast its second quarter 2001 financial results conference call this morning, July 24, 2001, at 8:30 a.m. eastern time. To listen to the call, connect to and access the investor relations section. A replay of the call will be available from today through July 30, 2001 similarly by webcast, and also by phone at 402-998-0680.

Waters Corporation holds worldwide leading positions in three complementary analytical technologies - high performance liquid chromatography, thermal analysis and mass spectrometry - which account for $4 billion in annual revenues of the $18 billion analytical instrument industry total.

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)

                         Three Months Ended       Six Months Ended
                               June 30                June 30
                           2001       2000        2001       2000

Net sales                206,803    197,408     407,835    377,610
Cost of sales             75,545     71,777     148,843    138,117

  Gross profit           131,258    125,631     258,992    239,493

Selling, general
 and administrative
 expenses                 67,169     61,060     133,076    121,455
Research and
 expenses                 11,741     10,557      22,779     20,919
Goodwill and
 purchased technology
 amortization              1,771      1,760       3,519      3,571

  Operating income        50,577     52,254      99,618     93,548

Interest income
 (expense), net            1,151       (343)      2,637     (1,044)
   Income before
    income taxes          51,728     51,911     102,255     92,504

Provision for
 income taxes             12,415     13,506      24,542     24,051
  Income before
   effect of
   change in
   principle              39,313     38,405      77,713     68,453

Cumulative effect of
 change in accounting
 principle (A)              --         --          --      (10,771)
  Net income              39,313     38,405      77,713     57,682

Income per basic
 common share:
  Net income before
   cumulative effect
   of accounting
   principle change         0.30       0.30        0.60       0.54
  Cumulative effect
   of change in
   principle (A)            --         --          --        (0.09)
    Net income              0.30       0.30        0.60       0.45

Income per diluted
 common share:
  Net income before
   cumulative effect
   of accounting
   principle change         0.29       0.28        0.56       0.50
  Cumulative effect
   of change in
   principle (A)            --         --          --        (0.08)
    Net income              0.29       0.28        0.56       0.42

Weighted average
 number of basic
 common shares           130,564    126,914     130,363    126,246

Weighted average
 number of diluted
 common shares
 and equivalents         137,564    136,222     137,785    135,720

(A) 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)

                                          June 30,    December 31,
                                            2001          2000

Cash and cash equivalents                 134,514        75,509
Accounts receivable                       162,315       167,713
Inventories                               107,478        87,275
Other current assets                       16,862        13,299
   Total current assets                   421,169       343,796

Property, plant and equipment, net        109,873       102,608
Other assets                              245,080       245,941
   Total assets                           776,122       692,345

Notes payable                               2,179         4,879
Accounts payable and accrued expenses     226,264       215,654
   Total current liabilities              228,443       220,533

Other liabilities                          19,905        20,031
   Total liabilities                      248,348       240,564

Total equity                              527,774       451,781
   Total liabilities and equity           776,122       692,345
CONTACT:          Waters Corporation
                  Brian Mazar, Vice President of Investor Relations