MILFORD, Mass.--(BUSINESS WIRE)--July 22, 2003--Waters Corporation (NYSE/WAT) reported today second quarter 2003 sales of $232 million, an increase of 7% when compared to sales reported of $217 million in the second quarter of 2002. Sales for the quarter benefited from the positive effects of currency translation and were flat with the prior year's result on an organic basis. Quarterly earnings per diluted share were $0.33, an increase of 18% over earnings per diluted share of $0.28 in 2002.
Commenting on the quarter Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "This quarter's results highlight the underlying strengths of our business, especially the combination of our strong international presence and our broad appeal to customers both within and outside of life science market segments. Despite a slowdown in our research mass spectrometry product lines we were able to meet our earnings projections primarily through steady overall HPLC growth, our global presence and prudent expense management. Excluding an expected litigation settlement, free cash flow was strong this quarter.
Looking toward the second half of the year, although we expect a continuation of cautious spending by our life science customers, we are encouraged by the positive reception to our new Quattro Premier (TM) tandem quadrupole instrument and the continued strength of our non-life science businesses."
As communicated in a prior press release, Waters Corporation will webcast its second quarter 2003 financial results conference call this morning, July 22, 2003, 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 28, 2003, similarly by webcast, and also by phone at 402-220-9782.
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 $4.4 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: 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 demands of the Company's healthcare and pharmaceutical company customers, changes in the healthcare market and the pharmaceutical industry, changes in distribution of the Company's products, the short-term effect on sales and expenses as a result of the formerly announced combination of the Waters and Micromass sales, service and distribution organizations, and foreign exchange fluctuations. 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, 2002, 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) Three Months Ended Six Months Ended June 30 June 30 2003 2002 2003 2002 Net sales 231,752 217,192 452,751 417,533 Cost of sales 95,488 90,600 189,699 175,234 Gross profit 136,264 126,592 263,052 242,299 Selling, general and administrative expenses 68,679 65,421 130,290 121,137 Research and development expenses 13,790 12,643 27,350 24,923 Purchased intangibles amortization 1,027 922 2,055 1,837 Litigation provisions (A) - - 1,500 2,800 Loss on disposal of business (B) - - 5,031 - Restructuring and other unusual charges (C) - - 1,214 - Operating income 52,768 47,606 95,612 91,602 Other income, net - 116 - 116 Interest income, net 1,904 1,500 2,729 2,878 Income from operations before income taxes 54,672 49,222 98,341 94,596 Provision for income taxes 12,574 11,321 22,266 21,645 Income before cumulative effect of change in accounting principle 42,098 37,901 76,075 72,951 Cumulative effect of change in accounting principle (D) - - - (4,506) Net income 42,098 37,901 76,075 68,445 Income per basic common share: Net income before cumulative effect of accounting principle change 0.34 0.29 0.61 0.56 Cumulative effect of change in accounting principle (D) - - - (0.03) Net income 0.34 0.29 0.61 0.52 Income per diluted common share: Net income before cumulative effect of accounting principle change 0.33 0.28 0.59 0.53 Cumulative effect of change in accounting principle (D) - - - (0.03) Net income 0.33 0.28 0.59 0.50 Weighted average number of basic common shares 123,610 131,510 124,925 131,264 Weighted average number of diluted common shares and equivalents 128,252 136,778 129,483 137,004 (A) The results for the six months ended June 30, 2003 include a $1.2 million provision for an environmental matter with the Commonwealth of Massachusetts. (B) The results for the six months ended June 30, 2003 include a loss on disposal of the inorganic mass spectrometry product line. (C) The results for the six months ended June 30, 2003 include restructuring and other incremental costs incurred in relation to the Company's reorganization of the HPLC and mass spectrometry businesses, and restructuring charges relating to the acquisition of the rheology business of Rheometric Scientific, Inc. (D) Effect at January 1, 2002 of a change in accounting method for patent related costs. Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) (Unaudited) Three Months Six Months Ended Ended June 30 June 30 2003 2002 2003 2002 Reconciliation of income per diluted share, in accordance with generally accepted accounting principles, with pro-forma results: Income per diluted share before cumulative effect of change in accounting principle 0.33 0.28 0.59 0.53 Adjustment for litigation provisions, net of tax - - 1,155 2,044 Income per diluted share effect - - 0.01 0.01 Adjustment for restructuring and other unusual charges, net of tax - - 935 - Income per diluted share effect - - 0.01 - Loss on disposal of business, net of tax - - 3,522 - Income per diluted share effect - - 0.03 - Other expense, write down of certain investments, net of tax - - - (89) Income per diluted share effect - - - (0.00) Pro-forma income per diluted share: 0.33 0.28 0.63 0.55 The pro-forma 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 those items management has excluded as non- operational activities or 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) June 30, 2003 December 31, 2002 Cash and cash equivalents 283,043 263,312 Restricted cash 0 49,944 Accounts receivable 192,346 196,273 Inventories 122,930 130,241 Other current assets 18,457 13,341 Total current assets 616,776 653,111 Property, plant and equipment, net 107,670 100,329 Other assets 284,997 255,478 Total assets 1,009,443 1,008,918 Notes payable and debt 115,838 2,665 Accounts payable and accrued expenses 261,816 315,521 Total current liabilities 377,654 318,186 Other long-term liabilities 26,748 25,422 Total liabilities 404,402 343,608 Total equity 605,041 665,310 Total liabilities and equity 1,009,443 1,008,918