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Waters Corporation Third Quarter 2001 Sales Up 8% Before Currency Effects, Earnings Per Diluted Share Up 4%

MILFORD, Mass.--(BUSINESS WIRE)--Oct. 23, 2001--Waters Corporation (NYSE:WAT) reported today that third quarter 2001 sales increased by 8% over prior year levels before unfavorable currency effects. After currency effects, reported sales growth was 6%. Earnings per diluted share (E.P.S.) were $0.28 for the quarter, representing a 4% increase over prior year E.P.S. of $0.27.

Douglas A. Berthiaume, Chairman and Chief Executive Officer, said: "Although third quarter earnings were within our July expectations range, sales fell somewhat short principally due to our inability to convert strong mass spectrometry orders flow into shipments during the later part of the quarter. Customer demand for our mass spectrometry products exceeded expectations, with orders growing over 20%, reflecting continued strength in life science applications including the fast growing proteomics segment. HPLC product line sales grew at the expected double digit rate. And, finally, thermal analysis product sales improved during the quarter and reached double digit growth as our customers reacted favorably to newly launched products. Waters financial position remains strong and we are optimistic about our future business prospects across all our product lines."

As communicated in a prior press release, Waters Corporation will webcast its third quarter 2001 financial results conference call this morning, October 23, 2001, at 8:30 a.m. eastern time. To listen to the call, connect to www.waters.com and access the investor relations section. A replay of the call will be available from today through October 29, 2001 similarly by webcast, and also by phone at 402-998-0980.

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.

CAUTIONARY STATEMENT

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           Nine Months
                             Ended September 30    Ended September 30
                              2001        2000       2001       2000

Net sales                    202,694    191,953    610,529    569,563
Cost of sales                 73,120     70,293    221,963    208,410

  Gross profit               129,574    121,660    388,566    361,153

Selling, general and
 administrative expenses      66,913     59,712    199,989    181,167
Research and development
 expenses                     11,794     10,394     34,573     31,313
Goodwill and purchased
 technology amortization       1,755      1,755      5,274      5,326

  Operating income            49,112     49,799    148,730    143,347

Interest income
 (expense), net                1,211        322      3,848       (722)
  Income before
   income taxes               50,323     50,121    152,578    142,625

Provision for income taxes    12,077     13,030     36,619     37,081
  Income before cumulative
   effect of change in
   accounting principle       38,246     37,091    115,959    105,544

Cumulative effect of
 change in accounting
 principle (A)                  --         --         --      (10,771)
  Net income                  38,246     37,091    115,959     94,773


Income per basic
 common share:
  Net income before
   cumulative effect
   of accounting
   principle change             0.29       0.29       0.89       0.83
  Cumulative effect of
   change in accounting
   principle (A)                --         --         --        (0.08)
    Net income                  0.29       0.29       0.89       0.75


Income per diluted
 common share:
  Net income before
   cumulative effect
   of accounting
   principle change             0.28       0.27       0.84       0.77
  Cumulative effect of
   change in accounting
   principle (A)                --         --         --        (0.08)
    Net income                  0.28       0.27       0.84       0.69


Weighted average number
 of basic common shares      130,752    128,485    130,486    126,984

Weighted average number
 of diluted common shares
 and equivalents             136,704    137,430    137,560    136,369


(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)

                                       September 30,   December 31, 
                                           2001            2000
                                        (Unaudited)

Cash and cash equivalents                 164,230         75,509
Accounts receivable                       166,780        167,713
Inventories                               115,043         87,275
Other current assets                       18,802         13,299
   Total current assets                   464,855        343,796

Property, plant and equipment, net        114,292        102,608
Other assets                              245,900        245,941
   Total assets                           825,047        692,345


Notes payable                               1,124          4,879
Accounts payable and accrued expenses     229,475        215,654
   Total current liabilities              230,599        220,533

Other liabilities                          19,180         20,031
   Total liabilities                      249,779        240,564

Total equity                              575,268        451,781
   Total liabilities and equity           825,047        692,345

--30--mb/bos*

CONTACT: Waters Corporation
Brian Mazar, 508-482-2193