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Waters Corporation Third Quarter 2002 Sales Up 4% before Currency Effects, Earnings Per Diluted Share Up 4%
MILFORD, Mass., Oct 22, 2002 (BUSINESS WIRE) -- Waters Corporation (NYSE:WAT) reported today that third quarter 2002 sales increased by 4% over prior year levels before favorable currency effects. After currency effects, reported sales growth was up 7% over the prior year. Earnings per diluted share (E.P.S.) were $0.29 for the quarter.

Douglas A. Berthiaume, Chairman and Chief Executive Officer, said, "Financial performance for the quarter was slightly below our expectations due to lower than planned mass spectrometry shipments. Our HPLC business continued to grow nicely with broad based strength across all geographical regions providing revenue growth in the low double digits. Cash flow continued to be very strong and exceeded our expectations, with $52 million of free cash flow for the quarter and $132 million year to date.

"We made significant progress on many fronts during the third quarter including the recently announced acquisition of the rheology product line of Rheometric Scientific and the initiation of a stock buyback program with $54 million of stock purchased to date. Also noteworthy, is the progress on the integration of our HPLC and mass spectrometry field operations which is advancing according to plan. We remain confident that the combined organization will enhance both the effectiveness and efficiency of our operations. We plan to record a restructuring charge in the fourth quarter."

As communicated in a prior press release, Waters Corporation will webcast its third quarter 2002 financial results conference call this morning, October 22, 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 October 28, 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.

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 Ended  Nine Months Ended
                                    September 30        September 30
                                   2002      2001      2002      2001
Net sales                       216,045   202,694   633,578   610,529
Cost of sales                    74,909    73,120   222,321   221,963
  Gross profit                  141,136   129,574   411,257   388,566
Selling, general and
 administrative expenses         77,682    66,913   226,641   199,989
Research and development
 expenses                        13,576    11,794    38,499    34,573
Patent litigation provision           -         -     2,800         -
Goodwill and purchased
 technology amortization            860     1,755     2,697     5,274
  Operating income               49,018    49,112   140,620   148,730
Other income, net                     -         -       116         -
Interest income, net              1,661     1,211     4,539     3,848
  Income from operations
   before income taxes           50,679    50,323   145,275   152,578
Provision for income taxes       11,656    12,077    33,301    36,619
  Income before cumulative
   effect of change in
   accounting principle          39,023    38,246   111,974   115,959
Cumulative effect of change
 in accounting principle (A)          -         -    (4,506)        -
  Net income                     39,023    38,246   107,468   115,959
Income per basic common share:
  Net income before cumulative
   effect of accounting
   principle change                0.30      0.29      0.85      0.89
  Cumulative effect of change
   in accounting principle (A)        -         -     (0.03)        -
    Net income                     0.30      0.29      0.82      0.89
Income per diluted common share:
  Net income before cumulative
   effect of accounting
   principle change                0.29      0.28      0.82      0.84
  Cumulative effect of change
   in accounting principle (A)        -         -     (0.03)        -
    Net income                     0.29      0.28      0.79      0.84
Weighted average number of
 basic common shares            130,788   130,752   131,090   130,486
Weighted average number of
 diluted common shares and
 equivalents                    135,483   136,704   136,511   137,560
(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)
                               September 30, 2002    December 31, 2001
                                      (Unaudited)
Cash and cash equivalents                 235,790             226,798
Restricted cash                            69,373                   -
Accounts receivable                       167,594             182,164
Inventories                               125,300             102,718
Other current assets                       12,696              11,064
   Total current assets                   610,753             522,744
Property, plant and equipment, net        116,108             114,207
Other assets                              262,711             249,960
   Total assets                           989,572             886,911
Notes payable                               1,141               1,140
Accounts payable and accrued expenses     295,808             279,866
   Total current liabilities              296,949             281,006
Other liabilities                          25,491              24,160
   Total liabilities                      322,440             305,166
Total equity                              667,132             581,745
   Total liabilities and equity           989,572             886,911
CONTACT:
Waters Corporation
Gene Cassis
508-482-2349