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.
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 989,572 886,911CONTACT: