MILFORD, Mass., Oct 22, 2003 (BUSINESS WIRE) -- Waters Corporation (NYSE:WAT) reported today third quarter 2003 sales of $230.4 million, an increase of 7 % over sales of $216.0 million in the third quarter of 2002. Sales for the quarter benefited from the positive effects of currency translation that contributed approximately 5% to the quarter's reported growth. Quarterly earnings per diluted share (E.P.S.) were $0.29, compared to $0.29 for the third quarter in 2002. On a pro-forma basis, excluding an in-process R&D charge, E.P.S. were $0.33 for the quarter, an increase of 14% over the last year's third quarter E.P.S. of $0.29. Free cash flow for the quarter was approximately $34 million.
Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "Growth in our HPLC business, driven by improved pharmaceutical spending in the U.S., highlighted our third quarter performance. This business improvement was somewhat offset by continued weakness in the proteomics and drug discovery markets affecting our mass spectrometry products. However, late in the quarter, we began customer shipments of the Quattro Premier(TM) marking our re-entry into the domestic high-end tandem quadrupole market. We are confident that our new Quattro Premier(TM) will accelerate growth of our worldwide market share in this resilient and growing product market."
As communicated in a prior press release, Waters Corporation will webcast its third quarter 2003 financial results conference call this morning, October 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 October 28, 2003, similarly by webcast, and also by phone at 402-220-5317.
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 Nine Months Ended September 30 September 30 2003 2002 2003 2002 Net sales 230,381 216,045 683,132 633,578 Cost of sales 95,045 89,832 284,744 265,066 Gross profit 135,336 126,213 398,388 368,512 Selling, general and administrative expenses 66,743 62,759 197,033 183,896 Research and development expenses 15,106 13,576 42,456 38,499 Purchased intangibles amortization 1,179 860 3,234 2,697 Litigation provisions (A) - - 1,500 2,800 Loss on disposal of business (B) - - 5,031 - Restructuring and other unusual charges (C) (135) - 1,079 - Expensed in-process research and development (D) 5,160 - 5,160 - Operating income 47,283 49,018 142,895 140,620 Other income, net - - - 116 Interest income, net 1,550 1,661 4,279 4,539 Income from operations before income taxes 48,833 50,679 147,174 145,275 Provision for income taxes 12,419 11,656 34,685 33,301 Income before cumulative effect of change in accounting principle 36,414 39,023 112,489 111,974 Cumulative effect of change in accounting principle (E) - - - (4,506) Net income 36,414 39,023 112,489 107,468 Income per basic common share: Net income before cumulative effect of accounting principle change 0.30 0.30 0.91 0.85 Cumulative effect of change in accounting principle (E) - - - (0.03) Net income 0.30 0.30 0.91 0.82 Income per diluted common share: Net income before cumulative effect of accounting principle change 0.29 0.29 0.87 0.82 Cumulative effect of change in accounting principle (E) - - - (0.03) Net income 0.29 0.29 0.87 0.79 Weighted average number of basic common shares 122,240 130,788 124,000 131,090 Weighted average number of diluted common shares and equivalents 126,709 135,483 128,568 136,511 (A) The results for the nine months ended September 30, 2003 include a $1.5 million provision for an environmental matter with the Commonwealth of Massachusetts. (B) The results for the nine months ended September 30, 2003 include a loss on disposal of the inorganic mass spectrometry product line. (C) The results for the three and nine months ended September 30, 2003 include restructuring and other incremental costs and adjustments recorded 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) The results for the three and nine months ended September 30, 2003 include charges for expensed in-process research and development relating to the acquisition of Creon Lab Control, AG. (E) 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 Nine Months Ended Ended September 30 September 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 0.29 0.29 0.87 0.82 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 (104) - 831 - Income per diluted share effect (0.00) - 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) Expensed in-process research and development 5,160 - 5,160 0 Income per diluted share effect 0.04 - 0.04 - Pro-forma income per diluted share: 0.33 0.29 0.96 0.83 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) September 30, December 31, 2003 2002 Cash and cash equivalents 288,120 263,312 Restricted cash 0 49,944 Accounts receivable 195,711 196,273 Inventories 124,947 130,241 Other current assets 16,251 13,341 Total current assets 625,029 653,111 Property, plant and equipment, net 106,780 100,329 Other assets 301,274 255,478 Total assets 1,033,083 1,008,918 Notes payable and debt 181,110 2,665 Accounts payable and accrued expenses 257,694 313,758 Total current liabilities 438,804 316,423 Other long-term liabilities 29,334 27,185 Total liabilities 468,138 343,608 Total equity 564,945 665,310 Total liabilities and equity 1,033,083 1,008,918
SOURCE: Waters Corporation
Waters Corporation Gene Cassis, 508-482-2349
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