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Waters Reports Fourth Quarter 2007 Sales Growth of 13%

MILFORD, Mass.--(BUSINESS WIRE)--Jan. 22, 2008--Waters Corporation (NYSE/WAT) reported fourth quarter 2007 sales of $437 million, an increase of 13% over sales of $387 million in the fourth quarter of 2006. In the quarter, foreign currency translation contributed 5% to the reported sales growth rate. On a GAAP basis, earnings per diluted share (E.P.S.) for the fourth quarter were $0.96, compared to $0.78 for the fourth quarter of 2006. On a non-GAAP basis, including the adjustments in the attached reconciliation, E.P.S. grew 17% to $0.98 from $0.84 in the fourth quarter of 2006.

For the full year, sales for the Company were $1.47 billion, an increase of 15% over sales of $1.28 billion in 2006. Foreign currency translation contributed 3% to the reported sales growth rate. E.P.S. for 2007 were $2.62 compared to $2.13 in 2006. On a non-GAAP basis, including adjustments in the attached reconciliation, E.P.S. grew 20% to $2.75 from $2.29 in 2006.

Commenting on the Company's performance, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "2007 was a very successful year for Waters as sales grew 15%, non-GAAP E.P.S. were up 20% and cash from operations increased approximately 35%. The year's performance was highlighted by continued rapid uptake of our ACQUITY UPLC(TM) systems and significant new placements of SYNAPT(TM) HDMS(TM) instruments. Our fourth quarter financial results were less than our expectations primarily as a result of a higher than expected tax rate for 2007 and weaker sales in Japan."

As communicated in a prior press release, Waters Corporation will webcast its fourth quarter 2007 financial results conference call this morning, January 22, 2008 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 will be available through January 29, 2008 at midnight eastern time, similarly by webcast and also by phone at 402-998-1399.

Waters Corporation holds worldwide leading positions in three complementary analytical technologies - liquid chromatography, mass spectrometry, and thermal analysis. These markets account for approximately $5.0 billion of the estimated $20 - $25 billion analytical instrumentation market.

CAUTIONARY STATEMENT

This release may contain "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 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, the impact of changes in accounting principles or tax rates, the ability to successfully integrate acquired businesses, fluctuations in capital expenditures by the Company's customers, in particular large pharmaceutical companies, regulatory and/or administrative obstacles to the timely completion of purchase order documentation, introduction of competing products by other companies, such as improved research-grade mass spectrometers, and/or higher speed and/or more sensitive liquid chromatographs, pressures on prices from competitors and/or customers, regulatory obstacles to new product introductions, lack of acceptance of new products, other changes in the demands of the Company's healthcare and pharmaceutical company customers, changes in distribution of the Company's products, risks associated with lawsuits and other legal actions particularly involving claims for infringement of patents and other intellectual property rights, and foreign exchange rate fluctuations affecting translation of the Company's future non-U.S. operating results. Such factors and others are discussed more fully in the section entitled "Risk Factors" of the Company's annual report on Form 10-K for the year ended December 31, 2006 and quarterly report on Form 10-Q for the period ended September 29, 2007, as filed with the Securities and Exchange Commission (the "SEC"), which "Risk Factors" discussion is incorporated by reference in this release. The forward-looking statements included in this release represent the Company's estimates or views as of the date of this release report and should not be relied upon as representing the Company's estimates or views as of any date subsequent to the date of this release.

                 Waters Corporation and Subsidiaries
                Consolidated Statements of Operations
                (In thousands, except per share data)
                             (Unaudited)

                                  (Unaudited)         (Unaudited)
                                 Three Months     Twelve Months Ended
                                     Ended
                               December December December   December
                                  31,      31,       31,        31,
                                  2007     2006       2007       2006

Net sales                      437,003  386,930  1,473,048  1,280,229
Cost of sales (1)              181,992  162,386    631,122    536,185

  Gross profit                 255,011  224,544    841,926    744,044

Selling and administrative
 expenses (1)                  101,996   95,761    403,703    357,664
Research and development
 expenses (1)                   20,838   19,470     80,649     77,306
Purchased intangibles
 amortization                    2,261    1,459      8,695      5,439
Restructuring and other
 unusual charges (2)                 -      814          -      8,484

  Operating income             129,916  107,040    348,879    295,151

Other expense (3)                    -   (5,847)         -     (5,847)
Interest expense, net           (5,734)  (7,249)   (25,687)   (26,345)
  Income from operations
   before income taxes         124,182   93,944    323,192    262,959

Provision for income taxes      25,239   14,055     55,120     40,759

  Net income                    98,943   79,889    268,072    222,200


Net income per basic common
 share                           $0.98    $0.79      $2.67      $2.16

Weighted-average number of
 basic common shares           100,689  101,431    100,500    102,691


Net income per diluted common
 share                           $0.96    $0.78      $2.62      $2.13

Weighted-average number of
 diluted common shares and
 equivalents                   102,778  103,019    102,505    104,240


(1) The results for the twelve months ended December 31, 2007 include
 a charge for a one-time contribution to the 401(k) defined
 contribution plan associated with freezing of pay credit accruals
 under the Company's U.S. defined benefit pension plan. The amount of
 the one-time charge taken in the third quarter of 2007 in the
 consolidated statement of operations above is as follows:




                                  (Unaudited)
                                Twelve Months
                                     Ended
                               December December
                                  31,      31,
                                  2007     2006
Cost of sales                    2,556        -
Selling and administrative
 expenses                        7,368        -
Research and development
 expenses                        2,243        -
                               -------- --------
   Total one-time contribution
    charge                      12,167        -


(2) The results for the three and twelve months ended December 31,
 2006 include restructuring and other incremental costs in relation to
 a cost reduction plan implemented in February 2006.


(3) The results for the three and twelve months ended December 31,
 2006 include a charge of $5.8 million recorded for an impairment of
 an equity investment.

                 Waters Corporation and Subsidiaries
                Consolidated Statements of Operations
                (In thousands, except per share data)
                             (Unaudited)

                                  (Unaudited)         (Unaudited)
                                 Three Months     Twelve Months Ended
                                     Ended
                               December December December   December
                                  31,      31,       31,        31,
                                  2007     2006       2007       2006

Reconciliation of net income per diluted share, in accordance with
 generally accepted accounting principles, with adjusted results:

Net income per diluted share     $0.96    $0.78      $2.62      $2.13
                               -------- -------- ---------- ----------

Adjustment for purchased
 intangibles amortization, net
 of tax                          1,294    1,054      6,137      4,485
Net income per diluted share
 effect                           0.01     0.01       0.06       0.04
                               -------- -------- ---------- ----------

Adjustment for one-time
 contribution, net of tax            -        -      7,750          -
Net income per diluted share
 effect                              -        -       0.08          -
                               -------- -------- ---------- ----------

Adjustment for restructuring
 and other unusual charges,
 net of tax                          -      693          -      7,059
Net income per diluted share
 effect                              -     0.01          -       0.07
                               -------- -------- ---------- ----------

Adjustment for impairment of
 equity investment, net of tax       -    4,865          -      4,865
Net income per diluted share
 effect                              -     0.05          -       0.05
                               -------- -------- ---------- ----------


Adjusted net income per
 diluted share                   $0.98    $0.84      $2.75      $2.29
                               ======== ======== ========== ==========

The adjusted net 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
 items management has excluded as non-operational transactions.
 Management has excluded the purchased intangibles amortization,
 restructuring charge and impairment of equity investment from its
 non-GAAP adjusted amounts since management believes that these
 charges are not directly related to ongoing operations thereby
 providing investors with information that helps to compare ongoing
 operating performance. Management has also excluded the one-time
 contribution from its non-GAAP adjusted amounts to enable management
 and investors to prepare meaningful comparisons of the Company's
 operating results to prior and future periods.

                 Waters Corporation and Subsidiaries
                Condensed Consolidated Balance Sheets
                     (In thousands and unaudited)

                                December 31, 2007    December 31, 2006

Cash and cash equivalents                 693,014              514,166
Accounts receivable                       317,792              272,157
Inventories                               175,888              168,437
Other current assets                       48,185               44,920
     Total current assets               1,234,879              999,680

Property, plant and equipment,
 net                                      160,856              149,262
Other assets                              484,857              468,371
     Total assets                       1,880,592            1,617,313


Notes payable and debt                    384,176              403,461
Accounts payable and accrued
 expenses                                 273,290              282,373
     Total current liabilities            657,466              685,834

Long-term debt                            500,000              500,000
Other long-term liabilities               137,851               69,096
     Total liabilities                  1,295,317            1,254,930

Total equity                              585,275              362,383
     Total liabilities and
      equity                            1,880,592            1,617,313
CONTACT: Waters Corporation
Gene Cassis, 508-482-2349
Vice President of Investor Relations

SOURCE: Waters Corporation