Full Press Release Details
Contact: Caspar Tudor, Director,
Investor Relations (508) 482-2429
Waters Corporation (NYSE: WAT) Reports Fourth Quarter
and Full-Year 2021 Financial Results
Milford, Mass., February 1, 2022 - Waters Corporation (NYSE: WAT) today announced
fourth quarter 2021 sales of $836 million, an increase of 6% as reported and 8% in constant currency, compared to sales of $787 million for the fourth quarter of 2020.
On a GAAP basis, diluted earnings per share (EPS) for the fourth quarter of 2021 increased to $3.52, compared to $3.49 for the fourth quarter of 2020. On a non-GAAP basis, EPS increased to $3.67, compared to $3.65 for the fourth quarter of 2020. A description and reconciliation of GAAP to non-GAAP results appear in the tables
below and can be found on the Company s website www.waters.com in the Investor Relations section.
On a GAAP basis, net cash provided by
operating activities was $218 million for the fourth quarter of 2021, compared to $267 million for the fourth quarter of 2020. On a non-GAAP basis, adjusted free cash flow for the fourth quarter of
2021 was $187 million versus $240 million for the fourth quarter of 2020.
For fiscal year 2021, the Company s sales were
$2,786 million, an increase of 18% as reported and 16% in constant currency, compared to sales of $2,365 million for fiscal year 2020.
GAAP basis, EPS for fiscal year 2021 increased to $11.17, compared to $8.36 for fiscal year 2020. On a non-GAAP basis, EPS increased to $11.20, compared to $9.05 for fiscal year 2020.
On a GAAP basis, net cash provided by operating activities was $747 million for fiscal year 2021, compared to $791 million for fiscal year 2020. On
a non-GAAP basis, adjusted free cash flow for fiscal year 2021 was $675 million versus $726 million for fiscal year 2020.
I am extremely grateful for our colleagues around the world who continue to overcome the challenges of the pandemic while delivering exceptional support
to our customers, said Dr. Udit Batra, President and Chief Executive Officer of Waters Corporation. We saw strong momentum in our two-year stacked revenue growth throughout 2021, demonstrating
that our transformation is truly embedded into how we operate. In the fourth quarter, we capitalized on broad-based growth across our end markets and geographies, with particular strength in biopharma, industrial and China. Despite a tougher
comparison and six fewer days in the quarter, consumables and instruments contributed solid gains.
Dr. Batra continued, As we close the books on 2021, I am very pleased with the revitalization of our
core systems portfolio and the growing contributions of new products such as ACQUITY Premier, Arc HPLC, Multi-Reflecting ToF mass spec and our TA Instruments Discovery product line, all setting us up for years to come.
Financial Highlights
Unless otherwise noted, sales
growth and decline percentages are presented on an as-reported basis and are the same as the sales growth and decline percentages presented on a constant currency basis as compared with the same period in the
prior year, each of which is detailed in the reconciliation of sales growth rates to constant currency growth rates in the tables below.
fourth quarter of 2021, sales into the pharmaceutical market increased 7% as reported and 8% in constant currency, sales into the industrial market increased 6% as reported and 7% in constant currency and sales into the academic and government
markets increased 4% as reported and 5% in constant currency.
Recurring revenues, which represent the combination of service and precision chemistries,
increased 2% as reported and 3% in constant currency, with six fewer days in the fourth quarter of 2021, while instrument system sales increased 10% as reported and 12% in constant currency.
Geographically, sales in Asia during the quarter increased 9%, sales in the Americas increased 8% (with U.S. sales growing 8%), and sales in Europe increased
1% as reported and 5% in constant currency.
For fiscal year 2021, sales into the pharmaceutical market increased 20% as reported and 19% in constant
currency, sales into the industrial market increased 17% as reported and 15% in constant currency and sales into the academic and government markets increased 7% as reported and 5% in constant currency.
Recurring revenues increased 13% as reported and 11% in constant currency, while instrument system sales increased 23%.
Geographically, sales in Asia increased 20% as reported and 19% in constant currency, sales in the Americas increased 16% (with U.S. sales growing 14%) and
sales in Europe increased 17% as reported and 14% in constant currency.
First Quarter and Full-Year 2022 Financial Outlook
The Company expects full-year 2022 constant currency sales growth in the range of 5% to 7%. Currency translation is expected to decrease full-year sales growth
by approximately one percentage point. The Company expects full-year 2022 non-GAAP EPS in the range of $11.75 to $12.00. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full-year.
The Company expects first quarter 2022 constant currency sales growth in
the range of 6% to 8%. Currency translation is expected to decrease first quarter sales growth by approximately three percentage points. The Company expects first quarter 2022 non-GAAP EPS in the range of
$2.25 to $2.35. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the fourth quarter.
Waters Corporation will webcast its
fourth quarter and full-year 2021 financial results conference call today, February 1, 2022 at 8:00 a.m. Eastern Time. To listen to the call and see the accompanying slide presentation, please visit www.waters.com, select
Investors under the About Waters section, navigate to Events & Presentations, and click on the Webcast. A replay will be available through at least February 15, 2022 at midnight Eastern
Time on the same website by webcast and also by phone at (888) 566-0450.
About Waters Corporation
Waters Corporation (NYSE: WAT), a global leader in analytical instruments and software, has pioneered chromatography, mass spectrometry and thermal analysis
innovations serving the life, materials and food sciences for more than 60 years. With more than 7,400 employees worldwide, Waters operates directly in 35 countries, including 14 manufacturing facilities, and with products available in more than 100
countries. For more information, visit www.waters.com.
Non-GAAP Financial Measures
This press release contains financial measures, such as constant currency growth rate, adjusted operating income, adjusted net income, adjusted earnings per
diluted share and adjusted free cash flow, among others, which are considered non-GAAP financial measures under applicable U.S. Securities and Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP). The Company s
definitions of these non-GAAP measures may differ from similarly titled measures used by others. The non-GAAP financial measures used in this press release adjust for
specified items that can be highly variable or difficult to predict. The Company generally uses these non-GAAP financial measures to facilitate management s financial and operational decision-making,
including evaluation of the Company s historical operating results, comparison to competitors operating results and determination of management incentive compensation. These non-GAAP financial
measures reflect an additional way of viewing aspects of the Company s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and
trends affecting the Company s business. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company s reported results of operations, management
strongly encourages investors to review the Company s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in the tables accompanying this release.
Cautionary Statement
This release contains forward-looking statements regarding future results and events. For this purpose, any statements that are not statements of
historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words feels , believes , anticipates , plans , expects , intends , suggests ,
appears , estimates , projects and similar expressions, whether in the negative or affirmative, 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, risks related to the effects of the ongoing COVID-19 pandemic on our
business, financial condition, results of operations and prospects, including: portions of our global workforce being unable to work fully and/or effectively due to working remotely, illness, quarantines, government actions, facility closures or
other reasons related to the pandemic, increased risks of cyber-attacks resulting from our temporary remote working model, disruptions in our manufacturing capabilities or to our supply chain and distribution network, volatility and uncertainty in
global capital markets limiting our ability to access capital, customers being unable to make timely payments for purchases and volatility in demand for our products; foreign exchange rate fluctuations potentially affecting translation of the
Company s future non-U.S. operating results; the impact on demand for the Company s products, including delays or disruptions to our distribution network, among the Company s various market
sectors or geographies from economic, sovereign and political uncertainties, particularly regarding the effect of new or proposed tariff or trade regulations or changes in the interpretation or enforcement of existing regulations; the effect on the
Company s financial results from the United Kingdom exiting the European Union; fluctuations in expenditures by the Company s customers, in particular large pharmaceutical companies; introduction of competing products by other companies
and loss of market share; pressures on prices from competitors and/or customers; regulatory, economic and competitive obstacles to new product introductions; other changes in demand for the Company s products from the effect of mergers and
acquisitions by the Company s customers; increased regulatory burdens as the Company s business evolves, especially with respect to the U.S. Food and Drug Administration and U.S. Environmental Protection Agency, among others; shifts in
taxable income in jurisdictions with different effective tax rates; the outcome of tax examinations or changes in respective country legislation affecting the Company s effective tax rate; the effect of the adoption of new accounting standards;
the ability to access capital, maintain liquidity and service the Company s debt in volatile market conditions, including any potential impact on the Company s operations stemming from sustained inflation, particularly in the U.S., as a
large portion of the Company s cash is held and operating cash flows are generated outside the U.S.; environmental and logistical obstacles affecting the distribution of products and risks associated with lawsuits and other legal actions,
particularly involving claims for infringement of patents and other intellectual property rights. Such factors and others are discussed more fully in the sections entitled Forward-Looking Statements and Risk Factors of the
Company s annual report on Form 10-K for the year ended December 31, 2020, as well as in the sections entitled Special Note Regarding Forward-Looking Statements and Risk
Factors of the Company s quarterly reports on Form 10-Q for the quarterly periods ended April 3, 2021, July 3, 2021, and October 2, 2021, each as filed with the Securities and
Exchange Commission ( SEC ), which discussions are incorporated by reference in this release, as updated by the Company s future filings with the SEC. The forward-looking statements included in this release represent the
Company s estimates or views as of the date of this 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 release. Except as required by law, the Company does
not assume any obligation to update any forward-looking statements.
Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||||||||||
| Net sales | $ | 836,449 | $ | 786,658 | $ | 2,785,874 | $ | 2,365,365 | ||||||||
| Costs and operating expenses: | ||||||||||||||||
| Cost of sales | 351,004 | 320,569 | 1,156,533 | 1,006,689 | ||||||||||||
| Selling and administrative expenses | 173,014 | 153,084 | 626,968 | 553,698 | ||||||||||||
| Research and development expenses | 43,331 | 39,662 | 168,358 | 140,777 | ||||||||||||
| Purchased intangibles amortization | 1,735 | 2,687 | 7,143 | 10,587 | ||||||||||||
| Asset impairment (a) | 6,945 | 6,945 | ||||||||||||||
| Litigation provision | 5,165 | 5,165 | 1,180 | |||||||||||||
| Operating income | 262,200 | 263,711 | 821,707 | 645,489 | ||||||||||||
| Other (expense) income, net (b) | (870 | ) | 374 | 17,203 | (1,775 | ) | ||||||||||
| Interest expense, net | (9,010 | ) | (6,834 | ) | (32,717 | ) | (32,800 | ) | ||||||||
| Income from operations before income taxes | 252,320 | 257,251 | 806,193 | 610,914 | ||||||||||||
| Provision for income taxes | 36,081 | 38,940 | 113,350 | 89,343 | ||||||||||||
| Net income | $ | 216,239 | $ | 218,311 | $ | 692,843 | $ | 521,571 | ||||||||
| Net income per basic common share | $ | 3.55 | $ | 3.51 | $ | 11.25 | $ | 8.40 | ||||||||
| Weighted-average number of basic common shares | 60,984 | 62,170 | 61,575 | 62,094 | ||||||||||||
| Net income per diluted common share | $ | 3.52 | $ | 3.49 | $ | 11.17 | $ | 8.36 | ||||||||
| Weighted-average number of diluted common shares and equivalents | 61,423 | 62,501 | 62,028 | 62,414 |
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segments, Products & Services, Geography and Markets
Three Months Ended December 31, 2021 and December 31, 2020
| Three Months Ended | Percent | Current Period Currency | Constant Currency | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | Change | Impact | Growth Rate (a) | ||||||||||||||||
| NET SALES - OPERATING SEGMENTS | ||||||||||||||||||||
| Waters | $ | 742,070 | $ | 703,738 | 5 | % | $ | (8,433 | ) | 7 | % | |||||||||
| TA | 94,379 | 82,920 | 14 | % | (1,591 | ) | 16 | % | ||||||||||||
| Total | $ | 836,449 | $ | 786,658 | 6 | % | $ | (10,024 | ) | 8 | % | |||||||||
| NET SALES - PRODUCTS & SERVICES | ||||||||||||||||||||
| Instruments | $ | 441,229 | $ | 400,436 | 10 | % | $ | (7,965 | ) | 12 | % | |||||||||
| Service | 256,489 | 254,667 | 1 | % | (2,932 | ) | 2 | % | ||||||||||||
| Chemistry | 138,731 | 131,555 | 5 | % | 873 | 5 | % | |||||||||||||
| Total Recurring | 395,220 | 386,222 | 2 | % | (2,059 | ) | 3 | % | ||||||||||||
| Total | $ | 836,449 | $ | 786,658 | 6 | % | $ | (10,024 | ) | 8 | % | |||||||||
| NET SALES - GEOGRAPHY | ||||||||||||||||||||
| Asia | $ | 321,674 | $ | 295,706 | 9 | % | $ | (988 | ) | 9 | % | |||||||||
| Americas | 271,968 | 251,437 | 8 | % | 384 | 8 | % | |||||||||||||
| Europe | 242,807 | 239,515 | 1 | % | (9,420 | ) | 5 | % | ||||||||||||
| Total | $ | 836,449 | $ | 786,658 | 6 | % | $ | (10,024 | ) | 8 | % | |||||||||
| NET SALES - MARKETS | ||||||||||||||||||||
| Pharmaceutical | $ | 491,870 | $ | 460,384 | 7 | % | $ | (7,068 | ) | 8 | % | |||||||||
| Industrial | 247,320 | 233,180 | 6 | % | (2,440 | ) | 7 | % | ||||||||||||
| Academic & Government | 97,259 | 93,094 | 4 | % | (516 | ) | 5 | % | ||||||||||||
| Total | $ | 836,449 | $ | 786,658 | 6 | % | $ | (10,024 | ) | 8 | % | |||||||||
| NET SALES - EXCLUDING CHINA | ||||||||||||||||||||
| Total Net Sales | $ | 836,449 | $ | 786,658 | 6 | % | $ | (10,024 | ) | 8 | % | |||||||||
| China Net Sales | 175,098 | 151,639 | 15 | % | 3,460 | 13 | % | |||||||||||||
| Total Net Sales Excluding China | $ | 661,351 | $ | 635,019 | 4 | % | $ | (13,484 | ) | 6 | % |
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segments, Products & Services, Geography and Markets
Twelve Months Ended December 31, 2021 and December 31, 2020
| Twelve Months Ended | Percent | Current Period Currency | Constant Currency | |||||||||||||||||
| December 31, 2021 | December 31, 2020 | Change | Impact | Growth Rate (a) | ||||||||||||||||
| NET SALES - OPERATING SEGMENTS | ||||||||||||||||||||
| Waters | $ | 2,473,083 | $ | 2,117,124 | 17 | % | $ | 28,714 | 15 | % | ||||||||||
| TA | 312,791 | 248,241 | 26 | % | 3,622 | 25 | % | |||||||||||||
| Total | $ | 2,785,874 | $ | 2,365,365 | 18 | % | $ | 32,336 | 16 | % | ||||||||||
| NET SALES - PRODUCTS & SERVICES | ||||||||||||||||||||
| Instruments | $ | 1,314,861 | $ | 1,065,253 | 23 | % | $ | 5,698 | 23 | % | ||||||||||
| Service | 963,804 | 868,032 | 11 | % | 15,696 | 9 | % | |||||||||||||
| Chemistry | 507,209 | 432,080 | 17 | % | 10,942 | 15 | % | |||||||||||||
| Total Recurring | 1,471,013 | 1,300,112 | 13 | % | 26,638 | 11 | % | |||||||||||||
| Total | $ | 2,785,874 | $ | 2,365,365 | 18 | % | $ | 32,336 | 16 | % | ||||||||||
| NET SALES - GEOGRAPHY | ||||||||||||||||||||
| Asia | $ | 1,075,765 | $ | 899,177 | 20 | % | $ | 7,093 | 19 | % | ||||||||||
| Americas | 925,220 | 797,842 | 16 | % | 2,455 | 16 | % | |||||||||||||
| Europe | 784,889 | 668,346 | 17 | % | 22,788 | 14 | % | |||||||||||||
| Total | $ | 2,785,874 | $ | 2,365,365 | 18 | % | $ | 32,336 | 16 | % | ||||||||||
| NET SALES - MARKETS | ||||||||||||||||||||
| Pharmaceutical | $ | 1,667,061 | $ | 1,386,966 | 20 | % | $ | 15,542 | 19 | % | ||||||||||
| Industrial | 829,204 | 707,772 | 17 | % | 12,430 | 15 | % | |||||||||||||
| Academic & Government | 289,609 | 270,627 | 7 | % | 4,364 | 5 | % | |||||||||||||
| Total | $ | 2,785,874 | $ | 2,365,365 | 18 | % | $ | 32,336 | 16 | % | ||||||||||
| NET SALES - EXCLUDING CHINA | ||||||||||||||||||||
| Total Net Sales | $ | 2,785,874 | $ | 2,365,365 | 18 | % | $ | 32,336 | 16 | % | ||||||||||
| China Net Sales | 521,128 | 404,352 | 29 | % | 15,159 | 25 | % | |||||||||||||
| Total Net Sales Excluding China | $ | 2,264,746 | $ | 1,961,013 | 15 | % | $ | 17,177 | 15 | % |
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP Financials
Three and Twelve Months Ended December 31, 2021 and December 31, 2020