Full Press Release Details
Contact: Caspar Tudor, Head of
Investor Relations (508) 482-2429
Waters Corporation (NYSE: WAT) Reports First Quarter
2024 Financial Results
MILFORD, Mass., May 7, 2024 - Waters Corporation (NYSE: WAT) today announced its financial results for the first quarter of 2024.
Sales for the first quarter of 2024 were $637 million, a decrease of 7% as reported, compared to sales of $685 million for the first quarter of
2023. Currency translation decreased sales by 1%, while the impact of acquisitions increased sales by 3%.
On a GAAP basis, diluted earnings per share
(EPS) for the first quarter of 2024 was $1.72, compared to $2.38 for the first quarter of 2023. On a non-GAAP basis, EPS was $2.21, compared to $2.49 for the first quarter of 2023. This includes a headwind of
approximately 4% due to unfavorable foreign exchange.
Our first quarter revenues were at the high end of our guidance as our team continues to
execute well, said Dr. Udit Batra, President & CEO, Waters Corporation. The margin expansion we delivered reflects the strength of our operational performance, especially when considering current volume and
foreign exchange headwinds.
Dr. Batra continued, With our steady stream of innovative new products and focus on higher growth areas, we
are well-positioned in our attractive end-markets.
During the first quarter of 2024, sales into the pharmaceutical market decreased 3% as reported and 6% in organic constant currency, sales into the industrial
market decreased 7% as reported and in organic constant currency, and sales into the academic and government market decreased 25% as reported and 30% in organic constant currency.
During the quarter, instrument system sales decreased 20% as reported and 25% in organic constant currency,
while recurring revenues, which represent the combination of service and precision chemistries, increased 3% as reported and in organic constant currency.
Geographically, sales in Asia during the quarter decreased 18% as reported and 16% in organic constant currency. Sales in the Americas decreased 2% as
reported and 8% in organic constant currency. Sales in Europe increased 2% as reported and decreased 3% in organic constant currency.
noted, sales growth and decline percentages are presented on an as-reported basis. 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.
Full-Year and Second Quarter 2024
Full-Year 2024 Financial Guidance
The Company continues to expect full-year 2024 organic constant currency sales growth to be in the range of -0.5% to
+1.5%. Currency translation is expected to decrease full-year sales growth by slightly less than 1%. M&A contribution from the Wyatt transaction covering the first four-and-a-half months of the year is expected to increase full-year reported sales growth by slightly over 1%. The resulting full-year 2024 reported sales growth is expected in the range of 0.0% to
The Company expects full-year 2024 non-GAAP EPS to be in the range of $11.75 to $12.05, which includes an
estimated headwind of approximately 2% due to unfavorable foreign exchange.
Please refer to the tables below for a reconciliation of the projected GAAP
to non-GAAP financial outlook for the full year.
Second Quarter 2024 Financial Guidance
The Company expects second quarter 2024 organic constant currency sales growth to be in the range of -6.0% to -4.0%. Currency translation is expected to decrease second quarter sales growth by approximately 2%. M&A contribution from the Wyatt transaction covering the first-month-and-a-half of the quarter is expected to increase second quarter reported sales growth by approximately 1.5%. The resulting second quarter 2024
reported sales growth is expected in the range of -6.5% to -4.5%.
Company expects second quarter 2024 non-GAAP EPS to be in the range of $2.50 to $2.60, which includes an estimated headwind of approximately 4% due to unfavorable foreign exchange.
Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the
Conference Call Details
Waters Corporation will webcast its first quarter 2024 financial results conference call today, May 7, 2024, at 8:00 a.m. Eastern Time. To listen to the
call and see the accompanying slide presentation, please visit www.waters.com, select Investor Relations under the About Waters section, navigate to Events & Presentations, and click on the
Webcast. A replay will be available through June 4, 2024 on the same website by webcast and also by phone at (800) 839-9317.
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, food, and environmental sciences for more than 65 years. With approximately 7,700 employees worldwide, Waters operates directly in 35 countries, including 15 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 organic constant currency growth rates, adjusted operating income, adjusted net income, adjusted
earnings per diluted share and 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, and expectations or ability to realize commercial success of the Wyatt transaction; the impact of this transaction on the Company s business, anticipated progress on
Waters research programs, development of new analytical instruments and associated software or consumables, manufacturing development and capabilities; the increased indebtedness of the Company as a result of the Wyatt transaction, the
repayment of which could impact the Company s future results, market prospects for its products and sales and earnings guidance; foreign currency exchange rate fluctuations potentially affecting translation of the Company s future non-U.S. operating results, particularly when a foreign currency weakens against the U.S. dollar; current global economic, sovereign and political conditions and uncertainties, including the effect of new or
proposed tariff or trade regulations as well as other new or changed domestic and foreign laws, regulations and policies; changes in inflation and interest rates; the impacts and costs of war, in particular as a result of the ongoing conflicts
between Russia and Ukraine and in the Middle East, and the possibility of further escalation resulting in new geopolitical and regulatory instability; the Chinese government s ongoing tightening of restrictions on procurement by
government-funded customers; the Company s ability to access capital, maintain liquidity and service the Company s debt in volatile market conditions; risks related to the effects of any pandemic on our business, financial condition,
results of operations and prospects; changes in timing and demand for the Company s products among the Company s customers and various market sectors, particularly as a result of fluctuations in their expenditures or ability to obtain
funding; the ability to realize the expected benefits related to the Company s various cost-saving initiatives, including workforce reductions and organizational restructurings; the introduction of competing products by other companies and loss
of market share, as well as pressures on prices from competitors and/or customers; changes in the competitive landscape as a result of changes in ownership, mergers and continued consolidation among the Company s competitors; regulatory,
economic and competitive obstacles to new product introductions; lack of acceptance of new products and inability to grow organically through innovation; rapidly changing technology and product obsolescence; risks associated with previous or future
acquisitions, strategic investments, joint ventures and divestitures, including risks associated with achieving the anticipated financial results and operational synergies; contingent purchase price payments and expansion of our business into new or
developing markets; risks associated with unexpected disruptions in operations; failure to adequately protect the Company s intellectual property, infringement of intellectual property rights of third parties and inability to obtain licenses on
commercially reasonable terms; the Company s ability to acquire adequate sources of supply and its reliance on outside contractors for certain components and modules, as well as disruptions to its supply chain; risks associated with third-party
sales intermediaries and resellers; the impact and costs of changes in statutory or contractual tax rates in jurisdictions in which the Company operates as well as shifts in taxable income among jurisdictions with different effective tax rates, the
outcome of ongoing and future tax examinations and changes in legislation affecting the Company s effective tax rate; the Company s ability to attract and retain qualified employees and management personnel; risks associated with
cybersecurity and technology, including attempts by third parties to defeat the security measures of the Company and its third-party partners; 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, and in connection with government contracts; regulatory, environmental and logistical obstacles affecting the distribution of the Company s products,
completion of purchase order documentation and the ability of customers to obtain letters of credit or other financing alternatives; risks associated with litigation and other legal and regulatory proceedings; and the impact and costs incurred from
changes in accounting principles and practices. 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, 2023, 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 | ||||||||
| March 30, 2024 | April 1, 2023 | |||||||
| Net sales | $ | 636,839 | $ | 684,674 | ||||
| Costs and operating expenses: | ||||||||
| Cost of sales | 261,786 | 284,380 | ||||||
| Selling and administrative expenses | 174,536 | 181,956 | ||||||
| Research and development expenses | 44,595 | 42,691 | ||||||
| Purchased intangibles amortization | 11,834 | 1,479 | ||||||
| Litigation provision | 10,242 | |||||||
| Operating income | 133,846 | 174,168 | ||||||
| Other income, net | 2,259 | 1,388 | ||||||
| Interest expense, net | (21,249 | ) | (10,383 | ) | ||||
| Income from operations before income taxes | 114,856 | 165,173 | ||||||
| Provision for income taxes | 12,660 | 24,250 | ||||||
| Net income | $ | 102,196 | $ | 140,923 | ||||
| Net income per basic common share | $ | 1.73 | $ | 2.39 | ||||
| Weighted-average number of basic common shares | 59,232 | 59,023 | ||||||
| Net income per diluted common share | $ | 1.72 | $ | 2.38 | ||||
| Weighted-average number of diluted common shares and equivalents | 59,431 | 59,317 |
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segments, Products & Services, Geography and Markets
Three Months Ended March 30, 2024 and April 1, 2023
| Three Months Ended | Percent | Impact of | Impact of | Organic Constant Currency | ||||||||||||||||||||
| March 30, 2024 | April 1, 2023 | Change | Currency | Acquisitions | Growth Rate (a) | |||||||||||||||||||
| NET SALES - OPERATING SEGMENTS | ||||||||||||||||||||||||
| Waters | $ | 561,899 | $ | 602,075 | (7 | %) | (1 | %) | 4 | % | (10 | %) | ||||||||||||
| TA | 74,940 | 82,599 | (9 | %) | (1 | %) | 0 | % | (9 | %) | ||||||||||||||
| Total | $ | 636,839 | $ | 684,674 | (7 | %) | (1 | %) | 3 | % | (9 | %) | ||||||||||||
| NET SALES - PRODUCTS & SERVICES | ||||||||||||||||||||||||
| Instruments | $ | 241,944 | $ | 302,942 | (20 | %) | 0 | % | 5 | % | (25 | %) | ||||||||||||
| Service | 260,688 | 248,217 | 5 | % | (1 | %) | 2 | % | 4 | % | ||||||||||||||
| Chemistry | 134,207 | 133,515 | 1 | % | (1 | %) | 0 | % | 2 | % | ||||||||||||||
| Total Recurring | 394,895 | 381,732 | 3 | % | (1 | %) | 2 | % | 3 | % | ||||||||||||||
| Total | $ | 636,839 | $ | 684,674 | (7 | %) | (1 | %) | 3 | % | (9 | %) | ||||||||||||
| NET SALES - GEOGRAPHY | ||||||||||||||||||||||||
| Asia | $ | 207,559 | $ | 253,081 | (18 | %) | (3 | %) | 1 | % | (16 | %) | ||||||||||||
| Americas | 241,171 | 246,421 | (2 | %) | 0 | % | 6 | % | (8 | %) | ||||||||||||||
| Europe | 188,109 | 185,172 | 2 | % | 2 | % | 2 | % | (3 | %) | ||||||||||||||
| Total | $ | 636,839 | $ | 684,674 | (7 | %) | (1 | %) | 3 | % | (9 | %) | ||||||||||||
| NET SALES - MARKETS | ||||||||||||||||||||||||
| Pharmaceutical | $ | 374,207 | $ | 384,898 | (3 | %) | (1 | %) | 4 | % | (6 | %) | ||||||||||||
| Industrial | 195,334 | 209,650 | (7 | %) | (1 | %) | 1 | % | (7 | %) | ||||||||||||||
| Academic & Government | 67,298 | 90,126 | (25 | %) | 2 | % | 3 | % | (30 | %) | ||||||||||||||
| Total | $ | 636,839 | $ | 684,674 | (7 | %) | (1 | %) | 3 | % | (9 | %) |
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP Financials
Three Months Ended March 30, 2024 and April 1, 2023
(In thousands, except per share data)
| Selling & Administrative Expenses (a) | Research & Development Expenses | Operating Income | Operating Income Percentage | Other Income | Income from Operations before Income Taxes | Provision for Income Taxes | Net Income | Diluted Earnings per Share | ||||||||||||||||||||||||||||
| Three Months Ended March 30, 2024 | ||||||||||||||||||||||||||||||||||||
| GAAP | $ | 196,612 | $ | 44,595 | $ | 133,846 | 21.0 | % | $ | 2,259 | $ | 114,856 | $ | 12,660 | $ | 102,196 | $ | 1.72 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||
| Purchased intangibles amortization (b) | (11,834 | ) | 11,834 | 1.9 | % | 11,834 | 2,832 | 9,002 | 0.15 | |||||||||||||||||||||||||||
| Litigation provision (c) | (10,242 | ) | 10,242 | 1.6 | % | 10,242 | 2,458 | 7,784 | 0.13 | |||||||||||||||||||||||||||
| Restructuring costs and certain other items (d) | (8,347 | ) | 8,347 | 1.3 | % | 8,347 | 2,055 | 6,292 | 0.11 | |||||||||||||||||||||||||||
| Retention bonus obligation (f) | (5,725 | ) | (1,909 | ) | 7,634 | 1.2 | % | 7,634 | 1,832 | 5,802 | 0.10 | |||||||||||||||||||||||||
| Adjusted Non-GAAP | $ | 160,464 | $ | 42,686 | $ | 171,903 | 27.0 | % | $ | 2,259 | $ | 152,913 | $ | 21,837 | $ | 131,076 | $ | 2.21 | ||||||||||||||||||
| Three Months Ended April 1, 2023 | ||||||||||||||||||||||||||||||||||||
| GAAP | $ | 183,435 | $ | 42,691 | $ | 174,168 | 25.4 | % | $ | 1,388 | $ | 165,173 | $ | 24,250 | $ | 140,923 | $ | 2.38 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||
| Purchased intangibles amortization (b) | (1,479 | ) | 1,479 | 0.2 | % | 1,479 | 335 | 1,144 | 0.02 | |||||||||||||||||||||||||||
| Restructuring costs and certain other items (d) | 405 | (405 | ) | (0.1 | %) | (405 | ) | 256 | (661 | ) | (0.01 | ) | ||||||||||||||||||||||||
| Acquisition related costs (e) | (8,342 | ) | 8,342 | 1.2 | % | 8,342 | 2,002 | 6,340 | 0.11 | |||||||||||||||||||||||||||
| Adjusted Non-GAAP | $ | 174,019 | $ | 42,691 | $ | 183,584 | 26.8 | % | $ | 1,388 | $ | 174,589 | $ | 26,843 | $ | 147,746 | $ | 2.49 |
Waters Corporation and Subsidiaries
Preliminary Condensed Unclassified Consolidated Balance Sheets
(In thousands and unaudited)
| March 30, 2024 | December 31, 2023 | |||||||
| Cash, cash equivalents and investments | $ | 338,213 | $ | 395,974 | ||||
| Accounts receivable | 626,329 | 702,168 | ||||||
| Inventories | 538,634 | 516,236 | ||||||
| Property, plant and equipment, net | 633,594 | 639,073 | ||||||
| Intangible assets, net | 611,147 | 629,187 | ||||||
| Goodwill | 1,297,826 | 1,305,446 | ||||||
| Other assets | 463,221 | 438,770 | ||||||
| Total assets | $ | 4,508,964 | $ | 4,626,854 | ||||
| Notes payable and debt | $ | 2,055,761 | $ | 2,355,513 | ||||
| Other liabilities | 1,196,678 | 1,121,000 | ||||||
| Total liabilities | 3,252,439 | 3,476,513 | ||||||
| Total stockholders equity | 1,256,525 | 1,150,341 | ||||||
| Total liabilities and stockholders equity | $ | 4,508,964 | $ | 4,626,854 |
Waters Corporation and Subsidiaries
Preliminary Condensed Consolidated Statements of Cash Flows