Full Press Release Details
Contact: Caspar Tudor, Head of
Investor Relations (508) 482-2429
Waters Corporation (NYSE: WAT) Reports Third Quarter
2023 Financial Results
November 7, 2023 - Waters Corporation (NYSE: WAT) today announced its financial results for the third quarter of 2023.
third quarter of 2023 were $712 million, which grew less than 1% as reported, compared to sales of $709 million for the third quarter of 2022. In organic constant currency, sales declined 4%, with better-than-expected growth for
pharmaceutical applications in the U.S. and Europe and weaker-than-expected overall performance in China. The impact of the Wyatt acquisition increased sales by 4%. Currency translation had minimal impact on sales for the quarter, which was adverse
to our expectations.
On a GAAP basis, diluted earnings per share (EPS) for the third quarter of 2023 was $2.27, compared to $2.60 for the third quarter
of 2022. On a non-GAAP basis, EPS was $2.84, compared to $2.64 for the third quarter of 2022. This includes a headwind of approximately 1% due to unfavorable foreign exchange.
Our team has demonstrated its continued strength in execution and excelled operationally, delivering strong results despite very challenging market
conditions, said Dr. Udit Batra, President & CEO, Waters Corporation. U.S. and Europe pharma growth was again solid in the quarter and exceeded our expectations. However, China fell below our expectations as weakness
moved beyond pharma into the industrial and academic and government segments.
Dr. Batra continued, We are thrilled with the continued strong
start to the Wyatt acquisition, which contributed 4% sales growth in the quarter. We have also continued to launch innovative new products, further differentiating our revitalized portfolio in the attractive end-markets that we serve.
During the third quarter of 2023, sales into the pharmaceutical market increased 4% as reported and decreased 2% in organic constant currency, sales into the
industrial market decreased 6% as reported and 8% in organic constant currency, and sales into the academic and government markets increased 3% as reported and decreased 3% in organic constant currency.
During the quarter, instrument system sales decreased 5% as reported and 13% in organic constant currency, while recurring revenues, which represent the
combination of service and precision chemistries, increased 6% as reported and 4% in organic constant currency.
Geographically, sales in Asia during the
quarter decreased 15% as reported and 12% in organic constant currency (with China sales declining double-digits). Sales in the Americas increased 7% as reported and were flat in organic constant currency (with U.S. sales growing 7% as reported and
declining 2% in organic constant currency). Sales in Europe increased 15% as reported and 3% in organic constant currency.
Sales for the first nine months of 2023 were
$2,137 million, an increase of 1% as reported, compared to sales of $2,113 million for the first nine months of 2022. Currency translation decreased sales by approximately 2% in the first nine months of 2023, while the impact of the
Wyatt acquisition increased sales by 2%, resulting in flat organic constant currency sales growth.
On a GAAP basis, EPS for the first nine months of 2023
was $7.19, compared to $7.94 for the first nine months of 2022. On a non-GAAP basis, EPS was $8.13, compared to $8.20 for the first nine months of 2022. This includes a headwind of approximately 3% due to unfavorable foreign exchange.
For the first nine months of 2023, sales into the pharmaceutical market decreased 2% as reported and 3% in organic constant currency, sales into the
industrial market increased 1% as reported and 2% in organic constant currency, and sales into the academic and government markets increased 20% as reported and 19% in organic constant currency.
For the first nine months of 2023, instrument system sales decreased 4% as reported and 6% in organic constant currency, while recurring revenues increased 5%
as reported and 6% in organic constant currency.
Geographically, sales in Asia for the first nine months of 2023 decreased 8% as reported and 4% in
organic constant currency (with China sales declining double-digits). Sales in the Americas increased 6% as reported and 2% in organic constant currency (with U.S. sales growing 5% as reported and 1% in organic constant currency). Sales in Europe
increased 9% as reported and 5% in organic constant currency.
Unless otherwise 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 Fourth Quarter 2023 Financial Guidance
Full-Year 2023 Financial Guidance
The Company now expects
full-year 2023 organic constant currency sales growth to decline in the range of -2% to -1%. Currency translation is expected to decrease full-year organic sales growth by approximately 1.5%. The Wyatt
transaction is expected to increase full-year reported sales growth by approximately 2.5%. The resulting full-year 2023 reported sales growth is expected in the range of -1% to flat.
The Company is updating its full-year 2023 non-GAAP EPS guidance to now be in the range of $11.65 to $11.75, which includes an estimated headwind of
approximately 3.5% 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.
Fourth Quarter 2023 Financial Guidance
The Company expects fourth quarter 2023 organic constant currency sales growth to decline in the range of -8% to -5%. Currency translation is expected to
decrease fourth quarter sales growth by approximately 1.5%. The Wyatt transaction is expected to increase fourth quarter reported sales growth by approximately 3.5%. The resulting fourth quarter 2023 reported sales growth is expected in the range of
The Company expects fourth quarter 2023 non-GAAP EPS in the range of $3.52 to $3.62, which includes an estimated headwind of approximately 5%
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
Corporation will webcast its third quarter 2023 financial results conference call today, November 7, 2023, 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 November 21, 2023 on the same website by webcast and
also by phone at (866) 407-9243.
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 over 60 years. With approximately 8,000 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 organic 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, expectations or ability to realize commercial success subsequent to the completion 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
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; changes in inflation and interest rates; the impacts and costs of war, in
particular as a result of the ongoing conflict between Russia and Ukraine and in the Middle East, and the possibility of further escalation resulting in new geopolitical and regulatory instability; the United Kingdom s exit from the European
Union and 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 the ongoing COVID-19 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; 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 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, 2022, 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 1, 2023 and July 1, 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)