Full Press Release Details
Contact: John Lynch, Vice President,
Treasurer and Investor Relations, 508-482-2314
Waters Reports Fourth Quarter and Full Year 2015 Financial Results
Strong Fourth Quarter Caps Milestone Year
Milford, Massachusetts, January 26, 2016 - Waters Corporation (NYSE: WAT) reported fourth quarter 2015 sales of $587 million, a slight increase versus
sales of $584 million in the fourth quarter of 2014. Foreign currency translation reduced sales growth by approximately 5%. On a GAAP basis, earnings per diluted share (EPS) for the fourth quarter were $1.83 compared to $1.80 for the fourth quarter
of 2014. On a non-GAAP basis, including the adjustments in the attached reconciliation, EPS declined 2% to $1.96 from $1.99 in the fourth quarter 2014. A description and reconciliation of GAAP to non-GAAP EPS is attached and can be found on the
Company s website at http://www.waters.com under the caption Investors .
For the full year, sales for the Company were $2.04 billion, an
increase of 3% in comparison to sales of $1.99 billion in 2014, with foreign currency translation reducing sales growth by about 6%. On a GAAP basis, EPS for 2015 was $5.65 compared to $5.07 in 2014. On a non-GAAP basis, including adjustments in the
attached reconciliation, EPS grew 7% to $5.89 from $5.48 in 2014.
Commenting on the Company s performance, Christopher J. O Connell, President
and Chief Executive Officer said, 2015 was a true milestone year for Waters, highlighted by impressive and balanced growth across key products and markets, the significant impact of meaningful new innovations, and a smooth CEO transition.
Heading into 2016, we are operating from a strong foundation.
As communicated in a prior press release, Waters Corporation will webcast its fourth
quarter 2015 financial results conference call this morning, January 26, 2016 at 8:30 a.m. eastern time. To listen to the call, connect to www.waters.com, choose Investor Relations and click on the Live Webcast . A replay
will be available through February 2, 2016 at midnight eastern time, similarly by webcast and also by phone at 402-220-4152.
Waters Corporation (NYSE: WAT) develops and manufactures advanced analytical science technologies for laboratory-dependent organizations.
For more than 50 years, the company has pioneered a connected portfolio of separations science, laboratory information management, mass spectrometry and thermal analysis systems.
CAUTIONARY STATEMENT
This release may contain 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, foreign exchange rate fluctuations potentially affecting translation of the
Company s future non-U.S. operating results; the impact on demand among the Company s various market sectors from economic, sovereign and political uncertainties; 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 from the effect of mergers and acquisitions by the Company s customers; uncertainties relating to organizational/leadership changes; 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 ability to access capital, maintain liquidity and service our debt in volatile market conditions, 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, 2014 and Form 10-Q for the period ended October 3, 2015 as filed with the Securities and Exchange Commission, which Forward-Looking Statements and Risk Factors discussions are 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
Condensed Unclassified Consolidated Balance Sheets
(In thousands and unaudited)
| December 31, 2015 | December 31, 2014 | |||||||
| Cash, cash equivalents and investments | 2,399,263 | 2,055,388 | ||||||
| Accounts receivable | 468,315 | 433,616 | ||||||
| Inventories | 263,415 | 246,430 | ||||||
| Property, plant and equipment, net | 333,355 | 321,583 | ||||||
| Intangible assets, net | 218,022 | 232,371 | ||||||
| Goodwill | 356,864 | 354,838 | ||||||
| Other assets | 221,919 | 233,708 | ||||||
| Total assets | 4,261,153 | 3,877,934 | ||||||
| Notes payable and debt | 1,668,336 | 1,465,243 | ||||||
| Other liabilities | 534,987 | 518,025 | ||||||
| Total liabilities | 2,203,323 | 1,983,268 | ||||||
| Total equity | 2,058,851 | 1,894,666 | ||||||
| Total liabilities and equity | 4,261,153 | 3,877,934 |
Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||||||
| Net sales | $ | 586,610 | $ | 583,870 | $ | 2,042,332 | $ | 1,989,344 | ||||||||
| Cost of sales | 237,915 | 233,119 | 842,672 | 824,913 | ||||||||||||
| Gross profit | 348,695 | 350,751 | 1,199,660 | 1,164,431 | ||||||||||||
| Selling and administrative expenses | 128,681 | 131,916 | 495,747 | 512,707 | ||||||||||||
| Research and development expenses | 28,336 | 28,724 | 118,545 | 107,726 | ||||||||||||
| Acquired in-process research and development | 3,855 | 15,456 | 3,855 | 15,456 | ||||||||||||
| Purchased intangibles amortization | 2,576 | 2,616 | 10,123 | 10,634 | ||||||||||||
| Litigation provisions | 3,939 | 3,939 | ||||||||||||||
| Operating income | 181,308 | 172,039 | 567,451 | 517,908 | ||||||||||||
| Interest expense, net | (6,070 | ) | (7,566 | ) | (25,532 | ) | (27,168 | ) | ||||||||
| Income from operations before income taxes | 175,238 | 164,473 | 541,919 | 490,740 | ||||||||||||
| Provision for income tax expense | 24,184 | 13,181 | 72,866 | 59,120 | ||||||||||||
| Net income | $ | 151,054 | $ | 151,292 | $ | 469,053 | $ | 431,620 | ||||||||
| Net income per basic common share | $ | 1.85 | $ | 1.82 | $ | 5.70 | $ | 5.12 | ||||||||
| Weighted-average number of basic common shares | 81,650 | 83,217 | 82,336 | 84,358 | ||||||||||||
| Net income per diluted common share | $ | 1.83 | $ | 1.80 | $ | 5.65 | $ | 5.07 | ||||||||
| Weighted-average number of diluted common shares and equivalents | 82,382 | 84,015 | 83,087 | 85,151 |
Waters Corporation and Subsidiaries
Quarterly Reconciliation of GAAP to Adjusted Non-GAAP Financials
(in thousands, except per share data)
2015 and 2014 adjusted amounts presented below are used by the management of the Company to measure operating performance against prior periods and forecasts and are not in accordance with generally accepted accounting principles (GAAP). These
Non-GAAP amounts should be considered supplemental to, and not a substitute for, financial performance in accordance with GAAP. The Company believes that the use of Non-GAAP measures, such as Adjusted Non-GAAP Earnings Per Share (EPS) and Adjusted
Non-GAAP Operating Income, helps management and investors gain a better understanding of the Company s core operating results, and is consistent with how management measures performance for purposes of executive compensation and forecasts the
Company s performance. The reconciliation identifies items management has excluded as non-operational items. Management has excluded the following items:
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||||||
| GAAP Selling and Administrative Expenses (including Purchased Intangibles | $ | (135,196 | ) | $ | (134,532 | ) | $ | (509,809 | ) | $ | (523,341 | ) | ||||
| Amortization & Litigation Provisions) | ||||||||||||||||
| Purchased Intangibles Amortization | 2,576 | 2,616 | 10,123 | 10,634 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 2,435 | 3,140 | 7,455 | 17,697 | ||||||||||||
| Litigation Provisions | 3,939 | 3,939 | ||||||||||||||
| Adjusted Non-GAAP Selling & Administrative Expenses | $ | (126,246 | ) | $ | (128,776 | ) | $ | (488,292 | ) | $ | (495,010 | ) | ||||
| GAAP Research & Development Expenses (including Acquired In-Process Research and Development) | $ | (32,191 | ) | $ | (44,180 | ) | $ | (122,400 | ) | $ | (123,182 | ) | ||||
| Acquired In-Process Research and Development | 3,855 | 15,456 | 3,855 | 15,456 | ||||||||||||
| Adjusted Non-GAAP Research & Development Expenses | $ | (28,336 | ) | $ | (28,724 | ) | $ | (118,545 | ) | $ | (107,726 | ) | ||||
| GAAP Operating Income | $ | 181,308 | $ | 172,039 | $ | 567,451 | $ | 517,908 | ||||||||
| Acquired In-Process Research and Development | 3,855 | 15,456 | 3,855 | 15,456 | ||||||||||||
| Purchased Intangibles Amortization | 2,576 | 2,616 | 10,123 | 10,634 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 2,435 | 3,140 | 7,455 | 17,697 | ||||||||||||
| Litigation Provisions | 3,939 | 3,939 | ||||||||||||||
| Adjusted Non-GAAP Operating Income | $ | 194,113 | $ | 193,251 | $ | 592,823 | $ | 561,695 | ||||||||
| GAAP Provision for Income Tax Expense | $ | (24,184 | ) | $ | (13,181 | ) | $ | (72,866 | ) | $ | (59,120 | ) | ||||
| Acquired In-Process Research and Development | (786 | ) | (3,323 | ) | (786 | ) | (3,323 | ) | ||||||||
| Purchased Intangibles Amortization | (729 | ) | (718 | ) | (2,888 | ) | (3,024 | ) | ||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | (606 | ) | (925 | ) | (2,377 | ) | (4,979 | ) | ||||||||
| Litigation Provisions | (1,478 | ) | (1,478 | ) | ||||||||||||
| Infrequent Income Tax Items | 959 | (357 | ) | 2,326 | 2,383 | |||||||||||
| Adjusted Non-GAAP Provision for Income Tax Expense | $ | (26,824 | ) | $ | (18,504 | ) | $ | (78,069 | ) | $ | (68,063 | ) | ||||
| GAAP Net Income | $ | 151,054 | $ | 151,292 | $ | 469,053 | $ | 431,620 | ||||||||
| Acquired In-Process Research and Development | 3,069 | 12,133 | 3,069 | 12,133 | ||||||||||||
| Purchased Intangibles Amortization | 1,847 | 1,898 | 7,235 | 7,610 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 1,829 | 2,215 | 5,078 | 12,718 | ||||||||||||
| Litigation Provisions | 2,461 | 2,461 | ||||||||||||||
| Infrequent Income Tax Items | 959 | (357 | ) | 2,326 | 2,383 | |||||||||||
| Adjusted Non-GAAP Net Income | $ | 161,219 | $ | 167,181 | $ | 489,222 | $ | 466,464 | ||||||||
| GAAP EPS | $ | 1.83 | $ | 1.80 | $ | 5.65 | $ | 5.07 | ||||||||
| Acquired In-Process Research and Development | 0.04 | 0.14 | 0.04 | 0.14 | ||||||||||||
| Purchased Intangibles Amortization | 0.02 | 0.02 | 0.09 | 0.09 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 0.02 | 0.03 | 0.06 | 0.15 | ||||||||||||
| Litigation Provisions | 0.03 | 0.03 | ||||||||||||||
| Infrequent Income Tax Items | 0.01 | 0.03 | 0.03 | |||||||||||||
| Adjusted Non-GAAP EPS | $ | 1.96 | $ | 1.99 | $ | 5.89 | $ | 5.48 |