Full Press Release Details
Contact: John Lynch, Vice President,
Treasurer and Investor Relations, 508-482-2314
Waters Reports Third Quarter 2015 Financial Results
Broad-Based Growth Momentum Continues
Milford, Massachusetts, October 27, 2015 - Waters Corporation (NYSE: WAT) reported today third quarter 2015 sales of $501 million, an increase of 2%
in comparison to sales of $493 million in the third quarter of 2014. Foreign currency translation reduced sales growth by approximately 7%. On a GAAP basis, earnings per diluted share (EPS) for the third quarter of 2015 were $1.40 compared to $1.34
for the third quarter of 2014. On a non-GAAP basis, including the adjustments in the attached reconciliation, EPS were $1.42 compared to $1.38 in the prior year quarter. 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 .
Through the first nine months of 2015, sales
for the Company were $1.46 billion, up 4% compared with sales of $1.41 billion in the first nine months of 2014. Foreign currency translation decreased sales growth during the first nine months of 2015 by approximately 7%. On a GAAP basis, EPS for
the first nine months of 2015 were $3.82 compared to $3.29 for the comparable period in 2014. On a non-GAAP basis, including the adjustments in the attached reconciliation, EPS increased 12% to $3.94 in the first nine months of 2015 as compared to
Commenting on the quarter, Christopher J. O Connell, President and Chief Executive Officer, said, Our strong organic sales
growth in the third quarter was characterized by continued broad-based momentum in our life science end markets and solid performance in our industrial and applied markets. Our year-to-date performance demonstrates Waters ability to turn
industry-leading technology and customer support into strong and consistent financial results. I am pleased to be joining Waters at this time and enthusiastic about the opportunities ahead.
As communicated in a prior press release, Waters Corporation will webcast its third quarter 2015 financial results conference call this morning,
October 27, 2015 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 November 3, 2015 at midnight
eastern time, similarly by webcast and also by phone at 203-369-0277.
About Waters Corporation
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 July 4, 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)
| October 3, 2015 | December 31, 2014 | |||||||
| Cash, cash equivalents and investments | 2,310,734 | 2,055,388 | ||||||
| Accounts receivable | 416,311 | 433,616 | ||||||
| Inventories | 281,786 | 246,430 | ||||||
| Property, plant and equipment, net | 325,554 | 321,583 | ||||||
| Intangible assets, net | 222,806 | 232,371 | ||||||
| Goodwill | 352,151 | 354,838 | ||||||
| Other assets | 211,902 | 233,708 | ||||||
| Total assets | 4,121,244 | 3,877,934 | ||||||
| Notes payable and debt | 1,630,176 | 1,465,243 | ||||||
| Other liabilities | 522,512 | 518,025 | ||||||
| Total liabilities | 2,152,688 | 1,983,268 | ||||||
| Total equity | 1,968,556 | 1,894,666 | ||||||
| Total liabilities and equity | 4,121,244 | 3,877,934 |
Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 3, 2015 | September 27, 2014 | October 3, 2015 | September 27, 2014 | |||||||||||||
| Net sales | $ | 500,578 | $ | 493,165 | $ | 1,455,722 | $ | 1,405,474 | ||||||||
| Cost of sales | 206,804 | 202,222 | 604,757 | 591,794 | ||||||||||||
| Gross profit | 293,774 | 290,943 | 850,965 | 813,680 | ||||||||||||
| Selling and administrative expenses | 124,655 | 122,226 | 367,066 | 380,791 | ||||||||||||
| Research and development expenses | 30,703 | 27,279 | 90,209 | 79,002 | ||||||||||||
| Purchased intangibles amortization | 2,573 | 2,725 | 7,547 | 8,018 | ||||||||||||
| Operating income | 135,843 | 138,713 | 386,143 | 345,869 | ||||||||||||
| Interest expense, net | (6,281 | ) | (7,300 | ) | (19,462 | ) | (19,602 | ) | ||||||||
| Income from operations before income taxes | 129,562 | 131,413 | 366,681 | 326,267 | ||||||||||||
| Provision for income tax expense | 13,281 | 17,916 | 48,682 | 45,939 | ||||||||||||
| Net income | $ | 116,281 | $ | 113,497 | $ | 317,999 | $ | 280,328 | ||||||||
| Net income per basic common share | $ | 1.42 | $ | 1.36 | $ | 3.85 | $ | 3.32 | ||||||||
| Weighted-average number of basic common shares | 82,036 | 83,663 | 82,552 | 84,375 | ||||||||||||
| Net income per diluted common share | $ | 1.40 | $ | 1.34 | $ | 3.82 | $ | 3.29 | ||||||||
| Weighted-average number of diluted common shares and equivalents | 82,784 | 84,401 | 83,305 | 85,162 |
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 | Nine Months Ended | |||||||||||||||
| October 3, 2015 | September 27, 2014 | October 3, 2015 | September 27, 2014 | |||||||||||||
| GAAP Selling and Administrative Expenses (including Purchased Intangibles Amortization) | $ | (127,228 | ) | $ | (124,951 | ) | $ | (374,613 | ) | $ | (388,809 | ) | ||||
| Purchased Intangibles Amortization | 2,573 | 2,725 | 7,547 | 8,018 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 1,732 | 191 | 5,020 | 14,557 | ||||||||||||
| Adjusted Non-GAAP Selling & Administrative Expenses | $ | (122,923 | ) | $ | (122,035 | ) | $ | (362,046 | ) | $ | (366,234 | ) | ||||
| GAAP Operating Income | $ | 135,843 | $ | 138,713 | $ | 386,143 | $ | 345,869 | ||||||||
| Purchased Intangibles Amortization | 2,573 | 2,725 | 7,547 | 8,018 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 1,732 | 191 | 5,020 | 14,557 | ||||||||||||
| Adjusted Non-GAAP Operating Income | $ | 140,148 | $ | 141,629 | $ | 398,710 | $ | 368,444 | ||||||||
| GAAP Provision for Income Tax Expense | $ | (13,281 | ) | $ | (17,916 | ) | $ | (48,682 | ) | $ | (45,939 | ) | ||||
| Purchased Intangibles Amortization | (738 | ) | (804 | ) | (2,159 | ) | (2,306 | ) | ||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | (772 | ) | 150 | (1,771 | ) | (4,054 | ) | |||||||||
| Infrequent Income Tax Items | (1,832 | ) | 1,033 | 1,367 | 2,740 | |||||||||||
| Adjusted Non-GAAP Provision for Income Tax Expense | $ | (16,623 | ) | $ | (17,537 | ) | $ | (51,245 | ) | $ | (49,559 | ) | ||||
| GAAP Net Income | $ | 116,281 | $ | 113,497 | $ | 317,999 | $ | 280,328 | ||||||||
| Purchased Intangibles Amortization | 1,835 | 1,921 | 5,388 | 5,712 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 960 | 341 | 3,249 | 10,503 | ||||||||||||
| Infrequent Income Tax Items | (1,832 | ) | 1,033 | 1,367 | 2,740 | |||||||||||
| Adjusted Non-GAAP Net Income | $ | 117,244 | $ | 116,792 | $ | 328,003 | $ | 299,283 | ||||||||
| GAAP EPS | $ | 1.40 | $ | 1.34 | $ | 3.82 | $ | 3.29 | ||||||||
| Purchased Intangibles Amortization | 0.02 | 0.02 | 0.06 | 0.07 | ||||||||||||
| Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs | 0.01 | 0.00 | 0.04 | 0.12 | ||||||||||||
| Infrequent Income Tax Items | (0.02 | ) | 0.01 | 0.02 | 0.03 | |||||||||||
| Adjusted Non-GAAP EPS | $ | 1.42 | $ | 1.38 | $ | 3.94 | $ | 3.51 |