Waters Corporation (NYSE:WAT) reported today first quarter 2015
sales of $460 million, an increase of 7% in comparison to sales of
$431 million in the first quarter of 2014. Foreign currency
translation reduced sales growth by 8%. On a GAAP basis, earnings
per diluted share (EPS) for the first quarter of 2015 were $1.15
compared to $0.82 for the first quarter of 2014. On a non-GAAP
basis, including the adjustments in the attached reconciliation,
EPS were up 32% to $1.21 compared to $0.92 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".
Commenting on the quarter, Douglas A. Berthiaume, Chairman,
President, and Chief Executive Officer, said, “Broad-based end
customer, product and geographical demand characterized our
exceptional organic revenue growth in the first quarter. In
addition, increased operating margins contributed to strong
double-digit growth in our adjusted earnings per share and solid
cash generation.”
As communicated in a prior press release, Waters Corporation
will webcast its first quarter 2015 financial results conference
call this morning, April 28, 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 May 5, 2015 at midnight eastern time, similarly
by webcast and also by phone at 203-369-3616.
About Waters Corporation
For over 50 years, Waters Corporation (NYSE:WAT) has created
business advantages for laboratory-dependent organizations by
delivering practical and sustainable innovation to enable
significant advancements in such areas as healthcare delivery,
environmental management, food safety and water quality
worldwide.
Pioneering a connected portfolio of separations science,
laboratory information management, mass spectrometry and thermal
analysis, Waters technology breakthroughs and laboratory solutions
provide an enduring platform for customer success.
With revenue of $1.99 billion in 2014, Waters is driving
scientific discovery and operational excellence for customers
worldwide.
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, uncertainties relating
to organizational/leadership transition plans; 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; 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; risks associated with
lawsuits and other legal actions, particularly involving claims for
infringement of patents and other intellectual property rights; and
foreign exchange rate fluctuations potentially affecting
translation of the Company’s future non-U.S. operating results.
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 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
SubsidiariesCondensed Unclassified Consolidated Balance Sheets(In
thousands and unaudited)
April 4, 2015 December 31, 2014 Cash, cash
equivalents and investments 2,109,045 2,055,388 Accounts receivable
394,370 433,616 Inventories 257,530 246,430 Property, plant and
equipment, net 316,814 321,583 Intangible assets, net 213,108
232,371 Goodwill 350,021 354,838 Other assets 231,838 233,708 Total
assets 3,872,726 3,877,934 Notes payable and debt
1,485,316 1,465,243 Other liabilities 525,170 518,025 Total
liabilities 2,010,486 1,983,268 Total equity 1,862,240
1,894,666 Total liabilities and equity 3,872,726 3,877,934
Waters Corporation and
SubsidiariesConsolidated Statements of Operations(In thousands,
except per share data)(Unaudited) (Unaudited) Three Months
Ended April 4, 2015 March 29, 2014 Net sales $ 460,404 $
430,508 Cost of sales 189,246 187,719 Gross profit 271,158
242,789 Selling and administrative expenses 119,751 126,635
Research and development expenses 28,951 24,746 Purchased
intangibles amortization 2,474 2,647 Operating income
119,982 88,761 Interest expense, net (6,635 ) (6,031 )
Income from operations before income taxes 113,347 82,730
Provision for income tax expense 17,286 12,428 Net
income $ 96,061 $ 70,302 Net income per basic common
share $ 1.16 $ 0.83 Weighted-average number of basic common
shares 83,025 84,977 Net income per diluted common
share $ 1.15 $ 0.82 Weighted-average number of diluted
common shares and equivalents 83,752 85,873
Waters Corporation and
SubsidiariesQuarterly Reconciliation of GAAP to Adjusted
Non-GAAP Financials(in thousands, except per share
data)
The 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, help management and investors gain a
better understanding of our 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:
- Purchased Intangibles Amortization was
excluded to allow for comparisons of operating results that are
consistent over periods of time.
- Restructuring Costs, Asset Impairments,
Acquisition-Related Costs and Other One-Time Costs were excluded as
the Company believes that costs to consolidate operations, reduce
overhead and complete acquisitions are infrequent or unusual and
are not indicative of normal operating costs.
- Infrequent Income Tax Items were
excluded as these costs and benefits are typically the result of
audit examination settlements, updates in management's assessment
of ongoing examinations or other unusual tax items and are not
indicative of the Company’s normal or future income tax
expense.
(Unaudited)
Three Months Ended April 4, 2015 March 29,
2014 GAAP Selling and Administrative Expenses (including
Purchased Intangibles Amortization) $ (122,225 ) $ (129,282 )
Purchased Intangibles Amortization 2,474 2,647 Restructuring Costs,
Asset Impairments, Acquisitions & Other One-Time Costs
1,272 8,318
Adjusted Non-GAAP Selling & Administrative Expenses
$ (118,479 ) $ (118,317 )
GAAP Operating Income $ 119,982 $ 88,761 Purchased
Intangibles Amortization 2,474 2,647 Restructuring Costs, Asset
Impairments, Acquisitions & Other One-Time Costs
1,272 8,318
Adjusted Non-GAAP Operating Income $
123,728 $ 99,726 GAAP
Provision for Income Tax Expense $ (17,286 ) $ (12,428 ) Purchased
Intangibles Amortization (704 ) (743 ) Restructuring Costs, Asset
Impairments, Acquisitions & Other One-Time Costs (363 ) (2,760
) Infrequent Income Tax Items
2,406 857 Adjusted Non-GAAP
Provision for Income Tax Expense $
(15,947 ) $ (15,074 ) GAAP Net Income $
96,061 $ 70,302 Purchased Intangibles Amortization 1,770 1,904
Restructuring Costs, Asset Impairments, Acquisitions & Other
One-Time Costs 909 5,558 Infrequent Income Tax Items
2,406 857
Adjusted Non-GAAP Net Income $ 101,146
$ 78,621 GAAP EPS $ 1.15
$ 0.82 Purchased Intangibles Amortization 0.02 0.02 Restructuring
Costs, Asset Impairments, Acquisitions & Other One-Time Costs
0.01 0.06 Infrequent Income Tax Items
0.03 0.01 Adjusted
Non-GAAP EPS $ 1.21
$ 0.92
Waters CorporationJohn Lynch, 508-482-2314Vice President,
Treasurer and Investor Relations
Waters (NYSE:WAT)
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