UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 28, 2015
Waters Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction
of Incorporation)
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01-14010 |
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13-3668640 |
(Commission
File Number) |
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(IRS Employer
Identification No.) |
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34 Maple Street, Milford, Massachusetts |
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01757 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(508) 478-2000
(Registrants Telephone Number, Including Area Code)
N/A
(Former Name or
Former Address, if Changed Since Last Report)
Check the appropriate box below
if the Form 8-K filing is intended to satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 |
Results of Operations and Financial Condition |
On July 28, 2015, Waters Corporation
announced its results of operations for the quarter ended July 4, 2015. A copy of the related press release is attached hereto as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference in its entirety.
Item 9.01 Financial Statements and Exhibits
Exhibit 99.1 Waters Corporation press release dated July 28, 2015 for the quarter ended July 4, 2015.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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WATERS CORPORATION |
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Dated: July 28, 2015 |
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By: |
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/s/ Eugene G. Cassis |
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Name: |
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Eugene G. Cassis |
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Title: |
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Corporate Vice President and Chief Financial Officer |
Exhibit 99.1
For Immediate Release
Contact: John Lynch, Vice President,
Treasurer and Investor Relations, 508-482-2314
Waters Reports Second Quarter 2015 Financial Results
Milford, Massachusetts, July 28, 2015 - Waters Corporation (NYSE/WAT) reported today second quarter 2015 sales of $495 million, an increase of 3% in
comparison to sales of $482 million in the second quarter of 2014. Foreign currency translation reduced sales growth by 7%. On a GAAP basis, earnings per diluted share (EPS) for the second quarter of 2015 were $1.27 compared to $1.13 for the second
quarter of 2014. On a non-GAAP basis, including the adjustments in the attached reconciliation, EPS were up 8% to $1.32 compared to $1.22 in the prior year quarter. A description and reconciliation of GAAP to non-GAAP EPS is attached and can be
found on the Companys website at http://www.waters.com under the caption Investors.
Through the first six months of 2015, sales
for the Company were $955 million, up 5% compared with sales of $912 million in the first six months of 2014. Foreign currency translation decreased sales growth during the first half of 2015 by 7%. On a GAAP basis, EPS for the first six months of
2015 were $2.41 compared to $1.95 for the comparable period in 2014. On a non-GAAP basis and including adjustments on the attached reconciliation, EPS were $2.52 in the first six months of 2015 as compared to $2.13 in 2014.
Commenting on the quarter, Douglas A. Berthiaume, Chairman, President, and Chief Executive Officer, said, Our strong performance in the second quarter
and first half of 2015 demonstrates the power of our technology-focused strategy and commitment to customer support. It also showcases our ability to continuously bring new innovations into the market while maintaining strong margins and strong free
cash flow.
As communicated in a prior press release, Waters Corporation will webcast its second quarter 2015 financial results conference call this
morning, July 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 August 4, 2015 at
midnight eastern time, similarly by webcast and also by phone at 203-369-1489.
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 Companys 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; foreign
exchange rate fluctuations potentially affecting translation of the Companys future non-U.S. operating results; the impact on demand among the Companys various market sectors from economic, sovereign and political uncertainties;
fluctuations in expenditures by the Companys 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 Companys customers; increased regulatory burdens as the Companys 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 Companys 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 Companys
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 Companys annual report on Form
10-K for the year ended December 31, 2014 and Form 10-Q for the period ended April 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 Companys estimates or views as of the date of this release report and should not be relied upon as representing the Companys
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)
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July 4, 2015 |
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December 31, 2014 |
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Cash, cash equivalents and investments |
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2,208,893 |
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2,055,388 |
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Accounts receivable |
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406,583 |
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433,616 |
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Inventories |
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272,932 |
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246,430 |
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Property, plant and equipment, net |
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324,896 |
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321,583 |
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Intangible assets, net |
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223,160 |
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232,371 |
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Goodwill |
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353,340 |
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354,838 |
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Other assets |
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239,040 |
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233,708 |
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Total assets |
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4,028,844 |
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3,877,934 |
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Notes payable and debt |
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1,560,297 |
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1,465,243 |
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Other liabilities |
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535,949 |
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518,025 |
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Total liabilities |
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2,096,246 |
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1,983,268 |
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Total equity |
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1,932,598 |
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1,894,666 |
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Total liabilities and equity |
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4,028,844 |
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3,877,934 |
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Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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July 4, 2015 |
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June 28, 2014 |
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July 4, 2015 |
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June 28, 2014 |
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Net sales |
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$ |
494,740 |
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$ |
481,801 |
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$ |
955,144 |
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$ |
912,309 |
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Cost of sales |
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208,707 |
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201,853 |
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397,953 |
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389,572 |
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Gross profit |
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286,033 |
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279,948 |
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557,191 |
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522,737 |
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Selling and administrative expenses |
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122,660 |
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131,930 |
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242,411 |
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258,565 |
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Research and development expenses |
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30,555 |
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26,977 |
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59,506 |
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51,723 |
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Purchased intangibles amortization |
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2,500 |
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2,646 |
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4,974 |
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5,293 |
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Operating income |
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130,318 |
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118,395 |
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250,300 |
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207,156 |
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Interest expense, net |
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(6,546 |
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(6,271 |
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(13,181 |
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(12,302 |
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Income from operations before income taxes |
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123,772 |
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112,124 |
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237,119 |
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194,854 |
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Provision for income tax expense |
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18,115 |
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15,595 |
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35,401 |
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28,023 |
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Net income |
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$ |
105,657 |
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$ |
96,529 |
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$ |
201,718 |
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$ |
166,831 |
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Net income per basic common share |
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$ |
1.28 |
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$ |
1.14 |
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$ |
2.44 |
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$ |
1.97 |
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Weighted-average number of basic common shares |
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82,564 |
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84,462 |
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82,798 |
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84,731 |
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Net income per diluted common share |
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$ |
1.27 |
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$ |
1.13 |
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$ |
2.41 |
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$ |
1.95 |
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Weighted-average number of diluted common shares and equivalents |
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83,332 |
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85,177 |
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83,551 |
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85,538 |
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Waters Corporation and Subsidiaries
Quarterly 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, helps management and investors gain a better understanding of the Companys core operating results, and is consistent with how management measures performance for purposes of executive compensation and forecasts the
Companys performance. The reconciliation identifies items management has excluded as non-operational items. Management has excluded the following items:
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Purchased Intangibles Amortization was excluded to allow for comparisons of operating results that are consistent over periods of time. |
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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. |
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Infrequent Income Tax Items were excluded as these costs and benefits are typically the result of audit examination settlements, updates in managements assessment of ongoing examinations or other unusual tax items
and are not indicative of the Companys normal or future income tax expense. |
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(Unaudited) |
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Three Months Ended |
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Six Months Ended |
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July 4, 2015 |
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June 28, 2014 |
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July 4, 2015 |
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June 28, 2014 |
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GAAP Selling and Administrative Expenses (including Purchased Intangibles Amortization) |
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$ |
(125,160 |
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$ |
(134,576 |
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$ |
(247,385 |
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$ |
(263,858 |
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Purchased Intangibles Amortization |
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2,500 |
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2,646 |
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4,974 |
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5,293 |
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Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs |
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2,016 |
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6,048 |
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3,288 |
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14,366 |
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Adjusted Non-GAAP Selling & Administrative Expenses |
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$ |
(120,644 |
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$ |
(125,882 |
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$ |
(239,123 |
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$ |
(244,199 |
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GAAP Operating Income |
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$ |
130,318 |
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$ |
118,395 |
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$ |
250,300 |
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$ |
207,156 |
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Purchased Intangibles Amortization |
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2,500 |
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2,646 |
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4,974 |
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5,293 |
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Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs |
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2,016 |
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6,048 |
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3,288 |
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14,366 |
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Adjusted Non-GAAP Operating Income |
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$ |
134,834 |
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$ |
127,089 |
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$ |
258,562 |
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$ |
226,815 |
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GAAP Provision for Income Tax Expense |
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$ |
(18,115 |
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$ |
(15,595 |
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$ |
(35,401 |
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$ |
(28,023 |
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Purchased Intangibles Amortization |
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(717 |
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(759 |
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(1,421 |
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(1,502 |
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Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs |
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(636 |
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(1,444 |
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(999 |
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(4,204 |
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Infrequent Income Tax Items |
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793 |
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850 |
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3,199 |
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1,707 |
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Adjusted Non-GAAP Provision for Income Tax Expense |
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$ |
(18,675 |
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$ |
(16,948 |
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$ |
(34,622 |
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$ |
(32,022 |
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GAAP Net Income |
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$ |
105,657 |
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$ |
96,529 |
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$ |
201,718 |
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$ |
166,831 |
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Purchased Intangibles Amortization |
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1,783 |
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1,887 |
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3,553 |
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3,791 |
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Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs |
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1,380 |
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4,604 |
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2,289 |
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10,162 |
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Infrequent Income Tax Items |
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793 |
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850 |
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3,199 |
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1,707 |
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Adjusted Non-GAAP Net Income |
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$ |
109,613 |
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$ |
103,870 |
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$ |
210,759 |
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$ |
182,491 |
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GAAP EPS |
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$ |
1.27 |
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$ |
1.13 |
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$ |
2.41 |
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$ |
1.95 |
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Purchased Intangibles Amortization |
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0.02 |
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0.02 |
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0.04 |
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0.04 |
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Restructuring Costs, Asset Impairments, Acquisition-Related Costs & Other One-Time Costs |
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0.02 |
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0.05 |
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0.03 |
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0.12 |
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Infrequent Income Tax Items |
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0.01 |
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0.01 |
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0.04 |
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0.02 |
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Adjusted Non-GAAP EPS |
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$ |
1.32 |
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$ |
1.22 |
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$ |
2.52 |
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$ |
2.13 |
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