Waters Corporation (NYSE: WAT) Reports Second Quarter 2021 Financial Results | Financial Buzz

Waters Corporation (NYSE: WAT) Reports Second Quarter 2021 Financial Results

Waters Corporation (NYSE: WAT) today announced second quarter 2021 sales of $682 million, a 31% increase as reported, compared to sales of $520 million for the second quarter of 2020. Foreign currency translation benefited sales growth by approximately 4% for the quarter.

On a GAAP basis, diluted earnings per share (EPS) for the second quarter of 2021 increased to $2.69, compared to $1.98 for the second quarter of 2020. On a non-GAAP basis, EPS increased to $2.60, compared to $2.10 for the second quarter of 2020. 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.

On a GAAP basis, net cash provided by operating activities was $143 million for the second quarter of 2021, compared to $199 million for the second quarter of 2020. On a non-GAAP basis, adjusted free cash flow for the second quarter of 2021 was $155 million versus $175 million for the second quarter of 2020.

For the first half of 2021, the Company’s sales were $1,290 million, an increase of 31% as reported, compared to sales of $985 million for the first half of 2020. Foreign currency translation benefited sales growth by approximately 4% for the first half of 2021.

On a GAAP basis, EPS for the first half of 2021 increased to $5.05, compared to $2.83 for the first half of 2020. On a non-GAAP basis, EPS increased to $4.89, compared to $3.25 in the first half of 2020.

On a GAAP basis, net cash provided by operating activities was $361 million for the first half of 2021, compared to $350 million for the first half of 2020. On a non-GAAP basis, adjusted free cash flow for the first half of 2021 was $348 million versus $296 million for the first half of 2020.

“We are very pleased with the commercial momentum we are building, thanks to the solid execution of the Waters team and accelerated progress against our transformation initiatives,” said Dr. Udit Batra, President and Chief Executive Officer of Waters Corporation. “Our second quarter results were led by strong growth in our pharma and industrial end markets. Continued market strength, combined with our solid execution, resulted in double-digit growth in instrument and chemistry sales, with total sales increasing across every region. We have built a strong team of proven leaders committed to a common vision and continued execution as we work to more closely align our portfolio with higher growth areas.”

Unless otherwise noted, sales growth and decline percentages are presented on an as-reported basis and are the same as the sales growth and decline percentages presented on a constant-currency basis as compared with the same period in the prior year, each of which is detailed in the reconciliation of sales growth rates to constant-currency growth rates in the tables below.

During the second quarter of 2021, sales into the pharmaceutical market increased 34% as reported and 31% in constant currency, sales into the industrial market increased 33% as reported and 28% in constant currency and sales into the academic and government markets increased 10% as reported and 7% in constant currency. For the first half of 2021, sales into the pharmaceutical market increased 33% as reported and 29% in constant currency, sales into the industrial market increased 31% as reported and 26% in constant currency and sales into the academic and government markets increased 20% as reported and 17% in constant currency.

During the second quarter, recurring revenues, which represent the combination of service and precision chemistries revenues, increased 22% as reported and 18% in constant currency, while instrument system sales increased 43% as reported and 40% in constant currency. For the first half of 2021, recurring revenues increased 21% as reported and 17% in constant currency, while instrument system sales increased 46% as reported and 42% in constant currency.

Geographically, sales in Asia during the quarter increased 30% as reported and 28% in constant currency, sales in the Americas increased 29% as reported and 28% in constant currency (with U.S. sales growing 26%) and sales in Europe increased 36% as reported and 25% in constant currency. For the first half of 2021, sales in Asia increased 36% as reported and 34% in constant currency, sales in the Americas increased 22% as reported and 21% in constant currency (with U.S. sales growing 19%) and sales in Europe increased 36% as reported and 25% in constant currency.

Third Quarter and Fiscal Year 2021 Financial Outlook

The Company expects full-year 2021 constant-currency sales growth in the range of 13% to 15%. Currency translation is expected to increase full-year sales growth by one to two percentage points. The Company also expects full-year 2021 non-GAAP EPS in the range of $10.50 to $10.70. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full-year.

The Company expects third quarter 2021 constant-currency sales growth in the range of 7% to 9%. Currency translation is expected to increase third quarter sales growth by approximately one percentage point. The Company also expects third quarter 2021 non-GAAP EPS in the range of $2.25 to $2.35. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the third quarter.

Conference Call

Waters Corporation will webcast its second quarter 2021 financial results conference call today, August 3, 2021 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 August 10, 2021 at midnight Eastern Time on the same website by webcast and also by phone at (888) 566-0486.

About Waters Corporation

Waters Corporation (NYSE: WAT), the world’s leading specialty measurement company, has pioneered chromatography, mass spectrometry and thermal analysis innovations serving the life, materials and food sciences for more than 60 years. With more than 7,400 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 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 the effects of the ongoing COVID-19 pandemic on our business, financial condition, results of operations and prospects, including: portions of our global workforce being unable to work fully and/or effectively due to working remotely, illness, quarantines, government actions, facility closures or other reasons related to the pandemic, increased risks of cyber-attacks resulting from our temporary remote working model, disruptions in our manufacturing capabilities or to our supply chain, volatility and uncertainty in global capital markets limiting our ability to access capital, customers being unable to make timely payments for purchases and volatility in demand for our products; foreign exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results; the impact on demand for the Company’s products among the Company’s various market sectors or geographies from economic, sovereign and political uncertainties, particularly regarding the effect of new or proposed tariff or trade regulations or changes in the interpretation or enforcement of existing regulations; the effect on the Company’s financial results from the United Kingdom exiting the European Union; 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 for the Company’s products 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 effect of the adoption of new accounting standards; the ability to access capital, maintain liquidity and service the Company’s 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, 2020, as well as in the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” of the Company’s quarterly report on Form 10-Q for the quarterly period ended April 3, 2021, 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)
(Unaudited)
 
 
Three Months Ended Six Months Ended
July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
 
Net sales

$

681,647

 

$

519,984

 

$

1,290,192

 

$

984,923

 

 
Costs and operating expenses:
Cost of sales

 

280,254

 

 

213,134

 

 

534,401

 

 

423,778

 

Selling and administrative expenses

 

158,213

 

 

117,449

 

 

301,409

 

 

265,184

 

Research and development expenses

 

44,949

 

 

31,155

 

 

83,041

 

 

66,144

 

Purchased intangibles amortization

 

1,809

 

 

2,618

 

 

3,649

 

 

5,243

 

Litigation provision

 

 

 

514

 

 

 

 

1,180

 

 
Operating income

 

196,422

 

 

155,114

 

 

367,692

 

 

223,394

 

 
Other income (expense), net (a)

 

9,321

 

 

(736

)

 

18,680

 

 

(1,110

)

Interest expense, net

 

(8,329

)

 

(9,015

)

 

(15,174

)

 

(19,058

)

 
Income from operations before income taxes

 

197,414

 

 

145,363

 

 

371,198

 

 

203,226

 

 
Provision for income taxes

 

30,122

 

 

22,434

 

 

55,779

 

 

26,735

 

 
Net income

$

167,292

 

$

122,929

 

$

315,419

 

$

176,491

 

 
 
Net income per basic common share

$

2.71

 

$

1.98

 

$

5.09

 

$

2.84

 

 
Weighted-average number of basic common shares

 

61,685

 

 

61,944

 

 

61,979

 

 

62,085

 

 
 
Net income per diluted common share

$

2.69

 

$

1.98

 

$

5.05

 

$

2.83

 

 
Weighted-average number of diluted common shares and equivalents

 

62,157

 

 

62,184

 

 

62,435

 

 

62,404

 

 
(a) During the three and six months ended July 3, 2021, the Company executed a settlement agreement to resolve patent infringement litigation with Bruker Corporation and Bruker Daltronik GmbH regarding their timsTOF product line. In connection with the settlement, the Company is entitled to receive $10 million in guaranteed payments, including minimum royalty payments, which was recognized within Other income (expense), net in our consolidated statement of operations. During the six months ended July 3, 2021, the Company recorded an unrealized gain of $10 million due to an observable change in the fair value of an existing investment the Company does not have the ability to exercise significant influence over.
 
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segments, Products & Services, Geography and Markets
Three Months Ended July 3, 2021 and June 27, 2020
(In thousands)
Current
Period Constant
Three Months Ended Percent Currency Currency
July 3, 2021 June 27, 2020 Change Impact Growth Rate (a)
 
NET SALES – OPERATING SEGMENTS
 
Waters $

607,324

$

465,709

30

%

$

17,199

27

%

TA

74,323

54,275

37

%

2,440

32

%

 
Total $

681,647

$

519,984

31

%

$

19,639

27

%

 
 
NET SALES – PRODUCTS & SERVICES
 
Instruments $

314,496

$

219,815

43

%

$

5,970

40

%

 
Service

240,692

205,064

17

%

8,910

13

%

Chemistry

126,459

95,105

33

%

4,759

28

%

Total Recurring

367,151

300,169

22

%

13,669

18

%

 
Total $

681,647

$

519,984

31

%

$

19,639

27

%

 
 
NET SALES – GEOGRAPHY
 
Asia $

269,947

$

208,209

30

%

$

2,946

28

%

Americas

224,894

174,782

29

%

1,019

28

%

Europe

186,806

136,993

36

%

15,674

25

%

 
Total $

681,647

$

519,984

31

%

$

19,639

27

%

 
 
NET SALES – MARKETS
 
Pharmaceutical $

416,705

$

311,018

34

%

$

10,572

31

%

Industrial

202,579

152,110

33

%

7,288

28

%

Academic & Government

62,363

56,856

10

%

1,779

7

%

 
Total $

681,647

$

519,984

31

%

$

19,639

27

%

 
 
NET SALES – EXCLUDING CHINA
 
Total Net Sales $

681,647

$

519,984

31

%

$

19,639

27

%

China Net Sales

127,225

89,816

42

%

4,069

37

%

 
Total Net Sales Excluding China $

554,422

$

430,168

29

%

$

15,570

25

%

 
 
(a) The Company believes that referring to comparable constant-currency growth rates is a useful way to evaluate the underlying performance of Waters Corporation’s net sales. Constant-currency growth rate, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, ignoring the impact of foreign currency exchange rates during the current period. See description of non-GAAP financial measures contained in this release.
 
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segments, Products & Services, Geography and Markets
Six Months Ended July 3, 2021 and June 27, 2020
(In thousands)
Current
Period Constant
Six Months Ended Percent Currency Currency
July 3, 2021 June 27, 2020 Change Impact Growth Rate (a)
 
NET SALES – OPERATING SEGMENTS
 
Waters $

1,149,202

$

879,920

31

%

$

35,220

27

%

TA

140,990

105,003

34

%

4,257

30

%

 
Total $

1,290,192

$

984,923

31

%

$

39,477

27

%

 
 
NET SALES – PRODUCTS & SERVICES
 
Instruments $

577,544

$

396,753

46

%

$

12,904

42

%

 
Service

467,215

395,820

18

%

17,634

14

%

Chemistry

245,433

192,350

28

%

8,939

23

%

Total Recurring

712,648

588,170

21

%

26,573

17

%

 
Total $

1,290,192

$

984,923

31

%

$

39,477

27

%

 
 
NET SALES – GEOGRAPHY
 
Asia $

499,489

$

367,289

36

%

$

8,043

34

%

Americas

422,251

346,958

22

%

1,476

21

%

Europe

368,452

270,676

36

%

29,958

25

%

 
Total $

1,290,192

$

984,923

31

%

$

39,477

27

%

 
 
NET SALES – MARKETS
 
Pharmaceutical $

776,853

$

583,581

33

%

$

22,362

29

%

Industrial

385,852

295,464

31

%

13,264

26

%

Academic & Government

127,487

105,878

20

%

3,851

17

%

 
Total $

1,290,192

$

984,923

31

%

$

39,477

27

%

 
 
NET SALES – EXCLUDING CHINA
 
Total Net Sales $

1,290,192

$

984,923

31

%

$

39,477

27

%

China Net Sales

230,144

137,047

68

%

8,095

62

%

 
Total Net Sales Excluding China $

1,060,048

$

847,876

25

%

$

31,382

21

%

 
 
(a) The Company believes that referring to comparable constant-currency growth rates is a useful way to evaluate the underlying performance of Waters Corporation’s net sales. Constant-currency growth rate, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, ignoring the impact of foreign currency exchange rates during the current period. See description of non-GAAP financial measures contained in this release.
Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP Financials
Three and Six Months Ended July 3, 2021 and June 27, 2020
(In thousands, except per share data)
 
Income from
Operations
Selling & Operating Other before Provision for Diluted
Administrative Operating Income Income Income Income Net Earnings
Expenses(a) Income Percentage (Expense) Taxes Taxes Income per Share
Three Months Ended July 3, 2021
GAAP $

160,022

 

$

196,422

28.8

%

$

9,321

 

$

197,414

 

$

30,122

 

$

167,292

 

$

2.69

 

Adjustments:
Purchased intangibles amortization (b)

(1,809

)

1,809

0.3

%

 

1,809

 

411

 

1,398

 

0.02

 

Restructuring costs and certain other items (c)

(614

)

614

0.1

%

 

614

 

44

 

570

 

0.01

 

Litigation settlement (d)

 

 

(10,083

)

(10,083

)

(1,916

)

(8,167

)

(0.13

)

Certain income tax items (e)

 

 

 

 

(594

)

594

 

0.01

 

Adjusted Non-GAAP $

157,599

 

$

198,845

29.2

%

$

(762

)

$

189,754

 

$

28,067

 

$

161,687

 

$

2.60

 

 
Three Months Ended June 27, 2020
GAAP $

120,581

 

$

155,114

29.8

%

$

(736

)

$

145,363

 

$

22,434

 

$

122,929

 

$

1.98

 

Adjustments:
Purchased intangibles amortization (b)

(2,618

)

2,618

0.5

%

 

2,618

 

515

 

2,103

 

0.03

 

Restructuring costs and certain other items (c)

(5,763

)

5,763

1.1

%

(152

)

5,611

 

1,084

 

4,527

 

0.07

 

Litigation provision (d)

(514

)

514

0.1

%

 

514

 

123

 

391

 

0.01

 

Certain income tax items (e)

 

 

 

 

(507

)

507

 

0.01

 

Adjusted Non-GAAP $

111,686

 

$

164,009

31.5

%

$

(888

)

$

154,106

 

$

23,649

 

$

130,457

 

$

2.10

 

 
Six Months Ended July 3, 2021
GAAP $

305,058

 

$

367,692

28.5

%

$

18,680

 

$

371,198

 

$

55,779

 

$

315,419

 

$

5.05

 

Adjustments:
Purchased intangibles amortization (b)

(3,649

)

3,649

0.3

%

 

3,649

 

825

 

2,824

 

0.05

 

Restructuring costs and certain other items (c)

(1,484

)

1,484

0.1

%

(9,707

)

(8,223

)

(2,076

)

(6,147

)

(0.10

)

Litigation settlement (d)

 

 

(10,083

)

(10,083

)

(1,916

)

(8,167

)

(0.13

)

Certain income tax items (e)

 

 

 

 

(1,144

)

1,144

 

0.02

 

Adjusted Non-GAAP $

299,925

 

$

372,825

28.9

%

$

(1,110

)

$

356,541

 

$

51,468

 

$

305,073

 

$

4.89

 

 
Six Months Ended June 27, 2020
GAAP $

271,607

 

$

223,394

22.7

%

$

(1,110

)

$

203,226

 

$

26,735

 

$

176,491

 

$

2.83

 

Adjustments:
Purchased intangibles amortization (b)

(5,243

)

5,243

0.5

%

 

5,243

 

1,037

 

4,206

 

0.07

 

Restructuring costs and certain other items (c)

(26,283

)

26,283

2.7

%

(461

)

25,822

 

5,681

 

20,141

 

0.32

 

Litigation provision (d)

(1,180

)

1,180

0.1

%

 

1,180

 

283

 

897

 

0.01

 

Certain income tax items (e)

 

 

 

 

(882

)

882

 

0.01

 

Adjusted Non-GAAP $

238,901

 

$

256,100

26.0

%

$

(1,571

)

$

235,471

 

$

32,854

 

$

202,617

 

$

3.25

 

 
 
(a) Selling & administrative expenses include purchased intangibles amortization, litigation provisions and settlements and asset impairments.
(b) The purchased intangibles amortization, a non-cash expense, was excluded to be consistent with how management evaluates the performance of its core business against historical operating results and the operating results of competitors over periods of time.
(c) Restructuring costs, mergers and acquisition costs and certain other items were excluded as the Company believes that the cost to consolidate operations, reduce overhead, acquire companies and certain other income or expense items are not normal and do not represent future ongoing business expenses of a specific function or geographic location of the Company.
(d) Litigation settlement gains and provisions were excluded as these items are isolated, unpredictable and not expected to recur regularly.
(e) Certain income tax items were excluded as these non-cash expenses and benefits represent updates in management’s assessment of ongoing examinations or other tax items that are not indicative of the Company’s normal or future income tax expense.
Waters Corporation and Subsidiaries
Preliminary Condensed Unclassified Consolidated Balance Sheets
(In thousands and unaudited)
 
 
 
July 3, 2021 December 31, 2020
 
Cash, cash equivalents and investments

$

663,622

$

443,146

Accounts receivable

 

543,072

 

573,316

Inventories

 

348,770

 

304,281

Property, plant and equipment, net

 

527,135

 

494,003

Intangible assets, net

 

246,836

 

258,645

Goodwill

 

439,826

 

444,362

Other assets

 

334,386

 

322,167

Total assets

$

3,103,647

$

2,839,920

 
 
Notes payable and debt

$

1,603,367

$

1,356,515

Other liabilities

 

1,232,007

 

1,251,261

Total liabilities

 

2,835,374

 

2,607,776

 
Total stockholders’ equity

 

268,273

 

232,144

Total liabilities and stockholders’ equity

$

3,103,647

$

2,839,920

Waters Corporation and Subsidiaries
Preliminary Condensed Consolidated Statements of Cash Flows
Three and Six Months Ended July 3, 2021 and June 27, 2020
(In thousands and unaudited)
 
Three Months Ended Six Months Ended
July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
 
Cash flows from operating activities:
Net income

$

167,292

 

$

122,929

 

$

315,419

 

$

176,491

 

Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation

 

7,291

 

 

8,926

 

 

15,596

 

 

18,122

 

Depreciation and amortization

 

33,387

 

 

31,015

 

 

64,743

 

 

60,203

 

Change in operating assets and liabilities, net

 

(64,930

)

 

35,941

 

 

(34,314

)

 

95,630

 

Net cash provided by operating activities

 

143,040

 

 

198,811

 

 

361,444

 

 

350,446

 

 
Cash flows from investing activities:
Additions to property, plant, equipment and software capitalization

 

(37,386

)

 

(45,899

)

 

(76,889

)

 

(97,029

)

Business acquisitions, net of cash acquired

 

 

 

 

 

 

 

(76,664

)

Investment in unaffiliated companies

 

 

 

(3,350

)

 

 

 

(3,350

)

Payments for intellectual property licenses

 

(7,000

)

 

 

 

(7,000

)

 

 

Net change in investments

 

(77,716

)

 

(12,911

)

 

(197,217

)

 

(15,292

)

Net cash used in investing activities

 

(122,102

)

 

(62,160

)

 

(281,106

)

 

(192,335

)

 
Cash flows from financing activities:
Net change in debt

 

(100,000

)

 

(200,000

)

 

246,363

 

 

14,634

 

Proceeds from stock plans

 

28,741

 

 

2,996

 

 

45,036

 

 

14,739

 

Purchases of treasury shares

 

(168,202

)

 

(71

)

 

(341,507

)

 

(196,297

)

Other cash flow from financing activities, net

 

2,495

 

 

4,791

 

 

1,917

 

 

7,558

 

Net cash used in financing activities

 

(236,966

)

 

(192,284

)

 

(48,191

)

 

(159,366

)

 
Effect of exchange rate changes on cash and cash equivalents

 

(7,699

)

 

4,608

 

 

(8,786

)

 

4,576

 

(Decrease) increase in cash and cash equivalents

 

(223,727

)

 

(51,025

)

 

23,361

 

 

3,321

 

 
Cash and cash equivalents at beginning of period

 

683,783

 

 

390,061

 

 

436,695

 

 

335,715

 

Cash and cash equivalents at end of period

$

460,056

 

$

339,036

 

$

460,056

 

$

339,036

 

 
 
 
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a)
 
 
Net cash provided by operating activities – GAAP

$

143,040

 

$

198,811

 

$

361,444

 

$

350,446

 

 
Adjustments:
Additions to property, plant, equipment and software capitalization

(37,386

)

(45,899

)

(76,889

)

(97,029

)
Tax reform payments

 

38,454

 

 

 

 

38,454

 

 

 

Litigation settlement received

 

(3,367

)

 

 

 

(3,367

)

 

 

Major facility renovations

 

13,795

 

 

22,524

 

 

28,285

 

 

43,067

 

Free Cash Flow – Adjusted Non-GAAP

$

154,536

 

$

175,436

 

$

347,927

 

$

296,484

 

 
(a) The Company defines free cash flow as net cash flow from operations accounted for under GAAP less capital expenditures and software capitalizations plus or minus any unusual and non recurring items. Free cash flow is not a GAAP measurement and may not be comparable to free cash flow reported by other companies.
 
Waters Corporation and Subsidiaries
Reconciliation of Projected GAAP to Adjusted Non-GAAP Financial Outlook
 
 
Three Months Ended Twelve Months Ended
October 2, 2021 December 31, 2021
Range Range
Projected Sales
 
Projected constant-currency sales growth rate (a)

7%

9%

13%

15%

 

Projected currency impact

1%

1%

1%

2%

 
Projected sales growth rate as reported

8%

10%

14%

17%

 
 
Projected Earnings Per Diluted Share Range Range
 
 
Projected GAAP earnings per diluted share

$

2.22

 

$

2.32

 

$

10.60

 

$

10.80

 

Adjustments:
Purchased intangibles amortization

$

0.02

 

$

0.02

 

$

0.09

 

$

0.09

 

Restructuring costs and certain other items

$

 

$

 

$

(0.10

)

$

(0.10

)

Litigation settlement

$

 

$

 

$

(0.13

)

$

(0.13

)

Certain income tax items

$

0.01

 

$

0.01

 

$

0.04

 

$

0.04

 

Projected adjusted non-GAAP earnings per diluted share

$

2.25

 

$

2.35

 

$

10.50

 

$

10.70

 

 
(a) Constant-currency growth rates are a non-GAAP financial measure that measures the change in net sales between current and prior year periods, ignoring the impact of foreign currency exchange rates during the current period. These amounts are estimated at the current foreign currency exchange rates and based on the forecasted geographical sales in local currency, as well as an assessment of market conditions as of today, and may differ significantly from actual results.
 
These forward-looking adjustment estimates do not reflect future gains and charges that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance.

 

Contacts

John Lynch, Vice President, Treasurer – (508) 482-2314

Caspar Tudor, Manager, Investor Relations – (508) 482-2429

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