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8-K - WATERS CORPORATION - WATERS CORP /DE/ | b84452e8vk.htm |
Exhibit 99.1
For Immediate Release
Contact: Gene Cassis, Vice President of Investor Relations, 508-482-2349
Waters Reports Fourth Quarter 2010 Financial Results
Milford, Massachusetts, January 25, 2011 Waters Corporation (NYSE/WAT) reported fourth quarter
2010 sales of $484 million, an increase of 13% from sales of $429 million in the fourth quarter of
2009. In the quarter, foreign currency translation was about neutral to sales growth. On a GAAP
basis, earnings per diluted share (E.P.S.) for the fourth quarter were $1.36 compared to $1.08 for
the fourth quarter of 2009. On a non-GAAP basis, including the adjustments in the attached
reconciliation, E.P.S. grew 23% to $1.38 from $1.12 in the fourth quarter of 2009.
For the full year, sales for the Company were $1.64 billion, an increase of 10% over sales of $1.50
billion in 2009 with foreign currency translation about neutral to sales growth. E.P.S. for 2010
were $4.06 compared to $3.34 in 2009. On a non-GAAP basis, including adjustments in the attached
reconciliation, E.P.S. grew 19% to $4.09 from $3.45 in 2009.
Commenting on the Companys 2010 performance, Douglas Berthiaume, Chairman, President and Chief
Executive Officer said, In the fourth quarter, a combination of
strong uptake of our new system offerings, continued business expansion in Asian
markets and an improvement in economic conditions drove sales growth. In addition, our continued focus on driving operational efficiency
contributed to both record cash generation and record earnings per share.
As communicated in a prior press release, Waters Corporation will webcast its fourth quarter 2010
financial results conference call this morning, January 25, 2011 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, 2010 at midnight eastern time, similarly
by webcast and also by phone at 402-220-9703
CAUTIONARY STATEMENT
This release may contain forward-looking statements regarding future results and events,
including statements regarding expected financial results, future growth and customer demand that
involve a number of risks and uncertainties. For this purpose, any statements that are not
statements of historical fact may be deemed forward-looking statements. Without limiting the
foregoing, the words, believes, anticipates, plans, expects, intends, appears,
estimates, projects, and similar expressions 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, the impact on demand among the Companys various market sectors from current
economic difficulties and uncertainties; increased regulatory burdens as the Companys business
evolves, especially with respect to the U.S. Securities and Exchange Commission, 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 in volatile market conditions; fluctuations in capital expenditures by the Companys
customers, in particular large pharmaceutical companies; the ability to sustain and enhance service
and consumable demand from the Companys installed base of instruments; regulatory and/or
administrative obstacles to the timely
completion of purchase order documentation; 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; 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; the impact of changes in accounting principles and practices; and foreign exchange rate
fluctuations potentially affecting translation of the Companys future non-U.S. operating results.
Such factors and others are discussed more fully in the section entitled Risk Factors of the
Companys annual report on Form 10-K for the year ended December 31, 2009 and quarterly report on
Form 10-Q for the period ended October 2, 2010 as filed with the Securities and Exchange
Commission, which Risk Factors discussion is 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 Consolidated Balance Sheets
(In thousands and unaudited)
Condensed Consolidated Balance Sheets
(In thousands and unaudited)
December 31, 2010 | December 31, 2009 | |||||||
Cash, cash equivalents and
short-term investments |
946,419 | 630,257 | ||||||
Accounts receivable |
358,237 | 314,247 | ||||||
Inventories |
204,300 | 178,666 | ||||||
Other current assets |
72,515 | 49,206 | ||||||
Total current assets |
1,581,471 | 1,172,376 | ||||||
Property, plant and equipment, net |
215,060 | 210,926 | ||||||
Other assets |
531,138 | 524,629 | ||||||
Total assets |
2,327,669 | 1,907,931 | ||||||
Notes payable and debt |
66,055 | 131,772 | ||||||
Accounts payable and accrued
expenses |
319,794 | 262,796 | ||||||
Total current liabilities |
385,849 | 394,568 | ||||||
Long-term debt |
700,000 | 500,000 | ||||||
Other long-term liabilities |
173,023 | 164,414 | ||||||
Total liabilities |
1,258,872 | 1,058,982 | ||||||
Total equity |
1,068,797 | 848,949 | ||||||
Total liabilities and equity |
2,327,669 | 1,907,931 |
Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
(Unaudited) | (Unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | |||||||||||||
Net sales |
$ | 483,578 | $ | 428,848 | $ | 1,643,371 | $ | 1,498,700 | ||||||||
Cost of sales |
189,253 | 170,131 | 653,303 | 594,882 | ||||||||||||
Gross profit |
294,325 | 258,717 | 990,068 | 903,818 | ||||||||||||
Selling and administrative expenses (1) (2) (3) (5) |
120,518 | 109,986 | 445,456 | 421,403 | ||||||||||||
Research and development expenses |
22,867 | 19,790 | 84,274 | 77,154 | ||||||||||||
Purchased intangibles amortization |
2,764 | 2,637 | 10,406 | 10,659 | ||||||||||||
Operating income |
148,176 | 126,304 | 449,932 | 394,602 | ||||||||||||
Interest expense, net |
(3,317 | ) | (1,595 | ) | (12,069 | ) | (7,950 | ) | ||||||||
Income from operations before income taxes |
144,859 | 124,709 | 437,863 | 386,652 | ||||||||||||
Provision for income taxes (4) |
18,255 | 20,586 | 56,100 | 63,339 | ||||||||||||
Net income |
$ | 126,604 | $ | 104,123 | $ | 381,763 | $ | 323,313 | ||||||||
Net income per basic common share |
$ | 1.38 | $ | 1.10 | $ | 4.13 | $ | 3.37 | ||||||||
Weighted-average number of basic common shares |
91,583 | 94,516 | 92,385 | 95,797 | ||||||||||||
Net income per diluted common share |
$ | 1.36 | $ | 1.08 | $ | 4.06 | $ | 3.34 | ||||||||
Weighted-average number of diluted common shares and equivalents |
93,344 | 96,111 | 94,057 | 96,862 |
(1) | Included in selling and administrative expenses for the three and twelve months ended December 31, 2010 are costs of less than $1 million and $2 million, respectively, associated with asset impairments related to certain Company facilities. Included in selling and administrative expenses for the twelve months ended December 31, 2009 are lease termination costs of $6 million. | |
(2) | Included in selling and administrative expenses for the three and twelve months ended December 31, 2010 are restructuring costs of less than $1 million and $1 million, respectively, related to cost reduction plans. Included in selling and administrative expenses for the three and twelve months ended December 31, 2009 are restructuring costs of $3 million and $4 million, respectively, related to cost reduction plans. | |
(3) | Included in selling and administrative expenses for the twelve months ended December 31, 2010 are costs of $3 million associated with a non-income tax audit settlement. | |
(4) | Included in the provision for income taxes for the twelve months ended December 31, 2010 is a net tax benefit of $8 million related to the reversal of a reserve for an uncertain tax position due to an audit settlement and a $2 million tax benefit related to the resolution of a pre-acquisition tax exposure. Included in the provision for income taxes for the twelve months ended December 31, 2009 is approximately $5 million of tax benefit associated with the reversal of a $5 million tax provision, which was originally recorded in 2008, related to the reorganization of certain foreign legal entities. The recognition of this tax benefit in 2009 was a result of changes in income tax regulations promulgated by the U.S. Treasury in February 2009. | |
(5) | Included in selling and administrative expenses for the twelve months ended December 31, 2009 are acquisition and other related costs of $1 million related to recent acquisitions. |
Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
(Unaudited) | (Unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | |||||||||||||
Reconciliation of net income per diluted share, in accordance with
generally accepted accounting principles, with adjusted results: |
||||||||||||||||
Net income per diluted share |
$ | 1.36 | $ | 1.08 | $ | 4.06 | $ | 3.34 | ||||||||
Adjustment for purchased intangibles amortization, net of tax |
1,985 | 1,902 | 7,497 | 7,689 | ||||||||||||
Net income per diluted share effect |
0.02 | 0.02 | 0.08 | 0.08 | ||||||||||||
Adjustment for asset impairments and lease termination costs, net of tax |
302 | | 1,761 | 3,723 | ||||||||||||
Net income per diluted share effect |
0.00 | | 0.02 | 0.04 | ||||||||||||
Adjustment for restructuring costs, net of tax |
72 | 2,033 | 823 | 2,676 | ||||||||||||
Net income per diluted share effect |
0.00 | 0.02 | 0.01 | 0.03 | ||||||||||||
Adjustment for reversal of income tax reserves upon audit settlement |
| | (7,581 | ) | | |||||||||||
Net income per diluted share effect |
| | (0.08 | ) | | |||||||||||
Adjustment for non-income tax audit settlement, net of tax |
| | 2,197 | | ||||||||||||
Net income per diluted share effect |
| | 0.02 | | ||||||||||||
Adjustment for one-time tax benefits |
| | (1,500 | ) | (4,555 | ) | ||||||||||
Net income per diluted share effect |
| | (0.02 | ) | (0.05 | ) | ||||||||||
Adjustment for acquisition-related costs, net of tax |
| | | 1,078 | ||||||||||||
Net income per diluted share effect |
| | | 0.01 | ||||||||||||
Adjusted net income per diluted share |
$ | 1.38 | $ | 1.12 | $ | 4.09 | $ | 3.45 | ||||||||
The adjusted net income per diluted share presented above is used by the management of the Company
to measure operating performance with prior periods and is not in accordance with generally
accepted accounting principles (GAAP). The above reconciliation identifies items management has
excluded as non-operational transactions, net of the effective applicable statutory tax rates.
Management has excluded the
purchased intangibles amortization, asset impairments, lease termination costs, restructuring
costs, reversal of income tax reserves upon audit settlement, non-income tax audit settlement,
one-time tax benefits and acquisition-related costs from its non-GAAP adjusted amounts since
management believes that these items are not directly related to ongoing operations, thereby
providing management and investors with information that may help them to compare ongoing operating
performance.