Exhibit 99.1

For Immediate Release

Contact: Bryan Brokmeier, CFA, Senior Director, Investor Relations, 508-482-3448

Waters Corporation (NYSE: WAT) Reports Third Quarter 2018 Financial Results

 

   

Sales of $578 million grew 2% as reported and 3% in constant currency

 

   

All end markets contributed to sales growth

 

   

Strong growth from China, partially offset by softness in Europe

 

   

GAAP EPS increased 8% to $1.83; non-GAAP EPS increased 8% to $1.92

Milford, Mass., October 23, 2018—Waters Corporation (NYSE: WAT) today announced third quarter 2018 sales of $578 million, a 2% increase as reported, versus sales of $566 million for the third quarter of 2017. Foreign currency translation decreased sales growth by approximately 1% for the quarter.

On a GAAP basis, diluted earnings per share (EPS) for the third quarter of 2018 increased 8% to $1.83, compared to $1.69 for the third quarter of 2017. On a non-GAAP basis, EPS increased 8% to $1.92, compared to $1.77 for the third quarter of 2017. A description and reconciliation of GAAP to non-GAAP results appear in the table below and can be found on the Company’s website at http://www.waters.com under the caption “Investors.”

On a GAAP basis, net cash provided by operating activities for the third quarter of 2018 decreased to $146 million from $154 million for the third quarter of 2017. On a non-GAAP basis, adjusted free cash flow increased to $136 million from $134 million for the third quarter of 2017.

For the first nine months of 2018, the Company’s sales were $1,705 million, up 5% as reported, compared with sales of $1,622 million for the first nine months of 2017. Foreign currency translation increased sales growth by approximately 2% during the first nine months of 2018. On a GAAP basis, EPS for the first nine months of 2018 was up 13% to $5.21, compared to $4.63 for the first nine months of 2017. On a non-GAAP basis, and including adjustments in the reconciliation below, EPS increased 9% to $5.45, compared to $4.98 for the first nine months of 2017.

On a GAAP basis, net cash provided by operating activities for the first nine months of 2018 decreased to $423 million from $505 million for the first nine months of 2017. On a non-GAAP basis, adjusted free cash flow decreased to $439 million from $450 million for the first nine months of 2017.

Chris O’Connell, Chairman and Chief Executive Officer of Waters Corporation, commented, “While third quarter sales growth was slower than expected, we delivered meaningful operating leverage and achieved high-single-digit earnings per share growth. We are making significant progress against our growth initiatives, headlined by our efforts over the past several years to transform our innovation process that is beginning to deliver a series of next generation products to market.”


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 below.

During the third quarter of 2018, sales into the pharmaceutical market grew 1% as reported and 2% in constant currency, sales into the industrial market grew 2%, and sales into the governmental and academic markets grew 7% as reported and 8% in constant currency. During the first nine months of 2018, sales into the pharmaceutical market grew 5% as reported and 3% in constant currency, sales into the industrial market grew 3% as reported and 1% in constant currency, and sales into the governmental and academic markets grew 11% as reported and 9% in constant currency.

During the third quarter, recurring revenues, which represent the combination of service and precision chemistries revenues, grew 4% as reported and 6% in constant currency, while instrument system sales were flat year over year. For the first nine months of 2018, recurring revenues grew 9% as reported and 6% in constant currency, while instrument system sales grew 1% as reported and were flat in constant currency.

Geographically, sales in Asia during the quarter grew 6% as reported and 7% in constant currency, sales in the Americas grew 2% (with U.S. sales flat), and sales in Europe declined 3% as reported and 2% in constant currency. For the first nine months of 2018, sales in Asia grew 6% as reported and 5% in constant currency, sales in the Americas grew 2%, with U.S. sales increasing 1%, and sales in Europe grew 7% as reported and 2% in constant currency.

Fourth Quarter and Fiscal Year 2018 Financial Outlook

Waters Corporation expects fourth quarter 2018 constant currency sales growth to be in a range of 3% to 4%. As of today, currency translation is expected to decrease fourth quarter sales growth by one to two percentage points. The Company also expects fourth quarter 2018 non-GAAP earnings per fully diluted share to be in the range of $2.55 to $2.65. Please refer to the table below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the fourth quarter.

The Company is revising its full-year 2018 guidance for constant currency sales growth to be in the range of 3% to 4%, compared to the prior range of 4% to 6%. As of today, currency translation is expected to increase 2018 sales growth by approximately one percentage point. The Company is also revising its guidance for full-year 2018 non-GAAP earnings per fully diluted share to be in the range of $8.00 to $8.10, compared to the prior range of $8.05 to $8.20. Please refer to the table below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full year.

Conference Call

Waters Corporation will webcast its third quarter 2018 financial results conference call today, October 23, 2018 at 8:00 a.m. Eastern Time. To listen to the call, please visit www.waters.com, choose “Investors,” and click on the “Live Webcast.” A replay will be available through October 30, 2018 at midnight Eastern Time on the same website by webcast and also by phone at 402-998-0977.


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 60 years. With approximately 7,000 employees worldwide, Waters operates directly in 31 countries, including 15 manufacturing facilities, 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 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 generally accepted accounting principles (GAAP). The Company’s definition 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 Waters Corporation’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 Waters Corporation’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 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 for the Company’s products among the Company’s various market sectors from economic, sovereign and political uncertainties, particularly regarding the effect of new or proposed tariff or trade regulations; the effect on the Company’s financial results from the United Kingdom voting to exit 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; impact of the newly enacted tax reform legislation in the U.S.; 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, 2017 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 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

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 29,
2018
    September 30,
2017
    September 29,
2018
    September 30,
2017
 

Net sales

   $ 578,021     $ 565,584     $ 1,704,910     $ 1,621,803  

Costs and operating expenses:

        

Cost of sales

     241,139       235,892       705,695       676,614  

Selling and administrative expenses

     126,997       135,206       394,049       395,972  

Research and development expenses

     35,173       33,782       105,297       97,471  

Litigation provision (settlement)

     924       —         (748     10,018  

Purchased intangibles amortization

     2,114       1,682       5,375       5,104  

Acquired in-process research and development

     —         —         —         5,000  

Operating income

     171,674       159,022       495,242       431,624  

Other (expense) income*

     (811     12       (2,293     64  

Interest expense, net

     (1,633     (5,234     (8,609     (16,329

Income from operations before income taxes

     169,230       153,800       484,340       415,359  

Provision for income taxes**

     28,216       17,696       75,698       41,876  

Net income

   $ 141,014     $ 136,104     $ 408,642     $ 373,483  

Net income per basic common share

   $ 1.84     $ 1.71     $ 5.26     $ 4.67  

Weighted-average number of basic common shares

     76,575       79,712       77,741       79,908  

Net income per diluted common share

   $ 1.83     $ 1.69     $ 5.21     $ 4.63  

Weighted-average number of diluted common shares and equivalents

     77,136       80,521       78,395       80,660  

 

*

The Company adopted new accounting guidance which requires that an employer disaggregate the service cost component from other components of net benefit cost. As a result of the adoption of this standard, the components of net periodic benefit cost other than the service cost component are included in other income in the consolidated statements of operations and all previous periods have been adjusted accordingly.

**

The provision for income taxes for the three and nine months ended September 29, 2018 includes a $2 million expense and a $6 million expense, respectively, related to U.S. tax reform. The provisions include: (1) an adjustment to our 2017 year end accrual for the toll charge resulting from federal proposed regulations and other state guidance during the third quarter and (2) the tax that results from the change in foreign currency exchange rates on the earnings taxed on December 31, 2017 under the Tax Cuts and Jobs Act as compared with the foreign currency exchange rates on the date of distribution of assets into the U.S.


Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

Net Sales by Operating Segment, Products & Services, Geography and Markets

Three Months Ended September 29, 2018 and September 30, 2017

(In thousands)

 

     Three Months Ended      Percent
Change
    Current
Period
Currency
Impact
    Constant
Currency
Growth Rate (a)
 
 
 
     September 29, 2018      September 30, 2017  

NET SALES – OPERATING SEGMENT

            

Waters

   $ 515,795      $ 503,904        2   $ (3,451     3

TA

     62,226        61,680        1     (294     1
  

 

 

    

 

 

      

 

 

   

Total

   $ 578,021      $ 565,584        2   $ (3,745     3
  

 

 

    

 

 

      

 

 

   

NET SALES – PRODUCTS & SERVICES

            

Instruments

   $ 282,543      $ 282,671        —       $ (706     —    

Service

     199,499        190,034        5     (2,483     6

Chemistry

     95,979        92,879        3     (556     4
  

 

 

    

 

 

      

 

 

   

Total Recurring

     295,478        282,913        4     (3,039     6
  

 

 

    

 

 

      

 

 

   

Total

   $ 578,021      $ 565,584        2   $ (3,745     3
  

 

 

    

 

 

      

 

 

   

NET SALES – GEOGRAPHY

            

Asia

   $ 222,196      $ 209,339        6   $ (1,583     7

Americas

     206,803        203,013        2     (297     2

Europe

     149,022        153,232        (3 %)      (1,865     (2 %) 
  

 

 

    

 

 

      

 

 

   

Total

   $ 578,021      $ 565,584        2   $ (3,745     3
  

 

 

    

 

 

      

 

 

   

NET SALES – MARKETS

            

Pharmaceutical

   $ 325,166      $ 321,963        1   $ (3,052     2

Industrial

     171,985        168,349        2     (157     2

Governmental & Academic

     80,870        75,272        7     (536     8
  

 

 

    

 

 

      

 

 

   

Total

   $ 578,021      $ 565,584        2   $ (3,745     3
  

 

 

    

 

 

      

 

 

   

 

(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 Segment, Products & Services, Geography and Markets

Nine Months Ended September 29, 2018 and September 30, 2017

(In thousands)

 

     Nine Months Ended      Percent
Change
    Current
Period
Currency
Impact
     Constant
Currency
Growth Rate (a)
 
 
 
     September 29, 2018      September 30, 2017  

NET SALES – OPERATING SEGMENT

             

Waters

   $ 1,514,246      $ 1,445,110        5   $ 28,767        3

TA

     190,664        176,693        8     2,638        6
  

 

 

    

 

 

      

 

 

    

Total

   $ 1,704,910      $ 1,621,803        5   $ 31,405        3
  

 

 

    

 

 

      

 

 

    

NET SALES – PRODUCTS & SERVICES

             

Instruments

   $ 812,690      $ 801,078        1   $ 12,344        —    

Service

     598,402        549,119        9     12,272        7

Chemistry

     293,818        271,606        8     6,789        6
  

 

 

    

 

 

      

 

 

    

Total Recurring

     892,220        820,725        9     19,061        6
  

 

 

    

 

 

      

 

 

    

Total

   $ 1,704,910      $ 1,621,803        5   $ 31,405        3
  

 

 

    

 

 

      

 

 

    

NET SALES – GEOGRAPHY

             

Asia

   $ 659,381      $ 620,148        6   $ 7,791        5

Americas

     586,639        574,249        2     420        2

Europe

     458,890        427,406        7     23,194        2
  

 

 

    

 

 

      

 

 

    

Total

   $ 1,704,910      $ 1,621,803        5   $ 31,405        3
  

 

 

    

 

 

      

 

 

    

NET SALES – MARKETS

             

Pharmaceutical

   $ 968,848      $ 921,423        5   $ 18,961        3

Industrial

     517,979        504,183        3     9,041        1

Governmental & Academic

     218,083        196,197        11     3,403        9
  

 

 

    

 

 

      

 

 

    

Total

   $ 1,704,910      $ 1,621,803        5   $ 31,405        3
  

 

 

    

 

 

      

 

 

    

 

(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

Quarters and Nine Months Ended September 29, 2018 and September 30, 2017

(In thousands, except per share data)

 

    Selling &
Administrative
Expenses(a)
    Research &
Development
Expenses(a)
    Operating
Income
    Operating
Income
Percentage
    Other
(Expense)
Income
    Income
from

Operations
before
Income
Taxes
    Provision
for

Income
Taxes
    Net
Income
    Diluted
Earnings
per Share
 

Quarter Ended September 29, 2018

                                                     

GAAP

  $ 130,035     $ 35,173     $ 171,674       29.7   $ (811   $ 169,230     $ 28,216     $ 141,014     $ 1.83  

Adjustments:

                 

Purchased intangibles amortization (b)

    (2,114     —         2,114       0.4     —         2,114       429       1,685       0.02  

Restructuring costs and certain other items (c)

    (681     —         681       0.1     —         681       157       524       0.01  

Pension termination (d)

    —         —         —         —         1,082       1,082       260       822       0.01  

Litigation settlement (e)

    (924     —         924       0.2       924       222       702       0.01  

Tax reform (f)

    —         —         —         —         —         —         (2,353     2,353       0.03  

Certain income tax items (g)

    —         —         —         —         —         —         (700     700       0.01  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Non-GAAP

  $ 126,316     $ 35,173     $ 175,393       30.3   $ 271     $ 174,031     $ 26,231     $ 147,800     $ 1.92  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Quarter Ended September 30, 2017

                                                     

GAAP

  $ 136,888     $ 33,782     $ 159,022       28.1   $ 12     $ 153,800     $ 17,696     $ 136,104     $ 1.69  

Adjustments:

                 

Purchased intangibles amortization (b)

    (1,682     —         1,682       0.3     —         1,682       436       1,246       0.02  

Restructuring costs and certain other items (c)

    (2,530     —         2,530       0.4     —         2,530       931       1,599       0.02  

Stock award modification (h)

    (3,855     —         3,855       0.7     —         3,855       1,446       2,409       0.03  

Certain income tax items (g)

    —         —         —         —         —         —         (837     837       0.01  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Non-GAAP

  $ 128,821     $ 33,782     $ 167,089       29.5   $ 12     $ 161,867     $ 19,672     $ 142,195     $ 1.77  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Nine Months Ended September 29, 2018

                                                     

GAAP

  $ 398,676     $ 105,297     $ 495,242       29.0   $ (2,293   $ 484,340     $ 75,698     $ 408,642     $ 5.21  

Adjustments:

                 

Purchased intangibles amortization (b)

    (5,375     —         5,375       0.3     —         5,375       935       4,440       0.06  

Restructuring costs and certain other items (c)

    (2,438     —         2,438       0.1     —         2,438       549       1,889       0.02  

Pension termination (d)

    —         —         —         —         3,247       3,247       780       2,467       0.03  

Litigation settlement (e)

    748       —         (748     —         —         (748     (179     (569     (0.01

Stock award modification (h)

    (1,014     —         1,014       0.1     —         1,014       243       771       0.01  

Tax reform (f)

    —         —         —         —         —         —         (6,230     6,230       0.08  

Certain income tax items (g)

    —         —         —         —         —         —         (3,385     3,385       0.04  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Non-GAAP

  $ 390,597     $ 105,297     $ 503,321       29.5   $ 954     $ 495,666     $ 68,411     $ 427,255     $ 5.45  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Nine Months Ended September 30, 2017

                                                     

GAAP

  $ 411,094     $ 102,471     $ 431,624       26.6   $ 64     $ 415,359     $ 41,876     $ 373,483     $ 4.63  

Adjustments:

                 

Purchased intangibles amortization (b)

    (5,104     —         5,104       0.3     —         5,104       1,358       3,746       0.05  

Restructuring costs and certain other items (c)

    (13,541     —         13,541       0.8     —         13,541       4,725       8,816       0.11  

Litigation provisions (e)

    (10,018     —         10,018       0.6     —         10,018       3,757       6,261       0.08  

Stock award modification (h)

    (3,855     —         3,855       0.2     —         3,855       1,446       2,409       0.03  

Acquired in-process research and development (i)

    —         (5,000     5,000       0.3     —         5,000       962       4,038       0.05  

Certain income tax items (g)

    —         —         —         —         —         —         (3,284     3,284       0.04  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Non-GAAP

  $ 378,576     $ 97,471     $ 469,142       28.9   $ 64     $ 452,877     $ 50,840     $ 402,037     $ 4.98  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Selling & administrative expenses include purchased intangibles amortization and litigation provisions. Research & development expenses include acquired in-process research and development.

(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 and certain other items were excluded as the Company believes that the cost to consolidate operations and reduce overhead 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)

The pension expense associated with terminating a frozen defined benefit pension plan was excluded as the Company believes these expenses are not indicative of normal operating costs.

(e)

Litigation provisions and settlement gain were excluded as these costs are isolated, unpredictable and not expected to recur regularly.

(f)

The provision for income taxes for the three and nine months ended September 29, 2018 includes a $2 million expense and a $6 million expense, respectively, related to U.S. tax reform. The provisions include: (1) an adjustment to our 2017 year end accrual for the toll charge resulting from federal proposed regulations and other state guidance during the third quarter and (2) the tax that results from the change in foreign currency exchange rates on the earnings taxed on December 31, 2017 under the Tax Cuts and Jobs Act as compared with the foreign currency exchange rates on the date of distribution of assets into the U.S. The Company believes this expense is not indicative of the Company’s normal or future income tax expense.

(g)

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.

(h)

The non-cash expense associated with accelerating the vesting of certain stock awards was excluded as the Company believes these expenses are not indicative of normal operating costs.

(i)

Acquired In-Process Research and Development was excluded as it relates to milestone payments associated with a licensing arrangement for mass spectrometry that the Company believes is unusual and not indicative of its normal business operations.


Waters Corporation and Subsidiaries

Preliminary Condensed Unclassified Consolidated Balance Sheets

(In thousands and unaudited)

 

     September 29, 2018      December 31, 2017  

Cash, cash equivalents and investments

   $ 2,084,260      $ 3,393,701  

Accounts receivable

     489,193        533,825  

Inventories

     313,614        270,294  

Property, plant and equipment, net

     338,472        349,278  

Intangible assets, net

     252,834        228,395  

Goodwill

     357,869        359,819  

Other assets

     206,816        189,042  

Total assets

   $ 4,043,058      $ 5,324,354  

Notes payable and debt

   $ 1,148,345      $ 1,997,774  

Other liabilities

     1,018,281        1,092,792  

Total liabilities

     2,166,626        3,090,566  

Total equity

     1,876,432        2,233,788  

Total liabilities and equity

   $ 4,043,058      $ 5,324,354  


Waters Corporation and Subsidiaries

Preliminary Condensed Consolidated Statements of Cash Flows

Three and Nine Months Ended September 29, 2018 and September 30, 2017

(In thousands and unaudited)

 

                                                                                                                                   
     Three Months Ended     Nine Months Ended  
     September 29, 2018     September 30, 2017     September 29, 2018     September 30, 2017  

Cash flows from operating activities:

        

Net income

   $ 141,014     $ 136,104     $ 408,642     $ 373,483  

Adjustments to reconcile net income to net cash provided by operating activities:

        

Stock-based compensation

     9,213       12,274       28,184       30,068  

Depreciation and amortization

     26,975       25,844       82,811       78,249  

Change in operating assets and liabilities, net

     (30,862     (20,026     (96,740     23,656  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     146,340       154,196       422,897       505,456  

Cash flows from investing activities:

        

Additions to property, plant, equipment and software capitalization

     (27,384     (19,899     (64,215     (55,257

Asset acquisitions, net of cash acquired

     (31,486     —         (31,486     —    

Investment in unaffiliated company

     (4,400     —         (7,615     (7,000

Payments for intellectual property licenses

     —         —         —         (5,000

Net change in investments

     114,606       (90,237     1,361,034       (336,731
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     51,336       (110,136     1,257,718       (403,988

Cash flows from financing activities:

        

Net change in debt

     (216     45,190       (849,990     130,126  

Proceeds from stock plans

     7,532       14,639       42,377       72,821  

Purchases of treasury shares

     (263,505     (79,908     (816,649     (245,742

Other cash flow from financing activities, net

     (23     2,871       (2,181     3,301  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (256,212     (17,208     (1,626,443     (39,494

Effect of exchange rate changes on cash and cash equivalents

     5,705       9,700       (7,118     36,202  
  

 

 

   

 

 

   

 

 

   

 

 

 

(Decrease) increase in cash and cash equivalents

     (52,831     36,552       47,054       98,176  

Cash and cash equivalents at beginning of period

     742,204       567,255       642,319       505,631  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 689,373     $ 603,807     $ 689,373     $ 603,807  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a)

 

 

Net cash provided by operating activities — GAAP

   $ 146,340     $ 154,196     $ 422,897     $ 505,456  

Adjustments:

        

Additions to property, plant, equipment and software capitalization

     (27,384     (19,899     (64,215     (55,257

Tax reform payments

     7,799       —         54,499       —    

Litigation settlement payment

     —         —         15,400       —    

Major facility renovations

     3,645       —         5,446       —    

One-time pension contributions

     5,245       —         5,245       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow — Adjusted Non-GAAP

   $ 135,645     $ 134,297     $ 439,272     $ 450,199  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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

(In thousands, except per share data)

 

     Three Months Ended
December 31, 2018
     Twelve Months Ended
December 31, 2018
 
         Range              Range      

Projected Sales

               

Projected constant currency sales growth rate

     3   -      4      3   -      4

Projected currency impact

     (2 %)    -      (1 %)       1   -      1
  

 

 

      

 

 

    

 

 

      

 

 

 

Projected sales growth rate as reported

     1   -      3      4   -      5
  

 

 

      

 

 

    

 

 

      

 

 

 
Projected Earnings Per Diluted Share    Range      Range  

Projected GAAP earnings per diluted share

   $ 2.51     -    $ 2.61      $ 7.73     -    $ 7.83  

Adjustments:

               

Purchased intangibles amortization

   $ 0.02     -    $ 0.02      $ 0.08     -    $ 0.08  

Restructuring costs and certain other items

   $ —       -    $ —        $ 0.02     -    $ 0.02  

Pension termination

   $ 0.01     -    $ 0.01      $ 0.04     -    $ 0.04  

Litigation provision

   $ —       -    $ —        $ (0.01   -    $ (0.01

Stock award modification

   $ —       -    $ —        $ 0.01     -    $ 0.01  

Tax reform

   $ —       -    $ —        $ 0.08     -    $ 0.08  

Certain income tax items

   $ 0.01     -    $ 0.01      $ 0.05     -    $ 0.05  
  

 

 

      

 

 

    

 

 

      

 

 

 

Projected adjusted non-GAAP earnings per diluted share

   $ 2.55     -    $ 2.65      $ 8.00     -    $ 8.10  
  

 

 

      

 

 

    

 

 

      

 

 

 

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.

View differences made from one to another to evaluate Waters Corp's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Waters Corp.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account