Form 8-K - Current report

WATERS CORP /DE/ NYSE false 0001000697 0001000697 2024-11-01 2024-11-01

 

 

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): November 1, 2024

 

 

Waters Corporation

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware		01-14010		13-3668640
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

34 Maple Street

Milford, Massachusetts 01757

(Address of Principal Executive Offices) (Zip Code)

[phone]

(Registrant’s 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 simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		WAT		New York Stock Exchange, Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02

Results of Operations and Financial Condition

On November 1, 2024, Waters Corporation (“Waters” or the “Company”) announced its results of operations for the quarter ended September 28, 2024. 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.

The information contained in Item 2.02 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibits
99.1		Waters Corporation press release dated November 1, 2024, for the quarter ended September 28, 2024.
104		Cover page Interactive Date File (embedded within the Inline XBRL document).

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Signatures

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.

 

				WATERS CORPORATION
Dated: November 1, 2024				By:		/s/ Amol Chaubal
				Name:		Amol Chaubal
				Title:		Senior Vice President and Chief Financial Officer
						(Principal Financial Officer and Principal Accounting Officer)

Exhibit 99.1

For Immediate Release

Contact: Caspar Tudor, Head of Investor Relations – [phone]

Waters Corporation (NYSE: WAT) Reports Third Quarter 2024 Financial Results

Highlights

 

•

Sales of $740 million exceeded guidance, grew 4% as reported and 4% in constant currency

 

•

Instruments returned to growth; recurring revenue grew high single-digits in constant currency

 

•

All reported regions returned to growth in the quarter; sales grew across all end markets, led by Pharma & Industrial

 

•

GAAP EPS of $2.71 and non-GAAP EPS of $2.93 significantly exceeded guidance, led by strong operational performance and better-than-expected market conditions

 

•

Raised full-year sales and EPS guidance, with 5% to 7% constant currency growth expected in the fourth quarter

Third Quarter 2024

MILFORD, Mass., November 1, 2024 - Waters Corporation (NYSE: WAT) today announced its financial results for the third quarter of 2024.

Sales for the third quarter of 2024 were $740 million, an increase of 4% as reported, compared to sales of $712 million for the third quarter of 2023. Currency translation had minimal impact on sales.

On a GAAP basis, diluted earnings per share (EPS) for the third quarter of 2024 was $2.71, compared to $2.27 for the third quarter of 2023. On a non-GAAP basis, EPS was $2.93, compared to $2.84 for the third quarter of 2023. This includes a headwind of approximately 2% due to unfavorable foreign exchange.

“We delivered exceptional third quarter results, fueled by new product adoption and improved customer spending trends,” said Dr. Udit Batra, President & CEO, Waters Corporation. “Instruments returned to growth sooner than expected, as liquid chromatography sales to pharma and industrial customers turned positive.”

Dr. Batra continued, “Looking ahead, our strong commercial execution, competitive product portfolio, and excellent operational performance give us confidence in the long-term outlook for Waters.”

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Other Highlights

During the third quarter of 2024, sales into the pharmaceutical market increased 2% as reported and 3% in constant currency. Sales into the industrial market increased 9% as reported and 7% in constant currency. Sales into the academic and government market increased 2% as reported and were flat in constant currency.

During the quarter, instrument system sales increased 1% as reported and in constant currency. Recurring revenues, which represent the combination of service and precision chemistries, increased 6% as reported and 7% in constant currency.

Geographically, sales in Asia during the quarter increased 5% as reported and 6% in constant currency. Sales in the Americas increased 1% as reported and in constant currency. Sales in Europe increased 6% as reported and 4% in constant currency.

Unless otherwise noted, sales growth and decline percentages are presented on an as-reported basis. 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.

Full-Year and Fourth Quarter 2024 Financial Guidance

Full-Year 2024 Financial Guidance

The Company is raising its full-year 2024 sales guidance, and now expects organic constant currency sales growth to be in the range of -0.9% to -0.3%. Currency translation is expected to decrease full-year sales growth by 1.2%. M&A contribution from the Wyatt transaction covering the first four-and-a-half months of the year has added 1.3% to full-year reported sales. The resulting full-year 2024 reported sales growth is expected in the range of -0.8% to -0.2%.

The Company is also raising its full-year 2024 non-GAAP EPS guidance to now be in the range of $11.67 to $11.87, which includes an estimated headwind of approximately 3% due to unfavorable foreign exchange.

Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full year.

Fourth Quarter 2024 Financial Guidance

The Company expects fourth quarter 2024 constant currency sales growth to be in the range of +5.0% to +7.0%. Currency translation is expected to decrease fourth quarter sales growth by 1.7%. The resulting fourth quarter 2024 reported sales growth is expected in the range of +3.3% to +5.3%.

The Company expects fourth quarter 2024 non-GAAP EPS to be in the range of $3.90 to $4.10, which includes an estimated headwind of approximately 3% due to unfavorable foreign exchange.

Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the fourth quarter.

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Conference Call Details

Waters Corporation will webcast its third quarter 2024 financial results conference call today, November 1, 2024, at 8:00 a.m. Eastern Time. To listen to the call and see the accompanying slide presentation, please visit www.waters.com, select “Investor Relations” under the “About Waters” section, navigate to “Events & Presentations,” and click on the “Webcast.” A replay will be available through November 29, 2024, on the same website by webcast and also by phone at [phone].

About Waters Corporation

Waters Corporation (NYSE:WAT), a global leader in analytical instruments and software, has pioneered chromatography, mass spectrometry, and thermal analysis innovations serving the life, materials, food, and environmental sciences for more than 65 years. With approximately 7,500 employees worldwide, Waters operates directly in 35 countries, including 15 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 organic constant currency growth rates, 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 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

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statements within this release for a variety of reasons, including and without limitation, risks related to, and expectations or ability to realize commercial success of the Wyatt transaction; the impact of this transaction on the Company’s business, anticipated progress on Waters’ research programs, development of new analytical instruments and associated software or consumables, manufacturing development and capabilities; the increased indebtedness of the Company as a result of the Wyatt transaction, the repayment of which could impact the Company’s future results, market prospects for its products and sales and earnings guidance; foreign currency exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results, particularly when a foreign currency weakens against the U.S. dollar; current global economic, sovereign and political conditions and uncertainties, including the effect of new or proposed tariff or trade regulations as well as other new or changed domestic and foreign laws, regulations and policies; changes in inflation and interest rates; the impacts and costs of war, in particular as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East, and the possibility of further escalation resulting in new geopolitical and regulatory instability; the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers; the Company’s ability to access capital, maintain liquidity and service the Company’s debt in volatile market conditions; risks related to the effects of any pandemic on our business, financial condition, results of operations and prospects; changes in timing and demand for the Company’s products among the Company’s customers and various market sectors, particularly as a result of fluctuations in their expenditures or ability to obtain funding; the ability to realize the expected benefits related to the Company’s various cost-saving initiatives, including workforce reductions and organizational restructurings; the introduction of competing products by other companies and loss of market share, as well as pressures on prices from competitors and/or customers; changes in the competitive landscape as a result of changes in ownership, mergers and continued consolidation among the Company’s competitors; regulatory, economic and competitive obstacles to new product introductions; lack of acceptance of new products and inability to grow organically through innovation; rapidly changing technology and product obsolescence; risks associated with previous or future acquisitions, strategic investments, joint ventures and divestitures, including risks associated with achieving the anticipated financial results and operational synergies; contingent purchase price payments and expansion of our business into new or developing markets; risks associated with unexpected disruptions in operations; failure to adequately protect the Company’s intellectual property, infringement of intellectual property rights of third parties and inability to obtain licenses on commercially reasonable terms; the Company’s ability to acquire adequate sources of supply and its reliance on outside contractors for certain components and modules, as well as disruptions to its supply chain; risks associated with third-party sales intermediaries and resellers; the impact and costs of changes in statutory or contractual tax rates in jurisdictions in which the Company operates as well as shifts in taxable income among jurisdictions with different effective tax rates, the outcome of ongoing and future tax examinations and changes in legislation affecting the Company’s effective tax rate; the Company’s ability to attract and retain qualified employees and management personnel; risks associated with cybersecurity and technology, including attempts by third parties to defeat the security measures of the Company and its third-party partners; 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, and in connection with government contracts; regulatory, environmental and logistical obstacles affecting the distribution of the Company’s products, completion of purchase order documentation and the ability of customers to obtain letters of credit or other financing alternatives; risks associated with litigation and other legal and regulatory proceedings; and the impact and costs incurred from changes in accounting principles and practices. Such factors and others are discussed more fully in the sections entitled “Forward-Looking Statements” and “Risk Factors” of the Company’s annual report

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on Form 10-K for the year ended December 31, 2023, as well as in the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” of the Company’s quarterly reports on Form 10-Q for the quarterly periods ended March 30, 2024 and June 29, 2024, 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.

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Waters Corporation and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended								Nine Months Ended
		September 28, 2024				September 30, 2023				September 28, 2024				September 30, 2023
Net sales		$	740,305			$	711,692			$	2,085,673			$	2,136,942
Costs and operating expenses:
Cost of sales			301,655				291,407				851,685				876,863
Selling and administrative expenses			169,097				186,748				516,880				555,657
Research and development expenses			45,336				41,995				136,113				130,559
Purchased intangibles amortization			11,759				12,116				35,337				20,410
Litigation provision			1,326				—				11,568				—
Operating income			211,132				179,426				534,090				553,453
Other (expense) income, net			(338	)			328				1,619				1,364
Interest expense, net			(17,177	)			(26,559	)			(57,824	)			(56,174	)
Income from operations before income taxes			193,617				153,195				477,885				498,643
Provision for income taxes			32,114				18,643				71,449				72,614
Net income		$	161,503			$	134,552			$	406,436			$	426,029
Net income per basic common share		$	2.72			$	2.28			$	6.85			$	7.21
Weighted-average number of basic common shares			59,367				59,093				59,314				59,061
Net income per diluted common share		$	2.71			$	2.27			$	6.83			$	7.19
Weighted-average number of diluted common shares and equivalents			59,504				59,255				59,471				59,262

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Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

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

Three Months Ended September 28, 2024 and September 30, 2023

(In thousands)

 

																		Constant
		Three Months Ended								Percent				Impact of				Currency
		September 28, 2024				September 30, 2023				Change				Currency				Growth Rate (a)
NET SALES - OPERATING SEGMENTS
Waters		$	655,652			$	629,348				4	%			0	%			4	%
TA			84,653				82,344				3	%			1	%			2	%
Total		$	740,305			$	711,692				4	%			0	%			4	%
NET SALES - PRODUCTS & SERVICES
Instruments		$	323,076			$	319,431				1	%			0	%			1	%
Service			278,294				263,611				6	%			0	%			6	%
Chemistry			138,935				128,650				8	%			0	%			8	%
Total Recurring			417,229				392,261				6	%			(1	%)			7	%
Total		$	740,305			$	711,692				4	%			0	%			4	%
NET SALES - GEOGRAPHY
Asia		$	251,329			$	238,228				5	%			(1	%)			6	%
Americas			279,136				275,479				1	%			0	%			1	%
Europe			209,840				197,985				6	%			2	%			4	%
Total		$	740,305			$	711,692				4	%			0	%			4	%
NET SALES - MARKETS
Pharmaceutical		$	430,138			$	421,535				2	%			(1	%)			3	%
Industrial			227,740				209,449				9	%			2	%			7	%
Academic & Government			82,427				80,708				2	%			2	%			0	%
Total		$	740,305			$	711,692				4	%			0	%			4	%

 

(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, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, excluding the impact of foreign currency exchange rates during the current period. See description of non-GAAP financial measures contained in this release.

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Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

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

Nine Months Ended September 28, 2024 and September 30, 2023

(In thousands)

 

																						Organic
																						Constant
		Nine Months Ended								Percent				Impact of				Impact of				Currency
		September 28, 2024				September 30, 2023				Change				Currency				Acquisitions				Growth Rate (a)
NET SALES - OPERATING SEGMENTS
Waters		$	1,840,112			$	1,884,658				(2	%)			(1	%)			2	%			(3	%)
TA			245,561				252,284				(3	%)			(1	%)			0	%			(2	%)
Total		$	2,085,673			$	2,136,942				(2	%)			(1	%)			2	%			(3	%)
NET SALES - PRODUCTS & SERVICES
Instruments		$	859,079			$	964,380				(11	%)			0	%			3	%			(14	%)
Service			812,367				774,478				5	%			(1	%)			1	%			5	%
Chemistry			414,227				398,084				4	%			(1	%)			0	%			5	%
Total Recurring			1,226,594				1,172,562				5	%			(1	%)			1	%			5	%
Total		$	2,085,673			$	2,136,942				(2	%)			(1	%)			2	%			(3	%)
NET SALES - GEOGRAPHY
Asia		$	696,319			$	745,932				(7	%)			(3	%)			1	%			(5	%)
Americas			794,775				804,827				(1	%)			0	%			3	%			(4	%)
Europe			594,579				586,183				1	%			2	%			2	%			(3	%)
Total		$	2,085,673			$	2,136,942				(2	%)			(1	%)			2	%			(3	%)
NET SALES - MARKETS
Pharmaceutical		$	1,220,092			$	1,233,177				(1	%)			(1	%)			2	%			(2	%)
Industrial			644,459				648,754				(1	%)			0	%			1	%			(2	%)
Academic & Government			221,122				255,011				(13	%)			1	%			2	%			(16	%)
Total		$	2,085,673			$	2,136,942				(2	%)			(1	%)			2	%			(3	%)

 

(a)

The Company believes that referring to comparable organic constant currency growth rates is a useful way to evaluate the underlying performance of Waters Corporation’s net sales. Organic constant currency growth, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, excluding the impact of foreign currency exchange rates during the current period and excluding the impact of acquisitions made within twelve months of the acquisition close date. See description of non-GAAP financial measures contained in this release.

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Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP Financials

Three and Nine Months Ended September 28, 2024 and September 30, 2023

(In thousands, except per share data)

 

		Selling & Administrative Expenses(a)				Research & Development Expenses				Operating Income				Operating Income Percentage				Other (Expense) Income				Income from Operations before Income Taxes				Provision for Income Taxes				Net Income				Diluted Earnings per Share
Three Months Ended September 28, 2024
GAAP		$	182,182			$	45,336			$	211,132				28.5	%		$	(338	)		$	193,617			$	32,114			$	161,503			$	2.71
Adjustments:
Purchased intangibles amortization (b)			(11,759	)			—				11,759				1.6	%			—				11,759				2,814				8,945				0.15
Litigation provision (c)			(1,326	)			—				1,326				0.2	%			—				1,326				318				1,008				0.02
Restructuring costs and certain other items (d)			(1,194	)			—				1,194				0.2	%			—				1,194				282				912				0.02
Retention bonus obligation (f)			(1,909	)			(636	)			2,545				0.3	%			—				2,545				611				1,934				0.03
Adjusted Non-GAAP		$	165,994			$	44,700			$	227,956				30.8	%		$	(338	)		$	210,441			$	36,139			$	174,302			$	2.93
Three Months Ended September 30, 2023
GAAP		$	198,864			$	41,995			$	179,426				25.2	%		$	328			$	153,195			$	18,643			$	134,552			$	2.27
Adjustments:
Purchased intangibles amortization (b)			(12,116	)			—				12,116				1.7	%			—				12,116				2,901				9,215				0.16
Restructuring costs and certain other items (d)			(24,057	)			—				24,057				3.4	%			(651	)			23,406				5,387				18,019				0.30
Acquisition related costs (e)			(1,263	)			—				1,263				0.2	%			—				1,263				303				960				0.02
Retention bonus obligation (f)			(5,725	)			(1,909	)			7,634				1.1	%			—				7,634				1,832				5,802				0.10
Adjusted Non-GAAP		$	155,703			$	40,086			$	224,496				31.5	%		$	(323	)		$	197,614			$	29,066			$	168,548			$	2.84
Nine Months Ended September 28, 2024
GAAP		$	563,785			$	136,113			$	534,090				25.6	%		$	1,619			$	477,885			$	71,449			$	406,436			$	6.83
Adjustments:
Purchased intangibles amortization (b)			(35,337	)			—				35,337				1.7	%			—				35,337				8,456				26,881				0.45
Litigation provision and settlement (c)			(11,568	)			—				11,568				0.6	%			—				11,568				2,776				8,792				0.15
Restructuring costs and certain other items (d)			(10,680	)			—				10,680				0.5	%			—				10,680				2,617				8,063				0.14
Retention bonus obligation (f)			(11,451	)			(3,817	)			15,268				0.7	%			—				15,268				3,664				11,604				0.20
Adjusted Non-GAAP		$	494,749			$	132,296			$	606,943				29.1	%		$	1,619			$	550,738			$	88,962			$	461,776			$	7.76
Nine Months Ended September 30, 2023
GAAP		$	576,067			$	130,559			$	553,453				25.9	%		$	1,364			$	498,643			$	72,614			$	426,029			$	7.19
Adjustments:
Purchased intangibles amortization (b)			(20,410	)			—				20,410				1.0	%			—				20,410				4,852				15,558				0.26
Restructuring costs and certain other items (d)			(28,881	)			—				28,881				1.4	%			(651	)			28,230				6,860				21,370				0.36
Acquisition related costs (e)			(13,298	)			—				13,298				0.6	%			—				13,298				3,191				10,107				0.17
Retention bonus obligation (f)			(8,368	)			(2,790	)			11,158				0.5	%			—				11,158				2,678				8,480				0.14
Adjusted Non-GAAP		$	505,110			$	127,769			$	627,200				29.4	%		$	713			$	571,739			$	90,195			$	481,544			$	8.13

 

(a)	Selling & administrative expenses include purchased intangibles amortization and litigation provisions and settlements.

(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)	Litigation provisions and settlement gains were excluded as these items are isolated, unpredictable and not expected to recur regularly.

(d)

Restructuring costs and certain other items were excluded as the Company believes that the cost to consolidate operations, 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.

(e)	Acquisition related costs include all incremental expenses incurred, such as advisory, legal, accounting, tax, valuation, and other professional fees. The Company believes that these costs are not normal and do not represent future ongoing business expenses.

(f)

In connection with the Wyatt acquisition, the Company started to recognize a two-year retention bonus obligation that is contingent upon the employee’s providing future service and continued employment with Waters. The Company believes that these costs are not normal and do not represent future ongoing business expenses.

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Waters Corporation and Subsidiaries

Preliminary Condensed Unclassified Consolidated Balance Sheets

(In thousands and unaudited)

 

		September 28, 2024				December 31, 2023
Cash, cash equivalents and investments		$	331,458			$	395,974
Accounts receivable			669,534				702,168
Inventories			518,994				516,236
Property, plant and equipment, net			642,627				639,073
Intangible assets, net			591,883				629,187
Goodwill			1,306,593				1,305,446
Other assets			450,531				438,770
Total assets		$	4,511,620			$	4,626,854
Notes payable and debt		$	1,826,248			$	2,355,513
Other liabilities			1,082,273				1,121,000
Total liabilities			2,908,521				3,476,513
Total stockholders’ equity			1,603,099				1,150,341
Total liabilities and stockholders’ equity		$	4,511,620			$	4,626,854

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Waters Corporation and Subsidiaries

Preliminary Condensed Consolidated Statements of Cash Flows

Three and Nine Months Ended September 28, 2024 and September 30, 2023

(In thousands and unaudited)

 

		Three Months Ended								Nine Months Ended
		September 28, 2024				September 30, 2023				September 28, 2024				September 30, 2023
Cash flows from operating activities:
Net income		$	161,503			$	134,552			$	406,436			$	426,029
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation			10,647				8,490				32,993				32,224
Depreciation and amortization			47,507				47,807				143,250				117,845
Change in operating assets and liabilities and other, net			(15,077	)			(33,031	)			(60,695	)			(203,411	)
Net cash provided by operating activities			204,580				157,818				521,984				372,687
Cash flows from investing activities:
Additions to property, plant, equipment and software capitalization			(25,618	)			(38,047	)			(90,377	)			(119,044	)
Business acquisitions, net of cash acquired			—				—				—				(1,285,907	)
(Investments in) proceeds from unaffiliated companies			(425	)			651				(1,489	)			651
Net change in investments			(8	)			(5	)			(44	)			(21	)
Net cash used in investing activities			(26,051	)			(37,401	)			(91,910	)			(1,404,321	)
Cash flows from financing activities:
Net change in debt			(180,000	)			(125,181	)			(530,000	)			929,601
Proceeds from stock plans			3,237				9,464				25,073				18,092
Purchases of treasury shares			(141	)			(692	)			(13,475	)			(70,433	)
Other cash flow from financing activities, net			20				2,884				15,305				8,178
Net cash used in financing activities			(176,884	)			(113,525	)			(503,097	)			885,438
Effect of exchange rate changes on cash and cash equivalents			2,442				(171	)			8,461				2,081
Increase (decrease) in cash and cash equivalents			4,087				6,721				(64,562	)			(144,115	)
Cash and cash equivalents at beginning of period			326,427				329,693				395,076				480,529
Cash and cash equivalents at end of period		$	330,514			$	336,414			$	330,514			$	336,414

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

 

Net cash provided by operating activities – GAAP		$	204,580			$	157,818			$	521,984			$	372,687
Adjustments:
Additions to property, plant, equipment
and software capitalization			(25,618	)			(38,047	)			(90,377	)			(119,044	)
Tax reform payments			—				—				95,645				72,101
Litigation settlements (received) paid, net			—				(375	)			9,250				(1,125	)
Major facility renovations			—				3,291				—				12,151
Payment of acquired Wyatt liabilities (b)			—				—				—				25,617
Payment of Wyatt retention bonus obligation (c)			—				—				19,770				—
Free Cash Flow - Adjusted Non-GAAP		$	178,962			$	122,687			$	556,272			$	362,387

 

(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.

(b)	In connection with the Wyatt acquisition, the Company assumed certain obligations of Wyatt and paid those obligations immediately upon closing the transaction. The Company believes that the assumed obligations do not represent future ongoing business expenses.

(c)	During the nine months ended September 28, 2024, the Company made its first retention payment under the Wyatt retention bonus program. The Company believes that these payments are not normal and do not represent future ongoing business expenses.

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Waters Corporation and Subsidiaries

Reconciliation of Projected GAAP to Adjusted Non-GAAP Financial Outlook

 

		Twelve Months Ended December 31, 2024												Three Months Ended December 31, 2024
		Range												Range
Projected Sales
Organic constant currency sales growth rate (a)			(0.9	%)			—				(0.3	%)			5.0	%			—				7.0	%
Impact of:
Currency translation			(1.2	%)			—				(1.2	%)			(1.7	%)			—				(1.7	%)
Acquisitions			1.3	%			—				1.3	%			—				—				—
Sales growth rate as reported			(0.8	%)			—				(0.2	%)			3.3	%			—				5.3	%
		Range												Range
Projected Earnings Per Diluted Share
GAAP earnings per diluted share		$	10.55				—			$	10.75			$	3.72				—			$	3.92
Adjustments:
Purchased intangibles amortization		$	0.60				—			$	0.60			$	0.15				—			$	0.15
Litigation settlement		$	0.15				—			$	0.15			$	—				—			$	—
Restructuring costs and certain other items		$	0.14				—			$	0.14			$	—				—			$	—
Retention bonus obligation		$	0.23				—			$	0.23			$	0.03				—			$	0.03
Adjusted non-GAAP earnings per diluted share		$	11.67				—			$	11.87			$	3.90				—			$	4.10

 

(a)

Organic constant currency growth rates are a non-GAAP financial measure that measures the change in net sales between current and prior year periods, excluding the impact of foreign currency exchange rates during the current period and excluding the impact of acquisitions made within twelve months of the acquisition close date. 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.

Document and Entity Information	Nov. 01, 2024
Cover [Abstract]
Entity Registrant Name	WATERS CORP /DE/
Security Exchange Name	NYSE
Amendment Flag	false
Entity Central Index Key	0001000697
Document Type	8-K
Document Period End Date	Nov. 01, 2024
Entity Incorporation State Country Code	DE
Entity File Number	01-14010
Entity Tax Identification Number	13-3668640
Entity Address, Address Line One	34 Maple Street
Entity Address, City or Town	Milford
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01757
City Area Code	(508)
Local Phone Number	478-2000
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common stock, par value $0.01 per share
Trading Symbol	WAT
Entity Emerging Growth Company	false

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