Waters Corporation (NYSE: WAT) Reports Fourth Quarter and Full-Year 2020 Financial Results

Rhea-AI Summary

Waters Corporation (NYSE: WAT) reported fourth quarter 2020 sales of $787 million, a 10% increase from $716 million in Q4 2019. Diluted EPS rose to $3.49 from $3.12. For fiscal 2020, total sales were $2,365 million, a 2% decrease from $2,407 million in 2019. Despite challenges, the company expects 2021 constant-currency sales growth of 5% to 8% and non-GAAP EPS of $9.32 to $9.57. The Board approved an extension of the share repurchase program with $1.5 billion remaining. Full details available in the Investor Relations section.

Positive

• Fourth quarter sales grew 10% year-over-year.
• Fourth quarter diluted EPS increased to $3.49.
• Recurring revenues increased 14% in Q4.
• Projected 2021 sales growth of 5% to 8%.

Negative

• Fiscal year 2020 sales decreased 2% year-over-year.
• Fiscal year 2020 GAAP EPS decreased to $8.36.

Waters Corporation (NYSE: WAT) today announced fourth quarter 2020 sales of $787 million, a 10% increase as reported, compared to sales of $716 million for the fourth quarter of 2019. Foreign currency translation benefited sales growth by approximately 3% for the quarter.

On a GAAP basis, diluted earnings per share (EPS) for the fourth quarter of 2020 increased to $3.49, compared to $3.12 for the fourth quarter of 2019. On a non-GAAP basis, EPS increased to $3.65, compared to $3.20 for the fourth quarter of 2019. 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 $267 million for the fourth quarter of 2020, compared to $192 million for the fourth quarter of 2019. On a non-GAAP basis, adjusted free cash flow for the fourth quarter of 2020 was $240 million versus $158 million for the fourth quarter of 2019.

For fiscal year 2020, the Company’s sales were $2,365 million, a decrease of 2% as reported, compared to sales of $2,407 million for fiscal year 2019. Foreign currency translation benefited sales growth by less than 1% during fiscal year 2020.

On a GAAP basis, EPS for fiscal year 2020 decreased to $8.36, compared to $8.69 for fiscal year 2019. On a non-GAAP basis, EPS increased to $9.05, compared to $8.99 in fiscal year 2019. Both GAAP and non-GAAP EPS were impacted by the decline in sales volumes.

On a GAAP basis, net cash provided by operating activities was $791 million for fiscal year 2020, compared to $643 million for fiscal year 2019. On a non-GAAP basis, adjusted free cash flow for fiscal year 2020 was $726 million versus $576 million for fiscal year 2019.

“This past year has been one of change and sacrifice, though it has been defined by the incredible resilience of our global team. From navigating the pandemic to a transition in leadership, the Waters team has responded with admirable drive, determination and spirit. And for that I am grateful,” said Dr. Udit Batra, President and Chief Executive Officer of Waters Corporation. “We are pleased with our fourth quarter results, driven by pharmaceutical market improvement, growth across all major geographies, contributions from COVID-related sales and early results from our near-term growth initiatives. We have made substantial progress over the last five months, and while it’s early days, I remain confident in our product portfolio, competitive position and our team to seize the opportunities for Waters in 2021.”

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 fourth quarter of 2020, sales into the pharmaceutical market increased 17% as reported and 15% in constant currency, sales into the industrial market increased 8% as reported and 5% in constant currency and sales into the academic and governmental markets declined 13% as reported and 15% in constant currency. For fiscal year 2020, sales into the pharmaceutical market increased 2% as reported and 1% in constant currency, sales into the industrial market declined 2% as reported and 3% in constant currency and sales into the academic and governmental markets declined 16% as reported and in constant currency.

During the fourth quarter, recurring revenues, which represent the combination of service and precision chemistries revenues, increased 14% as reported and 11% in constant currency, while instrument system sales increased 6% as reported and 4% in constant currency. For fiscal year 2020, recurring revenues increased 4% as reported and 3% in constant currency, while instrument system sales declined 8% as reported and 9% in constant currency.

Geographically, sales in Asia during the quarter increased 13% as reported and 12% in constant currency, sales in the Americas increased 3% (with U.S. sales growing 4%) and sales in Europe increased 15% as reported and 6% in constant currency. For fiscal year 2020, sales in Asia declined 4% as reported and in constant currency, sales in the Americas declined 4% (with U.S. sales declining 2%) and sales in Europe increased 5% as reported and 2% in constant currency.

First Quarter and Fiscal Year 2021 Financial Outlook

The Company expects full-year 2021 constant-currency sales growth in the range of 5% to 8%. 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 $9.32 to $9.57. 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 first quarter 2021 constant-currency sales growth in the range of 7% to 10%. Currency translation is expected to increase first quarter sales growth by approximately three percentage points. The Company also expects first quarter 2021 non-GAAP EPS in the range of $1.50 to $1.60. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the first quarter.

The Board of Directors of the Company has approved an extension of the Company's previously announced share repurchase program through January 21, 2023. As of the date of this press release, $1.5 billion remains available under the program for repurchases.

Conference Call

Waters Corporation will webcast its fourth quarter 2020 financial results conference call today, February 2, 2021 at 8:00 a.m. Eastern Time. To listen to the call, please visit www.waters.com, select “Investors” under the “About Waters” section, and click on the “Live Webcast.” A replay will be available through February 9, 2021 at midnight Eastern Time on the same website by webcast and also by phone at 800-337-6551.

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 7,000 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 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, 2019, 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 periods ended March 28, 2020, June 27, 2020 and September 26, 2020, each 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								Twelve Months Ended
	December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Net sales	$	786,658			$	716,294			$	2,365,365			$	2,406,596
Costs and operating expenses:
Cost of sales		320,569				299,068				1,006,689				1,010,700
Selling and administrative expenses		153,084				141,208				553,698				534,791
Research and development expenses		39,662				37,072				140,777				142,955
Purchased intangibles amortization		2,687				2,529				10,587				9,693
Asset impairment(1)		6,945				-				6,945				-
Litigation provision		-				-				1,180				-
Operating income		263,711				236,417				645,489				708,457
Other income (expense)		374				(2,223	)			(1,775	)			(3,586	)
Interest expense, net		(6,834	)			(9,806	)			(32,800	)			(26,632	)
Income from operations before income taxes		257,251				224,388				610,914				678,239
Provision for income taxes(2)		38,940				23,719				89,343				86,041
Net income	$	218,311			$	200,669			$	521,571			$	592,198
Net income per basic common share	$	3.51			$	3.15			$	8.40			$	8.76
Weighted-average number of basic common shares		62,170				63,795				62,094				67,627
Net income per diluted common share	$	3.49			$	3.12			$	8.36			$	8.69
Weighted-average number of diluted common shares and equivalents		62,501				64,348				62,414				68,166

(1) The asset impairment incurred during the three and twelve months ended December 31, 2020 included a non-cash impairment charge of $10 million related to certain intangible assets previously acquired. In conjunction with the intangible asset impairment charge, the Company also reduced its liability for contingent consideration of $3 million during the three and twelve months ended December 31, 2020. The net impact of $7 million is reported as an asset impairment in the consolidated statements of operations.
(2) The provision for income taxes for the twelve months ended December 31, 2019 included a $3 million benefit related to the tax on the change in foreign currency exchange rates on the earnings taxed in December 31, 2017 under the Tax Cuts and Jobs Act and the subsequent finalization of the tax regulations during the first quarter of 2019. The difference is due to the change from the foreign currency exchange rates required by the U.S. Department of the Treasury on December 31, 2017 to the foreign currency exchange rates on either the date of distribution of assets into the U.S. or the foreign currency exchange rates as of December 31, 2019.

Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segment, Products & Services, Geography and Markets
Three Months Ended December 31, 2020 and December 31, 2019
(In thousands)
														Current
														Period			Constant
					Three Months Ended						Percent			Currency			Currency
					December 31, 2020			December 31, 2019			Change			Impact			Growth Rate (a)
NET SALES - OPERATING SEGMENT
Waters					$	703,738		$	634,306			11%		$	17,249			8%
TA						82,920			81,988			1%			2,156			(1%)
Total					$	786,658		$	716,294			10%		$	19,405			7%
NET SALES - PRODUCTS & SERVICES
Instruments					$	400,436		$	376,631			6%		$	10,482			4%
Service						254,667			227,446			12%			5,534			10%
Chemistry						131,555			112,217			17%			3,389			14%
Total Recurring						386,222			339,663			14%			8,923			11%
Total					$	786,658		$	716,294			10%		$	19,405			7%
NET SALES - GEOGRAPHY
Asia					$	295,706		$	261,990			13%		$	1,058			12%
Americas						251,437			245,140			3%			115			3%
Europe						239,515			209,164			15%			18,232			6%
Total					$	786,658		$	716,294			10%		$	19,405			7%
NET SALES - MARKETS
Pharmaceutical					$	460,384		$	392,391			17%		$	10,808			15%
Industrial						233,180			216,698			8%			6,549			5%
Academic & Governmental						93,094			107,205			(13%)			2,048			(15%)
Total					$	786,658		$	716,294			10%		$	19,405			7%
NET SALES - EXCLUDING CHINA
Total Net Sales					$	786,658		$	716,294			10%		$	19,405			7%
China Net Sales						151,639			125,013			21%			2,644			19%
Total Net Sales Excluding China					$	635,019		$	591,281			7%		$	16,761			5%

___________________________________________
(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
Twelve Months Ended December 31, 2020 and December 31, 2019
(In thousands)
														Current
														Period			Constant
					Twelve Months Ended						Percent			Currency			Currency
					December 31, 2020			December 31, 2019			Change			Impact			Growth Rate (a)
NET SALES - OPERATING SEGMENT
Waters					$	2,117,124		$	2,137,483			(1%)		$	12,248			(2%)
TA						248,241			269,113			(8%)			1,543			(8%)
Total					$	2,365,365		$	2,406,596			(2%)		$	13,791			(2%)
NET SALES - PRODUCTS & SERVICES
Instruments					$	1,065,253		$	1,155,171			(8%)		$	8,295			(9%)
Service						868,032			839,407			3%			2,618			3%
Chemistry						432,080			412,018			5%			2,878			4%
Total Recurring						1,300,112			1,251,425			4%			5,496			3%
Total					$	2,365,365		$	2,406,596			(2%)		$	13,791			(2%)
NET SALES - GEOGRAPHY
Asia					$	899,177		$	939,112			(4%)		$	(5,743)			(4%)
Americas						797,842			830,241			(4%)			80			(4%)
Europe						668,346			637,243			5%			19,454			2%
Total					$	2,365,365		$	2,406,596			(2%)		$	13,791			(2%)
NET SALES - MARKETS
Pharmaceutical					$	1,386,966		$	1,365,275			2%		$	5,871			1%
Industrial						707,772			719,377			(2%)			7,959			(3%)
Academic & Governmental						270,627			321,944			(16%)			(39)			(16%)
Total					$	2,365,365		$	2,406,596			(2%)		$	13,791			(2%)
NET SALES - EXCLUDING CHINA
Total Net Sales					$	2,365,365		$	2,406,596			(2%)		$	13,791			(2%)
China Net Sales						404,352			439,557			(8%)			747			(8%)
Total Net Sales Excluding China					$	1,961,013		$	1,967,039			-		$	13,044			(1%)

___________________________________________
(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 & Twelve Months Ended December 31, 2020 and December 31, 2019
(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 December 31, 2020
GAAP				$	162,716			$	263,711			33.5	%		$	374			$	257,251		$	38,940			$	218,311			$	3.49
Adjustments:
	Purchased intangibles amortization (b)				(2,687	)			2,687			0.3	%			-				2,687			541				2,146				0.03
	Asset Impairment (c)				(6,945	)			6,945			0.9	%			-				6,945			1,180				5,765				0.09
	Restructuring costs and certain other items (d)				(2,142	)			2,142			0.3	%			(1,623	)			519			139				380				0.01
	Pension expenses (e)				-				-			-				235				235			71				164				-
	Certain income tax items (f)				-				-			-				-				-			(1,052	)			1,052				0.02
Adjusted Non-GAAP				$	150,942			$	275,485			35.0	%		$	(1,014	)		$	267,637		$	39,819			$	227,818			$	3.65
Three Months Ended December 31, 2019
GAAP				$	143,737			$	236,417			33.0	%		$	(2,223	)		$	224,388		$	23,719			$	200,669			$	3.12
Adjustments:
	Purchased intangibles amortization (b)				(2,529	)			2,529			0.4	%			-				2,529			512				2,017				0.03
	Restructuring costs and certain other items (d)				(1,810	)			1,810			0.3	%			-				1,810			483				1,327				0.02
	Pension expenses (e)				-				-			-				1,602				1,602			385				1,217				0.02
	Certain income tax items (f)				-				-			-				-				-			(714	)			714				0.01
Adjusted Non-GAAP				$	139,398			$	240,756			33.6	%		$	(621	)		$	230,329		$	24,385			$	205,944			$	3.20
Twelve Months Ended December 31, 2020
GAAP				$	572,410			$	645,489			27.3	%		$	(1,775	)		$	610,914		$	89,343			$	521,571			$	8.36
Adjustments:
	Purchased intangibles amortization (b)				(10,587	)			10,587			0.4	%			-				10,587			2,102				8,485				0.14
	Asset Impairment (c)				(6,945	)			6,945			0.3	%			-				6,945			1,180				5,765				0.09
	Restructuring costs and certain other items (d)				(35,196	)			35,196			1.5	%			(2,084	)			33,112			7,512				25,600				0.41
	Pension expenses (e)				-				-			-				235				235			71				164				-
	Litigation settlement (g)				(1,180	)			1,180			-				-				1,180			283				897				0.01
	Certain income tax items (f)				-				-			-				-				-			(2,619	)			2,619				0.04
Adjusted Non-GAAP				$	518,502			$	699,397			29.6	%		$	(3,624	)		$	662,973		$	97,872			$	565,101			$	9.05
Twelve Months Ended December 31, 2019
GAAP				$	544,484			$	708,457			29.4	%		$	(3,586	)		$	678,239		$	86,041			$	592,198			$	8.69
Adjustments:
	Purchased intangibles amortization (b)				(9,693	)			9,693			0.4	%			-				9,693			2,032				7,661				0.11
	Restructuring costs and certain other items (d)				(16,192	)			16,192			0.7	%			-				16,192			4,106				12,086				0.18
	Pension expenses (e)				-				-			-				1,602				1,602			385				1,217				0.02
	Tax reform (h)				-				-			-				-				-			3,229				(3,229	)			(0.05	)
	Certain income tax items (f)				-				-			-				-				-			(2,622	)			2,622				0.04
Adjusted Non-GAAP				$	518,599			$	734,342			30.5	%		$	(1,984	)		$	705,726		$	93,171			$	612,555			$	8.99

___________________________________________
(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)	The asset impairment, a non-cash expense, is a one-time charge related to the write-off of certain intangible assets and a contingent consideration liability that were both associated with a previous acquisition. The asset impairment was excluded as the Company does not believe these expenses are indicative of normal operating costs.
(d)	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.
(e)	The pension settlement and curtailment expenses associated with certain defined benefit pension plans were excluded as the Company believes these expenses are not indicative of normal operating costs.
(f)	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.
(g)	Litigation provisions and settlement gains were excluded as these items are isolated, unpredictable and not expected to recur regularly.
(h)	The provision for income taxes for the twelve months ended December 31, 2019 included a $3 million benefit related to the tax on the change in foreign currency exchange rates on the earnings taxed in December 31, 2017 under the Tax Cuts and Jobs Act and the subsequent finalization of the tax regulations during the first quarter of 2019. The difference is due to the change from the foreign currency exchange rates required by the U.S. Department of the Treasury on December 31, 2017 to the foreign currency exchange rates on either the date of distribution of assets into the U.S. or the foreign currency exchange rates as of December 31, 2019.

Waters Corporation and Subsidiaries
Preliminary Condensed Unclassified Consolidated Balance Sheets
(In thousands and unaudited)
					December 31, 2020			December 31, 2019
Cash, cash equivalents and investments					$	443,146		$	337,144
Accounts receivable						573,316			587,734
Inventories						304,281			320,551
Property, plant and equipment, net						494,003			417,342
Intangible assets, net						258,645			240,203
Goodwill						444,362			356,128
Other assets						322,167			297,953
Total assets					$	2,839,920		$	2,557,055
Notes payable and debt					$	1,356,515		$	1,681,163
Other liabilities						1,251,261			1,092,173
Total liabilities						2,607,776			2,773,336
Total stockholders' equity (deficit)						232,144			(216,281	)
Total liabilities and stockholders' equity (deficit)					$	2,839,920		$	2,557,055

Waters Corporation and Subsidiaries
Preliminary Condensed Consolidated Statements of Cash Flows
Three and Twelve Months Ended December 31, 2020 and December 31, 2019
(In thousands and unaudited)
				Three Months Ended								Twelve Months Ended
				December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Cash flows from operating activities:
	Net income			$	218,311			$	200,669			$	521,571			$	592,198
	Adjustments to reconcile net income to net
			cash provided by operating activities:
		Stock-based compensation			9,150				9,660				36,865				38,577
		Depreciation and amortization			44,260				24,977				135,351				105,296
		Change in operating assets and liabilities, net			(4,239	)			(43,411	)			96,720				(92,984	)
			Net cash provided by operating activities		267,482				191,895				790,507				643,087
Cash flows from investing activities:
	Additions to property, plant, equipment
			and software capitalization		(47,044	)			(53,618	)			(172,384	)			(163,823	)
	Business acquisitions, net of cash acquired				(3,881	)			-				(80,545	)			-
	Investment in unaffiliated companies				(2,293	)			(1,593	)			(6,143	)			(8,843	)
	Net change in investments				15,685				(1,428	)			(5,022	)			941,468
			Net cash (used in) provided by investing activities		(37,533	)			(56,639	)			(264,094	)			768,802
Cash flows from financing activities:
	Net change in debt				(215,000	)			325,308				(325,366	)			532,256
	Proceeds from stock plans				37,612				19,404				66,033				53,715
	Purchases of treasury shares				(56	)			(559,558	)			(196,409	)			(2,469,258	)
	Other cash flow from financing activities, net				4,910				3,709				15,240				10,609
			Net cash used in financing activities		(172,534	)			(211,137	)			(440,502	)			(1,872,678	)
Effect of exchange rate changes on cash and cash equivalents					4,346				6,947				15,069				224
			Increase (decrease) in cash and cash equivalents		61,761				(68,934	)			100,980				(460,565	)
Cash and cash equivalents at beginning of period					374,934				404,649				335,715				796,280
			Cash and cash equivalents at end of period	$	436,695			$	335,715			$	436,695			$	335,715
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a)
Net cash provided by operating activities - GAAP				$	267,482			$	191,895			$	790,507			$	643,087
	Adjustments:
		Additions to property, plant, equipment
			and software capitalization		(47,044	)			(53,618	)			(172,384	)			(163,823	)
		Tax reform payments			-				-				38,454				29,109
		Major facility renovations			19,486				19,276				69,806				67,624
Free Cash Flow - Adjusted Non-GAAP				$	239,924			$	157,553			$	726,383			$	575,997

(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
			April 3, 2021								December 31, 2021
						Range								Range
Projected Sales
Projected constant-currency sales growth rate (a)				7	%	-		10	%			5	%	-		8	%
Projected currency impact				3	%	-		3	%			1	%	-		2	%
Projected sales growth rate as reported				10	%	-		13	%			6	%	-		10	%
Projected Earnings Per Diluted Share						Range								Range
Projected GAAP earnings per diluted share			$	1.45		-	$	1.55			$	9.12		-	$	9.37
Adjustments:
	Purchased intangibles amortization		$	0.04		-	$	0.04			$	0.16		-	$	0.16
	Certain income tax items		$	0.01		-	$	0.01			$	0.04		-	$	0.04
Projected adjusted non-GAAP earnings per diluted share			$	1.50		-	$	1.60			$	9.32		-	$	9.57

(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.

 

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FAQ

What were Waters Corporation's fourth quarter 2020 sales figures?

Waters Corporation reported fourth quarter 2020 sales of $787 million.

How much did diluted EPS increase for Waters Corporation in Q4 2020?

Diluted EPS increased to $3.49 in Q4 2020, up from $3.12 in Q4 2019.

What is the forecast for Waters Corporation's sales growth in 2021?

Waters Corporation expects full-year 2021 constant-currency sales growth in the range of 5% to 8%.

What was Waters Corporation's total sales for fiscal year 2020?

Total sales for fiscal year 2020 were $2,365 million, a 2% decrease from 2019.

How much is remaining under Waters Corporation's share repurchase program?

As of the press release, $1.5 billion remains available under the share repurchase program.