Waters Corporation (NYSE: WAT) Reports Fourth Quarter and Full-Year 2023 Financial Results
- Operational excellence drove gross margin expansion of 170 basis points and adjusted operating margin expansion of 120 basis points
- Wyatt acquisition delivered an on-target M&A contribution of 2.5% to sales
- Strong execution in tough market conditions delivered sales of $2,956 million, a decline of 0.5% as reported and 2% in organic constant currency
- Sales into the pharmaceutical, industrial, and academic/government markets decreased, as well as instrument system sales, with significant declines in Asia
- Full-year 2024 organic constant currency sales growth expected to be in the range of -0.5% to +1.5%
- Sales of $819 million declined 4.5% as reported and 8% in organic constant currency, in line with guidance
- Sales into the pharmaceutical, industrial, and academic/government markets decreased, as well as instrument system sales, with significant declines in Asia
- The Company expects full-year 2024 organic constant currency sales growth to be in the range of -0.5% to +1.5%
Insights
The recent financial results from Waters Corporation indicate a contraction in sales both quarterly and annually, which can be a red flag for investors. However, the expansion in gross and adjusted operating margins suggests effective cost management and operational efficiency, which could mitigate concerns over revenue declines. The increase in non-GAAP EPS, despite currency headwinds and acquisition-related dilution, reflects a strong underlying profitability that investors would find reassuring.
From a financial perspective, the Wyatt acquisition's precise contribution to sales aligns with forecasts, indicating successful M&A execution. This performance, combined with the company's guidance for the upcoming fiscal year, provides a nuanced picture of its future revenue trajectory and profitability. The projected headwinds from foreign exchange and the specific contribution from the Wyatt acquisition to full-year reported sales growth are critical factors for investors to consider in their valuation models.
Waters Corporation's performance in different markets and product categories provides insights into broader industry trends. The decline in sales to the pharmaceutical market and instrument system sales suggests a potential slowdown in capital expenditure among pharmaceutical companies, which could be indicative of broader economic pressures or sector-specific challenges. Conversely, the growth in recurring revenues highlights a resilient demand for Waters' service and precision chemistries, a positive sign for the company's long-term revenue stability.
Geographically, the stark decline in China sales may reflect regulatory challenges or economic conditions affecting the region, while growth in the Americas and Europe, albeit mixed, suggests regional variability in market conditions. These trends are essential for businesses operating in the analytical instruments sector to understand regional dynamics and adapt their strategies accordingly.
The impact of currency fluctuations on Waters Corporation's financials is a microcosm of the broader economic environment. The significant headwinds due to unfavorable foreign exchange rates underscore the volatility in international markets and the importance of currency risk management for multinational companies. Additionally, the expected decrease in sales growth due to currency translation in the 2024 guidance highlights the potential for continued currency challenges in the global economy.
Investors should note the resilience of the academic and government markets, which may indicate stable funding or prioritization of research in these sectors despite economic uncertainties. This could suggest a more defensive positioning within the industry, where companies with diversified revenue streams across sectors and geographies may be better insulated against market downturns.
Highlights
Fourth Quarter 2023
- Sales of
$819 million 4.5% as reported and8% in organic constant currency, in line with guidance - Operational excellence drove gross margin expansion of 170 basis points and adjusted operating margin expansion of 120 basis points
- Non-GAAP EPS of
$3.62 $3.65
Full-Year 2023
- Strong execution in tough market conditions delivered sales of
$2,956 million 0.5% as reported and2% in organic constant currency, as expected - Wyatt acquisition delivered an on-target M&A contribution of
2.5% to sales - Gross margin expanded 160 basis points to
59.6% and adjusted operating margin expanded 70 basis points to30.9%
Sales for the fourth quarter of 2023 were
On a GAAP basis, diluted earnings per share (EPS) for the fourth quarter of 2023 were
For fiscal year 2023, the Company's sales were
On a GAAP basis, EPS for fiscal year 2023 was
"Waters results in 2023 demonstrate our teams' strong focus on execution, the competitiveness of our new products, and the resilience of demand in QA/QC and high-volume applications," said Dr. Udit Batra, President & CEO, Waters Corporation. "Our focus on operational excellence helped us to deliver exceptional margin expansion even in difficult market conditions."
Dr. Batra continued, "The year ended with our business benefitting from an expected increase in sales in Q4 versus that of Q3, a testament to our teams' commitment to innovation that addresses our customers' greatest needs. We also reached a new chapter in our transformation in 2023 with the acquisition of Wyatt. We have made very good progress integrating the team, achieving our target sales contribution of
Fourth Quarter 2023
During the fourth quarter of 2023, sales into the pharmaceutical market decreased
During the quarter, instrument system sales decreased
Geographically, sales in
Full-Year 2023
For fiscal year 2023, sales into the pharmaceutical market decreased
For fiscal year 2023, instrument system sales decreased
Geographically, sales in
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 First Quarter 2024 Financial Guidance
Full-Year 2024 Financial Guidance
The Company expects full-year 2024 organic constant currency sales growth to be in the range of -
The Company expects full-year 2024 non-GAAP EPS to be in the range of
Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full-year.
First Quarter 2024 Financial Guidance
The Company expects first quarter 2024 organic constant currency sales growth to be in the range of -
The Company expects first quarter 2024 non-GAAP EPS to be in the range of
Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the first quarter.
Conference Call Details
Waters Corporation will webcast its fourth quarter and fiscal year 2023 financial results conference call today, February 6, 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 "Investors" under the "About Waters" section, navigate to "Events & Presentations," and click on the "Webcast." A replay will be available through February 20, 2024 on the same website by webcast and also by phone at (866) 363-1805.
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 60 years. With approximately 8,000 employees worldwide, Waters operates directly in 35 countries, including 14 manufacturing facilities, and with products available in more than 100 countries. For more information, visit www.waters.com.
Non-GAAP Financial Measures
This press release contains financial measures, such as organic 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
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, 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-
Waters Corporation and Subsidiaries | |||||||
Consolidated Statements of Operations | |||||||
(In thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended | Twelve Months Ended | ||||||
December 31, | December 31, | December 31, | December 31, | ||||
Net sales | $ 819,474 | $ 858,510 | $ 2,956,416 | $ 2,971,956 | |||
Costs and operating expenses: | |||||||
Cost of sales | 318,360 | 348,190 | 1,195,223 | 1,248,182 | |||
Selling and administrative expenses | 180,357 | 174,257 | 736,014 | 658,026 | |||
Research and development expenses | 44,386 | 48,277 | 174,945 | 176,190 | |||
Purchased intangibles amortization | 12,148 | 1,503 | 32,558 | 6,366 | |||
Acquired in-process research and development | - | - | - | 9,797 | |||
Operating income | 264,223 | 286,283 | 817,676 | 873,395 | |||
Other (expense) income, net | (557) | (372) | 807 | 2,228 | |||
Interest expense, net | (26,066) | (10,415) | (82,240) | (37,777) | |||
Income from operations before income taxes | 237,600 | 275,496 | 736,243 | 837,846 | |||
Provision for income taxes | 21,395 | 48,434 | 94,009 | 130,091 | |||
Net income | $ 216,205 | $ 227,062 | $ 642,234 | $ 707,755 | |||
Net income per basic common share | $ 3.66 | $ 3.83 | $ 10.87 | $ 11.80 | |||
Weighted-average number of basic common shares | 59,142 | 59,329 | 59,076 | 59,985 | |||
Net income per diluted common share | $ 3.65 | $ 3.81 | $ 10.84 | $ 11.73 | |||
Weighted-average number of diluted common shares and equivalents | 59,311 | 59,644 | 59,270 | 60,331 | |||
Waters Corporation and Subsidiaries | ||||||||||||||
Reconciliation of GAAP to Adjusted Non-GAAP | ||||||||||||||
Net Sales by Operating Segments, Products & Services, Geography and Markets | ||||||||||||||
Three Months Ended December 31, 2023 and December 31, 2022 | ||||||||||||||
(In thousands) | ||||||||||||||
Organic | ||||||||||||||
Constant | ||||||||||||||
Three Months Ended | Percent | Impact of | Impact of | Currency | ||||||||||
December 31, 2023 | December 31, 2022 | Change | Currency | Acquisitions | Growth Rate (a) | |||||||||
NET SALES - OPERATING SEGMENTS | ||||||||||||||
Waters | $ | 716,932 | $ | 754,753 | (5 %) | 0 % | 4 % | (9 %) | ||||||
TA | 102,542 | 103,757 | (1 %) | 1 % | 0 % | (2 %) | ||||||||
Total | $ | 819,474 | $ | 858,510 | (5 %) | 0 % | 3 % | (8 %) | ||||||
NET SALES - PRODUCTS & SERVICES | ||||||||||||||
Instruments | $ | 397,201 | $ | 463,038 | (14 %) | 1 % | 5 % | (20 %) | ||||||
Service | 278,888 | 255,734 | 9 % | 1 % | 2 % | 6 % | ||||||||
Chemistry | 143,385 | 139,738 | 3 % | 0 % | 0 % | 3 % | ||||||||
Total Recurring | 422,273 | 395,472 | 7 % | 0 % | 2 % | 5 % | ||||||||
Total | $ | 819,474 | $ | 858,510 | (5 %) | 0 % | 3 % | (8 %) | ||||||
NET SALES - GEOGRAPHY | ||||||||||||||
$ | 261,893 | $ | 319,465 | (18 %) | (3 %) | 1 % | (16 %) | |||||||
303,746 | 293,118 | 4 % | 0 % | 6 % | (2 %) | |||||||||
253,835 | 245,927 | 3 % | 6 % | 4 % | (6 %) | |||||||||
Total | $ | 819,474 | $ | 858,510 | (5 %) | 0 % | 3 % | (8 %) | ||||||
NET SALES - MARKETS | ||||||||||||||
Pharmaceutical | $ | 463,698 | $ | 492,763 | (6 %) | 1 % | 4 % | (11 %) | ||||||
Industrial | 260,249 | 267,923 | (3 %) | (0 %) | 1 % | (4 %) | ||||||||
Academic & Government | 95,527 | 97,824 | (2 %) | 1 % | 7 % | (9 %) | ||||||||
Total | $ | 819,474 | $ | 858,510 | (5 %) | 0 % | 3 % | (8 %) | ||||||
(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. | ||||||
Waters Corporation and Subsidiaries | ||||||||||||||
Reconciliation of GAAP to Adjusted Non-GAAP | ||||||||||||||
Net Sales by Operating Segments, Products & Services, Geography and Markets | ||||||||||||||
Twelve Months Ended December 31, 2023 and December 31, 2022 | ||||||||||||||
(In thousands) | ||||||||||||||
Organic | ||||||||||||||
Constant | ||||||||||||||
Twelve Months Ended | Percent | Impact of | Impact of | Currency | ||||||||||
December 31, 2023 | December 31, 2022 | Change | Currency | Acquisitions | Growth Rate (a) | |||||||||
NET SALES - OPERATING SEGMENTS | ||||||||||||||
Waters | $ | 2,601,590 | $ | 2,626,462 | (1 %) | (1 %) | 3 % | (3 %) | ||||||
TA | 354,826 | 345,494 | 3 % | (0 %) | 0 % | 3 % | ||||||||
Total | $ | 2,956,416 | $ | 2,971,956 | (1 %) | (1 %) | 3 % | (2 %) | ||||||
NET SALES - PRODUCTS & SERVICES | ||||||||||||||
Instruments | $ | 1,361,581 | $ | 1,462,770 | (7 %) | (1 %) | 4 % | (10 %) | ||||||
Service | 1,053,366 | 983,787 | 7 % | (1 %) | 2 % | 7 % | ||||||||
Chemistry | 541,469 | 525,399 | 3 % | (1 %) | 0 % | 4 % | ||||||||
Total Recurring | 1,594,835 | 1,509,186 | 6 % | (1 %) | 1 % | 6 % | ||||||||
Total | $ | 2,956,416 | $ | 2,971,956 | (1 %) | (1 %) | 3 % | (2 %) | ||||||
NET SALES - GEOGRAPHY | ||||||||||||||
$ | 1,007,825 | $ | 1,131,743 | (11 %) | (4 %) | 0 % | (7 %) | |||||||
1,108,573 | 1,055,635 | 5 % | (0 %) | 4 % | 1 % | |||||||||
840,018 | 784,578 | 7 % | 3 % | 3 % | 2 % | |||||||||
Total | $ | 2,956,416 | $ | 2,971,956 | (1 %) | (1 %) | 3 % | (2 %) | ||||||
NET SALES - MARKETS | ||||||||||||||
Pharmaceutical | $ | 1,696,875 | $ | 1,751,665 | (3 %) | (1 %) | 3 % | (5 %) | ||||||
Industrial | 909,003 | 909,805 | 0 % | (1 %) | 1 % | 0 % | ||||||||
Academic & Government | 350,538 | 310,486 | 13 % | (1 %) | 4 % | 10 % | ||||||||
Total | $ | 2,956,416 | $ | 2,971,956 | (1 %) | (1 %) | 3 % | (2 %) | ||||||
(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. | ||||||
Waters Corporation and Subsidiaries | ||||||||||||||||||||||||||||
Reconciliation of GAAP to Adjusted Non-GAAP Financials | ||||||||||||||||||||||||||||
Three and Twelve Months Ended December 31, 2023 and December 31, 2022 | ||||||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||
Acquired | Income from | |||||||||||||||||||||||||||
IPR&D and | Operations | |||||||||||||||||||||||||||
Selling & | Research & | Operating | Other | before | Provision for | Diluted | ||||||||||||||||||||||
Administrative | Development | Operating | Income | (Expense) | Income | Income | Net | Earnings | ||||||||||||||||||||
Expenses(a) | Expenses | Income | Percentage | Income | Taxes | Taxes | Income | per Share | ||||||||||||||||||||
Three Months Ended December 31, 2023 | ||||||||||||||||||||||||||||
GAAP | $ | 192,505 | $ | 44,386 | $ | 264,223 | 32.2 % | $ | (557) | $ | 237,600 | $ | 21,395 | $ | 216,205 | $ | 3.65 | |||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (12,148) | - | 12,148 | 1.5 % | - | 12,148 | 2,906 | 9,242 | 0.16 | |||||||||||||||||||
Restructuring costs and certain other items (d) | (1,036) | - | 1,036 | 0.1 % | 130 | 1,166 | 266 | 900 | 0.02 | |||||||||||||||||||
Acquisition related costs (e) | (649) | - | 649 | 0.1 % | - | 649 | 156 | 493 | 0.01 | |||||||||||||||||||
Retention bonus obligation (g) | (5,725) | (1,909) | 7,634 | 0.9 % | - | 7,634 | 1,832 | 5,802 | 0.10 | |||||||||||||||||||
Certain income tax items (f) | - | - | - | - | - | - | 17,651 | (17,651) | (0.30) | |||||||||||||||||||
Adjusted Non-GAAP | $ | 172,947 | $ | 42,477 | $ | 285,690 | 34.9 % | $ | (427) | $ | 259,197 | $ | 44,206 | $ | 214,991 | $ | 3.62 | |||||||||||
Three Months Ended December 31, 2022 | ||||||||||||||||||||||||||||
GAAP | $ | 175,760 | $ | 48,277 | $ | 286,283 | 33.3 % | $ | (372) | $ | 275,496 | $ | 48,434 | $ | 227,062 | $ | 3.81 | |||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (1,503) | - | 1,503 | 0.2 % | - | 1,503 | 346 | 1,157 | 0.02 | |||||||||||||||||||
Restructuring costs and certain other items (d) | (1,364) | - | 1,364 | 0.2 % | (120) | 1,244 | 278 | 966 | 0.02 | |||||||||||||||||||
Adjusted Non-GAAP | $ | 172,893 | $ | 48,277 | $ | 289,150 | 33.7 % | $ | (492) | $ | 278,243 | $ | 49,058 | $ | 229,185 | $ | 3.84 | |||||||||||
Twelve Months Ended December 31, 2023 | ||||||||||||||||||||||||||||
GAAP | $ | 768,572 | $ | 174,945 | $ | 817,676 | 27.7 % | $ | 807 | $ | 736,243 | $ | 94,009 | $ | 642,234 | $ | 10.84 | |||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (32,558) | - | 32,558 | 1.1 % | - | 32,558 | 7,758 | 24,800 | 0.42 | |||||||||||||||||||
Restructuring costs and certain other items (d) | (29,917) | - | 29,917 | 1.0 % | (521) | 29,396 | 7,126 | 22,270 | 0.38 | |||||||||||||||||||
Acquisition related costs (e) | (13,947) | - | 13,947 | 0.5 % | - | 13,947 | 3,347 | 10,600 | 0.18 | |||||||||||||||||||
Retention bonus obligation (g) | (14,093) | (4,699) | 18,792 | 0.6 % | - | 18,792 | 4,510 | 14,282 | 0.24 | |||||||||||||||||||
Certain income tax items (f) | - | - | - | - | - | - | 17,651 | (17,651) | (0.30) | |||||||||||||||||||
Adjusted Non-GAAP | $ | 678,057 | $ | 170,246 | $ | 912,890 | 30.9 % | $ | 286 | $ | 830,936 | $ | 134,401 | $ | 696,535 | $ | 11.75 | |||||||||||
Twelve Months Ended December 31, 2022 | ||||||||||||||||||||||||||||
GAAP | $ | 664,392 | $ | 185,987 | $ | 873,395 | 29.4 % | $ | 2,228 | $ | 837,846 | $ | 130,091 | $ | 707,755 | $ | 11.73 | |||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (6,366) | - | 6,366 | 0.2 % | - | 6,366 | 1,461 | 4,905 | 0.08 | |||||||||||||||||||
Acquired in-process research and development (c) | - | (9,797) | 9,797 | 0.3 % | - | 9,797 | 2,351 | 7,446 | 0.12 | |||||||||||||||||||
Restructuring costs and certain other items (d) | (8,551) | - | 8,551 | 0.3 % | (3,273) | 5,278 | 1,186 | 4,092 | 0.07 | |||||||||||||||||||
Certain income tax items (f) | - | - | - | - | - | - | (994) | 994 | 0.02 | |||||||||||||||||||
Adjusted Non-GAAP | $ | 649,475 | $ | 176,190 | $ | 898,109 | 30.2 % | $ | (1,045) | $ | 859,287 | $ | 134,095 | $ | 725,192 | $ | 12.02 | |||||||||||
(a) | Selling & administrative expenses include purchased intangibles amortization. | ||||||
(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) | Acquired in-process research and development was excluded as it relates to the cost of a licensing arrangement for charge detection mass spectrometry that the Company believes is unusual and not indicative of its normal business operations. | ||||||
(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) | Certain income tax items were excluded as these non-cash expenses and benefits represent updates in management's assessment of ongoing examinations, tax audit settlements, or other tax items that are not indicative of the Company's normal or future income tax expense. | ||||||
(g) | 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. | ||||||
Waters Corporation and Subsidiaries | ||||
Preliminary Condensed Unclassified Consolidated Balance Sheets | ||||
(In thousands and unaudited) | ||||
December 31, 2023 | December 31, 2022 | |||
Cash, cash equivalents and investments | $ 395,974 | $ 481,391 | ||
Accounts receivable | 702,168 | 722,892 | ||
Inventories | 516,236 | 455,710 | ||
Property, plant and equipment, net | 639,073 | 582,217 | ||
Intangible assets, net | 629,187 | 227,399 | ||
Goodwill | 1,305,446 | 430,328 | ||
Other assets | 438,770 | 381,516 | ||
Total assets | $ 4,626,854 | $ 3,281,453 | ||
Notes payable and debt | $ 2,355,513 | $ 1,574,878 | ||
Other liabilities | 1,121,000 | 1,202,087 | ||
Total liabilities | 3,476,513 | 2,776,965 | ||
Total stockholders' equity | 1,150,341 | 504,488 | ||
Total liabilities and stockholders' equity | $ 4,626,854 | $ 3,281,453 | ||
Waters Corporation and Subsidiaries | |||||||||||
Preliminary Condensed Consolidated Statements of Cash Flows | |||||||||||
Three and Twelve Months Ended December 31, 2023 and December 31, 2022 | |||||||||||
(In thousands and unaudited) | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ 216,205 | $ 227,062 | $ 642,234 | $ 707,755 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Stock-based compensation | 4,644 | 11,635 | 36,868 | 42,564 | |||||||
Depreciation and amortization | 48,060 | 31,318 | 165,905 | 130,423 | |||||||
Change in operating assets and liabilities and other, net | (38,787) | (71,306) | (242,198) | (269,081) | |||||||
Net cash provided by operating activities | 230,122 | 198,709 | 602,809 | 611,661 | |||||||
Cash flows from investing activities: | |||||||||||
Additions to property, plant, equipment and software capitalization | (41,588) | (62,184) | (160,632) | (175,921) | |||||||
Business acquisitions, net of cash acquired | 3,553 | - | (1,282,354) | - | |||||||
Proceeds from equity investments, net | 91 | - | 742 | 8,903 | |||||||
Payments for intellectual property licenses | - | - | - | (7,535) | |||||||
Net change in investments | - | - | (21) | 66,586 | |||||||
Net cash used in investing activities | (37,944) | (62,184) | (1,442,265) | (107,967) | |||||||
Cash flows from financing activities: | |||||||||||
Net change in debt | (150,001) | 30,000 | 779,600 | 60,000 | |||||||
Proceeds from stock plans | 11,700 | 6,665 | 29,792 | 42,801 | |||||||
Purchases of treasury shares | 156 | (148,894) | (70,277) | (626,061) | |||||||
Other cash flow from financing activities, net | 7,658 | 783 | 15,836 | 13,627 | |||||||
Net cash (used in) provided by financing activities | (130,487) | (111,446) | 754,951 | (509,633) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (3,029) | 11,813 | (948) | (14,766) | |||||||
Increase (decrease) in cash and cash equivalents | 58,662 | 36,892 | (85,453) | (20,705) | |||||||
Cash and cash equivalents at beginning of period | 336,414 | 443,637 | 480,529 | 501,234 | |||||||
Cash and cash equivalents at end of period | $ 395,076 | $ 480,529 | $ 395,076 | $ 480,529 | |||||||
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a) | |||||||||||
Net cash provided by operating activities - GAAP | $ 230,122 | $ 198,709 | $ 602,809 | $ 611,661 | |||||||
Adjustments: | |||||||||||
Additions to property, plant, equipment and software capitalization | (41,588) | (62,184) | (160,632) | (175,921) | |||||||
Tax reform payments | - | - | 72,101 | 38,454 | |||||||
Litigation settlements paid, net | (375) | - | (1,500) | (584) | |||||||
Major facility renovations | 3,494 | 8,113 | 15,645 | 32,079 | |||||||
Payment of acquired Wyatt liabilities (b) | - | - | 25,617 | - | |||||||
Free Cash Flow - Adjusted Non-GAAP | $ 191,653 | $ 144,638 | $ 554,040 | $ 505,689 | |||||||
(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. | ||||||
Waters Corporation and Subsidiaries | |||||||||
Reconciliation of Projected GAAP to Adjusted Non-GAAP Financial Outlook | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
March 30, 2024 | December 31, 2024 | ||||||||
Range | Range | ||||||||
Projected Sales | |||||||||
Organic constant currency sales growth rate (a) | (11.0 %) | - | (9.0 %) | (0.5 %) | - | 1.5 % | |||
Impact of: | |||||||||
Currency translation | (1.0 %) | - | (1.0 %) | (0.8 %) | - | (0.8 %) | |||
Acquisitions | 3.5 % | - | 3.5 % | 1.3 % | - | 1.3 % | |||
Sales growth rate as reported | (8.5 %) | - | (6.5 %) | 0.0 % | - | 2.0 % | |||
Range | Range | ||||||||
Projected Earnings Per Diluted Share | |||||||||
GAAP earnings per diluted share | $ 1.77 | - | $ 1.87 | $ 10.80 | - | $ 11.10 | |||
Adjustments: | |||||||||
Purchased intangibles amortization | $ 0.18 | - | $ 0.18 | $ 0.70 | - | $ 0.70 | |||
Retention bonus obligation | $ 0.10 | - | $ 0.10 | $ 0.25 | - | $ 0.25 | |||
Adjusted non-GAAP earnings per diluted share | $ 2.05 | - | $ 2.15 | $ 11.75 | - | $ 12.05 | |||
(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. | |||||||
Contact: Caspar Tudor, Head of Investor Relations – (508) 482-2429
View original content:https://www.prnewswire.com/news-releases/waters-corporation-nyse-wat-reports-fourth-quarter-and-full-year-2023-financial-results-302053821.html
SOURCE Waters Corporation
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