Waters Corporation (NYSE: WAT) Reports Second Quarter 2024 Financial Results
Waters (NYSE: WAT) reported Q2 2024 financial results with sales of $709 million, exceeding guidance but declining 4% as reported and in organic constant currency. GAAP EPS was $2.40, while non-GAAP EPS was $2.63, surpassing expectations due to strong operational performance. The company experienced better-than-expected performance in China and higher M&A contribution from Wyatt.
Key highlights include:
- Ex-China organic constant currency sales growth across Pharma, Industrial, and Academic & Government end markets
- Full-year outlook adjusted for a more gradual market improvement in H2 2024
- Pharmaceutical market sales decreased 3% as reported, 4% in organic constant currency
- Industrial market sales decreased 4% both as reported and in organic constant currency
- Academic and government market sales declined 15% as reported, 16% in organic constant currency
Waters (NYSE: WAT) ha pubblicato i risultati finanziari per il secondo trimestre del 2024, con vendite di $709 milioni, superiori alle previsioni, ma in calo del 4% sia in termini assoluti che in valuta costante organica. L'EPS GAAP è stato di $2.40, mentre l'EPS non-GAAP è stato di $2.63, superando le aspettative grazie a una solida performance operativa. L'azienda ha registrato una performance migliore del previsto in Cina e un maggior contributo dalle operazioni di fusione e acquisizione con Wyatt.
Tra i punti salienti ci sono:
- Crescita delle vendite organiche in valuta costante al di fuori della Cina nei settori farmaceutico, industriale e nei mercati accademici e governativi
- Prospettive annuali adeguate per un miglioramento più graduale del mercato nella seconda metà del 2024
- Le vendite nel mercato farmaceutico sono diminuite del 3% in termini assoluti, e del 4% in valuta costante organica
- Le vendite nel mercato industriale sono diminuite del 4% sia in termini assoluti che in valuta costante organica
- Le vendite nel mercato accademico e governativo sono diminuite del 15% in termini assoluti e del 16% in valuta costante organica
Waters (NYSE: WAT) reportó resultados financieros del segundo trimestre de 2024 con ventas de $709 millones, superando las expectativas, pero con una caída del 4% tanto en términos reportados como en moneda constante orgánica. El EPS GAAP fue de $2.40, mientras que el EPS no-GAAP fue de $2.63, superando las expectativas gracias a un sólido rendimiento operativo. La compañía tuvo un desempeño mejor al esperado en China y una mayor contribución de fusiones y adquisiciones de Wyatt.
Los aspectos destacados incluyen:
- Crecimiento de ventas orgánicas en moneda constante fuera de China en los mercados farmacéutico, industrial y académico y gubernamental
- Perspectivas del año completo ajustadas para una mejora más gradual del mercado en la segunda mitad de 2024
- Las ventas del mercado farmacéutico disminuyeron un 3% en términos reportados, y un 4% en moneda constante orgánica
- Las ventas del mercado industrial cayeron un 4% tanto en términos reportados como en moneda constante orgánica
- Las ventas del mercado académico y gubernamental disminuyeron un 15% en términos reportados, y un 16% en moneda constante orgánica
Waters (NYSE: WAT)는 2024년 2분기 재무 결과를 발표하며 $709백만의 매출을 기록하여 예상치를 초과했지만, 보고 기준과 유기적 상수 통화 기준으로 각각 4% 감소했다고 전했습니다. GAAP EPS는 $2.40이며, 비-GAAP EPS는 $2.63로 강력한 운영 성과 덕분에 기대를 초과했습니다. 회사는 중국에서 예상보다 나은 성과를 경험했으며, Wyatt으로부터의 인수합병 기여도가 증가했습니다.
주요 하이라이트는 다음과 같습니다:
- 중국을 제외한 유기적 상수 통화 기준의 제약, 산업, 학술 및 정부 최종 시장에서의 매출 성장
- 2024년 하반기 시장 개선을 보다 점진적으로 반영한 연간 전망
- 제약 시장의 매출은 보고 기준으로 3% 감소했으며, 유기적 상수 통화 기준으로는 4% 감소했습니다
- 산업 시장의 매출은 보고 기준과 유기적 상수 통화 기준 모두 4% 감소했습니다
- 학술 및 정부 시장의 매출은 보고 기준으로 15%, 유기적 상수 통화 기준으로는 16% 감소했습니다
Waters (NYSE: WAT) a annoncé ses résultats financiers pour le deuxième trimestre 2024, avec des ventes de $709 millions, dépassant les prévisions, mais en baisse de 4% tant en termes de rapport que de monnaie constante organique. Le BAIIA GAAP était de $2.40, tandis que le BAIIA non-GAAP était de $2.63, dépassant les attentes grâce à une forte performance opérationnelle. L'entreprise a connu une performance meilleure que prévu en Chine et une contribution plus importante des fusions et acquisitions de Wyatt.
Les principaux points forts incluent :
- Croissance des ventes organiques en monnaie constante hors de Chine dans les secteurs pharmaceutique, industriel et académique et gouvernemental
- Prévisions annuelles ajustées pour une amélioration progressive du marché dans la seconde moitié de 2024
- Les ventes sur le marché pharmaceutique ont diminué de 3% en termes de rapport, et de 4% en monnaie constante organique
- Les ventes sur le marché industriel ont diminué de 4% tant dans les rapports que dans la monnaie constante organique
- Les ventes sur le marché académique et gouvernemental ont diminué de 15% en termes de rapport, et de 16% en monnaie constante organique
Waters (NYSE: WAT) hat die finanziellen Ergebnisse für das 2. Quartal 2024 veröffentlicht, mit einem Umsatz von $709 Millionen, was die Prognosen übertraf, aber um 4% sowohl in den gemeldeten Zahlen als auch in konstanter organischer Währung zurückging. GAAP EPS betrug $2.40, während das non-GAAP EPS bei $2.63 lag, was die Erwartungen aufgrund einer starken operativen Leistung übertraf. Das Unternehmen erlebte eine bessere als erwartete Performance in China und einen höheren Beitrag durch Fusionen und Übernahmen von Wyatt.
Wichtige Highlights sind:
- Wachstum der organischen Verkäufe in konstanter Währung außerhalb Chinas in den Endmärkten Pharma, Industrie und Akademie & Regierung
- Jahresausblick angepasst für eine allmählichere Marktentwicklung in der zweiten Hälfte von 2024
- Die Verkaufszahlen im Pharmamarkt sanken um 3% in den gemeldeten Zahlen und um 4% in konstanter organischer Währung
- Die Verkaufszahlen im Industriesektor sanken um 4% sowohl in den gemeldeten Zahlen als auch in konstanter organischer Währung
- Die Verkaufszahlen im akademischen und staatlichen Sektor sanken um 15% in den gemeldeten Zahlen und um 16% in konstanter organischer Währung
- Q2 sales of $709 million exceeded guidance
- Non-GAAP EPS of $2.63 beat expectations
- Better-than-expected performance in China
- Higher M&A contribution from Wyatt acquisition
- Resilient margins due to disciplined operational management
- Recurring revenues increased 4% as reported, 5% in organic constant currency
- Overall sales declined 4% as reported and in organic constant currency
- GAAP EPS decreased from $2.55 in Q2 2023 to $2.40 in Q2 2024
- Pharmaceutical market sales decreased 3% as reported, 4% in organic constant currency
- Industrial market sales decreased 4% both as reported and in organic constant currency
- Academic and government market sales declined 15% as reported, 16% in organic constant currency
- Instrument system sales decreased 14% as reported, 17% in organic constant currency
- Full-year 2024 organic constant currency sales growth guidance lowered to -2.0% to -0.5%
Waters 's Q2 2024 results present a mixed picture. While the company exceeded its guidance, there are several concerning trends to note:
- Sales declined
4% both as reported and in organic constant currency, reaching$709 million . - GAAP EPS decreased from
$2.55 to$2.40 , while non-GAAP EPS fell from$2.80 to$2.63 . - The pharmaceutical market, a key segment for Waters, saw a
3% decrease in sales as reported. - Instrument system sales, often an indicator of future growth, dropped significantly by
14% as reported.
On the positive side, recurring revenues increased by
Looking ahead, Waters has adjusted its full-year 2024 outlook, now expecting organic constant currency sales growth between
Investors should closely monitor Waters' ability to return to growth in H2 2024 as projected, particularly in key markets like pharmaceuticals and China. The company's innovative product pipeline and disciplined operational approach could provide a foundation for recovery, but macroeconomic headwinds and market uncertainties persist.
Waters 's Q2 2024 results offer valuable insights into broader market trends:
- The
4% decline in pharmaceutical market sales suggests ongoing challenges in this sector, possibly due to reduced R&D spending or delayed capital investments. - Industrial market sales also decreased by
4% , indicating potential slowdowns in manufacturing or quality control investments. - The sharp
15% drop in academic and government market sales is particularly noteworthy, possibly reflecting budget constraints or shifting priorities in research funding.
Geographically, the performance was uniformly challenging:
- Asia:
7% decrease as reported,3% in organic constant currency - Americas:
3% decrease as reported,7% in organic constant currency - Europe:
3% decrease as reported,7% in organic constant currency
The discrepancy between reported and organic constant currency figures in Asia suggests currency fluctuations played a significant role in this region's performance.
The
However, the
The company's cautious outlook for the rest of 2024 aligns with broader market uncertainties and suggests that the challenges faced in Q2 may persist into the second half of the year.
Highlights
- Sales of
$709 million 4% as reported and4% in organic constant currency - GAAP EPS of
$2.40 $2.63 - Beat driven by better-than-expected performance in
China , as well as higher-than-expected M&A contribution to overall sales from Wyatt - Ex-
China organic constant currency sales growth as expected across Pharma, Industrial, and Academic & Government end markets - Full-year outlook reflects the potential for a more gradual market improvement in the second half of the year than previously anticipated
Second Quarter 2024
Sales for the second quarter of 2024 were
On a GAAP basis, diluted earnings per share (EPS) for the second quarter of 2024 was
"Our team executed well to deliver second quarter results that exceeded both our top-line and bottom-line reported guidance," said Dr. Udit Batra, President & CEO, Waters Corporation. "Our margins remained resilient, thanks to our disciplined approach to operational management, which offset headwinds from volume, currency, and inflation."
Dr. Batra added, "We continue to build positive momentum in our business and expect to return to growth in the second half of the year. Looking further ahead, our steady stream of innovative new products positions us well in our attractive end markets."
Other Highlights
During the second quarter of 2024, sales into the pharmaceutical market 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 Third Quarter 2024 Financial Guidance
Full-Year 2024 Financial Guidance
The Company now 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.
Third Quarter 2024 Financial Guidance
The Company expects third quarter 2024 constant currency sales growth to be in the range of +
The Company expects third 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 third quarter.
Conference Call Details
Waters Corporation will webcast its second quarter 2024 financial results conference call today, July 31, 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 August 28, 2024 on the same website by webcast and also by phone at (800) 839-9317.
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
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 | Six Months Ended | ||||||
June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||
Net sales | $ 708,529 | $ 740,576 | $ 1,345,368 | $ 1,425,250 | |||
Costs and operating expenses: | |||||||
Cost of sales | 288,244 | 301,076 | 550,030 | 585,456 | |||
Selling and administrative expenses | 173,247 | 186,953 | 347,783 | 368,909 | |||
Research and development expenses | 46,182 | 45,873 | 90,777 | 88,564 | |||
Purchased intangibles amortization | 11,744 | 6,815 | 23,578 | 8,294 | |||
Litigation provision | - | - | 10,242 | - | |||
Operating income | 189,112 | 199,859 | 322,958 | 374,027 | |||
Other (expense) income, net | (302) | (352) | 1,957 | 1,036 | |||
Interest expense, net | (19,398) | (19,232) | (40,647) | (29,615) | |||
Income from operations before income taxes | 169,412 | 180,275 | 284,268 | 345,448 | |||
Provision for income taxes | 26,675 | 29,721 | 39,335 | 53,971 | |||
Net income | $ 142,737 | $ 150,554 | $ 244,933 | $ 291,477 | |||
Net income per basic common share | $ 2.41 | $ 2.56 | $ 4.13 | $ 4.97 | |||
Weighted-average number of basic common shares | 59,339 | 58,857 | 59,287 | 58,703 | |||
Net income per diluted common share | $ 2.40 | $ 2.55 | $ 4.12 | $ 4.95 | |||
Weighted-average number of diluted common shares and equivalents | 59,451 | 59,010 | 59,445 | 58,909 | |||
Waters Corporation and Subsidiaries | |||||||||||||||||
Reconciliation of GAAP to Adjusted Non-GAAP | |||||||||||||||||
Net Sales by Operating Segments, Products & Services, Geography and Markets | |||||||||||||||||
Three Months Ended June 29, 2024 and July 1, 2023 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Organic | |||||||||||||||||
Constant | |||||||||||||||||
Three Months Ended | Percent | Impact of | Impact of | Currency | |||||||||||||
June 29, 2024 | July 1, 2023 | Change | Currency | Acquisitions | Growth Rate (a) | ||||||||||||
NET SALES - OPERATING SEGMENTS | |||||||||||||||||
Waters | $ | 622,561 | $ | 653,235 | (5 %) | (2 %) | 3 % | (6 %) | |||||||||
TA | 85,968 | 87,341 | (2 %) | (2 %) | 0 % | 0 % | |||||||||||
Total | $ | 708,529 | $ | 740,576 | (4 %) | (2 %) | 2 % | (4 %) | |||||||||
NET SALES - PRODUCTS & SERVICES | |||||||||||||||||
Instruments | $ | 294,059 | $ | 342,007 | (14 %) | (1 %) | 4 % | (17 %) | |||||||||
Service | 273,385 | 262,650 | 4 % | (2 %) | 1 % | 5 % | |||||||||||
Chemistry | 141,085 | 135,919 | 4 % | (1 %) | 0 % | 5 % | |||||||||||
Total Recurring | 414,470 | 398,569 | 4 % | (2 %) | 1 % | 5 % | |||||||||||
Total | $ | 708,529 | $ | 740,576 | (4 %) | (2 %) | 2 % | (4 %) | |||||||||
NET SALES - GEOGRAPHY | |||||||||||||||||
$ | 237,431 | $ | 254,623 | (7 %) | (5 %) | 1 % | (3 %) | ||||||||||
274,468 | 282,927 | (3 %) | 0 % | 4 % | (7 %) | ||||||||||||
196,630 | 203,026 | (3 %) | 1 % | 3 % | (7 %) | ||||||||||||
Total | $ | 708,529 | $ | 740,576 | (4 %) | (2 %) | 2 % | (4 %) | |||||||||
NET SALES - MARKETS | |||||||||||||||||
Pharmaceutical | $ | 415,747 | $ | 426,744 | (3 %) | (2 %) | 3 % | (4 %) | |||||||||
Industrial | 221,385 | 229,655 | (4 %) | (1 %) | 1 % | (4 %) | |||||||||||
Academic & Government | 71,397 | 84,177 | (15 %) | (1 %) | 2 % | (16 %) | |||||||||||
Total | $ | 708,529 | $ | 740,576 | (4 %) | (2 %) | 2 % | (4 %) | |||||||||
___________________ | |||||||||||||||||
(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 | |||||||||||||||||
Six Months Ended June 29, 2024 and July 1, 2023 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Organic | |||||||||||||||||
Constant | |||||||||||||||||
Six Months Ended | Percent | Impact of | Impact of | Currency | |||||||||||||
June 29, 2024 | July 1, 2023 | Change | Currency | Acquisitions | Growth Rate (a) | ||||||||||||
NET SALES - OPERATING SEGMENTS | |||||||||||||||||
Waters | $ | 1,184,460 | $ | 1,255,310 | (6 %) | (1 %) | 3 % | (8 %) | |||||||||
TA | 160,908 | 169,940 | (5 %) | (2 %) | 0 % | (3 %) | |||||||||||
Total | $ | 1,345,368 | $ | 1,425,250 | (6 %) | (1 %) | 3 % | (8 %) | |||||||||
NET SALES - PRODUCTS & SERVICES | |||||||||||||||||
Instruments | $ | 536,003 | $ | 644,949 | (17 %) | (0 %) | 4 % | (21 %) | |||||||||
Service | 534,073 | 510,867 | 5 % | (2 %) | 2 % | 5 % | |||||||||||
Chemistry | 275,292 | 269,434 | 2 % | (1 %) | 0 % | 3 % | |||||||||||
Total Recurring | 809,365 | 780,301 | 4 % | (2 %) | 1 % | 5 % | |||||||||||
Total | $ | 1,345,368 | $ | 1,425,250 | (6 %) | (1 %) | 3 % | (8 %) | |||||||||
NET SALES - GEOGRAPHY | |||||||||||||||||
$ | 444,990 | $ | 507,704 | (12 %) | (4 %) | 1 % | (9 %) | ||||||||||
515,639 | 529,348 | (3 %) | 0 % | 5 % | (8 %) | ||||||||||||
384,739 | 388,198 | (1 %) | 2 % | 3 % | (6 %) | ||||||||||||
Total | $ | 1,345,368 | $ | 1,425,250 | (6 %) | (1 %) | 3 % | (8 %) | |||||||||
NET SALES - MARKETS | |||||||||||||||||
Pharmaceutical | $ | 789,954 | $ | 811,642 | (3 %) | (1 %) | 4 % | (6 %) | |||||||||
Industrial | 416,719 | 439,305 | (5 %) | (1 %) | 1 % | (5 %) | |||||||||||
Academic & Government | 138,695 | 174,303 | (20 %) | 0 % | 3 % | (23 %) | |||||||||||
Total | $ | 1,345,368 | $ | 1,425,250 | (6 %) | (1 %) | 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 Financials | |||||||||||||||||||||||||||||
Three and Six Months Ended June 29, 2024 and July 1, 2023 | |||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||
Income from | |||||||||||||||||||||||||||||
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 June 29, 2024 | |||||||||||||||||||||||||||||
GAAP | $ | 184,991 | $ | 46,182 | $ | 189,112 | 26.7 % | $ | (302) | $ | 169,412 | $ | 26,675 | $ | 142,737 | $ | 2.40 | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (11,744) | - | 11,744 | 1.7 % | - | 11,744 | 2,810 | 8,934 | 0.15 | ||||||||||||||||||||
Restructuring costs and certain other items (d) | (1,139) | - | 1,139 | 0.2 % | - | 1,139 | 280 | 859 | 0.01 | ||||||||||||||||||||
Retention bonus obligation (f) | (3,817) | (1,272) | 5,089 | 0.7 % | - | 5,089 | 1,221 | 3,868 | 0.07 | ||||||||||||||||||||
Adjusted Non-GAAP | $ | 168,291 | $ | 44,910 | $ | 207,084 | 29.2 % | $ | (302) | $ | 187,384 | $ | 30,986 | $ | 156,398 | $ | 2.63 | ||||||||||||
Three Months Ended July 1, 2023 | |||||||||||||||||||||||||||||
GAAP | $ | 193,768 | $ | 45,873 | $ | 199,859 | 27.0 % | $ | (352) | $ | 180,275 | $ | 29,721 | $ | 150,554 | $ | 2.55 | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (6,815) | - | 6,815 | 0.9 % | - | 6,815 | 1,616 | 5,199 | 0.09 | ||||||||||||||||||||
Restructuring costs and certain other items (d) | (5,229) | - | 5,229 | 0.7 % | - | 5,229 | 1,217 | 4,012 | 0.07 | ||||||||||||||||||||
Acquisition related costs (e) | (3,693) | - | 3,693 | 0.5 % | - | 3,693 | 886 | 2,807 | 0.05 | ||||||||||||||||||||
Retention bonus obligation (f) | (2,643) | (881) | 3,524 | 0.5 % | - | 3,524 | 846 | 2,678 | 0.05 | ||||||||||||||||||||
Adjusted Non-GAAP | $ | 175,388 | $ | 44,992 | $ | 219,120 | 29.6 % | $ | (352) | $ | 199,536 | $ | 34,286 | $ | 165,250 | $ | 2.80 | ||||||||||||
Six Months Ended June 29, 2024 | |||||||||||||||||||||||||||||
GAAP | $ | 381,603 | $ | 90,777 | $ | 322,958 | 24.0 % | $ | 1,957 | $ | 284,268 | $ | 39,335 | $ | 244,933 | $ | 4.12 | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (23,578) | - | 23,578 | 1.8 % | - | 23,578 | 5,642 | 17,936 | 0.30 | ||||||||||||||||||||
Litigation provision and settlement (c) | (10,242) | - | 10,242 | 0.8 % | - | 10,242 | 2,458 | 7,784 | 0.13 | ||||||||||||||||||||
Restructuring costs and certain other items (d) | (9,486) | - | 9,486 | 0.7 % | - | 9,486 | 2,335 | 7,151 | 0.12 | ||||||||||||||||||||
Retention bonus obligation (f) | (9,542) | (3,181) | 12,723 | 0.9 % | - | 12,723 | 3,053 | 9,670 | 0.16 | ||||||||||||||||||||
Adjusted Non-GAAP | $ | 328,755 | $ | 87,596 | $ | 378,987 | 28.2 % | $ | 1,957 | $ | 340,297 | $ | 52,823 | $ | 287,474 | $ | 4.84 | ||||||||||||
Six Months Ended July 1, 2023 | |||||||||||||||||||||||||||||
GAAP | $ | 377,203 | $ | 88,564 | $ | 374,027 | 26.2 % | $ | 1,036 | $ | 345,448 | $ | 53,971 | $ | 291,477 | $ | 4.95 | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (8,294) | - | 8,294 | 0.6 % | - | 8,294 | 1,951 | 6,343 | 0.11 | ||||||||||||||||||||
Restructuring costs and certain other items (d) | (4,824) | - | 4,824 | 0.3 % | - | 4,824 | 1,473 | 3,351 | 0.06 | ||||||||||||||||||||
Acquisition related costs (e) | (12,035) | - | 12,035 | 0.8 % | - | 12,035 | 2,888 | 9,147 | 0.16 | ||||||||||||||||||||
Retention bonus obligation (f) | (2,643) | (881) | 3,524 | 0.2 % | - | 3,524 | 846 | 2,678 | 0.05 | ||||||||||||||||||||
Adjusted Non-GAAP | $ | 349,407 | $ | 87,683 | $ | 402,704 | 28.3 % | $ | 1,036 | $ | 374,125 | $ | 61,129 | $ | 312,996 | $ | 5.31 | ||||||||||||
___________________ | |||||||||||||||||||||||||||||
(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) | 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. | ||||||||||||||||||||||||||||
Waters Corporation and Subsidiaries | |||||||
Preliminary Condensed Unclassified Consolidated Balance Sheets | |||||||
(In thousands and unaudited) | |||||||
June 29, 2024 | December 31, 2023 | ||||||
Cash, cash equivalents and investments | $ 327,361 | $ 395,974 | |||||
Accounts receivable | 610,088 | 702,168 | |||||
Inventories | 522,927 | 516,236 | |||||
Property, plant and equipment, net | 636,110 | 639,073 | |||||
Intangible assets, net | 596,398 | 629,187 | |||||
Goodwill | 1,297,796 | 1,305,446 | |||||
Other assets | 458,367 | 438,770 | |||||
Total assets | $ 4,449,047 | $ 4,626,854 | |||||
Notes payable and debt | $ 2,006,009 | $ 2,355,513 | |||||
Other liabilities | 1,031,071 | 1,121,000 | |||||
Total liabilities | 3,037,080 | 3,476,513 | |||||
Total stockholders' equity | 1,411,967 | 1,150,341 | |||||
Total liabilities and stockholders' equity | $ 4,449,047 | $ 4,626,854 | |||||
Waters Corporation and Subsidiaries | |||||||||||
Preliminary Condensed Consolidated Statements of Cash Flows | |||||||||||
Three and Six Months Ended June 29, 2024 and July 1, 2023 | |||||||||||
(In thousands and unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ 142,737 | $ 150,554 | $ 244,933 | $ 291,477 | |||||||
Adjustments to reconcile net income to net | |||||||||||
cash provided by operating activities: | |||||||||||
Stock-based compensation | 11,433 | 10,929 | 22,346 | 23,734 | |||||||
Depreciation and amortization | 47,229 | 38,884 | 95,743 | 70,038 | |||||||
Change in operating assets and liabilities and other, net | (146,865) | (182,249) | (45,618) | (170,380) | |||||||
Net cash provided by operating activities | 54,534 | 18,118 | 317,404 | 214,869 | |||||||
Cash flows from investing activities: | |||||||||||
Additions to property, plant, equipment | |||||||||||
and software capitalization | (36,104) | (46,607) | (64,759) | (80,997) | |||||||
Business acquisitions, net of cash acquired | - | (1,285,907) | - | (1,285,907) | |||||||
Investments in unaffiliated companies | - | - | (1,064) | - | |||||||
Net change in investments | (11) | - | (36) | (16) | |||||||
Net cash used in investing activities | (36,115) | (1,332,514) | (65,859) | (1,366,920) | |||||||
Cash flows from financing activities: | |||||||||||
Net change in debt | (50,000) | 1,149,742 | (350,000) | 1,054,782 | |||||||
Proceeds from stock plans | 7,904 | 6,250 | 21,836 | 8,628 | |||||||
Purchases of treasury shares | (245) | (236) | (13,334) | (69,741) | |||||||
Other cash flow from financing activities, net | 8,304 | 2,418 | 15,285 | 5,294 | |||||||
Net cash used in financing activities | (34,037) | 1,158,174 | (326,213) | 998,963 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 4,755 | (155) | 6,019 | 2,252 | |||||||
Decrease in cash and cash equivalents | (10,863) | (156,377) | (68,649) | (150,836) | |||||||
Cash and cash equivalents at beginning of period | 337,290 | 486,070 | 395,076 | 480,529 | |||||||
Cash and cash equivalents at end of period | $ 326,427 | $ 329,693 | $ 326,427 | $ 329,693 | |||||||
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a) | |||||||||||
Net cash provided by operating activities - GAAP | $ 54,534 | $ 18,118 | $ 317,404 | $ 214,869 | |||||||
Adjustments: | |||||||||||
Additions to property, plant, equipment | |||||||||||
and software capitalization | (36,104) | (46,607) | (64,759) | (80,997) | |||||||
Tax reform payments | 95,645 | 72,101 | 95,645 | 72,101 | |||||||
Litigation settlements paid (received), net | 9,625 | (375) | 9,250 | (750) | |||||||
Major facility renovations | - | 4,394 | - | 8,860 | |||||||
Payment of acquired Wyatt liabilities (b) | - | 25,617 | - | 25,617 | |||||||
Payment of Wyatt retention bonus obligation (c) | 19,770 | - | 19,770 | - | |||||||
Free Cash Flow - Adjusted Non-GAAP | $ 143,470 | $ 73,248 | $ 377,310 | $ 239,700 | |||||||
___________________ | |||||||||||
(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 three months ended June 29, 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. | ||||||||||
Waters Corporation and Subsidiaries | ||||||||||
Reconciliation of Projected GAAP to Adjusted Non-GAAP Financial Outlook | ||||||||||
Twelve Months Ended | Three Months Ended | |||||||||
December 31, 2024 | September 28, 2024 | |||||||||
Range | Range | |||||||||
Projected Sales | ||||||||||
Organic constant currency sales growth rate (a) | (2.0 %) | - | (0.5 %) | 1.0 % | - | 3.0 % | ||||
Impact of: | ||||||||||
Currency translation | (1.5 %) | - | (1.5 %) | (1.5 %) | - | (1.5 %) | ||||
Acquisitions | 1.3 % | - | 1.3 % | ‒ | - | ‒ | ||||
Sales growth rate as reported | (2.2 %) | - | (0.7 %) | (0.5 %) | - | 1.5 % | ||||
Range | Range | |||||||||
Projected Earnings Per Diluted Share | ||||||||||
GAAP earnings per diluted share | $ 10.47 | - | $ 10.57 | $ 2.42 | - | $ 2.52 | ||||
Adjustments: | ||||||||||
Purchased intangibles amortization | $ 0.60 | - | $ 0.60 | $ 0.15 | - | $ 0.15 | ||||
Litigation settlement | $ 0.13 | - | $ 0.13 | $ - | - | $ - | ||||
Restructuring costs and certain other items | $ 0.12 | - | $ 0.12 | $ - | - | $ - | ||||
Retention bonus obligation | $ 0.23 | - | $ 0.23 | $ 0.03 | - | $ 0.03 | ||||
Adjusted non-GAAP earnings per diluted share | $ 11.55 | - | $ 11.65 | $ 2.60 | - | $ 2.70 | ||||
___________________ | ||||||||||
(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-second-quarter-2024-financial-results-302210403.html
SOURCE Waters Corporation
FAQ
What were Waters 's (WAT) Q2 2024 sales figures?
How did Waters 's (WAT) EPS perform in Q2 2024?
What is Waters 's (WAT) full-year 2024 sales growth guidance?
How did Waters 's (WAT) pharmaceutical market sales perform in Q2 2024?
What is Waters 's (WAT) Q3 2024 financial guidance?
