(Source: Business Wire)
Waters Corporation (NYSE/WAT) reported today second quarter 2009 sales of $363 million, a decrease of 9% over sales of $399 million in the second quarter of 2008. These quarterly sales include an adverse foreign currency translation impact of approximately 5%. On a GAAP basis, earnings per diluted share (E.P.S.) for the second quarter were $0.72, compared to $0.82 for the second quarter in 2008. On a non-GAAP basis, E.P.S. were up 3% to $0.78 in the second quarter of 2009 from $ 0.76 in the second quarter of 2008. A reconciliation of GAAP to non-GAAP E.P.S. is attached.
Through the first six months of 2009, sales for the Company were $696 million, a decrease of 10% in comparison to sales of $770 million in the first six months of 2008. Foreign currency translation contributed negatively to sales growth during the first half of 2009 and reduced sales by 5%. E.P.S. for the first six months of 2009 were $1.47 compared to $1.49 for the comparable period in 2008. On a non-GAAP basis and including adjustments on the attached reconciliation, E.P.S grew 5% in the first six months of 2009 to $1.52 from $1.45 in 2008.
Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, "Our financial results in the quarter were in line with our expectations and sales to our major end markets in the quarter indicated a continuation of the general demand trends that we reported in April 2009. Our efforts throughout the quarter to focus on improved operational efficiency allowed us to generate non-GAAP E.P.S. growth in this challenging business environment."
As communicated in a prior press release, Waters Corporation will webcast its second quarter 2009 financial results conference call this morning, July 28, 2009 at 8:30 a.m. eastern time. To listen to the call, connect to www.waters.com, choose "Investor" and click on the Live Webcast. A replay of the call will be available through August 4, 2009, similarly by webcast and also by phone at 402-220-4708.
About Waters Corporation:
Waters Corporation creates business advantage for laboratory-dependent organizations by delivering practical and sustainable innovation to enable significant advancements in such areas as healthcare delivery, environmental management, food safety, and water quality worldwide.
Pioneering a connected portfolio of separations science, laboratory information management, mass spectrometry and thermal analysis, Waters technology breakthroughs and laboratory solutions, provide an enduring platform for customer success.
With revenue of $1.58 billion in 2008 and 5,000 employees, Waters is driving scientific discovery and operational excellence for customers worldwide.
CAUTIONARY STATEMENT
This release may contain "forward-looking" statements regarding future results and events, including statements regarding expected financial results, future growth and customer demand that involve a number of risks and uncertainties. For this purpose, any statements that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words, "believes", "anticipates", "plans", "expects", "intends", "appears", "estimates", "projects", and similar expressions 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, the impact on demand among the Company's various market sectors from current economic difficulties and possible recession; the impact of changes in accounting principles and practices or tax rates, including the effect of restructuring certain legal entities; the ability to access capital in volatile market conditions; the ability to successfully integrate acquired businesses; fluctuations in capital expenditures by the Company's customers, in particular large pharmaceutical companies, regulatory and/or administrative obstacles to the timely completion of purchase order documentation; introduction of competing products by other companies and loss of market share; pressures on prices from competitors and/or customers; regulatory obstacles to new product introductions; lack of acceptance of new products; other changes in the demands of the Company's healthcare and pharmaceutical company customers; changes in distribution of the Company's products; risks associated with lawsuits and other legal actions, particularly involving claims for infringement of patents and other intellectual property rights; and foreign exchange rate fluctuations potentially affecting translation of the Company's future non-U.S. operating results. Such factors and others are discussed more fully in the section entitled "Risk Factors" of the Company's annual report on Form 10-K for the year ended December 31, 2008 and quarterly report on Form 10-Q for the period ended April 4, 2009 as filed with the Securities and Exchange Commission, which "Risk Factors" discussion is incorporated by reference in this release. The forward-looking statements included in this release represent the Company's estimates or views as of the date of this release report and should not be relied upon as representing the Company's estimates or views as of any date subsequent to the date of this release.
Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) (Unaudited) (Unaudited) Three Months Ended Six Months Ended July 4, 2009 June 28, 2008 July 4, 2009 June 28, 2008 Net sales $ 362,837 $ 398,771 $ 695,889 $ 770,483 Cost of sales (5) 144,154 175,232 271,608 330,683 Gross profit 218,683 223,539 424,281 439,800 Selling and administrative expenses (1) (2) (3) 109,583 111,935 208,742 217,772 Research and development expenses 19,722 22,228 38,054 42,014 Purchased intangibles amortization 2,683 2,352 5,299 4,624 Operating income 86,695 87,024 172,186 175,390 - - Interest expense, net (2,054 ) (4,855 ) (4,276 ) (9,099 ) Income from operations before income taxes 84,641 82,169 167,910 166,291 Provision for income taxes (4) (5) 14,734 (979 ) 24,656 14,668 Net income $ 69,907 $ 83,148 $ 143,254 $ 151,623 Net income per basic common share $ 0.73 $ 0.83 $ 1.48 $ 1.52 Weighted-average number of basic common shares 96,147 99,586 96,696 99,981 Net income per diluted common share $ 0.72 $ 0.82 $ 1.47 $ 1.49 Weighted-average number of diluted common shares and equivalents 96,996 101,035 97,388 101,531 (1) Included in selling and administrative expenses for the three and six months ended July 4, 2009 are lease termination costs and other incremental related costs of $5.9 million. (2) Included in selling and administrative expenses for the six months ended July 4, 2009 are restructuring and other incremental costs of $1.0 million related to cost reduction plans. (3) Included in selling and administrative expenses for the six months ended July 4, 2009 are acquisition and other incremental related costs of $1.3 million related to recent acquisitions. (4) Included in the provision for income taxes for the six months ended July 4, 2009 is a reversal of a $4.6 million charge related to the restructuring of certain legal entities that had been expensed in the third quarter of 2008. (5) During the second quarter of 2008, the Company identified errors originating in periods prior to the quarter ended June 28, 2008. The errors primarily relate to (i) an overstatement of the Company's income tax expense of $16.3 million as a result of errors in recording its income tax provision in prior periods and (ii) an understatement of amortization expense of $8.7 million for certain capitalized software. The Company incorrectly calculated its provision for income taxes by tax-effecting a deferred tax liability utilizing a U.S. tax rate of 35% instead of an Irish tax rate of 10%. In addition, the Company incorrectly accounted for Irish-based capitalized software and the related amortization expense as a U.S. Dollar-denominated asset instead of Euro-denominated asset resulting in an understatement of amortization expense and cumulative translation adjustment. Waters Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) (Unaudited) (Unaudited) Three Months Ended Six Months Ended July 4, 2009 June 28, 2008 July 4, 2009 June 28, 2008 Reconciliation of net income per diluted share, in accordance with generally accepted accounting principles, with adjusted results: Net income per diluted share $ 0.72 $ 0.82 $ 1.47 $ 1.49 Adjustment for purchased intangibles amortization, net of tax 2,008 1,675 3,827 3,278 Net income per diluted share effect 0.02 0.02 0.04 0.03 Adjustment for lease termination and other incremental costs, net of tax 3,723 - 3,723 - Net income per diluted share effect 0.04 - 0.04 - Adjustment for restrucA service of YellowBrix, Inc.
