Waters Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Non-GAAP
Net Sales by Operating Segments, Products & Services, Geography and Markets
Three Months Ended March 30, 2024 and April 1, 2023
(In thousands)
Organic | |||||||||||
Constant | |||||||||||
Three Months Ended | Percent | Impact of | Impact of | Currency | |||||||
March 30, 2024 | April 1, 2023 | Change | Currency | Acquisitions | Growth Rate (a) | ||||||
NET SALES - OPERATING SEGMENTS | |||||||||||
Waters | $ | 561,899 | $ | 602,075 | (7%) | (1%) | 4% | (10%) | |||
TA | 74,940 | 82,599 | (9%) | (1%) | 0% | (9%) | |||||
Total | $ | 636,839 | $ | 684,674 | (7%) | (1%) | 3% | (9%) | |||
NET SALES - PRODUCTS & SERVICES | |||||||||||
Instruments | $ | 241,944 | $ | 302,942 | (20%) | 0% | 5% | (25%) | |||
Service | 260,688 | 248,217 | 5% | (1%) | 2% | 4% | |||||
Chemistry | 134,207 | 133,515 | 1% | (1%) | 0% | 2% | |||||
Total Recurring | 394,895 | 381,732 | 3% | (1%) | 2% | 3% | |||||
Total | $ | 636,839 | $ | 684,674 | (7%) | (1%) | 3% | (9%) | |||
NET SALES - GEOGRAPHY | |||||||||||
Asia | $ | 207,559 | $ | 253,081 | (18%) | (3%) | 1% | (16%) | |||
Americas | 241,171 | 246,421 | (2%) | 0% | 6% | (8%) | |||||
Europe | 188,109 | 185,172 | 2% | 2% | 2% | (3%) | |||||
Total | $ | 636,839 | $ | 684,674 | (7%) | (1%) | 3% | (9%) | |||
NET SALES - MARKETS | |||||||||||
Pharmaceutical | $ | 374,207 | $ | 384,898 | (3%) | (1%) | 4% | (6%) | |||
Industrial | 195,334 | 209,650 | (7%) | (1%) | 1% | (7%) | |||||
Academic & Government | 67,298 | 90,126 | (25%) | 2% | 3% | (30%) | |||||
Total | $ | 636,839 | $ | 684,674 | (7%) | (1%) | 3% | (9%) | |||
- 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 Months Ended March 30, 2024 and April 1, 2023 (In thousands, except per share data)
Income from | ||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||
Selling & | Research & | Operating | before | Provision for | Diluted | |||||||||||||||||||||
Administrative | Development | Operating | Income | Other | Income | Income | Net | Earnings | ||||||||||||||||||
Three Months Ended March 30, 2024 | Expenses(a) | Expenses | Income | Percentage | Income | Taxes | Taxes | Income | per Share | |||||||||||||||||
$ | 196,612 | $ | 44,595 | $ | 133,846 | 21.0% | $ | 2,259 | $ | 114,856 | $ | 12,660 | $ | 102,196 | $ | 1.72 | ||||||||||
GAAP | ||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (11,834) | - | 11,834 | 1.9% | - | 11,834 | 2,832 | 9,002 | 0.15 | |||||||||||||||||
Litigation provision (c) | (10,242) | - | 10,242 | 1.6% | - | 10,242 | 2,458 | 7,784 | 0.13 | |||||||||||||||||
Restructuring costs and certain other items (d) | (8,347) | - | 8,347 | 1.3% | - | 8,347 | 2,055 | 6,292 | 0.11 | |||||||||||||||||
Retention bonus obligation (f) | (5,725) | (1,909) | 7,634 | 1.2% | - | 7,634 | 1,832 | 5,802 | 0.10 | |||||||||||||||||
Adjusted Non-GAAP | $ | 160,464 | $ | 42,686 | $ | 171,903 | 27.0% | $ | 2,259 | $ | 152,913 | $ | 21,837 | $ | 131,076 | $ | 2.21 | |||||||||
Three Months Ended April 1, 2023 | ||||||||||||||||||||||||||
GAAP | $ | 183,435 | $ | 42,691 | $ | 174,168 | 25.4% | $ | 1,388 | $ | 165,173 | $ | 24,250 | $ | 140,923 | $ | 2.38 | |||||||||
Adjustments: | ||||||||||||||||||||||||||
Purchased intangibles amortization (b) | (1,479) | - | 1,479 | 0.2% | - | 1,479 | 335 | 1,144 | 0.02 | |||||||||||||||||
Restructuring costs and certain other items (d) | 405 | - | (405) | (0.1%) | - | (405) | 256 | (661) | (0.01) | |||||||||||||||||
Acquisition related costs (e) | (8,342) | - | 8,342 | 1.2% | - | 8,342 | 2,002 | 6,340 | 0.11 | |||||||||||||||||
Adjusted Non-GAAP | $ | 174,019 | $ | 42,691 | $ | 183,584 | 26.8% | $ | 1,388 | $ | 174,589 | $ | 26,843 | $ | 147,746 | $ | 2.49 | |||||||||
- Selling & administrative expenses include purchased intangibles amortization.
- 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.
- Litigation provisions and settlement gains were excluded as these items are isolated, unpredictable and not expected to recur regularly.
- 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.
- 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.
- 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 Consolidated Statements of Cash Flows
Three Months Ended March 30, 2024 and April 1, 2023
(In thousands and unaudited)
Three Months Ended | |||||
March 30, 2024 | April 1, 2023 | ||||
Cash flows from operating activities: | |||||
Net income | $ | 102,196 | $ | 140,923 | |
Adjustments to reconcile net income to net | |||||
cash provided by operating activities: | |||||
Stock-based compensation | 10,913 | 12,805 | |||
Depreciation and amortization | 48,514 | 31,154 | |||
Change in operating assets and liabilities and other, net | 101,247 | 11,869 | |||
Net cash provided by operating activities | 262,870 | 196,751 | |||
Cash flows from investing activities: | |||||
Additions to property, plant, equipment | |||||
and software capitalization | (28,655) | (34,390) | |||
Investments in unaffiliated companies | (1,064) | - | |||
Net change in investments | (25) | (16) | |||
Net cash used in investing activities | (29,744) | (34,406) | |||
Cash flows from financing activities: | |||||
Net change in debt | (300,000) | (94,960) | |||
Proceeds from stock plans | 13,932 | 2,378 | |||
Purchases of treasury shares | (13,089) | (69,505) | |||
Other cash flow from financing activities, net | 6,981 | 2,876 | |||
Net cash used in financing activities | (292,176) | (159,211) | |||
Effect of exchange rate changes on cash and cash equivalents | 1,264 | 2,407 | |||
(Decrease) increase in cash and cash equivalents | (57,786) | 5,541 | |||
Cash and cash equivalents at beginning of period | 395,076 | 480,529 | |||
Cash and cash equivalents at end of period | $ | 337,290 | $ | 486,070 | |
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow (a)
Net cash provided by operating activities - GAAP | $ | 262,870 | $ | 196,751 | |
Adjustments: | |||||
Additions to property, plant, equipment | |||||
and software capitalization | (28,655) | (34,390) | |||
Litigation settlements received, net | (375) | (375) | |||
Major facility renovations | - | 4,466 | |||
Free Cash Flow - Adjusted Non-GAAP | $ | 233,840 | $ | 166,452 | |
- 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 | ||||||
June 29, 2024 | December 31, 2024 | ||||||
Projected Sales | Range | Range | |||||
Organic constant currency sales growth rate (a) | (6.0%) | - | (4.0%) | (0.5%) | - | 1.5% | |
Impact of: | |||||||
Currency translation | (2.0%) | - | (2.0%) | (0.6%) | - | (0.6%) | |
Acquisitions | 1.5% | - | 1.5% | 1.1% | - | 1.1% | |
Sales growth rate as reported | (6.5%) | - | (4.5%) | 0.0% | - | 2.0% | |
Projected Earnings Per Diluted Share | Range | Range | |||||||||
GAAP earnings per diluted share | $ | 2.28 | - | $ | 2.38 | $ | 10.90 | - | $ | 11.20 | |
Adjustments: | |||||||||||
Purchased intangibles amortization | $ | 0.15 | - | $ | 0.15 | $ | 0.60 | - | $ | 0.60 | |
Retention bonus obligation | $ | 0.07 | - | $ | 0.07 | $ | 0.25 | - | $ | 0.25 | |
Adjusted non-GAAP earnings per diluted share | |||||||||||
$ | 2.50 | - | $ | 2.60 | $ | 11.75 | - | $ | 12.05 | ||
- 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.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Waters Corporation published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 10:55:05 UTC.