Company Announcements

Waters Corporation and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Three Months Ended

March 29, 2025

March 30, 2024

Net sales

$             661,705

$             636,839

Costs and operating expenses:

Cost of sales

276,745

261,786

Selling and administrative expenses 

174,881

174,536

Research and development expenses 

46,622

44,595

Purchased intangibles amortization 

11,712

11,834

Litigation provision

-

10,242

Operating income 

151,745

133,846

Other income, net

1,524

2,259

Interest expense, net

(10,381)

(21,249)

Income from operations before income taxes

142,888

114,856

Provision for income taxes

21,507

12,660

Net income

$             121,381

$             102,196

Net income per basic common share

$                   2.04

$                   1.73

Weighted-average number of basic common shares

59,439

59,232

Net income per diluted common share

$                   2.03

$                   1.72

Weighted-average number of diluted common shares and equivalents

59,711

59,431

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 29, 2025 and March 30, 2024

(In thousands)

Constant

Three Months Ended

Percent

Impact of

Currency

March 29, 2025

March 30, 2024

Change

Currency

Growth Rate ^(a)

NET SALES - OPERATING SEGMENTS

Waters

$

587,297

$

561,899

5 %

(3 %)

8 %

TA

74,408

74,940

(1 %)

(1 %)

1 %

Total

$

661,705

$

636,839

4 %

(3 %)

7 %

NET SALES - PRODUCTS & SERVICES

Instruments

$

262,893

$

241,944

9 %

(3 %)

11 %

Service

261,175

260,688

0 %

(3 %)

3 %

Chemistry

137,637

134,207

3 %

(3 %)

5 %

Total Recurring

398,812

394,895

1 %

(3 %)

4 %

Total

$

661,705

$

636,839

4 %

(3 %)

7 %

NET SALES - GEOGRAPHY

Asia

$

220,776

$

207,559

6 %

(6 %)

13 %

Americas

255,537

241,171

6 %

0 %

6 %

Europe

185,392

188,109

(1 %)

(2 %)

1 %

Total

$

661,705

$

636,839

4 %

(3 %)

7 %

NET SALES - MARKETS

Pharmaceutical

$

391,051

$

374,207

5 %

(3 %)

8 %

Industrial

203,365

195,334

4 %

(2 %)

6 %

Academic & Government

67,289

67,298

0 %

(3 %)

3 %

Total

$

661,705

$

636,839

4 %

(3 %)

7 %

____________________________________

(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, 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. 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 29, 2025 and March 30, 2024

(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

Expenses ^(a)

Expenses

Income

Percentage

Income

Taxes

Taxes

Income

per Share

Three Months Ended March 29, 2025

GAAP

$

186,593

$

46,622

$

151,745

22.9 %

$

1,524

$

142,888

$

21,507

$

121,381

$

2.03

Adjustments:

Purchased intangibles amortization ^(b)

(11,712)

-

11,712

1.8 %

-

11,712

2,832

8,880

0.15

Restructuring costs and certain other items ^(d)

(598)

-

598

0.1 %

-

598

144

454

0.01

ERP implementation and transformation costs ^(f)

(2,295)

-

2,295

0.3 %

-

2,295

551

1,744

0.03

Retention bonus obligation ^(e)

(1,909)

(636)

2,545

0.4 %

-

2,545

611

1,934

0.03

Adjusted Non-GAAP

$

170,079

$

45,986

$

168,895

25.5 %

$

1,524

$

160,038

$

25,645

$

134,393

$

2.25

Three Months Ended March 30, 2024

GAAP

$

196,612

$

44,595

$

133,846

21.0 %

$

2,259

$

114,856

$

12,660

$

102,196

$

1.72

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 ^(e)

(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

____________________________________

(a)

Selling & administrative expenses include purchased intangibles amortization and litigation provisions and settlements.

(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)

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.

(f)

ERP implementation and transformation costs represent costs related to the Company's initiative to transition from its legacy enterprise resource planning (ERP) system to a new global ERP solution with a cloud-based infrastructure. These costs, which do not represent normal or future ongoing business expenses, are one-time, non-recurring costs related to the establishment of our new global ERP solution that were determined to be non-capitalizable in accordance with accounting standards.

Waters Corporation and Subsidiaries

Preliminary Condensed Unclassified Consolidated Balance Sheets

(In thousands and unaudited)

March 29, 2025

December 31, 2024

Cash and cash equivalents

$              382,872

$              325,355

Accounts receivable

713,278

733,365

Inventories

511,499

477,261

Property, plant and equipment, net

643,260

651,200

Intangible assets, net

560,754

567,906

Goodwill

1,300,020

1,295,720

Other assets

479,893

502,988

   Total assets

$           4,591,576

$           4,553,795

Notes payable and debt

$           1,456,727

$           1,626,488

Other liabilities

1,172,452

1,098,800

   Total liabilities

2,629,179

2,725,288

Total stockholders' equity

1,962,397

1,828,507

   Total liabilities and stockholders' equity

$           4,591,576

$           4,553,795

Waters Corporation and Subsidiaries

Preliminary Condensed Consolidated Statements of Cash Flows

Three Months Ended March 29, 2025 and March 30, 2024

(In thousands and unaudited)

Three Months Ended

March 29, 2025

March 30, 2024

Cash flows from operating activities:

Net income

$                    121,381

$                 102,196

Adjustments to reconcile net income to net

cash provided by operating activities:

Stock-based compensation

12,878

10,913

Depreciation and amortization

49,369

48,514

Change in operating assets and liabilities and other, net

75,925

101,247

Net cash provided by operating activities

259,553

262,870

Cash flows from investing activities:

Additions to property, plant, equipment

and software capitalization

(25,742)

(28,655)

Investments in unaffiliated companies

(506)

(1,064)

Net change in investments

-

(25)

Net cash used in investing activities

(26,248)

(29,744)

Cash flows from financing activities:

Net change in debt

(170,000)

(300,000)

Proceeds from stock plans

8,246

13,932

Purchases of treasury shares

(13,934)

(13,089)

Other cash flow from financing activities, net

2,441

6,981

Net cash used in financing activities

(173,247)

(292,176)

Effect of exchange rate changes on cash and cash equivalents

(2,541)

1,264

Increase (decrease) in cash and cash equivalents

57,517

(57,786)

Cash and cash equivalents at beginning of period

325,355

395,076

Cash and cash equivalents at end of period

$                    382,872

$                 337,290

Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow ^(a)

Net cash provided by operating activities - GAAP

$                    259,553

$                 262,870

Adjustments:

Additions to property, plant, equipment

and software capitalization

(25,742)

(28,655)

Litigation settlements received, net

-

(375)

Free Cash Flow - Adjusted Non-GAAP

$                    233,811

$                 233,840

____________________________________

(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

Twelve Months Ended

Three Months Ended

December 31, 2025

June 28, 2025

Range

Range

Projected Sales

Constant currency sales growth rate ^(a)

5.0 %

-

7.0 %

5.0 %

-

7.0 %

Currency translation impact

(1.0 %)

-

(1.0 %)

(1.0 %)

-

(1.0 %)

Sales growth rate as reported

4.0 %

-

6.0 %

4.0 %

-

6.0 %

Range

Range

Projected Earnings Per Diluted Share

GAAP earnings per diluted share

$    11.88

-

$    12.18

$      2.66

-

$      2.76

Adjustments:

Purchased intangibles amortization 

$      0.60

-

$      0.60

$      0.15

-

$      0.15

ERP implementation and transformation costs 

$      0.22

-

$      0.22

$      0.05

-

$      0.05

Retention bonus obligation

$      0.05

-

$      0.05

$      0.02

-

$      0.02

Adjusted non-GAAP earnings per diluted share

$    12.75

-

$    13.05

$      2.88

-

$      2.98

____________________________________

(a)

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. 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.