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Waters 8-K Report, Financial Results (May 7, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 7, 2024
Period End
May 7, 2024
Security
WAT
In the record · 2016–202610-K1210-Q338-K109

WAT filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 109 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’16May ’16
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed May 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Waters Corporation (NYSE: WAT) furnished this Form 8-K under Item 2.02 to report its results for the quarter ended March 30, 2024, attaching a press release as Exhibit 99.1.

In the quarter, net sales were $636.8 milliona ($636,839 thousand), down from $684.7 million in the prior-year quarter. Diluted GAAP EPS was $1.72 versus $2.38, and non-GAAP diluted EPS was $2.21 versus $2.49. Net income was $102.2 million, and net cash provided by operating activities was $262.9 million.

Free cash flow, as adjusted and non-GAAP, was $233.8 millionb. The press release describes the sales decline as 7% as reported and 9% in organic constant currency, with instrument sales down 20% as reported and recurring revenues up 3%. The company reported weaker sales in Asia (down 18% as reported) and the academic and government market (down 25% as reported).

Operating income declined to $133.8 millionc from $174.2 million, and interest expense rose to $21.2 million from $10.4 million. Total debt (notes payable and debt) fell to $2.06 billion from $2.36 billion at year-end 2023, and the company made a $300 million net debt repayment in the quarter. The filing also records a $10.2 million litigation provision and $11.8 million of purchased intangibles amortization, both of which were excluded from non-GAAP results.

Management maintained full-year 2024 guidance for organic constant currency sales growth of -0.5% to +1.5%, with reported sales growth of 0.0% to +2.0% and non-GAAP EPS of $11.75 to $12.05d. For the second quarter of 2024, the company guided to organic constant currency sales growth of -6.0% to -4.0% and non-GAAP EPS of $2.50 to $2.60. The Wyatt acquisition contributes to reported growth in both periods, and the company cited increased indebtedness from that transaction as a risk factor.

02—Key points

Key Highlights

  1. Net sales of $636.8 million, down 7% as reported and 9% in organic constant currency versus the prior-year quarter; the company described this as at the high end of its guidance.
  2. Diluted GAAP EPS of $1.72 (vs. $2.38) and non-GAAP diluted EPS of $2.21 (vs. $2.49), with non-GAAP results including an approximately 4% foreign exchange headwind.
  3. Instrument sales fell 20% as reported (25% organic constant currency), while recurring revenues (service and chemistry) rose 3%.
  4. Operating income declined to $133.8 million from $174.2 million, and interest expense rose to $21.2 million from $10.4 million.
  5. Total notes payable and debt decreased to $2.06 billion from $2.36 billion at December 31, 2023, following a $300 million net debt repayment in the quarter.
  6. Full-year 2024 guidance maintained: organic constant currency sales growth of -0.5% to +1.5% and non-GAAP EPS of $11.75 to $12.05; second-quarter non-GAAP EPS guided to $2.50 to $2.60.
  7. Operating cash flow of $262.9 million and adjusted free cash flow of $233.8 million for the quarter.

03—Questions

Frequently Asked Questions

  1. How did Waters perform in the first quarter of 2024?

    Net sales were $636.8 million, down 7% as reported and 9% in organic constant currency from $684.7 million a year earlier. GAAP diluted EPS was $1.72 versus $2.38, and non-GAAP diluted EPS was $2.21 versus $2.49.

  2. What drove the decline in sales?

    Instrument system sales fell 20% as reported, and sales in Asia declined 18% as reported. Sales to the academic and government market dropped 25%, while recurring revenues rose 3%. Currency translation reduced sales by 1%, and acquisitions increased them by 3%.

  3. What is the company's guidance for 2024?

    Management maintained full-year organic constant currency sales growth guidance of -0.5% to +1.5% and expects reported sales growth of 0.0% to +2.0%. Full-year non-GAAP EPS is expected at $11.75 to $12.05. For the second quarter, organic constant currency sales growth is guided to -6.0% to -4.0%, with non-GAAP EPS of $2.50 to $2.60.

  4. How is Waters managing its debt and cash flow?

    Notes payable and debt fell to $2.06 billion from $2.36 billion at year-end 2023, reflecting a $300 million net debt repayment in the quarter. Operating cash flow was $262.9 million, and adjusted free cash flow was $233.8 million. The filing notes that the Wyatt transaction increased indebtedness, which is a risk factor.

  5. What non-recurring items affected the quarter's GAAP results?

    GAAP results included a $10.2 million litigation provision and $8.3 million of restructuring costs and other items. The company also recorded $11.8 million of purchased intangibles amortization and a $7.6 million retention bonus obligation tied to the Wyatt acquisition. These items were excluded from non-GAAP results.

04—Continue

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