01—Abstract
Summary
Summary of the 8-K filed July 31, 2024. Cited figures are marked; the original filing is the authoritative source.
Waters Corporation (NYSE: WAT) filed this Form 8-K under Item 2.02 (Results of Operations and Financial Condition) to furnish its press release announcing results for the second quarter ended June 29, 2024.
Net sales were $709 milliona (reported $708,529 thousand), a decrease of 4% as reported from $741 million in the second quarter of 2023, with currency translation reducing sales by 2% and acquisitions adding 2%. GAAP diluted EPS was $2.40 versus $2.55 a year earlier, and non-GAAP EPS was $2.63 versus $2.80, with the company noting an approximately 5% headwind from unfavorable foreign exchange on non-GAAP EPS. Organic constant currency sales declined 4%, with instrument sales down 14% as reported and recurring revenues up 4% as reported.
The company updated its full-year 2024 guidance, now expecting organic constant currency sales growth of -2.0% to -0.5% and reported sales growth of -2.2% to -0.7%, including a roughly 1.5% currency headwind and a 1.3% contribution from the Wyatt acquisition. Non-GAAP EPS guidance for full-year 2024 is $11.55 to $11.65b. For the third quarter, the company guided to organic constant currency sales growth of +1.0% to +3.0%, reported growth of -0.5% to +1.5%, and non-GAAP EPS of $2.60 to $2.70.
Management said the full-year outlook reflects the potential for a more gradual market improvement in the second half than previously anticipated. Balance sheet and cash flow data in the release show notes payable and debt of $2,006,009 thousandc at June 29, 2024, down from $2,355,513 thousand at December 31, 2023, and six-month net cash from operating activities of $317,404 thousand. Free cash flow on an adjusted non-GAAP basis was $377,310 thousand for the six months, compared with $239,700 thousand a year earlier.
02—Key points
Key Highlights
- Q2 2024 net sales of $709 million (reported $708,529 thousand), down 4% as reported and down 4% in organic constant currency from $741 million a year earlier
- GAAP diluted EPS of $2.40 vs. $2.55 in Q2 2023; non-GAAP diluted EPS of $2.63 vs. $2.80, with about a 5% headwind from unfavorable foreign exchange
- Instrument system sales fell 14% as reported, while recurring revenues (service and chemistry) rose 4% as reported and 5% in organic constant currency
- Academic & Government sales declined 15% as reported; pharmaceutical sales declined 3% and industrial sales declined 4%
- Full-year 2024 guidance: organic constant currency sales growth of -2.0% to -0.5%, reported sales growth of -2.2% to -0.7%, and non-GAAP EPS of $11.55 to $11.65
- Third-quarter 2024 guidance: non-GAAP EPS of $2.60 to $2.70 and reported sales growth of -0.5% to +1.5%
- Total debt declined to $2,006,009 thousand at June 29, 2024 from $2,355,513 thousand at December 31, 2023, and six-month adjusted non-GAAP free cash flow was $377,310 thousand
03—Questions
Frequently Asked Questions
How did Waters perform in the second quarter of 2024?
Net sales were $709 million, down 4% as reported and 4% in organic constant currency, versus $741 million in Q2 2023. GAAP diluted EPS was $2.40 compared with $2.55, and non-GAAP EPS was $2.63 compared with $2.80. The company said results exceeded both its top-line and bottom-line reported guidance.
What is the company's updated full-year 2024 outlook?
Waters expects full-year 2024 organic constant currency sales growth of -2.0% to -0.5% and reported sales growth of -2.2% to -0.7%. Currency translation is expected to reduce growth by about 1.5%, while the Wyatt acquisition adds 1.3%. Non-GAAP EPS is expected to be $11.55 to $11.65, including an estimated roughly 3% foreign exchange headwind.
What does the company expect for the third quarter of 2024?
Waters guided to third-quarter constant currency sales growth of +1.0% to +3.0% and reported sales growth of -0.5% to +1.5%, with currency translation expected to reduce sales growth by about 1.5%. Non-GAAP EPS is projected at $2.60 to $2.70, including an estimated roughly 2% foreign exchange headwind.
Which parts of the business were weakest in the quarter?
Instrument system sales fell 14% as reported and 17% in organic constant currency. Academic and government sales declined 15% as reported and 16% in organic constant currency. Sales in Asia declined 7% as reported, and the Americas and Europe each declined 3% as reported.
What is the company's debt and cash flow position?
Notes payable and debt were $2,006,009 thousand at June 29, 2024, down from $2,355,513 thousand at December 31, 2023. Net cash provided by operating activities was $317,404 thousand for the six months, and adjusted non-GAAP free cash flow was $377,310 thousand, compared with $239,700 thousand in the prior-year period.
04—Continue