WATERS CORP Stock Forecasts | WAT EPS & Price Predictions

EX-99.1 2 d302881dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

For Immediate Release

Contact: Caspar Tudor, Director, Investor Relations – (508) 482-2429

Waters Corporation (NYSE: WAT) Reports Fourth Quarter

and Full-Year 2021 Financial Results

•

Fourth quarter sales of $836 million grew 8% in constant currency, 6% as reported

•

Quarter led by double-digit instrument sales growth, with momentum increasing on a two year stacked basis into year-end

•

Transformation on track with strong growth in 2021 as instrument sales and recurring revenues grew across all regions, delivering 16% growth in constant currency, 18% as reported

•

Full-year GAAP EPS of $11.17; non-GAAP EPS of $11.20, a 24% increase from prior year

Milford, Mass., February 1, 2022 - Waters Corporation (NYSE: WAT) today announced fourth quarter 2021 sales of $836 million, an increase of 6% as reported and 8% in constant currency, compared to sales of $787 million for the fourth quarter of 2020.

On a GAAP basis, diluted earnings per share (EPS) for the fourth quarter of 2021 increased to $3.52, compared to $3.49 for the fourth quarter of 2020. On a non-GAAP basis, EPS increased to $3.67, compared to $3.65 for the fourth quarter of 2020. A description and reconciliation of GAAP to non-GAAP results appear in the tables below and can be found on the Company’s website www.waters.com in the Investor Relations section.

On a GAAP basis, net cash provided by operating activities was $218 million for the fourth quarter of 2021, compared to $267 million for the fourth quarter of 2020. On a non-GAAP basis, adjusted free cash flow for the fourth quarter of 2021 was $187 million versus $240 million for the fourth quarter of 2020.

For fiscal year 2021, the Company’s sales were $2,786 million, an increase of 18% as reported and 16% in constant currency, compared to sales of $2,365 million for fiscal year 2020.

On a GAAP basis, EPS for fiscal year 2021 increased to $11.17, compared to $8.36 for fiscal year 2020. On a non-GAAP basis, EPS increased to $11.20, compared to $9.05 for fiscal year 2020.

On a GAAP basis, net cash provided by operating activities was $747 million for fiscal year 2021, compared to $791 million for fiscal year 2020. On a non-GAAP basis, adjusted free cash flow for fiscal year 2021 was $675 million versus $726 million for fiscal year 2020.

“I am extremely grateful for our colleagues around the world who continue to overcome the challenges of the pandemic while delivering exceptional support to our customers,” said Dr. Udit Batra, President and Chief Executive Officer of Waters Corporation. “We saw strong momentum in our two-year stacked revenue growth throughout 2021, demonstrating that our transformation is truly embedded into how we operate. In the fourth quarter, we capitalized on broad-based growth across our end markets and geographies, with particular strength in biopharma, industrial and China. Despite a tougher comparison and six fewer days in the quarter, consumables and instruments contributed solid gains.”

Dr. Batra continued, “As we close the books on 2021, I am very pleased with the revitalization of our core systems portfolio and the growing contributions of new products such as ACQUITY Premier, Arc HPLC, Multi-Reflecting ToF mass spec and our TA Instruments Discovery product line, all setting us up for years to come.”

Financial Highlights

Unless otherwise noted, sales growth and decline percentages are presented on an as-reported basis and are the same as the sales growth and decline percentages presented on a constant currency basis as compared with the same period in the prior year, each of which is detailed in the reconciliation of sales growth rates to constant currency growth rates in the tables below.

During the fourth quarter of 2021, sales into the pharmaceutical market increased 7% as reported and 8% in constant currency, sales into the industrial market increased 6% as reported and 7% in constant currency and sales into the academic and government markets increased 4% as reported and 5% in constant currency.

Recurring revenues, which represent the combination of service and precision chemistries, increased 2% as reported and 3% in constant currency, with six fewer days in the fourth quarter of 2021, while instrument system sales increased 10% as reported and 12% in constant currency.

Geographically, sales in Asia during the quarter increased 9%, sales in the Americas increased 8% (with U.S. sales growing 8%), and sales in Europe increased 1% as reported and 5% in constant currency.

For fiscal year 2021, sales into the pharmaceutical market increased 20% as reported and 19% in constant currency, sales into the industrial market increased 17% as reported and 15% in constant currency and sales into the academic and government markets increased 7% as reported and 5% in constant currency.

Recurring revenues increased 13% as reported and 11% in constant currency, while instrument system sales increased 23%.

Geographically, sales in Asia increased 20% as reported and 19% in constant currency, sales in the Americas increased 16% (with U.S. sales growing 14%) and sales in Europe increased 17% as reported and 14% in constant currency.

First Quarter and Full-Year 2022 Financial Outlook

The Company expects full-year 2022 constant currency sales growth in the range of 5% to 7%. Currency translation is expected to decrease full-year sales growth by approximately one percentage point. The Company expects full-year 2022 non-GAAP EPS in the range of $11.75 to $12.00. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full-year.

The Company expects first quarter 2022 constant currency sales growth in the range of 6% to 8%. Currency translation is expected to decrease first quarter sales growth by approximately three percentage points. The Company expects first quarter 2022 non-GAAP EPS in the range of $2.25 to $2.35. Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the fourth quarter.

Conference Call

Waters Corporation will webcast its fourth quarter and full-year 2021 financial results conference call today, February 1, 2022 at 8:00 a.m. Eastern Time. To listen to the call and see the accompanying slide presentation, please visit www.waters.com, select “Investors” under the “About Waters” section, navigate to “Events & Presentations,” and click on the “Webcast.” A replay will be available through at least February 15, 2022 at midnight Eastern Time on the same website by webcast and also by phone at (888) 566-0450.

About Waters Corporation

Waters Corporation (NYSE: WAT), a global leader in analytical instruments and software, has pioneered chromatography, mass spectrometry and thermal analysis innovations serving the life, materials and food sciences for more than 60 years. With more than 7,400 employees worldwide, Waters operates directly in 35 countries, including 14 manufacturing facilities, and with products available in more than 100 countries. For more information, visit www.waters.com.

Non-GAAP Financial Measures

This press release contains financial measures, such as constant currency growth rate, adjusted operating income, adjusted net income, adjusted earnings per diluted share and adjusted free cash flow, among others, which are considered “non-GAAP” financial measures under applicable U.S. Securities and Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP). The Company’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. The non-GAAP financial measures used in this press release adjust for specified items that can be highly variable or difficult to predict. The Company generally uses these non-GAAP financial measures to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results, comparison to competitors’ operating results and determination of management incentive compensation. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting the Company’s business. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables accompanying this release.

Cautionary Statement

This release contains “forward-looking” statements regarding future results and events. For this purpose, any statements that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words “feels”, “believes”, “anticipates”, “plans”, “expects”, “intends”, “suggests”, “appears”, “estimates”, “projects” and similar expressions, whether in the negative or affirmative, 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, risks related to the effects of the ongoing COVID-19 pandemic on our business, financial condition, results of operations and prospects, including: portions of our global workforce being unable to work fully and/or effectively due to working remotely, illness, quarantines, government actions, facility closures or other reasons related to the pandemic, increased risks of cyber-attacks resulting from our temporary remote working model, disruptions in our manufacturing capabilities or to our supply chain and distribution network, volatility and uncertainty in global capital markets limiting our ability to access capital, customers being unable to make timely payments for purchases and volatility in demand for our products; foreign exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results; the impact on demand for the Company’s products, including delays or disruptions to our distribution network, among the Company’s various market sectors or geographies from economic, sovereign and political uncertainties, particularly regarding the effect of new or proposed tariff or trade regulations or changes in the interpretation or enforcement of existing regulations; the effect on the Company’s financial results from the United Kingdom exiting the European Union; fluctuations in expenditures by the Company’s customers, in particular large pharmaceutical companies; introduction of competing products by other companies and loss of market share; pressures on prices from competitors and/or customers; regulatory, economic and competitive obstacles to new product introductions; other changes in demand for the Company’s products from the effect of mergers and acquisitions by the Company’s customers; increased regulatory burdens as the Company’s business evolves, especially with respect to the U.S. Food and Drug Administration and U.S. Environmental Protection Agency, among others; shifts in taxable income in jurisdictions with different effective tax rates; the outcome of tax examinations or changes in respective country legislation affecting the Company’s effective tax rate; the effect of the adoption of new accounting standards; the ability to access capital, maintain liquidity and service the Company’s debt in volatile market conditions, including any potential impact on the Company’s operations stemming from sustained inflation, particularly in the U.S., as a large portion of the Company’s cash is held and operating cash flows are generated outside the U.S.; environmental and logistical obstacles affecting the distribution of products and risks associated with lawsuits and other legal actions, particularly involving claims for infringement of patents and other intellectual property rights. Such factors and others are discussed more fully in the sections entitled “Forward-Looking Statements” and “Risk Factors” of the Company’s annual report on Form 10-K for the year ended December 31, 2020, as well as in the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” of the Company’s quarterly reports on Form 10-Q for the quarterly periods ended April 3, 2021, July 3, 2021, and October 2, 2021, each as filed with the Securities and Exchange Commission (“SEC”), which discussions are incorporated by reference in this release, as updated by the Company’s future filings with the SEC. The forward-looking statements included in this release represent the Company’s estimates or views as of the date of this release 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. Except as required by law, the Company does not assume any obligation to update any forward-looking statements.

Waters Corporation and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Twelve Months Ended
	December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net sales	$	836,449		$	786,658		$	2,785,874		$	2,365,365
Costs and operating expenses:
Cost of sales		351,004			320,569			1,156,533			1,006,689
Selling and administrative expenses		173,014			153,084			626,968			553,698
Research and development expenses		43,331			39,662			168,358			140,777
Purchased intangibles amortization		1,735			2,687			7,143			10,587
Asset impairment^(a)		—			6,945			—			6,945
Litigation provision		5,165			—			5,165			1,180
Operating income		262,200			263,711			821,707			645,489
Other (expense) income, net ^(b)		(870	)		374			17,203			(1,775	)
Interest expense, net		(9,010	)		(6,834	)		(32,717	)		(32,800	)
Income from operations before income taxes		252,320			257,251			806,193			610,914
Provision for income taxes		36,081			38,940			113,350			89,343
Net income	$	216,239		$	218,311		$	692,843		$	521,571
Net income per basic common share	$	3.55		$	3.51		$	11.25		$	8.40
Weighted-average number of basic common shares		60,984			62,170			61,575			62,094
Net income per diluted common share	$	3.52		$	3.49		$	11.17		$	8.36
Weighted-average number of diluted common shares and equivalents		61,423			62,501			62,028			62,414

(a)

The asset impairment incurred during the three and twelve months ended December 31, 2020 included a non-cash impairment charge of $10 million related to certain intangible assets previously acquired. In conjunction with the intangible asset impairment charge, the Company also reduced its liability for contingent consideration of $3 million during the three and twelve months ended December 31, 2020. The net impact of $7 million is reported as an asset impairment in the consolidated statements of operations.

(b)

During the twelve months ended December 31, 2021, the Company executed a settlement agreement to resolve patent infringement litigation with Bruker Corporation and Bruker Daltronik GmbH regarding their timsTOF product line. In connection with the settlement, the Company is entitled to receive $10 million in guaranteed payments, including minimum royalty payments, which was recognized within Other (expense) income, net in our consolidated statement of operations. During the twelve months ended December 31, 2021, the Company recorded an unrealized gain of $10 million due to an observable change in the fair value of an existing investment the Company does not have the ability to exercise significant influence over.

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP

Net Sales by Operating Segments, Products & Services, Geography and Markets

Three Months Ended December 31, 2021 and December 31, 2020

(In thousands)


	Three Months Ended				Percent			Current Period Currency			Constant Currency
	December 31, 2021		December 31, 2020		Change			Impact			Growth Rate ^(a)
NET SALES - OPERATING SEGMENTS
Waters	$	742,070	$	703,738		5	%	$	(8,433	)		7	%
TA		94,379		82,920		14	%		(1,591	)		16	%

Total	$	836,449	$	786,658		6	%	$	(10,024	)		8	%

NET SALES - PRODUCTS & SERVICES
Instruments	$	441,229	$	400,436		10	%	$	(7,965	)		12	%
Service		256,489		254,667		1	%		(2,932	)		2	%
Chemistry		138,731		131,555		5	%		873			5	%

Total Recurring		395,220		386,222		2	%		(2,059	)		3	%

Total	$	836,449	$	786,658		6	%	$	(10,024	)		8	%

NET SALES - GEOGRAPHY
Asia	$	321,674	$	295,706		9	%	$	(988	)		9	%
Americas		271,968		251,437		8	%		384			8	%
Europe		242,807		239,515		1	%		(9,420	)		5	%

Total	$	836,449	$	786,658		6	%	$	(10,024	)		8	%

NET SALES - MARKETS
Pharmaceutical	$	491,870	$	460,384		7	%	$	(7,068	)		8	%
Industrial		247,320		233,180		6	%		(2,440	)		7	%
Academic & Government		97,259		93,094		4	%		(516	)		5	%

Total	$	836,449	$	786,658		6	%	$	(10,024	)		8	%

NET SALES - EXCLUDING CHINA
Total Net Sales	$	836,449	$	786,658		6	%	$	(10,024	)		8	%
China Net Sales		175,098		151,639		15	%		3,460			13	%

Total Net Sales Excluding China	$	661,351	$	635,019		4	%	$	(13,484	)		6	%

(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 rate, a non-GAAP financial measure, measures the change in net sales between current and prior year periods, ignoring 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

Net Sales by Operating Segments, Products & Services, Geography and Markets

Twelve Months Ended December 31, 2021 and December 31, 2020

(In thousands)


	Twelve Months Ended				Percent			Current Period Currency		Constant Currency
	December 31, 2021		December 31, 2020		Change			Impact		Growth Rate ^(a)
NET SALES - OPERATING SEGMENTS
Waters	$	2,473,083	$	2,117,124		17	%	$	28,714		15	%
TA		312,791		248,241		26	%		3,622		25	%

Total	$	2,785,874	$	2,365,365		18	%	$	32,336		16	%

NET SALES - PRODUCTS & SERVICES
Instruments	$	1,314,861	$	1,065,253		23	%	$	5,698		23	%
Service		963,804		868,032		11	%		15,696		9	%
Chemistry		507,209		432,080		17	%		10,942		15	%

Total Recurring		1,471,013		1,300,112		13	%		26,638		11	%

Total	$	2,785,874	$	2,365,365		18	%	$	32,336		16	%

NET SALES - GEOGRAPHY
Asia	$	1,075,765	$	899,177		20	%	$	7,093		19	%
Americas		925,220		797,842		16	%		2,455		16	%
Europe		784,889		668,346		17	%		22,788		14	%

Total	$	2,785,874	$	2,365,365		18	%	$	32,336		16	%

NET SALES - MARKETS
Pharmaceutical	$	1,667,061	$	1,386,966		20	%	$	15,542		19	%
Industrial		829,204		707,772		17	%		12,430		15	%
Academic & Government		289,609		270,627		7	%		4,364		5	%

Total	$	2,785,874	$	2,365,365		18	%	$	32,336		16	%

NET SALES - EXCLUDING CHINA
Total Net Sales	$	2,785,874	$	2,365,365		18	%	$	32,336		16	%
China Net Sales		521,128		404,352		29	%		15,159		25	%

Total Net Sales Excluding China	$	2,264,746	$	1,961,013		15	%	$	17,177		15	%

(a)

Waters Corporation and Subsidiaries

Reconciliation of GAAP to Adjusted Non-GAAP Financials

Three and Twelve Months Ended December 31, 2021 and December 31, 2020

(In thousands, except per share data)


	Selling & Administrative Expenses^(a)			Operating Income		Operating Income Percentage			Other Income (Expense)			Income from Operations before Income Taxes			Provision for Income Taxes			Net Income			Diluted Earnings per Share
Three Months Ended December 31, 2021
GAAP	$	179,914		$	262,200		31.3	%	$	(870	)	$	252,320		$	36,081		$	216,239		$	3.52
Adjustments:
Purchased intangibles amortization ^(b)		(1,735	)		1,735		0.2	%		—			1,735			392			1,343			0.02
Restructuring costs and certain other items ^(c)		(3,669	)		3,669		0.4	%		—			3,669			783			2,886			0.05
Pension expenses ^(d)		—			—		—			109			109			33			76			—
Litigation provision ^(e)		(5,165	)		5,165		0.6	%		—			5,165			1,240			3,925			0.06
Certain income tax items ^(f)		—			—		—			—			—			(653	)		653			0.01

Adjusted Non-GAAP	$	169,345		$	272,769		32.6	%	$	(761	)	$	262,998		$	37,876		$	225,122		$	3.67

Three Months Ended December 31, 2020
GAAP	$	162,716		$	263,711		33.5	%	$	374		$	257,251		$	38,940		$	218,311		$	3.49
Adjustments:
Purchased intangibles amortization ^(b)		(2,687	)		2,687		0.3	%		—			2,687			541			2,146			0.03
Asset Impairment ^(g)		(6,945	)		6,945		0.9	%		—			6,945			1,180			5,765			0.09
Restructuring costs and certain other items ^(c)		(2,142	)		2,142		0.3	%		(1,623	)		519			139			380			0.01
Pension expenses ^(d)		—			—		—			235			235			71			164			—
Certain income tax items ^(f)		—			—		—			—			—			(1,052	)		1,052			0.02

Adjusted Non-GAAP	$	150,942		$	275,485		35.0	%	$	(1,014	)	$	267,637		$	39,819		$	227,818		$	3.65

Twelve Months Ended December 31, 2021
GAAP	$	639,276		$	821,707		29.5	%	$	17,203		$	806,193		$	113,350		$	692,843		$	11.17
Adjustments:
Purchased intangibles amortization ^(b)		(7,143	)		7,143		0.3	%		—			7,143			1,617			5,526			0.09
Restructuring costs and certain other items ^(c)		(7,338	)		7,338		0.3	%		(9,707	)		(2,369	)		(779	)		(1,590	)		(0.03	)
Pension expenses ^(d)		—			—		—			(294	)		(294	)		(74	)		(220	)		—
Litigation provision and settlement ^(e)		(5,165	)		5,165		0.2	%		(10,083	)		(4,918	)		(676	)		(4,242	)		(0.07	)
Certain income tax items ^(f)		—			—		—			—			—			(2,341	)		2,341			0.04

Adjusted Non-GAAP	$	619,630		$	841,353		30.2	%	$	(2,881	)	$	805,755		$	111,097		$	694,658		$	11.20

Twelve Months Ended December 31, 2020
GAAP	$	572,410		$	645,489		27.3	%	$	(1,775	)	$	610,914		$	89,343		$	521,571		$	8.36
Adjustments:
Purchased intangibles amortization ^(b)		(10,587	)		10,587		0.4	%		—			10,587			2,102			8,485			0.14
Asset Impairment ^(g)		(6,945	)		6,945		0.3	%		—			6,945			1,180			5,765			0.09
Restructuring costs and certain other items ^(c)		(35,196	)		35,196		1.5	%		(2,084	)		33,112			7,512			25,600			0.41
Pension expenses ^(d)		—			—		—			235			235			71			164			—
Litigation provision ^(e)		(1,180	)		1,180		—			—			1,180			283			897			0.01
Certain income tax items ^(f)		—			—		—			—			—			(2,619	)		2,619			0.04

Adjusted Non-GAAP	$	518,502		$	699,397		29.6	%	$	(3,624	)	$	662,973		$	97,872		$	565,101		$	9.05

(a)	Selling & administrative expenses include purchased intangibles amortization, litigation provisions and settlements and asset impairments.

(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)

Restructuring costs, mergers and acquisition costs and certain other items were excluded as the Company believes that the cost to consolidate operations, reduce overhead, acquire companies 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.

(d)	The pension settlement and curtailment expenses associated with certain defined benefit pension plans were excluded as the Company believes these expenses are not indicative of normal operating costs.

(e)	Litigation settlement gains and provisions were excluded as these items are isolated, unpredictable and not expected to recur regularly.

(f)	Certain income tax items were excluded as these non-cash expenses and benefits represent updates in management’s assessment of ongoing examinations or other tax items that are not indicative of the Company’s normal or future income tax expense.

(g)

The asset impairment, a non-cash expense, is a one-time charge related to the write-off of certain intangible assets and a contingent consideration liability that were both associated with a previous acquisition. The asset impairment was excluded as the Company does not believe these expenses are indicative of normal operating costs.

Waters Corporation and Subsidiaries

Preliminary Condensed Unclassified Consolidated Balance Sheets

(In thousands and unaudited)


	December 31, 2021		December 31, 2020
Cash, cash equivalents and investments	$	569,285	$	443,146
Accounts receivable		612,648		573,316
Inventories		356,095		304,281
Property, plant and equipment, net		547,913		494,003
Intangible assets, net		242,401		258,645
Goodwill		437,865		444,362
Other assets		328,725		322,167
Total assets	$	3,094,932	$	2,839,920
Notes payable and debt	$	1,513,870	$	1,356,515
Other liabilities		1,213,508		1,251,261
Total liabilities		2,727,378		2,607,776
Total stockholders’ equity		367,554		232,144
Total liabilities and stockholders’ equity	$	3,094,932	$	2,839,920

Waters Corporation and Subsidiaries

Preliminary Condensed Consolidated Statements of Cash Flows

Three and Twelve Months Ended December 31, 2021 and December 31, 2020

(In thousands and unaudited)


	Three Months Ended						Twelve Months Ended
	December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Cash flows from operating activities:
Net income	$	216,239		$	218,311		$	692,843		$	521,571
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		7,969			9,150			29,918			36,865
Depreciation and amortization		33,754			44,260			131,680			135,351
Change in operating assets and liabilities, net		(40,024	)		(4,239	)		(107,167	)		96,720

Net cash provided by operating activities		217,938			267,482			747,274			790,507
Cash flows from investing activities:
Additions to property, plant, equipment and software capitalization		(44,652	)		(47,044	)		(161,266	)		(172,384	)
Business acquisitions, net of cash acquired		—			(3,881	)		—			(80,545	)
Investment in unaffiliated companies		(921	)		(2,293	)		(1,788	)		(6,143	)
Payments for intellectual property licenses		—			—			(7,000	)		—
Net change in investments		62,371			15,685			(61,576	)		(5,022	)

Net cash provided by (used) in investing activities		16,798			(37,533	)		(231,630	)		(264,094	)
Cash flows from financing activities:
Net change in debt		(100,000	)		(215,000	)		151,463			(325,366	)
Proceeds from stock plans		643			37,612			55,643			66,033
Purchases of treasury shares		(156,235	)		(56	)		(648,930	)		(196,409	)
Other cash flow from financing activities, net		1,224			4,910			3,549			15,240

Net cash used in financing activities		(254,368	)		(172,534	)		(438,275	)		(440,502	)
Effect of exchange rate changes on cash and cash equivalents		(3,836	)		4,346			(12,830	)		15,069

(Decrease) increase in cash and cash equivalents		(23,468	)		61,761			64,539			100,980
Cash and cash equivalents at beginning of period		524,702			374,934			436,695			335,715

Cash and cash equivalents at end of period	$	501,234		$	436,695		$	501,234		$	436,695

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


Net cash provided by operating activities - GAAP	$	217,938		$	267,482		$	747,274		$	790,507
Adjustments:
Additions to property, plant, equipment and software capitalization		(44,652	)		(47,044	)		(161,266	)		(172,384	)
Tax reform payments		—			—			38,454			38,454
Litigation settlements paid, net		5,165			—			1,798			—
Major facility renovations		9,029			19,486			49,207			69,806

Free Cash Flow - Adjusted Non-GAAP	$	187,480		$	239,924		$	675,467		$	726,383

(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


	Three Months Ended April 2, 2022						Twelve Months Ended December 31, 2022
	Range						Range
Projected Sales
Projected constant currency sales growth rate ^(a)		6	%	—	8	%		5	%	—	7	%
Projected currency impact		(3	%)	—	(3	%)		(1	%)	—	(1	%)

Projected sales growth rate as reported		3	%	—	5	%		4	%	—	6	%


	Range					Range
Projected Earnings Per Diluted Share
Projected GAAP earnings per diluted share	$	2.22	—	$	2.32	$	11.65	—	$	11.90
Adjustments:
Purchased intangibles amortization	$	0.02	—	$	0.02	$	0.08	—	$	0.08
Certain income tax items	$	0.01	—	$	0.01	$	0.02	—	$	0.02

Projected adjusted non-GAAP earnings per diluted share	$	2.25	—	$	2.35	$	11.75	—	$	12.00

(a)

Constant currency growth rates are a non-GAAP financial measure that measures the change in net sales between current and prior year periods, ignoring 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.