Waters (WAT) 8-K Waters Corporation Reports Second Quarter 2010 Results

Exhibit 99.1

For Immediate Release

Contact: Gene Cassis, Vice President of Investor Relations, 508-482-2349

Waters Corporation Reports Second Quarter 2010 Results

Milford, Massachusetts, July 28, 2010 — Waters Corporation (NYSE/WAT) reported today second quarter 2010 sales of $391 million, an increase of 8% over sales of $363 million in the second quarter of 2009. These quarterly sales include an adverse foreign currency translation impact of approximately 1%. On a GAAP basis, earnings per diluted share (E.P.S.) for the second quarter were $0.90, compared to $0.72 for the second quarter in 2009. On a non-GAAP basis, E.P.S. were up 19% to $0.93 in the second quarter of 2010 from $0.78 in the second quarter of 2009. A reconciliation of GAAP to non-GAAP E.P.S. is attached.

Through the first six months of 2010, sales for the Company were $759 million, an increase of 9% in comparison to sales of $696 million in the first six months of 2009. Foreign currency translation contributed positively to sales growth during the first half of 2010 and increased sales by 1%. E.P.S. for the first six months of 2010 were $1.69 compared to $1.47 for the comparable period in 2009. On a non-GAAP basis, including the adjustments on the attached reconciliation, E.P.S grew 14% in the first six months of 2010 to $1.74 from $1.52 in 2009.

Commenting on the quarter, Douglas Berthiaume, Chairman, President and Chief Executive Officer said, “We are encouraged by the improved demand trends that we saw across key markets in the quarter. Strong acceptance of new chromatography and mass spectrometry systems launched in the first half of 2010, continued superior sales growth in Asia and an impressive recovery in demand for our TA Instruments business contributed significantly to Waters’ improved results.”

As communicated in a prior press release, Waters Corporation will webcast its second quarter 2010 financial results conference call this morning, July 28, 2010 at 8:30 a.m. eastern time. To listen to the call, connect to www.waters.com, choose “Investors” and click on the Live Webcast. A replay of the call will be available through August 4, 2010, similarly by webcast and also by phone at 402-220-3893.

About Waters Corporation:

For over 50 years, Waters Corporation has created business advantages for laboratory-dependent organizations by delivering practical and sustainable innovation to enable significant advancements in such areas as healthcare delivery, environmental management, food safety, and water quality worldwide.

Pioneering a connected portfolio of separations science, laboratory information management, mass spectrometry and thermal analysis, Waters^® technology breakthroughs and laboratory solutions provide an enduring platform for customer success.

With revenue of $1.5 billion in 2009 and 5,200 employees, Waters is driving scientific discovery and operational excellence for customers worldwide.

CAUTIONARY STATEMENT

This release may contain “forward-looking” statements regarding future results and events, including statements regarding expected financial results, future growth and customer demand that involve a number of risks and uncertainties. For this purpose, any statements that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words, “believes”, “anticipates”, “plans”, “expects”, “intends”, “appears”, “estimates”, “projects”, and similar expressions 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, the impact on demand among the Company’s various market sectors from current economic difficulties and uncertainties; increased regulatory burdens as the Company’s business evolves, especially with respect to the U.S. Securities and Exchange Commission, 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 ability to access capital in volatile market conditions; fluctuations in capital expenditures by the Company’s customers, in particular large pharmaceutical companies; the ability to sustain and enhance service and consumable demand from the Company’s installed base of instruments; regulatory and/or administrative obstacles to the timely completion of purchase order documentation; 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 from the effect of mergers and acquisitions by the Company’s customers; environmental and logistical obstacles affecting the distribution of products; risks associated with lawsuits and other legal actions, particularly involving claims for infringement of patents and other intellectual property rights; the impact of changes in accounting principles and practices; and foreign exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results. Such factors and others are discussed more fully in the section entitled “Risk Factors” of the Company’s annual report on Form 10-K for the year ended December 31, 2009 and quarterly report on Form 10-Q for the period ended April 3, 2010 as filed with the Securities and Exchange Commission, which “Risk Factors” discussion is incorporated by reference in this release. The forward-looking statements included in this release represent the Company’s estimates or views as of the date of this release report 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.

Waters Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands and unaudited)

	July 3, 2010		December 31, 2009
Cash, cash equivalents and short-term investments		754,473		630,257
Accounts receivable		314,174		314,247
Inventories		191,782		178,666
Other current assets		51,429		49,206
Total current assets		1,311,858		1,172,376
Property, plant and equipment, net		210,649		210,926
Other assets		513,892		524,629
Total assets		2,036,399		1,907,931
Notes payable and debt		56,858		131,772
Accounts payable and accrued expenses		305,713		262,796
Total current liabilities		362,571		394,568
Long-term debt		700,000		500,000
Other long-term liabilities		160,878		164,414
Total liabilities		1,223,449		1,058,982
Total equity		812,950		848,949
Total liabilities and equity		2,036,399		1,907,931

Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

	(Unaudited)						(Unaudited)
	Three Months Ended						Six Months Ended
	July 3, 2010			July 4, 2009			July 3, 2010			July 4, 2009
Net sales	$	391,055		$	362,837		$	758,755		$	695,889
Cost of sales		155,133			144,154			301,065			271,608
Gross profit		235,922			218,683			457,690			424,281
Selling and administrative expenses (1) (2) (4)		106,939			109,583			213,632			208,742
Research and development expenses		20,807			19,722			40,883			38,054
Purchased intangibles amortization		2,592			2,683			5,234			5,299
Operating income		105,584			86,695			197,941			172,186
Interest expense, net		(3,173	)		(2,054	)		(5,458	)		(4,276	)
Income from operations before income taxes		102,411			84,641			192,483			167,910
Provision for income taxes (3)		17,489			14,734			32,043			24,656
Net income	$	84,922		$	69,907		$	160,440		$	143,254
Net income per basic common share	$	0.92		$	0.73		$	1.72		$	1.48
Weighted-average number of basic common shares		92,612			96,147			93,110			96,696
Net income per diluted common share	$	0.90		$	0.72		$	1.69		$	1.47
Weighted-average number of diluted common shares and equivalents		94,278			96,996			94,753			97,388

(1)	Included in selling and administrative expenses for the three and six months ended July 3, 2010 are restructuring costs of less than $1 million and $1 million, respectively, related to cost reduction plans. Included in selling and administrative expenses for the six months ended July 4, 2009 are restructuring costs of $1 million related to cost reduction plans.
(2)	Included in selling and administrative expenses for the three and six months ended July 3, 2010 are costs of $1 million and $2 million, respectively, associated with asset impairments related to certain Company facilities. Included in selling and administrative expenses for the three and six months ended July 4, 2009 are lease termination costs of $6 million.
(3)	Included in the provision for income taxes for the six months ended July 3, 2010 is a $2 million tax benefit related to the resolution of a pre-acquisition tax exposure.
	Included in the provision for income taxes for the six months ended July 4, 2009 is approximately $5 million of tax benefit associated with the reversal of a $5 million tax provision, which was originally recorded in 2008, related to the reorganization of certain foreign legal entities. The recognition of this tax benefit in 2009 was a result of changes in income tax regulations promulgated by the U.S. Treasury in February 2009.
(4)	Included in selling and administrative expenses for the six months ended July 4, 2009 are acquisition and other related costs of $1 million related to recent acquisitions.

Waters Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

	(Unaudited)				(Unaudited)
	Three Months Ended				Six Months Ended
	July 3, 2010		July 4, 2009		July 3, 2010			July 4, 2009
Reconciliation of net income per diluted share, in accordance with generally accepted accounting principles, with adjusted results:
Net income per diluted share	$	0.90	$	0.72	$	1.69		$	1.47
Adjustment for purchased intangibles amortization, net of tax		1,874		2,008		3,785			3,827
Net income per diluted share effect		0.02		0.02		0.04			0.04
Adjustment for restructuring costs, net of tax		163		—		687			643
Net income per diluted share effect		0.00		—		0.01			0.01
Adjustment for asset impairments and lease termination costs, net of tax		533		3,723		1,157			3,723
Net income per diluted share effect		0.01		0.04		0.01			0.04
Adjustment for one-time tax benefits		—		—		(1,500	)		(4,555	)
Net income per diluted share effect		—		—		(0.02	)		(0.05	)
Adjustment for acquisition-related costs, net of tax		—		—		—			1,078
Net income per diluted share effect		—		—		—			0.01
Adjusted net income per diluted share	$	0.93	$	0.78	$	1.74		$	1.52

The adjusted net income per diluted share presented above is used by the management of the Company to measure operating performance with prior periods and is not in accordance with generally accepted accounting principles (GAAP). The above reconciliation identifies items management has excluded as non-operational transactions, net of the effective applicable statutory tax rates. Management has excluded the purchased intangibles amortization, restructuring costs, asset impairments, lease termination costs, one-time tax benefits and acquisition-related costs from its non-GAAP adjusted amounts since management believes that these items are not directly related to ongoing operations, thereby providing management and investors with information that may help them to compare ongoing operating performance.