SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______TO________.
COMMISSION FILE NUMBER: 01-14010
WATERS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN THE CHARTER)
DELAWARE 13-3668640
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
34 MAPLE STREET
MILFORD, MASSACHUSETTS 01757
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (508) 478-2000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days
Yes (X) No ( )
Number of shares outstanding of the Registrant's common stock as of May 8, 2000:
63,294,203.
WATERS CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
INDEX
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999 3
Consolidated Statements of Operations for the three months ended March 31,
2000 and 1999 4
Consolidated Statements of Cash Flows for the three months ended March 31,
2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
2
WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 2,226 $ 3,803
Accounts receivable, less allowances for doubtful accounts of
$4,075 and $3,741 at March 31, 2000 and December 31, 1999,
respectively 148,016 149,271
Inventories 87,305 80,363
Other current assets 16,890 13,893
------------ ------------
Total current assets 254,437 247,330
Property, plant and equipment, net of accumulated depreciation
of $59,664 and $56,412 at March 31, 2000 and December 31,
1999, respectively 93,516 91,841
Other assets 75,310 74,530
Goodwill, less accumulated amortization of $16,860 and $16,068 at
March 31, 2000 and December 31, 1999, respectively 169,112 170,736
------------ ------------
Total assets $ 592,375 $ 584,437
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long term debt $ 14,954 $ 14,164
Accounts payable 41,364 34,771
Deferred revenue and customer advances 37,219 31,406
Accrued retirement plan contributions 5,262 5,181
Accrued income taxes 22,602 16,350
Accrued other taxes 4,317 4,026
Other current liabilities 82,266 91,943
------------ ------------
Total current liabilities 207,984 197,841
Long term debt 42,300 81,105
Other liabilities 11,038 13,329
------------ ------------
Total liabilities 261,322 292,275
Stockholders' Equity:
Common stock, par value $0.01 per share, 100,000 shares authorized, 63,280
and 62,259 shares issued and outstanding at March 31,
2000 and December 31, 1999, respectively 633 623
Additional paid-in capital 204,278 195,455
Deferred stock option compensation (111) (166)
Retained earnings 130,360 100,041
Accumulated other comprehensive (loss) (4,107) (3,791)
------------ ------------
Total stockholders' equity 331,053 292,162
------------ ------------
Total liabilities and stockholders' equity $ 592,375 $ 584,437
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
3
WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
FOR THE THREE MONTHS ENDED
---------------------------------
MARCH 31, 2000 MARCH 31, 1999
Net sales $180,641 $160,362
Cost of sales 66,413 60,622
----------- ----------
Gross profit 114,228 99,740
Selling, general and administrative expenses 60,395 54,504
Research and development expenses 10,362 8,686
Goodwill and purchased technology amortization 1,811 2,045
----------- ----------
Operating income 41,660 34,505
Interest expense, net 701 3,033
----------- ----------
Income before income taxes 40,959 31,472
Provision for income taxes 10,640 8,498
----------- ----------
Net income 30,319 22,974
Less: accretion of and 6% dividend on preferred stock - 244
----------- ----------
Net income available to common stockholders $30,319 $22,730
=========== ==========
----------- ----------
Net income per basic common share $0.48 $0.37
=========== ==========
Weighted average number of basic common shares 62,801 60,894
----------- ----------
Net income per diluted common share $0.45 $0.35
=========== ==========
Weighted average number of diluted common shares and equivalents 67,592 65,840
The accompanying notes are an integral part of the consolidated financial
statements.
4
WATERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
FOR THE THREE MONTHS ENDED
-----------------------------------------
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
Cash flows from operating activities:
Net income $30,319 $22,974
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 7,532 6,769
Amortization of debt issuance costs 184 184
Compensatory stock option expense 55 55
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable (1,404) 8,996
(Increase) decrease in inventories (8,133) 894
Increase (decrease) in accounts payable and other current
liabilities 4,392 (6,635)
Increase in deferred revenue and customer advances 6,242 1,398
Other, net (3,951) 437
---------------- ----------------
Net cash provided by operating activities 35,236 35,072
Cash flows from investing activities:
Additions to property, plant and equipment (6,456) (4,610)
Software capitalization and other intangibles (1,344) (1,165)
Loans to officers 343 (34)
---------------- ----------------
Net cash (used in) investing activities (7,457) (5,809)
Cash flows from financing activities:
Net (repayment) of bank debt (38,015) (35,915)
Proceeds from stock plans 8,833 3,387
---------------- ----------------
Net cash (used in) financing activities (29,182) (32,528)
Effect of exchange rate changes on cash and cash equivalents (174) (475)
---------------- ----------------
(Decrease) in cash and cash equivalents (1,577) (3,740)
Cash and cash equivalents at beginning of period 3,803 5,497
---------------- ----------------
Cash and cash equivalents at end of period $2,226 $1,757
================ ================
The accompanying notes are an integral part of the consolidated financial
statements.
5
WATERS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1. ORGANIZATION AND BASIS OF PRESENTATION
Waters Corporation ("Waters" or the "Company"), an analytical instrument
manufacturer, is the world's largest manufacturer and distributor of high
performance liquid chromatography ("HPLC") instruments, chromatography columns
and other consumables, and related service. HPLC, the largest product segment of
the analytical instrument market, is utilized in a broad range of industries to
detect, identify, monitor and measure the chemical, physical and biological
composition of materials, and to purify a full range of compounds. Through its
Micromass Limited ("Micromass") subsidiary, the Company is also a market leader
in the development, manufacture, and distribution of mass spectrometry ("MS")
instruments, which are complementary products that can be integrated and used
along with other analytical instruments, especially HPLC. Through its TA
Instruments, Inc. ("TAI") subsidiary, the Company is also the world's leader in
thermal analysis, a prevalent and complementary technique used in the analysis
of polymers.
The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP"). The
consolidated financial statements include the accounts of the Company and its
subsidiaries. All material intercompany balances and transactions have been
eliminated. Certain amounts from prior years have been reclassified in the
accompanying financial statements in order to be consistent with the current
year's classifications.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect (i) the reported amounts of assets and liabilities,
(ii) disclosure of contingent assets and liabilities at the dates of the
financial statements and (iii) the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
It is management's opinion that the accompanying interim financial
statements reflect all adjustments (which are normal and recurring) necessary
for a fair presentation of the results for the interim periods. The interim
financial statements should be read in conjunction with the consolidated
financial statements included in the Company's 10-K filing with the Securities
and Exchange Commission for the year ended December 31, 1999.
2. INVENTORIES
Inventories are classified as follows:
MARCH 31, DECEMBER 31,
2000 1999
------- -------
Raw materials $31,821 $27,155
Work in progress 18,019 14,446
Finished goods 37,465 38,762
------- -------
Total Inventories $87,305 $80,363
======= =======
3. INCOME TAXES
The Company's effective tax rate for the three months ended March 31, 2000 and
1999, was 26% and 27%, respectively.
6
WATERS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
4. EARNINGS PER SHARE
Basic and diluted EPS calculations are detailed as follows:
-----------------------------------------------------
THREE MONTHS ENDED MARCH 31, 2000
-----------------------------------------------------
INCOME SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ------
Net income $ 30,319
Income per basic common share from operations $ 30,319 62,801 $ 0.48
Effect of dilutive securities:
Options outstanding 4,524
Options exercised 267
-------- ------ ------
Income per diluted common share from operations $ 30,319 67,592 $ 0.45
======== ====== ======
-----------------------------------------------------
THREE MONTHS ENDED MARCH 31, 1999
-----------------------------------------------------
INCOME SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ------
Net income $ 22,974
Less: Accretion of and 6% dividend on preferred
stock 244
-------- ------ ------
Income per basic common share from operations $ 22,730 60,894 $ 0.37
Effect of dilutive securities:
Options outstanding 4,776
Options exercised 170
-------- ------ ------
Income per diluted common share from operations $ 22,730 65,840 $ 0.35
======== ====== ======
As of March 31, 2000, the Company had two thousand stock option securities
that were antidilutive. These securities were not included in the computation of
diluted EPS. As of March 31, 1999, the Company had no stock option securities
that were antidilutive.
5. COMPREHENSIVE INCOME
Comprehensive income details follow:
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2000 1999
---- ----
Net income $ 30,319 $ 22,974
Other comprehensive income (316) 1,131
---------- ---------
Comprehensive income $ 30,003 $ 24,105
========== =========
7
WATERS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
6. BUSINESS SEGMENT INFORMATION
SFAS 131 establishes standards for reporting information about operating
segments in annual financial statements of public business enterprises. The
Company evaluated its business activities that are regularly reviewed by the
Chief Executive Officer for which discrete financial information is available.
As a result of this evaluation, the Company determined that it has three
operating segments: Waters, Micromass and TAI.
Waters is in the business of manufacturing and distributing HPLC
instruments, columns and other consumables, and related service; Micromass is in
the business of manufacturing and distributing mass spectrometry instruments
that can be integrated and used along with other analytical instruments,
particularly HPLC; and TAI is in the business of manufacturing and distributing
thermal analysis and rheology instruments. For all three of these operating
segments within the analytical instrument industry; economic characteristics,
production processes, products and services, types and classes of customers,
methods of distribution, and regulatory environments are similar. Because of
these similarities, the three segments have been aggregated into one reporting
segment for financial statement purposes. Please refer to the consolidated
financial statements for financial information regarding the one reportable
segment of the Company.
7. STOCKHOLDERS' EQUITY
On February 29, 2000, the Board of Directors approved an amendment to the
Company's Certificate of Incorporation to increase authorized common stock from
one hundred million to two hundred million shares, contingent upon shareholder
approval at the Company's Annual Meeting. On May 4, 2000, shareholders approved
the amendment.
In 1999, the Board of Directors approved a two-for-one common stock
split, in the form of a 100% stock dividend. All share and per share amounts
have been retroactively restated to reflect the stock split.
8. NEW ACCOUNTING PRONOUNCEMENTS
In March 2000, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation ("FIN") 44, Accounting for Certain Transactions Involving Stock
Compensation - an interpretation of Accounting Principles Board ("APB") Opinion
25. FIN 44 clarifies the application of APB Opinion 25 and among other issues
clarifies the following: the definition of an employee for purposes of applying
APB Opinion 25; the criteria for determining whether a plan qualifies as a
non-compensatory plan; the accounting consequence of various modifications to
the terms of previously fixed stock options or awards; and the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain conclusions in FIN 44 cover specific events
that occurred after either December 15, 1998 or January 12, 2000. The Company
does not expect the application of FIN 44 to have a material impact on the
Company's financial position or results of operations.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") 101, Revenue Recognition in Financial
Statements, which provides guidance related to revenue recognition based on
interpretations and practices promulgated by the SEC. Before modification by SAB
101A, SAB 101 was to be effective with the first fiscal quarter of fiscal years
beginning after December 15, 1999 and requires companies to report any changes
in revenue recognition as a cumulative change in accounting principle at the
time of implementation. In March 2000, the SEC issued SAB 101A, Amendment:
Revenue Recognition in Financial Statements, which delays implementation of SAB
101 until the Company's second fiscal quarter of 2000. The Company is currently
determining the effect, if any, it will have on the financial statements.
In June 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") 137, Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of SFAS 133.
SFAS 137 amends SFAS 133, Accounting for Derivative Instruments and Hedging
Activities, which was issued in June 1998 and previously was to be effective for
all fiscal quarters of fiscal years beginning after June 15, 1999. SFAS 137
defers the effective date of SFAS 133 to fiscal years beginning after June 15,
2000. Earlier application is permitted. SFAS 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments
8
embedded in other contracts and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
While management has not determined the impact of the new standard, it is not
expected to be material to the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET SALES:
Net sales for the three month period ended March 31, 2000 (the "2000 Quarter")
were $180.6 million, compared to $160.4 million for the three month period ended
March 31, 1999 (the "1999 Quarter"), an increase of 13%. Excluding the
unfavorable effects of a stronger U.S. dollar, net sales increased by 15% over
the 1999 Quarter. The 2000 Quarter reflected continued strong demand,
particularly from life science customers. Mass spectrometry and HPLC product
lines led the growth. Time-of-flight mass spectrometry products continued to
perform well and sales grew in excess of 50% in the 2000 quarter with
accelerating demand from customers in both high throughput drug discovery and
proteomics applications. Growth was broad-based with double-digit increases
across all geographies except Europe which grew in the single digits.
GROSS PROFIT:
Gross profit for the 2000 Quarter was $114.2 million, compared to $99.7 million
for the 1999 Quarter, an increase of $14.5 million or 15%. Gross profit as a
percentage of sales increased to 63.2% in the 2000 Quarter from 62.2% in the
1999 Quarter, primarily as a result of increased efficiencies in the Company's
manufacturing operations and lower raw material costs.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Selling, general and administrative expenses for the 2000 Quarter were $60.4
million, compared to $54.5 million for the 1999 Quarter. As a percentage of net
sales, selling, general and administrative expenses decreased to 33.4% for the
2000 Quarter from 34.0% for the 1999 Quarter as a result of higher sales volume
and expense controls. The $5.9 million or 11% increase in total expenditures
primarily resulted from increased headcount required to support increased sales
levels.
RESEARCH AND DEVELOPMENT EXPENSES:
Research and development expenses were $10.4 million for the 2000 Quarter
compared to $8.7 million for the 1999 Quarter, a $1.7 million or 19% increase
from the 1999 Quarter. The Company continued to invest significantly in the
development of new and improved HPLC, mass spectrometry, thermal analysis and
rheology products.
GOODWILL AND PURCHASED TECHNOLOGY AMORTIZATION:
Goodwill and purchased technology amortization for the 2000 Quarter was $1.8
million, compared to $2.0 million for the 1999 Quarter, a decrease of $0.2
million or 11%. The expense decreased as a portion of purchased technology
reached full amortization in 1999.
OPERATING INCOME:
Operating income for the 2000 Quarter was $41.7 million, compared to $34.5
million for the 1999 Quarter, an increase of $7.2 million or 21%. Waters
improved operating income levels on the strength of sales growth, volume
leverage and continued focus on cost controls in all operating areas.
INTEREST EXPENSE, NET:
Net interest expense decreased by $2.3 million, or 77%, from $3.0 million in the
1999 Quarter to $0.7 million in the 2000 Quarter. The current quarter decrease
primarily reflected lower average debt levels as a result of repayments from the
Company's cash flow.
PROVISION FOR INCOME TAXES:
The Company's effective income tax rate was 26% in the 2000 Quarter and 27% in
the 1999 Quarter. The 2000 Quarter rate decreased primarily due to a favorable
shift in the mix of taxable income to lower tax rate jurisdictions.
9
NET INCOME:
Income for the 2000 Quarter was $30.3 million, compared to $23.0 million for the
1999 Quarter, an increase of $7.3 million or 32%. The improvement over the 1999
Quarter was a result of sales growth, productivity improvement in all operating
areas, a decline in interest expense and the impact of a decrease in the
Company's effective income tax rate.
EURO CURRENCY CONVERSION
Several countries of the European Union will adopt the euro as their legal
currency effective July 1, 2002. A transition period has been established from
January 1, 1999 to July 1, 2002 during which companies conducting business in
these countries may use the euro or their local currency. The Company has
considered the potential impact of the euro conversion on pricing competition,
information technology systems, currency risk and risk management. Currently,
the Company does not expect that the euro conversion will result in any material
increase in costs to the Company or have a material adverse effect on its
business or financial condition.
LIQUIDITY AND CAPITAL RESOURCES
During the 2000 Quarter, net cash provided by the Company's operating activities
was $35.2 million, primarily as a result of net income for the period after
adding back depreciation and amortization. Within operating activities, $8.1
million of cash was used for inventory growth to support future sales, which was
offset by cash provided from an increase in current liabilities, including a
$6.2 million increase in deferred revenue and customer advances. Cash was also
provided to the Company from $8.8 million of combined proceeds from the exercise
of stock options and the purchase of stock by its employees. Primary uses of
cash flow during the quarter were $38.0 million of net bank debt repayment and
$7.8 million of property, plant and equipment and software capitalization
investments.
The Company believes that existing cash balances and current cash flow from
operating activities together with borrowings available under the Bank Credit
Agreement will be sufficient to fund working capital, capital spending and debt
service requirements of the Company in the foreseeable future.
As a publicly held company, the Company has not paid any dividends and does
not plan to pay any dividends in the foreseeable future.
FORWARD-LOOKING INFORMATION
SAFE HARBOR STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1996
Certain statements contained herein are forward looking. These statements are
subject to various risks and uncertainties, many of which are outside the
control of the Company, including (i) changes in the HPLC, mass spectrometry and
thermal analysis portions of the analytical instrument marketplace as a result
of economic or regulatory influences, (ii) changes in the competitive
marketplace, including new products and pricing changes by the Company's
competitors and (iii) the ability of the Company to generate increased sales and
profitability from new product introductions, as well as additional risk factors
set forth in the Company's Form 10-K. Factual results or events could differ
materially from the plans, intentions and expectations disclosed in the
forward-looking statements we make, whether because of these factors or for
other reasons. We do not assume any obligations to update any forward-looking
statement we make.
10
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company and its subsidiaries are involved in
various litigation matters arising in the ordinary course of its
business. The Company does not believe that the matters in which it or
its subsidiaries are currently involved, either individually or in the
aggregate, are material to the Company or its subsidiaries.
The Company, through its subsidiary TAI, asserted a claim against The
Perkin-Elmer Corporation ("PE") alleging patent infringement of three
patents owned by TAI ("the TAI patents"). PE counterclaimed for
infringement of a patent owned by PE ("the PE patent"). PE withdrew its
claim for infringement preserving its right to appeal rulings
interpreting the claims of the PE patent. The U.S. District Court for
the District of Delaware granted judgment as a matter of law in favor
of TAI and enjoined PE from infringing the TAI patents. PE has appealed
the District Court judgment in favor of TAI. PE has also filed a motion
for post-judgment relief which motion has been denied. The Company
believes it has meritorious arguments and should prevail, although the
outcome is not certain. The Company believes that any outcome will not
be material to the Company.
The Company has filed suit in the U.S. against Hewlett-Packard Company
and Hewlett-Packard GmbH ("HP"), seeking a declaration that certain
products sold under the mark Alliance do not constitute an infringement
of one or more patents owned by HP or its foreign subsidiaries ("the HP
patents"). The action in the U.S. was dismissed for lack of
controversy. Actions seeking revocation or nullification of foreign HP
patents have been filed by the Company in Germany, France and England.
A German patent tribunal found the HP German patent to be valid. The
Company is appealing the German decision. In England and Germany, HP
has brought an action alleging certain features of the Alliance pump
may infringe the HP patent. The Company believes it has meritorious
arguments and should prevail, although the outcome is not certain. The
Company believes that any outcome of the proceedings will not be
material to the Company.
Cohesive Technologies, Inc. ("Cohesive") has filed infringement actions
against the Company alleging that one product, out of many in a large
product line, infringes one or more Cohesive patents. The Company has
denied infringement. The Company believes it has meritorious arguments
and should prevail, although the outcome is not certain. The Company
believes that any outcome of the proceedings will not be material to
the Company.
Viscotek Corporation ("Viscotek") has filed a civil action against the
Company alleging one option offered with a high temperature gel
permeation chromatography instrument is an infringement of two patents.
These patents are owned by E. I. Du Pont de Nemours and Company ("Du
Pont") and claimed to be exclusively licensed to Viscotek. Du Pont is
not a party to the suit. The Company has answered the complaint and
believes it does not infringe the patents. The Company believes it has
meritorious arguments and should prevail, although the outcome is not
certain. The Company believes that any outcome of the proceedings will
not be material to the Company.
PE Corporation, MDS Inc. and Perkin-Elmer Sciex Instruments have filed
a civil action against the Micromass UK Limited and Micromass, Inc.
wholly owned subsidiaries of the Company alleging one or more mass
spectroscopy instrument products infringes upon a patent. The Company
has not yet been served with the complaint. The Company believes it has
meritorious arguments and should prevail, although the outcome is not
certain. The Company believes that any outcome of the proceedings will
not be material to the Company.
Item 2. Changes in Securities
On February 29, 2000, the Board of Directors approved an amendment to
the Company's Certificate of Incorporation to increase authorized
common stock from one hundred million to two hundred million shares,
contingent upon shareholder approval at the Company's Annual Meeting.
On May 4, 2000, shareholders approved the amendment.
11
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit 10.1 Amended and Restated Credit Agreement, dated as of
June 16, 1997 among Waters Corporation, Waters
Technologies Corporation, Bankers Trust Company
and other Lenders party thereto
Exhibit 10.2 First Amendment to Amended and Restated Credit
Agreement, dated as of September 4, 1997
Exhibit 10.21 Second Amendment to Amended and Restated Credit
Agreement, dated as of February 7, 2000
Exhibit 10.3 Waters Corporation Second Amended and Restated
1996 Long-Term Performance Incentive Plan
Exhibit 10.51 First Amendment to the Waters Corporation 1996
Non-Employee Director Deferred Compensation Plan
Exhibit 10.6 Waters Corporation Amended and Restated 1996
Non-Employee Director Stock Option Plan
Exhibit 10.91 Amendment to the WCD Investors, Inc. Amended
and Restated 1994 Stock Option Plan
Exhibit 27.1 Financial Data Schedule
B. No reports on Form 8-K were filed during the three months ended
March 31, 2000.
12
WATERS CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: May 8, 2000 Waters Corporation
/S/ PHILIP S. TAYMOR
-----------------------------------------
Philip S. Taymor
Senior Vice President and Chief Financial
Officer
13