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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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☒ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☐ | Smaller reporting company |
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| Emerging growth company |
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Page
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PART I
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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|||
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3
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4
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5
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6
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7
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8
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Item 2.
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27
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Item 3.
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37
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Item 4.
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37
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PART II
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OTHER INFORMATION
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|||
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Item 1.
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38
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Item 1A.
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38
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Item 2.
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38
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Item 6.
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39
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40
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|||
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April 3, 2021
|
December 31, 2020
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|||||||
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(In thousands, except per share data)
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||||||||
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ASSETS
|
||||||||
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Current assets:
|
||||||||
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Cash and cash equivalents
|
$ |
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$ |
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||||
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Investments
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||||||
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Accounts receivable, net
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||||||
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Inventories
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||||||
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Other current assets
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||||||
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|||||
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Total current assets
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||||||
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Property, plant and equipment, net
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||||||
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Intangible assets, net
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||||||
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Goodwill
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||||||
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Operating lease assets
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||||||
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Other assets
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||||||
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|||||
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Total assets
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$ |
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$ |
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||||
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|||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
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Current liabilities:
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||||||||
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Notes payable and debt
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$ |
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$ |
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||||
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Accounts payable
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||||||
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Accrued employee compensation
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||||||
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Deferred revenue and customer advances
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||||||
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Current operating lease liabilities
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||||||
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Accrued income taxes
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||||||
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Accrued warranty
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||||||
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Other current liabilities
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||||||
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|||||
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Total current liabilities
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||||||
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Long-term liabilities:
|
||||||||
|
Long-term debt
|
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|
||||||
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Long-term portion of retirement benefits
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||||||
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Long-term income tax liabilities
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|
||||||
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Long-term operating lease liabilities
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|
||||||
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Other long-term liabilities
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|
||||||
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|
|||||
|
Total long-term liabilities
|
|
|
||||||
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|
|||||
|
Total liabilities
|
|
|
||||||
|
Commitments and contingencies (Notes
6
,
7
and 1
1
)
|
|
|
||||||
|
Stockholders’ equity:
|
||||||||
|
Preferred stock, par value $
|
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|
||||||
|
Common stock, par value $
|
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|
||||||
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Additional
paid-in
capital
|
|
|
||||||
|
Retained earnings
|
|
|
||||||
|
Treasury stock, at cost,
|
(
|
) |
(
|
) | ||||
|
Accumulated other comprehensive loss
|
(
|
) |
(
|
) | ||||
|
|
|
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|
|||||
|
Total stockholders’ equity
|
|
|
||||||
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|
|||||
|
Total liabilities and stockholders’ equity
|
$ |
|
$ |
|
||||
|
|
|
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|
|||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
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(In thousands, except per share data)
|
||||||||
|
Revenues:
|
||||||||
|
Product sales
|
$ |
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$ |
|
||||
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Service sales
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|
||||||
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|
|||||
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Total net sales
|
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|
||||||
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Costs and operating expenses:
|
||||||||
|
Cost of product sales
|
|
|
||||||
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Cost of service sales
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|
||||||
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Selling and administrative expenses
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|
||||||
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Research and development expenses
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|
||||||
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Purchased intangibles amortization
|
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|
||||||
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Litigation provision
|
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|
||||||
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|
|||||
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Total costs and operating expenses
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|
|
||||||
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|
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|
|||||
|
Operating income
|
|
|
||||||
|
Other income (expense
), net
|
|
(
|
) | |||||
|
Interest expense
|
(
|
) |
(
|
) | ||||
|
Interest income
|
|
|
||||||
|
|
|
|
|
|||||
|
Income before income taxes
|
|
|
||||||
|
Provision for income taxes
|
|
|
||||||
|
|
|
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|
|||||
|
Net income
|
$ |
|
$ |
|
||||
|
|
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|
|||||
|
Net income per basic common share
|
$ |
|
$ |
|
||||
|
Weighted-average number of basic common shares
|
|
|
||||||
|
Net income per diluted common share
|
$ |
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$ |
|
||||
|
Weighted-average number of diluted common shares and equivalents
|
|
|
||||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
(In thousands)
|
||||||||
|
Net income
|
$ |
|
$ |
|
||||
|
Other comprehensive income (loss):
|
||||||||
|
Foreign currency translation
|
|
(
|
) | |||||
|
Unrealized losses on investments before income taxes
|
(
|
) |
|
|||||
|
|
|
|
|
|||||
|
Unrealized losses on investments, net of tax
|
(
|
) |
|
|||||
|
Retirement liability adjustment before reclassifications
|
|
|
||||||
|
Amounts reclassified to other income
|
|
|
||||||
|
|
|
|
|
|||||
|
Retirement liability adjustment before income taxes
|
|
|
||||||
|
Income tax expense
|
(
|
)
|
(
|
) | ||||
|
|
|
|
|
|||||
|
Retirement liability adjustment, net of tax
|
|
|
||||||
|
Other comprehensive income (loss)
|
|
(
|
) | |||||
|
Comprehensive income
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
(In thousands)
|
||||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$ |
|
$ |
|
||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
|
Stock-based compensation
|
|
|
||||||
|
Deferred income taxes
|
|
(
|
) | |||||
|
Depreciation
|
|
|
||||||
|
Amortization of intangibles
|
|
|
||||||
|
Change in operating assets and liabilities:
|
||||||||
|
Decrease in accounts receivable
|
|
|
||||||
|
Increase in inventories
|
(
|
) |
(
|
) | ||||
|
Increase in other current assets
|
(
|
) |
(
|
) | ||||
|
(Increase) decrease in other assets
|
(
|
) |
|
|||||
|
Decrease in accounts payable and other current liabilities
|
(
|
) |
(
|
) | ||||
|
Increase in deferred revenue and customer advances
|
|
|
||||||
|
(Decrease) increase in other liabilities
|
(
|
) |
|
|||||
|
|
|
|
|
|||||
|
Net cash provided by operating activities
|
|
|
||||||
|
Cash flows from investing activities:
|
||||||||
|
Additions to property, plant, equipment and software capitalization
|
(
|
) |
(
|
) | ||||
|
Business acquisitions, net of cash acquired
|
|
(
|
) | |||||
|
Purchases of investments
|
(
|
) |
(
|
) | ||||
|
Maturities and sales of investments
|
|
|
||||||
|
|
|
|
|
|||||
|
Net cash used in investing activities
|
(
|
) |
(
|
) | ||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from debt issuances
|
|
|
||||||
|
Payments on debt
|
(
|
) |
(
|
) | ||||
|
Payments of debt issuance costs
|
(
|
) |
|
|||||
|
Proceeds from stock plans
|
|
|
||||||
|
Purchases of treasury shares
|
(
|
) |
(
|
) | ||||
|
(Payments for) proceeds from derivative contracts
|
(
|
) |
|
|||||
|
|
|
|
|
|||||
|
Net cash provided by financing activities
|
|
|
||||||
|
Effect of exchange rate changes on cash and cash equivalents
|
(
|
) |
(
|
) | ||||
|
|
|
|
|
|||||
|
Increase in cash and cash equivalents
|
|
|
||||||
|
Cash and cash equivalents at beginning of period
|
|
|
||||||
|
|
|
|
|
|||||
|
Cash and cash equivalents at end of period
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
Number
of Common Shares |
Common
Stock |
Additional
Paid-In
Capital |
Retained
Earnings |
Treasury
Stock |
Accumulated
Other Comprehensive Loss |
Total
Stockholders’
Deficit
|
||||||||||||||||||||||
|
Balance December 31, 2019
|
|
$ |
|
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | $ |
(
|
) | ||||||||||||
|
Net income
|
— | — | — |
|
— | — |
|
|||||||||||||||||||||
|
Adoption of new accounting pronouncement
|
— | — | — |
(
|
) | — | — |
(
|
) | |||||||||||||||||||
|
Other comprehensive loss
|
— | — | — | — | — |
(
|
) |
(
|
) | |||||||||||||||||||
|
Issuance of common stock for employees:
|
||||||||||||||||||||||||||||
|
Employee Stock Purchase Plan
|
|
— |
|
— | — | — |
|
|||||||||||||||||||||
|
Stock options exercised
|
|
|
|
— | — | — |
|
|||||||||||||||||||||
|
Treasury stock
|
— | — | — | — |
(
|
) | — |
(
|
) | |||||||||||||||||||
|
Stock-based compensation
|
|
|
|
— | — | — |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance March 28, 2020
|
|
$ |
|
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | $ |
(
|
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Number
of Common Shares |
Common
Stock |
Additional
Paid-In
Capital |
Retained
Earnings |
Treasury
Stock |
Accumulated
Other Comprehensive Loss |
Total
Stockholders’
Equity
|
||||||||||||||||||||||
|
Balance December 31, 2020
|
|
$ |
|
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | $ |
|
|||||||||||||
|
Net income
|
—
|
— | — |
|
— | — |
|
|||||||||||||||||||||
|
Other comprehensive income
|
—
|
— | — | — | — |
|
|
|||||||||||||||||||||
|
Issuance of common stock for employees:
|
||||||||||||||||||||||||||||
|
Employee Stock Purchase Plan
|
|
|
— | — | — |
|
||||||||||||||||||||||
|
Stock options exercised
|
|
|
|
— | — | — |
|
|||||||||||||||||||||
|
Treasury stock
|
— | — | — | — |
(
|
) | — |
(
|
) | |||||||||||||||||||
|
Stock-based compensation
|
|
|
|
— | — | — |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance April 3, 2021
|
|
$ |
|
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | $ |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at
Beginning
of Period
|
Impact of
CECL
Adoption
|
Additions
|
Deductions
|
Balance at
End of
Period
|
||||||||||||||||
|
Allowance for
Credit Losses
|
||||||||||||||||||||
|
April 3, 2021
|
$ |
|
$ | — | $ |
|
$ |
(
|
) | $ |
|
|||||||||
|
March 28, 2020
|
$ |
|
$ |
|
$ |
|
$ |
(
|
) | $ |
|
|||||||||
|
Total at
April 3,
2021
|
Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
|
Assets:
|
||||||||||||||||
|
U.S. Treasury securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Corporate debt securities
|
|
|
|
|
||||||||||||
|
Time deposits
|
|
|
|
|
||||||||||||
|
Waters 401(k) Restoration Plan assets
|
|
|
|
|
||||||||||||
|
Foreign currency exchange contracts
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Liabilities:
|
||||||||||||||||
|
Contingent consideration
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Foreign currency exchange contracts
|
|
|
|
|
||||||||||||
|
Interest rate cross-currency swap agreements
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total at
December 31,
2020
|
Quoted
in Active
Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
|
Assets:
|
||||||||||||||||
|
Time deposits
|
$ |
|
$ | — | $ |
|
$ | — | ||||||||
|
Waters 401(k) Restoration Plan assets
|
|
|
— | — | ||||||||||||
|
Foreign currency exchange contracts
|
|
— |
|
— | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total
|
$ |
|
$ |
|
$ |
|
$ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Liabilities:
|
||||||||||||||||
|
Contingent consideration
|
$ |
|
$ | — | $ | — | $ |
|
||||||||
|
Foreign currency exchange contracts
|
|
— |
|
— | ||||||||||||
|
Interest rate cross-currency swap agreements
|
|
— |
|
— | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total
|
$ |
|
$ | — | $ |
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
April 3, 2021
|
December 31, 2020
|
|||||||||||||||
|
Notional Value
|
Fair Value
|
Notional Value
|
Fair Value
|
|||||||||||||
|
Foreign currency exchange contracts:
|
||||||||||||||||
|
Other current assets
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Other current liabilities
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Interest rate cross-currency swap agreements:
|
||||||||||||||||
|
Other
liabilities
|
$ |
|
$ |
(
|
) | $ |
|
$ |
(
|
) | ||||||
|
Accumulated other
comprehensive loss
|
$ |
|
$ |
|
||||||||||||
|
|
|
Financial
|
|
Three Months Ended
|
|
|||||
|
|
|
Statement
Classification
|
|
April 3, 2021
|
|
|
March 28, 2020
|
|
||
|
Foreign currency exchange contracts:
|
|
|||||||||
|
Realized gains (losses) on closed contracts
|
Cost of sales | $ |
|
$ |
(
|
) | ||||
|
Unrealized (losses) gains on open contracts
|
Cost of sales |
(
|
) |
|
||||||
|
|
|
|
|
|||||||
|
Cumulative net
pre-tax
gains (losses)
|
Cost of sales | $ |
|
$ |
(
|
) | ||||
|
|
|
|
|
|||||||
|
Interest rate cross-currency swap agreements:
|
||||||||||
|
Interest earned
|
Interest income | $ |
|
$ |
|
|||||
|
Unrealized gains on
contracts, net
|
Stockholders’
equity (deficit)
|
$ |
|
$ |
|
|||||
|
Balance at
Beginning
of Period
|
Accruals for
Warranties
|
Settlements
Made
|
Balance at
End of
Period
|
|||||||||||||
|
Accrued warranty liability:
|
||||||||||||||||
|
April 3, 2021
|
$ |
|
$ |
|
$ |
(
|
) | $ |
|
|||||||
|
March 28, 2020
|
$ |
|
$ |
|
$ |
(
|
) | $ |
|
|||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Balance at the beginning of the period
|
$ |
|
$ |
|
||||
|
Recognition of revenue included in balance at beginning of the period
|
(
|
) |
(
|
) | ||||
|
Revenue deferred during the period, net of revenue recognized
|
|
|
||||||
|
|
|
|
|
|||||
|
Balance at the end of the period
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
April 3, 2021
|
||||
|
Deferred revenue and customer advances expected to be recognized in:
|
||||
|
One
year or
less
|
$ |
|
||
|
13-24
months
|
|
|||
|
25
months and beyond
|
|
|||
|
|
|
|||
|
Total
|
$ |
|
||
|
|
|
|||
|
April 3, 2021
|
||||||||||||||||
|
Amortized
Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Fair
Value
|
|||||||||||||
|
U.S. Treasury securities
|
$ |
|
$ | — | $ | — | $ |
|
||||||||
|
Corporate debt securities
|
|
|
(
|
) |
|
|||||||||||
|
Time deposits
|
|
— | — |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total
|
$ |
|
$ |
|
$ |
(
|
) | $ |
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Amounts included in:
|
||||||||||||||||
|
Cash equivalents
|
$ |
|
$ |
|
$ |
(
|
) | $ |
|
|||||||
|
Investments
|
|
|
(
|
) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total
|
$ |
|
$ |
|
$ |
(
|
) | $ |
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
December 31, 2020
|
||||||||||||||||
|
Amortized
Cost |
Unrealized
Gain |
Unrealized
Loss |
Fair
Value |
|||||||||||||
|
Time deposits
|
|
— | — |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total
|
$ |
|
$ | — | $ | — | $ |
|
||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Amounts included in:
|
||||||||||||||||
|
Investments
|
|
— | — |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total
|
$ |
|
$ | — | $ | — | $ |
|
||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
April 3, 2021
|
December 31, 2020
|
|||||||
|
Due in one year or less
|
$ |
|
$ |
|
||||
|
Due after one year through three years
|
|
— | ||||||
|
|
|
|
|
|||||
|
Total
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
April 3, 2021
|
December 31, 2020
|
|||||||
|
Raw materials
|
$ |
|
$ |
|
||||
|
Work in progress
|
|
|
||||||
|
Finished goods
|
|
|
||||||
|
|
|
|
|
|||||
|
Total inventories
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
April 3, 2021
|
December 31, 2020
|
|||||||||||||||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Weighted-
Average
Amortization
Period
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Weighted-
Average
Amortization
Period
|
|||||||||||||||||||
|
Capitalized software
|
$ |
|
$ |
|
|
$ |
|
$ |
|
|
||||||||||||||
|
Purchased intangibles
|
|
|
|
|
|
|
||||||||||||||||||
|
Trademarks
|
|
— | — |
|
— | — | ||||||||||||||||||
|
Licenses
|
|
|
|
|
|
|
||||||||||||||||||
|
Patents and other intangibles
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Total
|
$ |
|
$ |
|
|
$ |
|
$ |
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Senior
Unsecured Notes |
|
Term
|
|
Interest Rate
|
|
Face Value
(in millions) |
|
|
Maturity Date
|
|
|
Series N
|
|
|
$ |
|
|
March
2026
|
||||
|
Series O
|
|
|
$ |
|
|
March
2031
|
||||
|
April 3, 2021
|
December 31, 2020
|
|||||||
|
Senior unsecured notes - Series E -
|
— |
|
||||||
|
Senior unsecured notes - Series F -
|
|
|
||||||
|
|
|
|
|
|||||
|
Total notes payable and debt, current
|
|
|
||||||
|
Senior unsecured notes - Series G -
|
|
|
||||||
|
Senior unsecured notes - Series H - floating rate*, due June 2024
|
|
|
||||||
|
Senior unsecured notes - Series I -
|
|
|
||||||
|
Senior unsecured notes - Series K -
|
|
|
||||||
|
Senior unsecured notes - Series L -
|
|
|
||||||
|
Senior unsecured notes - Series M -
|
|
|
||||||
|
Senior unsecured notes - Series N -
|
|
— | ||||||
|
Senior unsecured notes - Series O -
|
|
— | ||||||
|
Credit agreement
|
|
|
||||||
|
Unamortized debt issuance costs
|
(
|
) |
(
|
) | ||||
|
|
|
|
|
|||||
|
Total long-term debt
|
|
|
||||||
|
|
|
|
|
|||||
|
Total debt
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
| * |
Series H senior unsecured notes bear interest at a
3-month
LIBOR for that floating rate interest period plus
|
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Balance at the beginning of the period
|
$ |
|
$ |
|
||||
|
Net reductions for lapse of statutes taken during the period
|
(
|
) |
(
|
) | ||||
|
Net additions for tax positions taken during the current period
|
|
|
||||||
|
|
|
|
|
|||||
|
Balance at the end of the period
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Cost of sales
|
$ |
|
$ |
|
||||
|
Selling and administrative expenses
|
|
|
||||||
|
Research and development expenses
|
|
|
||||||
|
|
|
|
|
|||||
|
Total stock-based compensation
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
|
|
Three Months Ended
|
|
|||||
|
Options Issued and Significant Assumptions Used to Estimate Option Fair Values
|
|
April 3, 2021
|
|
|
March 28, 2020
|
|
||
|
Options issued in thousands
|
|
|
||||||
|
Risk-free interest rate
|
|
% |
|
% | ||||
|
Expected life in years
|
|
|
|
|
|
|
|
|
|
Expected volatility
|
|
% |
|
% | ||||
|
Expected dividend
s
|
|
— | ||||||
|
|
|
Three Months Ended
|
|
|||||
|
Weighted-Average Exercise Price and Fair Value of Options on the Date of Grant
|
|
April 3, 2021
|
|
|
March 28, 2020
|
|
||
|
Exercise price
|
|
$
|
|
|
|
$
|
|
|
|
Fair value
|
|
$
|
|
|
|
$
|
|
|
|
|
|
Number of Shares
|
|
|
Exercise Price per Share
|
|
|
Weighted-Average
Exercise Price per Share |
|
|||||||||
|
Outstanding at December 31, 2020
|
|
$ |
|
|
|
to
|
|
$
|
|
$ |
|
|||||||
|
Granted
|
|
$ |
|
|
|
to
|
|
$
|
|
$ |
|
|||||||
|
Exercised
|
(
|
) | $ |
|
|
|
to
|
|
$
|
|
$ |
|
||||||
|
Canceled
|
(
|
) | $ |
|
|
|
to
|
|
$
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
|
Outstanding at April 3, 2021
|
|
$ |
|
|
|
to
|
|
$
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||||||
|
Shares
|
Weighted-Average
Grant Date Fair Value per Share |
|||||||
|
Unvested at December 31, 2020
|
|
$ |
|
|||||
|
Granted
|
|
$ |
|
|||||
|
Vested
|
(
|
) | $ |
|
||||
|
Forfeited
|
(
|
) | $ |
|
||||
|
|
|
|||||||
|
Unvested at April 3, 2021
|
|
$ |
|
|||||
|
|
|
|||||||
|
Three Months Ended
|
||||||||
|
Performance Stock Units Issued and Significant Assumptions Used
to Estimate Fair Values |
April 3, 2021
|
March 28, 2020
|
||||||
|
Performance stock units issued (in thousands)
|
|
|
||||||
|
Risk-free interest rate
|
|
% |
|
% | ||||
|
Expected life in years
|
|
|
||||||
|
Expected volatility
|
|
% |
|
% | ||||
|
Average volatility of peer companies
|
|
% |
|
% | ||||
|
Correlation coefficient
|
|
% |
|
% | ||||
|
Expected dividends
|
|
— | ||||||
|
Shares
|
Weighted-Average
Fair Value per Share |
|||||||
|
Unvested at December 31, 2020
|
|
$ |
|
|||||
|
Granted
|
|
$ |
|
|||||
|
Vested
|
(
|
) | $ |
|
||||
|
Forfeited
|
(
|
) | $ |
|
||||
|
|
|
|||||||
|
Unvested at April 3, 2021
|
|
$ |
|
|||||
|
|
|
|||||||
|
Three Months Ended April 3, 2021
|
||||||||||||
|
Net Income
(Numerator) |
Weighted-
Average (Denominator) |
Per
Amount |
||||||||||
|
Net income per basic common share
|
$ |
|
|
$ |
|
|||||||
|
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities
|
|
|
(
|
) | ||||||||
|
|
|
|
|
|
|
|||||||
|
Net income per diluted common share
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Three Months Ended March 28, 2020
|
||||||||||||
|
Net Income
(Numerator) |
Weighted-
Average Shares
(Denominator) |
Per
Amount |
||||||||||
|
Net income per basic common share
|
$ |
|
|
$ |
|
|||||||
|
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities
|
— |
|
— | |||||||||
|
|
|
|
|
|
|
|||||||
|
Net income per diluted common share
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Currency
Translation |
Unrealized Loss on
Retirement Plans |
Unrealized Gain
(Loss) on Investments |
Accumulated Other
Comprehensive Loss |
|||||||||||||
|
Balance at December 31, 2020
|
$ |
(
|
) | $ |
(
|
) | $ |
|
$ |
(
|
) | |||||
|
Other comprehensive loss, net of tax
|
|
|
(
|
) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Balance at April 3, 2021
|
$ |
(
|
) | $ |
(
|
) | $ |
(
|
) | $ |
(
|
) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended
|
||||||||||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||||||||||
|
U.S. Retiree
|
Non-U.S.
|
U.S. Retiree
|
Non-U.S.
|
|||||||||||||
|
Healthcare
|
Pension
|
Healthcare
|
Pension
|
|||||||||||||
|
Plan
|
Plans
|
Plan
|
Plans
|
|||||||||||||
|
Service cost
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Interest cost
|
|
|
|
|
||||||||||||
|
Expected return on plan assets
|
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||
|
Net amortization:
|
||||||||||||||||
|
Prior service credit
|
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||
|
Net actuarial loss
|
|
|
— |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net periodic pension cost
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Product net sales:
|
||||||||
|
Waters instrument systems
|
$ |
|
$ |
|
||||
|
Chemistry consumables
|
|
|
||||||
|
TA instrument systems
|
|
|
||||||
|
|
|
|
|
|||||
|
Total product sales
|
|
|
||||||
|
Service net sales:
|
||||||||
|
Waters service
|
|
|
||||||
|
TA service
|
|
|
||||||
|
|
|
|
|
|||||
|
Total service sales
|
|
|
||||||
|
|
|
|
|
|||||
|
Total net sales
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Net Sales:
|
||||||||
|
Asia:
|
||||||||
|
China
|
$ |
|
$ |
|
||||
|
Japan
|
|
|
||||||
|
Asia Other
|
|
|
||||||
|
|
|
|
|
|||||
|
Total Asia
|
|
|
||||||
|
Americas:
|
||||||||
|
United States
|
|
|
||||||
|
Americas Other
|
|
|
||||||
|
|
|
|
|
|||||
|
Total Americas
|
|
|
||||||
|
Europe
|
|
|
||||||
|
|
|
|
|
|||||
|
Total net sales
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Pharmaceutical
|
$ |
|
$ |
|
||||
|
Industrial
|
|
|
||||||
|
Academic and government
|
|
|
||||||
|
|
|
|
|
|||||
|
Total net sales
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Net sales recognized at a point in time:
|
||||||||
|
Instrument systems
|
$ |
|
$ |
|
||||
|
Chemistry consumables
|
|
|
||||||
|
Service sales recognized at a point in time (time & materials)
|
|
|
||||||
|
|
|
|
|
|||||
|
Total net sales recognized at a point in time
|
|
|
||||||
|
Net sales recognized over time:
|
||||||||
|
Service and software sales recognized over time (contracts)
|
|
|
||||||
|
|
|
|
|
|||||
|
Total net sales
|
$ |
|
$ |
|
||||
|
|
|
|
|
|||||
|
Three Months Ended
|
||||||||||||
|
April 3, 2021
|
March 28, 2020
|
% change
|
||||||||||
|
Revenues:
|
||||||||||||
|
Product sales
|
$ | 382,022 | $ | 274,183 |
|
39
|
%
|
|||||
|
Service sales
|
226,523 | 190,756 |
|
19
|
%
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Total net sales
|
608,545 | 464,939 |
|
31
|
%
|
|||||||
|
Costs and operating expenses:
|
||||||||||||
|
Cost of sales
|
254,147 | 210,644 |
|
21
|
%
|
|||||||
|
Selling and administrative expenses
|
143,196 | 147,735 |
|
(3
|
%)
|
|||||||
|
Research and development expenses
|
38,092 | 34,989 |
|
9
|
%
|
|||||||
|
Purchased intangibles amortization
|
1,840 | 2,625 |
|
(30
|
%)
|
|||||||
|
Litigation provision
|
— | 666 |
|
(100
|
%)
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Operating income
|
171,270 | 68,280 |
|
151
|
%
|
|||||||
|
Operating income as a % of sales
|
|
28.1
|
%
|
|
14.7
|
%
|
||||||
|
Other income (expense), net
|
9,359 | (374 | ) |
|
2,602
|
%
|
||||||
|
Interest expense, net
|
(6,845 | ) | (10,043 | ) |
|
(32
|
%)
|
|||||
|
|
|
|
|
|
|
|||||||
|
Income before income taxes
|
173,784 | 57,863 |
|
200
|
%
|
|||||||
|
Provision for income taxes
|
25,657 | 4,301 |
|
497
|
%
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Net income
|
$ | 148,127 | $ | 53,562 |
|
177
|
%
|
|||||
|
|
|
|
|
|
|
|||||||
|
Net income per diluted common share
|
$ | 2.37 | $ | 0.86 |
|
176
|
%
|
|||||
|
Three Months Ended
|
||||||||||||
|
April 3, 2021
|
March 28, 2020
|
% change
|
||||||||||
|
Net Sales:
|
||||||||||||
|
Asia:
|
||||||||||||
|
China
|
$ | 102,919 | $ | 47,231 |
|
118
|
%
|
|||||
|
Japan
|
50,296 | 45,089 |
|
12
|
%
|
|||||||
|
Asia Other
|
76,327 | 66,760 |
|
14
|
%
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Total Asia
|
229,542 | 159,080 |
|
44
|
%
|
|||||||
|
Americas:
|
||||||||||||
|
United States
|
162,433 | 143,898 |
|
13
|
%
|
|||||||
|
Americas Other
|
34,924 | 28,278 |
|
24
|
%
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Total Americas
|
197,357 | 172,176 |
|
15
|
%
|
|||||||
|
Europe
|
181,646 | 133,683 |
|
36
|
%
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Total net sales
|
$ | 608,545 | $ | 464,939 |
|
31
|
%
|
|||||
|
|
|
|
|
|
|
|||||||
|
Three Months Ended
|
||||||||||||
|
April 3, 2021
|
March 28, 2020
|
% change
|
||||||||||
|
Pharmaceutical
|
$ | 360,148 | $ | 272,563 |
|
32
|
%
|
|||||
|
Industrial
|
183,273 | 143,354 |
|
28
|
%
|
|||||||
|
Academic and government
|
65,124 | 49,022 |
|
33
|
%
|
|||||||
|
|
|
|
|
|
|
|||||||
|
Total net sales
|
$ | 608,545 | $ | 464,939 |
|
31
|
%
|
|||||
|
|
|
|
|
|
|
|||||||
|
Three Months Ended
|
||||||||||||||||||||
|
April 3, 2021
|
% of
Total |
March 28, 2020
|
% of
Total |
% change
|
||||||||||||||||
|
Waters instrument systems
|
$ | 216,072 |
|
40
|
%
|
$ | 142,829 |
|
34
|
%
|
|
51
|
%
|
|||||||
|
Chemistry consumables
|
118,974 |
|
22
|
%
|
97,245 |
|
24
|
%
|
|
22
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Waters product sales
|
335,046 |
|
62
|
%
|
240,074 |
|
58
|
%
|
|
40
|
%
|
|||||||||
|
Waters service
|
206,832 |
|
38
|
%
|
174,137 |
|
42
|
%
|
|
19
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Waters net sales
|
$ | 541,878 |
|
100
|
%
|
$ | 414,211 |
|
100
|
%
|
|
31
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Three Months Ended
|
||||||||||||||||||||
|
April 3, 2021
|
% of
Total |
March 28, 2020
|
% of
Total |
% change
|
||||||||||||||||
|
TA instrument systems
|
$ | 46,976 |
|
70%
|
|
$ | 34,109 |
|
67%
|
|
38% | |||||||||
|
TA service
|
19,691 |
|
30%
|
|
16,619 |
|
33%
|
|
18% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total TA net sales
|
$ | 66,667 |
|
100%
|
|
$ | 50,728 |
|
100%
|
|
31% | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Three Months Ended
|
||||||||
|
April 3, 2021
|
March 28, 2020
|
|||||||
|
Net income
|
$ | 148,127 | $ | 53,562 | ||||
|
Depreciation and amortization
|
31,356 | 29,188 | ||||||
|
Stock-based compensation
|
8,305 | 9,196 | ||||||
|
Deferred income taxes
|
2,787 | (2,525 | ) | |||||
|
Change in accounts receivable
|
7,945 | 54,026 | ||||||
|
Change in inventories
|
(30,544 | ) | (29,399 | ) | ||||
|
Change in accounts payable and other current liabilities
|
(29,758 | ) | (15,825 | ) | ||||
|
Change in deferred revenue and customer advances
|
89,048 | 46,465 | ||||||
|
Other changes
|
(8,862 | ) | 6,947 | |||||
|
|
|
|
|
|||||
|
Net cash provided by operating activities
|
218,404 | 151,635 | ||||||
|
Net cash used in investing activities
|
(159,004 | ) | (130,175 | ) | ||||
|
Net cash provided by financing activities
|
188,775 | 32,918 | ||||||
|
Effect of exchange rate changes on cash and cash equivalents
|
(1,087 | ) | (32 | ) | ||||
|
|
|
|
|
|||||
|
Increase in cash and cash equivalents
|
$ | 247,088 | $ | 54,346 | ||||
|
|
|
|
|
|||||
| • |
The changes in accounts receivable were primarily attributable to timing of payments made by customers and timing of sales. Days sales outstanding decreased to 84 days at April 3, 2021 as compared to 99 days at March 28, 2020.
|
| • |
The changes in accounts payable and other current liabilities were a result of the timing of payments to vendors, as well as the annual payment of management incentive compensation.
|
| • |
Net cash provided from deferred revenue and customer advances results from annual increases in new service contracts as a higher installed base of customers renew annual service contracts.
|
| • |
Other changes were attributable to variation in the timing of various provisions, expenditures, prepaid income taxes and accruals in other current assets, other assets and other liabilities.
|
| • |
Risks related to the effects of the
COVID-19
pandemic on our business, 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, volatility and uncertainty in global capital markets limiting our ability to access capital, customers being unable to make timely payment for purchases and volatility in demand for our products.
|
| • |
Foreign currency exchange rate fluctuations that could adversely affect translation of the Company’s future sales, financial operating results and the condition of its
non-U.S.
operations, especially when a currency weakens against the U.S. dollar.
|
| • |
Current global economic, sovereign and political conditions and uncertainties, particularly regarding the effect of the
COVID-19
pandemic; new or proposed tariffs or trade regulations or changes in the interpretation or enforcement of existing regulations; the United Kingdom’s exit from the European Union as well as the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers; the Company’s ability to access capital and maintain liquidity in volatile market conditions; changes in timing and demand for the Company’s products among the Company’s customers and various market sectors or geographies, particularly if they should reduce capital expenditures or are unable to obtain funding, as in the cases of governmental, academic and research institutions; the effect of mergers and acquisitions on customer demand for the Company’s products; and the Company’s ability to sustain and enhance service.
|
| • |
Negative industry trends; changes in the competitive landscape as a result of changes in ownership, mergers and continued consolidation among the Company’s competitors; introduction of competing products by other companies and loss of market share; pressures on prices from customers or resulting from competition; regulatory, economic and competitive obstacles to new product introductions; lack of acceptance of new products; expansion of our business in developing markets; spending by certain
end-markets;
ability to obtain alternative sources for components and modules; and the possibility that future sales of new products related to acquisitions, which trigger contingent purchase payments, may exceed the Company’s expectations.
|
| • |
Increased regulatory burdens as the Company’s business evolves, especially with respect to the United States Food and Drug Administration and the United States Environmental Protection Agency, among others, as well as regulatory, environmental and logistical obstacles affecting the distribution of the Company’s products, completion of purchase order documentation by our customers and ability of customers to obtain letters of credit or other financing alternatives.
|
| • |
Risks associated with lawsuits, particularly involving claims for infringement of patents and other intellectual property rights.
|
| • |
The impact and costs incurred from changes in accounting principles and practices; the impact and costs of changes in statutory or contractual tax rates in jurisdictions in which the Company operates, specifically as it relates to the 2017 Tax Act in the U.S.; shifts in taxable income among jurisdictions with different effective tax rates; and the outcome of and costs associated with ongoing and future tax audit examinations or changes in respective country legislation affecting the Company’s effective rates.
|
|
Period
|
Total Number
of Shares Purchased (1) |
Average
Price Paid per Share |
Total Number of
Shares Purchased as Part of Publicly Announced Programs |
Maximum Dollar
Value of Shares that May Yet Be Purchased Under
the Programs (2)
|
||||||||||||
|
January 1, 2021 to January 30, 2021
|
— | $ | — | — | $ | 1,524,905 | ||||||||||
|
January 31, 2021 to February 27, 2021
|
254 | $ | 281.49 | 229 | $ | 1,460,425 | ||||||||||
|
February 28, 2021 to April 3, 2021
|
401 | $ | 272.22 | 399 | $ | 1,351,782 | ||||||||||
|
|
|
|
|
|||||||||||||
|
Total
|
655 | $ | 275.82 | 628 | $ | 1,351,782 | ||||||||||
|
|
|
|
|
|||||||||||||
| (1) |
The Company repurchased 27 thousand shares of common stock at a cost of $8 million related to the vesting of restricted stock during the three months ended April 3, 2021.
|
| (2) |
In January 2019, the Company’s Board of Directors authorized the Company to repurchase up to $4 billion of its outstanding common stock in open market or private transactions over a
two-year
period. This program replaced the remaining amounts available under the
pre-existing
authorization. In December 2020, the Company’s Board of Directors authorized the extension of the share repurchase program through January 21, 2023.
|
| (*) |
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference.
|
| W ATERS C ORPORATION |
|
/s/ Michael F. Silveira
|
| Michael F. Silveira |
| Interim Chief Financial Officer |
|
(principal financial officer)
|
|
(principal accounting officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
Customers
| Customer name | Ticker |
|---|---|
| Abbott Laboratories | ABT |
| Laboratory Corporation of America Holdings | LH |
| Pfizer Inc. | PFE |
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|