Waters has announced its second-quarter 2021 sales of $682 million, a 31 per cent increase as reported, compared to sales of $520 million for the second quarter of 2020. Foreign currency translation benefited sales growth by approximately 4 per cent for the quarter.
On a GAAP basis, diluted earnings per share (EPS) for the second quarter of 2021 increased to $2.69, compared to $1.98 for the second quarter of 2020. On a non-GAAP basis, EPS increased to $2.60, compared to $2.10 for the second 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 $143 million for the second quarter of 2021, compared to $199 million for the second quarter of 2020. On a non-GAAP basis, adjusted free cash flow for the second quarter of 2021 was $155 million versus $175 million for the second quarter of 2020.
For the first half of 2021, the Company’s sales were $1,290 million, an increase of 31 per cent as reported, compared to sales of $985 million for the first half of 2020. Foreign currency translation benefited sales growth by approximately 4 per cent for the first half of 2021.
On a GAAP basis, EPS for the first half of 2021 increased to $5.05, compared to $2.83 for the first half of 2020. On a non-GAAP basis, EPS increased to $4.89, compared to $3.25 in the first half of 2020.
On a GAAP basis, net cash provided by operating activities was $361 million for the first half of 2021, compared to $350 million for the first half of 2020. On a non-GAAP basis, adjusted free cash flow for the first half of 2021 was $348 million versus $296 million for the first half of 2020.
‘We are very pleased with the commercial momentum we are building, thanks to the solid execution of the Waters team and accelerated progress against our transformation initiatives,’ said Dr Udit Batra, president and chief executive officer of Waters. ‘Our second quarter results were led by strong growth in our pharma and industrial end markets. Continued market strength, combined with our solid execution, resulted in double-digit growth in instrument and chemistry sales, with total sales increasing across every region. We have built a strong team of proven leaders committed to a common vision and continued execution as we work to more closely align our portfolio with higher growth areas.’
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 second quarter of 2021, sales into the pharmaceutical market increased 34 per cent as reported and 31 per cent in constant currency, sales into the industrial market increased 33 per cent as reported and 28 per cent in constant currency and sales into the academic and government markets increased 10 per cent as reported and 7 per cent in constant currency. For the first half of 2021, sales into the pharmaceutical market increased 33 per cent as reported and 29 per cent in constant currency, sales into the industrial market increased 31 per cent as reported and 26 per cent in constant currency and sales into the academic and government markets increased 20 per cent as reported and 17 per cent in constant currency.
During the second quarter, recurring revenues, which represent the combination of service and precision chemistries revenues, increased 22 per cent as reported and 18 per cent in constant currency, while instrument system sales increased 43 per cent as reported and 40 per cent in constant currency. For the first half of 2021, recurring revenues increased 21 per cent as reported and 17 per cent in constant currency, while instrument system sales increased 46 per cent as reported and 42 per cent in constant currency.
Geographically, sales in Asia during the quarter increased 30 per cent as reported and 28 per cent in constant currency, sales in the Americas increased 29 per cent as reported and 28 per cent in constant currency (with U.S. sales growing 26 per cent) and sales in Europe increased 36 per cent as reported and 25 per cent in constant currency. For the first half of 2021, sales in Asia increased 36 per cent as reported and 34 per cent in constant currency, sales in the Americas increased 22 per cent as reported and 21 per cent in constant currency (with U.S. sales growing 19 per cent) and sales in Europe increased 36 per cent as reported and 25 per cent in constant currency.
Third Quarter and Fiscal Year 2021 Financial Outlook
The Company expects full-year 2021 constant-currency sales growth in the range of 13 per cent to 15 per cent. Currency translation is expected to increase full-year sales growth by one to two percentage points. The Company also expects full-year 2021 non-GAAP EPS in the range of $10.50 to $10.70. 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 third quarter 2021 constant-currency sales growth in the range of 7 per cent to 9 per cent. Currency translation is expected to increase third quarter sales growth by approximately one percentage point. The Company also expects third quarter 2021 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 third quarter.
