Waters Corporation (NYSE:WAT) Q4 2014 Earnings Conference Call - Final Transcript

Jan 27, 2015 • 08:30 am ET

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Waters Corporation (NYSE:WAT) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good afternoon. Welcome to the Waters Corporation Fourth Quarter 2014 Financial Results Conference Call. All participants will be able to listen-only until the question-and-answer session of the conference. This conference is being recorded. If anyone has any objections, please disconnect at this time. I would like to introduce your host for today's call, Mr. Douglas Berthiaume, Chairman, President and Chief Executive Officer of Waters Corporation. Sir, you may begin.

Executive
Douglas Berthiaume

Well, thank you. Good afternoon and welcome to the Waters Corporation fourth quarter and full year 2014 conference call. We appreciate you being able to change your schedules in order to be with us late this afternoon. It was a result of the weather emergency and the mandatory travel restrictions that were announced this afternoon by the Governor of Massachusetts that we decided our best way to deal with it was to release earnings at the close of business today rather than wait for tomorrow morning when we weren't sure what the conditions would allow us to do. So, thank you for bearing with us.

With me on today's call is Gene Cassis, the Waters' CFO; Art Caputo, the President of the Waters Division; and John Lynch, the Vice President of Investor Relations. Today, I am going to start with an overview of the business and Gene will follow with details of our financial results and an outlook for our business in 2015. But before we start, I'd like Gene to cover the cautionary language.

Executive
Gene Cassis

Well, thank you, Doug.

(Forward-Looking Cautionary Statements)

Executive
Douglas Berthiaume

Thank you, Gene. Well, I am pleased to tell you that our 8% constant currency revenue increase in the fourth quarter was a strong finish to 2014 and resulted in full year sales growth of 6%, a rate that's actually in line with our original full year outlook. And I think that's notable, because you will recall that our first quarter was significantly weaker than originally planned. So, we saw significant strengthening in the business as the year progressed.Looking at the full year, the big story was stronger demand from our pharmaceutical sector.

This strength was geographically broad-based with improved demand from both research and quality control segments. So, with this increase in global pharmaceutical business that offset the softer demand that we and others saw in China throughout most of 2014. Consistent with our history and carefully managed -- we carefully managed our expenses through the year, while launching new instrument systems and integrating a handful of small acquired businesses. So, for the full year, our adjusted earnings per share were up 9% after foreign currency headwinds reduced earnings per share by about $0.22 or 4%.

Looking at the fourth quarter constant currency sales for the corporation were up 8% with instrument systems growing 6% and our recurring revenues, the combination of service and chemistry consumables up a strong 10%.If you look at our operating divisions Waters Division sales grew by 10%, again at constant currency. The strength that we saw in the quarter for the Waters Division was