past year was the most challenging for Waters in recent history.
In the first quarter of 2002, an adverse U.S. mass spectrometry
patent litigation judgement caused us to remove affected products
from the U.S. market and start an accelerated reengineering program
to address the resulting product void. Principally as a result
of this product void, mass spectrometry revenues declined in 2002.
Our largest product line, high performance liquid chromatography
(HPLC), performed well for most of the year. However, late in
2002, customers in the life science marketplace, including large
pharmaceutical companies, slowed their pace of capital spending.
As a result, overall product line revenue growth slowed in late
2002. As the year progressed, industrial customers, which have
been generally weak for the last several years, did show signs
of increasing demand for our core HPLC products, and for the thermal
analysis products of our TA Instruments subsidiary as well.