Waterhouse were eliminated from the CONCACAF league Wednesday night, as they played to a 0-0 draw with Montagua at the Olympico Metropolitano Stadium in Honduras, to lose the two-leg tie 2-0 on aggregate.
Montagua won the first-leg at the National Stadium 2-0 with goals from Marcelo Pereira in the 68th minute and Kevin Lopez three minutes later.
Waterhouse ended the match on Wednesday with 10 players, as Tremaine Stewart received a second yellow card in the 57th minute, after getting the first in the 29th.
Both Waterhouse and Montagua failed to convert in an encounter that had Mark Miller and Shawn Lawes of Waterhouse also receiving yellow cards with Stewart, while Cristopher Melendez and Juan Montes got for Montagua.
The match was played in an empty stadium as CONCACAF is punishing Montagua for a spectator fight with fellow Honduran club Olympia in August, that left three people dead and several others injured.
Waterhouse advanced to the quarter-finals of the competition in August after defeating CS Herediano of Costa Rica. They drew 1-1 at the National Stadium and recorded a similar scoreline in the return leg in Honduras, before winning 7-6 on penalties.