Agilent Technologies Reports Second Quarter Fiscal Year 2019 Financial Results
Business Wire 14-May-2019 4:05 PM
Highlights:
-
Revenue of $1.24 billion represents 3 percent reported growth and 4
percent core revenue(1) growth
-
GAAP net income of $182 million and EPS of $0.57
-
Non-GAAP net income of $228 million or $0.71 per share(2),
up 9 percent year-over-year
-
Full-year revenue outlook revised to $5.085 billion to $5.125 billion,
with non-GAAP earnings guidance for the year maintained at $3.03 to
$3.07 per share(3)
Agilent Technologies, Inc. (NYSE:A) today reported revenue of $1.24
billion for the second quarter ended April 30, 2019, up 3 percent
year-over-year (up 4 percent on a core basis(1)).
On a GAAP basis, second-quarter net income was $182 million or $0.57 per
share. This compares with $205 million and $0.63 per share in the second
quarter of 2018. Non-GAAP net income(2) was $228 million or
$0.71 per share during the quarter, compared with $212 million and $0.65
per share during the second quarter a year ago.
"While overall revenues were below our expectations, the story of our
second quarter results is one where we demonstrated the resilience of
Agilent's business model," said Mike McMullen, Agilent president and
CEO. "Two of our three business units continued to deliver strong growth
while the third was affected by soft market conditions. We generated EPS
of $0.71, representing 9 percent growth, which was at the midpoint of
our guidance."
Financial Highlights
Life Sciences and Applied Markets Group
Second-quarter revenue of $529 million from Agilent's Life Sciences and
Applied Markets Group (LSAG) was down 1 percent year over year (down 1
percent on a core basis(1)). Demand in the environmental and
forensics markets was strong, offset by weakness in the pharma and food
markets. LSAG's operating margin for the quarter was 20.3 percent.
Agilent CrossLab Group
Second-quarter revenue of $455 million from the Agilent CrossLab
Group (ACG) grew 7 percent year over year (up 9 percent on a core basis(1)).
Growth was broad-based across all regions, led by China. ACG's operating
margin for the quarter was 25.2 percent.
Diagnostics and Genomics Group
Second-quarter revenue of $254 million from Agilent's Diagnostics and
Genomics Group (DGG) grew 5 percent year over year (up 6 percent on a
core basis(1)). Strength in the company's pathology-related
businesses and NASD led the group's results. DGG's operating margin for
the quarter was 19.3 percent.
Third-Quarter and Full-Year Outlook
Agilent expects third-quarter 2019 revenue in the range of $1.225
billion to $1.245 billion. Third-quarter 2019 non-GAAP earnings are
expected to be in the range of $0.71 to $0.73 per share(3).
For fiscal year 2019, the company is revising its full-year revenue
guidance to a range of $5.085 billion to $5.125 billion while
maintaining non-GAAP earnings guidance in the range of $3.03 to
$3.07 per share(3).
Conference Call
Agilent's management will present more details about its second-quarter
fiscal year 2019 financial results on a conference call with investors
today at 1:30 p.m. (Pacific Time). This event will be webcast live in
listen-only mode. Listeners may log on at www.investor.agilent.com and
select "Q2 2019 Agilent Technologies Inc. Earnings Conference Call" in
the "News & Events — Calendar of Events" section. The webcast will
remain available on the company's website for 90 days.
Additional information regarding financial results can be found at www.investor.agilent.com by
selecting "Financial Results" in the "Financial Information" section.
A telephone replay of the conference call will be available at
approximately 4:30 p.m. (Pacific Time) after the call on May 14 and
through May 21 by dialing (855) 859-2056 (or (404) 537-3406 from outside
the United States) and entering passcode 3086626.
About Agilent Technologies
Agilent Technologies Inc. (NYSE:A) is a global leader in life sciences,
diagnostics and applied chemical markets. With more than 50 years of
insight and innovation, Agilent instruments, software, services,
solutions and people provide trusted answers to customers' most
challenging questions. The company generated revenues of $4.91
billion in fiscal 2018 and employs 15,550 people worldwide. Information
about Agilent is available at www.agilent.com.
To receive the latest Agilent news, subscribe to the Agilent Newsroom.
Follow Agilent on LinkedIn, Twitter,
and Facebook.
Forward-Looking Statements
This news release contains forward-looking statements as defined in the
Securities Exchange Act of 1934 and is subject to the safe harbors
created therein. The forward-looking statements contained herein
include, but are not limited to, information regarding Agilent's revenue
and non-GAAP earnings guidance for the third quarter and full fiscal
year 2019 and future amortization of intangibles. These forward-looking
statements involve risks and uncertainties that could cause Agilent's
results to differ materially from management's current expectations.
Such risks and uncertainties include, but are not limited to, unforeseen
changes in the strength of its customers' businesses; unforeseen changes
in the demand for current and new products, technologies, and services;
unforeseen changes in the currency markets; customer purchasing
decisions and timing, and the risk that Agilent is not able to realize
the savings expected from integration and restructuring activities. In
addition, other risks that Agilent faces in running its operations
include the ability to execute successfully through business cycles; the
ability to meet and achieve the benefits of its cost-reduction goals and
otherwise successfully adapt its cost structures to continuing changes
in business conditions; ongoing competitive, pricing and gross-margin
pressures; the risk that its cost-cutting initiatives will impair its
ability to develop products and remain competitive and to operate
effectively; the impact of geopolitical uncertainties and global
economic conditions on its operations, its markets and its ability to
conduct business; the ability to improve asset performance to adapt to
changes in demand; the ability of its supply chain to adapt to changes
in demand; the ability to successfully introduce new products at the
right time, price and mix; the ability of Agilent to successfully
integrate recent acquisitions; the ability of Agilent to successfully
comply with certain complex regulations; and other risks detailed in
Agilent's filings with the Securities and Exchange Commission, including
its quarterly report on Form 10-Q for the quarter ended January 31,
2019. Forward-looking statements are based on the beliefs and
assumptions of Agilent's management and on currently available
information. Agilent undertakes no responsibility to publicly update or
revise any forward-looking statement.
(1) Core revenue growth excludes the impact of currency and acquisitions
and divestitures within the past 12 months. Core revenue is a non-GAAP
measure. A reconciliation between Q2 FY19 GAAP revenue and core revenue
is set forth on page 6 of the attached tables along with additional
information regarding the use of this non-GAAP measure. Core revenue
growth rate as projected for Q3 FY19 and full fiscal year 2019 excludes
the impact of currency and acquisitions and divestitures within the past
12 months. Most of the excluded amounts pertain to events that have not
yet occurred and are not currently possible to estimate with a
reasonable degree of accuracy and could differ materially. Therefore, no
reconciliation to GAAP amounts has been provided for the projection.
(2) Non-GAAP net income and non-GAAP earnings per share primarily
exclude the impacts of non-cash intangibles amortization,
transformational initiatives, acquisition and integration costs, pension
settlement gain, Nucleic Acid Solutions Division ("NASD") site costs and
special compliance costs. Agilent also excludes any tax benefits or
expenses that are not directly related to ongoing operations and which
are either isolated or are not expected to occur again with any
regularity or predictability including the impact of the 2017 Tax Act. A
reconciliation between non-GAAP net income and GAAP net income is set
forth on page 4 of the attached tables along with additional information
regarding the use of this non-GAAP measure.
(3) Non-GAAP earnings per share as projected for Q3 FY19 and full fiscal
year 2019 excludes primarily the impacts of non-cash intangibles
amortization, transformational initiatives, acquisition and integration
costs, pension settlement gain, Nucleic Acid Solutions Division ("NASD")
site costs and special compliance costs. Agilent also excludes any tax
benefits or expenses that are not directly related to ongoing operations
and which are either isolated or are not expected to occur again with
any regularity or predictability. Most of these excluded amounts pertain
to events that have not yet occurred and are not currently possible to
estimate with a reasonable degree of accuracy and could differ
materially. Therefore, no reconciliation to GAAP amounts has been
provided. Future amortization of intangibles is expected to be
approximately $26 million per quarter.
NOTE TO EDITORS: Further technology, corporate citizenship and executive
news is available on the Agilent news site at www.agilent.com/go/news.
|
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
|
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
|
(In millions, except per share amounts)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
April 30,
|
|
April 30,
|
|
|
|
2019
|
|
2018(a)
|
|
2019
|
|
2018(a)
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
1,238
|
|
|
$
|
1,206
|
|
|
$
|
2,522
|
|
|
$
|
2,417
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Cost of products and services
|
|
|
569
|
|
|
|
563
|
|
|
|
1,146
|
|
|
|
1,104
|
|
|
Research and development
|
|
|
99
|
|
|
|
92
|
|
|
|
201
|
|
|
|
186
|
|
|
Selling, general and administrative
|
|
|
354
|
|
|
|
341
|
|
|
|
709
|
|
|
|
688
|
|
|
Total costs and expenses
|
|
|
1,022
|
|
|
|
996
|
|
|
|
2,056
|
|
|
|
1,978
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
216
|
|
|
|
210
|
|
|
|
466
|
|
|
|
439
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
10
|
|
|
|
10
|
|
|
|
20
|
|
|
|
19
|
|
|
Interest expense
|
|
|
(17
|
)
|
|
|
(19
|
)
|
|
|
(35
|
)
|
|
|
(39
|
)
|
|
Other income (expense), net
|
|
|
9
|
|
|
|
26
|
|
|
|
15
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
218
|
|
|
|
227
|
|
|
|
466
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from) income taxes
|
|
|
36
|
|
|
|
22
|
|
|
|
(220
|
)
|
|
|
575
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
182
|
|
|
$
|
205
|
|
|
$
|
686
|
|
|
$
|
(115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.57
|
|
|
$
|
0.64
|
|
|
$
|
2.16
|
|
|
$
|
(0.36
|
)
|
|
Diluted
|
|
$
|
0.57
|
|
|
$
|
0.63
|
|
|
$
|
2.13
|
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss) per
share:
|
|
|
|
|
|
|
Basic
|
|
|
317
|
|
|
|
322
|
|
|
|
318
|
|
|
|
323
|
|
|
Diluted
|
|
|
321
|
|
|
|
326
|
|
|
|
322
|
|
|
|
323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjusted to include the impact of the adoption of ASU
2017-07 (pension expense reclassification) as of 11/1/2018. There is
no impact to net income (loss) or net income (loss) per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 1
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
(In millions, except par value and share amounts)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
October 31,
|
|
|
|
|
|
2019
|
|
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,155
|
|
|
$
|
2,247
|
|
|
Accounts receivable, net
|
|
|
819
|
|
|
|
776
|
|
|
Inventory
|
|
|
657
|
|
|
|
638
|
|
|
Other current assets
|
|
|
181
|
|
|
|
187
|
|
|
Total current assets
|
|
|
3,812
|
|
|
|
3,848
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
827
|
|
|
|
822
|
|
|
Goodwill and other intangible assets, net
|
|
|
3,650
|
|
|
|
3,464
|
|
|
Long-term investments
|
|
|
96
|
|
|
|
68
|
|
|
Other assets
|
|
|
637
|
|
|
|
339
|
|
|
Total assets
|
|
$
|
9,022
|
|
|
$
|
8,541
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
314
|
|
|
$
|
340
|
|
|
Employee compensation and benefits
|
|
|
292
|
|
|
|
304
|
|
|
Deferred revenue
|
|
|
347
|
|
|
|
324
|
|
|
Other accrued liabilities
|
|
|
165
|
|
|
|
203
|
|
|
Total current liabilities
|
|
|
1,118
|
|
|
|
1,171
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
1,798
|
|
|
|
1,799
|
|
|
Retirement and post-retirement benefits
|
|
|
229
|
|
|
|
239
|
|
|
Other long-term liabilities
|
|
|
752
|
|
|
|
761
|
|
|
Total liabilities
|
|
|
3,897
|
|
|
|
3,970
|
|
|
|
|
|
|
|
|
|
|
Total Equity:
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Preferred stock; $0.01 par value; 125 million shares authorized;
none issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Common stock; $0.01 par value, 2 billion shares authorized; 317
million shares at April 30, 2019 and 318 million shares at October
31, 2018, issued
|
|
|
3
|
|
|
|
3
|
|
|
Treasury stock at cost; 9 thousand shares at April 30, 2019 and
zero shares at October 31, 2018
|
|
|
(1
|
)
|
|
|
—
|
|
|
Additional paid-in-capital
|
|
|
5,343
|
|
|
|
5,308
|
|
|
Retained earnings (accumulated deficit)
|
|
|
178
|
|
|
|
(336
|
)
|
|
Accumulated other comprehensive loss
|
|
|
(398
|
)
|
|
|
(408
|
)
|
|
Total stockholders' equity
|
|
|
5,125
|
|
|
|
4,567
|
|
|
Non-controlling interest
|
|
|
—
|
|
|
|
4
|
|
|
Total equity
|
|
|
5,125
|
|
|
|
4,571
|
|
|
Total liabilities and equity
|
|
$
|
9,022
|
|
|
$
|
8,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary balance sheet is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(In millions)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
April 30,
|
|
April 30,
|
|
|
|
2019
|
|
2018
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income (loss)
|
|
$
|
686
|
|
|
$
|
(115
|
)
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
107
|
|
|
|
101
|
|
|
Share-based compensation
|
|
|
40
|
|
|
|
43
|
|
|
Excess and obsolete inventory related charges
|
|
|
7
|
|
|
|
17
|
|
|
Other non-cash expenses, net
|
|
|
2
|
|
|
|
2
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(17
|
)
|
|
|
(21
|
)
|
|
Inventory
|
|
|
(21
|
)
|
|
|
(34
|
)
|
|
Accounts payable
|
|
|
(8
|
)
|
|
|
(14
|
)
|
|
Employee compensation and benefits
|
|
|
(13
|
)
|
|
|
(7
|
)
|
|
Change in assets and liabilities due to Tax Act
|
|
|
—
|
|
|
|
533
|
|
|
Other assets and liabilities
|
|
|
(318
|
)
|
|
|
13
|
|
|
Net cash provided by operating activities (a)
|
|
|
465
|
|
|
|
518
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Investments in property, plant and equipment
|
|
|
(78
|
)
|
|
|
(108
|
)
|
|
Payment to acquire fair value investments
|
|
|
(18
|
)
|
|
|
(1
|
)
|
|
Payment in exchange for convertible note
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
Acquisition of businesses and intangible assets, net of cash acquired
|
|
|
(248
|
)
|
|
|
(7
|
)
|
|
Net cash used in investing activities
|
|
|
(346
|
)
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Issuance of common stock under employee stock plans
|
|
|
33
|
|
|
|
36
|
|
|
Payment of taxes related to net share settlement of equity awards
|
|
|
(14
|
)
|
|
|
(29
|
)
|
|
Payment of dividends
|
|
|
(104
|
)
|
|
|
(96
|
)
|
|
Proceeds from revolving credit facility
|
|
|
—
|
|
|
|
356
|
|
|
Repayment of debt and revolving credit facility
|
|
|
—
|
|
|
|
(251
|
)
|
|
Purchase of non-controlling interest
|
|
|
(4
|
)
|
|
|
—
|
|
|
Treasury stock repurchases
|
|
|
(125
|
)
|
|
|
(93
|
)
|
|
Net cash used in financing activities
|
|
|
(214
|
)
|
|
|
(77
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate movements
|
|
|
2
|
|
|
|
9
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
|
(93
|
)
|
|
|
332
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at beginning of period
|
|
|
2,254
|
|
|
|
2,686
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
2,161
|
|
|
$
|
3,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents and restricted cash to the
condensed consolidated balance sheet:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,155
|
|
|
$
|
3,011
|
|
|
Restricted cash, included in other assets
|
|
|
6
|
|
|
|
7
|
|
|
Total cash, cash equivalents and restricted cash
|
|
$
|
2,161
|
|
|
$
|
3,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Cash payments included in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Income tax payments (refunds), net
|
|
$
|
104
|
|
|
$
|
48
|
|
|
Interest payments
|
|
$
|
36
|
|
|
$
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary cash flow is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
|
|
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS
|
|
(In millions, except per share amounts)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
April 30,
|
|
April 30,
|
|
|
|
2019
|
|
DilutedEPS
|
|
2018
|
|
DilutedEPS
|
|
2019
|
|
DilutedEPS
|
|
2018
|
|
DilutedEPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$ 182
|
|
$ 0.57
|
|
|
$ 205
|
|
$ 0.63
|
|
|
$ 686
|
|
$ 2.13
|
|
|
$ (115)
|
|
$ (0.36)
|
(b)
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization
|
|
26
|
|
0.08
|
|
|
25
|
|
0.08
|
|
|
54
|
|
0.17
|
|
|
50
|
|
0.15
|
|
|
Business exit and divestiture costs
|
—
|
|
—
|
|
|
8
|
|
0.02
|
|
|
—
|
|
—
|
|
|
8
|
|
0.02
|
|
|
Transformational initiatives
|
|
9
|
|
0.03
|
|
|
5
|
|
0.02
|
|
|
14
|
|
0.04
|
|
|
9
|
|
0.03
|
|
|
Acquisition and integration costs
|
|
10
|
|
0.03
|
|
|
4
|
|
0.01
|
|
|
20
|
|
0.06
|
|
|
7
|
|
0.02
|
|
|
Pension settlement gain
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(5)
|
|
(0.02)
|
|
|
NASD site costs
|
|
4
|
|
0.01
|
|
|
2
|
|
0.01
|
|
|
6
|
|
0.02
|
|
|
4
|
|
0.01
|
|
|
Special compliance costs
|
|
1
|
|
—
|
|
|
1
|
|
—
|
|
|
1
|
|
—
|
|
|
2
|
|
0.01
|
|
|
Other
|
|
5
|
|
0.02
|
|
|
(14)
|
|
(0.04)
|
|
|
6
|
|
0.02
|
|
|
(13)
|
|
(0.04)
|
|
|
Adjustment for Tax Reform
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
533
|
|
1.63
|
|
|
Tax benefit on intra-entity asset transfer
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(299)
|
|
(0.93)
|
|
|
—
|
|
—
|
|
|
Adjustment for taxes (a)
|
|
(9)
|
|
(0.03)
|
|
|
(24)
|
|
(0.08)
|
|
|
(16)
|
|
(0.04)
|
|
|
(52)
|
|
(0.14)
|
|
|
Non-GAAP net income
|
|
$ 228
|
|
$ 0.71
|
|
|
$ 212
|
|
$ 0.65
|
|
|
$ 472
|
|
$ 1.47
|
|
|
$ 428
|
|
$ 1.31
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The adjustment for taxes excludes tax benefits that
management believes are not directly related to on-going operations
and which are either isolated or cannot be expected to occur again
with any regularity or predictability. For the three months ended
April 30, 2019, management used a non-GAAP effective tax rate of
16.48%. For the six months ended April 30, 2019, management used a
non-GAAP effective tax rate of 16.75%. In the same periods last
year, management used a non-GAAP effective tax rate of 18%.
|
|
|
|
(b) GAAP diluted net loss per share was computed using
323 million weighted average diluted shares which excludes from
consideration the anti-dilutive effects of all potential common
shares outstanding.
|
|
|
|
(c) Non-GAAP diluted net income per share was computed
using 326 million weighted average diluted shares which includes the
dilutive effects of potential common shares outstanding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We provide non-GAAP net income and non-GAAP net income per share
amounts in order to provide meaningful supplemental information
regarding our operational performance and our prospects for the
future. These supplemental measures exclude, among other things,
charges related to amortization of intangibles, business exit and
divestiture costs, transformational initiatives, acquisition and
integration costs, pension settlement gain, NASD site costs, special
compliance costs, adjustment for Tax Reform, and tax benefit on
intra-entity asset transfer.
|
|
|
|
Business exit and divestiture costs include costs associated
with business divestitures.
|
|
|
|
Transformational initiatives include expenses associated with
targeted cost reduction activities such as manufacturing transfers
including costs to move manufacturing due to new tariffs and tariff
remediation actions, small site consolidations, legal entity and
other business reorganizations, insourcing or outsourcing of
activities. Such costs may include move and relocation costs,
one-time termination benefits and other one-time reorganization
costs. Included in this category are also expenses associated with
company programs to transform our product lifecycle management (PLM)
system, human resources and financial systems.
|
|
|
|
Acquisition and Integration costs include all incremental
expenses incurred to effect a business combination. Such acquisition
costs may include advisory, legal, accounting, valuation, and other
professional or consulting fees. Such integration costs may include
expenses directly related to integration of business and facility
operations, the transfer of assets and intellectual property,
information technology systems and infrastructure and other
employee-related costs.
|
|
|
|
Pension settlement gain resulted from transfer of the
substitutional portion of our Japanese pension plan to the
government.
|
|
|
|
NASD site costs include all the costs related to the
expansion of our manufacturing of nucleic acid active pharmaceutical
ingredients incurred prior to the commencement of commercial
manufacturing.
|
|
|
|
Special compliance costs include costs associated with
transforming our processes to implement new regulations such as the
EU's General Data Protection Regulation (GDPR), revenue recognition
and certain tax reporting requirements.
|
|
|
|
Other includes certain legal costs and settlements in
addition to other miscellaneous adjustments.
|
|
|
|
Adjustment for Tax Reform primarily consists of an estimated
provision of $480 million for U.S. transition tax and correlative
items on deemed repatriated earnings of non-U.S. subsidiaries and an
estimated provision of $53 million associated with the decrease in
the U.S. corporate tax rate from 35% to 21% and its impact on our
U.S. deferred tax assets and liabilities. The taxes payable
associated with the transition tax, net of tax attributes, on deemed
repatriation of foreign earnings is approximately $440 million,
payable over 8 years.
|
|
|
|
Tax benefit on intra-entity asset transfer relates to our
operations in Singapore along with our application of the new
accounting rules for income tax consequences of intra-entity
transfer of assets as adopted on November 1, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our management uses non-GAAP measures to evaluate the performance of
our core businesses, to estimate future core performance and to
compensate employees. Since management finds this measure to be
useful, we believe that our investors benefit from seeing our
results "through the eyes" of management in addition to seeing our
GAAP results. This information facilitates our management's internal
comparisons to our historical operating results as well as to the
operating results of our competitors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our management recognizes that items such as amortization of
intangibles can have a material impact on our cash flows and/or our
net income. Our GAAP financial statements including our statement of
cash flows portray those effects. Although we believe it is useful
for investors to see core performance free of special items,
investors should understand that the excluded items are actual
expenses that may impact the cash available to us for other uses. To
gain a complete picture of all effects on the company's profit and
loss from any and all events, management does (and investors should)
rely upon the GAAP income statement. The non-GAAP numbers focus
instead upon the core business of the company, which is only a
subset, albeit a critical one, of the company's performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Readers are reminded that non-GAAP numbers are merely a supplement
to, and not a replacement for, GAAP financial measures. They should
be read in conjunction with the GAAP financial measures. It should
be noted as well that our non-GAAP information may be different from
the non-GAAP information provided by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary non-GAAP net income and diluted EPS reconciliation
is estimated based on our current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
|
|
SEGMENT INFORMATION
|
|
(In millions, except where noted)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
|
|
|
|
|
Q2'19
|
|
Q2'18
|
|
Revenue
|
|
$
|
529
|
|
|
$
|
537
|
|
|
Gross Margin, %
|
|
|
60.6
|
%
|
|
|
59.7
|
%
|
|
Income from Operations
|
|
$
|
107
|
|
|
$
|
113
|
|
|
Operating margin, %
|
|
|
20.3
|
%
|
|
|
21.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
|
|
|
|
Q2'19
|
|
Q2'18
|
|
Revenue
|
|
$
|
254
|
|
|
$
|
243
|
|
|
Gross Margin, %
|
|
|
54.8
|
%
|
|
|
54.8
|
%
|
|
Income from Operations
|
|
$
|
49
|
|
|
$
|
48
|
|
|
Operating margin, %
|
|
|
19.3
|
%
|
|
|
19.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
|
|
|
|
Q2'19
|
|
Q2'18
|
|
Revenue
|
|
$
|
455
|
|
|
$
|
426
|
|
|
Gross Margin, %
|
|
|
51.3
|
%
|
|
|
50.0
|
%
|
|
Income from Operations
|
|
$
|
115
|
|
|
$
|
96
|
|
|
Operating margin, %
|
|
|
25.2
|
%
|
|
|
22.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations reflect the results of our reportable
segments under Agilent's management reporting system which are not
necessarily in conformity with GAAP financial measures. Income from
operations of our reporting segments exclude, among other things,
charges related to amortization of intangibles, business exit and
divestiture costs, transformational initiatives, acquisition and
integration costs, pension settlement gain, NASD site costs, and
special compliance costs.
|
|
|
|
|
|
|
|
Readers are reminded that non-GAAP numbers are merely a supplement
to, and not a replacement for, GAAP financial measures. They should
be read in conjunction with the GAAP financial measures. It should
be noted as well that our non-GAAP information may be different from
the non-GAAP information provided by other companies.
|
|
|
|
|
|
|
|
The preliminary segment information is estimated based on our
current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
|
|
RECONCILIATIONS OF REVENUE BY SEGMENT EXCLUDING
|
|
ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS
(CORE)
|
|
(in millions)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-Year
|
|
|
|
|
|
|
|
|
GAAP Revenue by Segment
|
|
Q2'19
|
|
Q2'18
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
$ 529
|
|
$ 537
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
254
|
|
243
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
455
|
|
426
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent
|
|
$ 1,238
|
|
$ 1,206
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
(excluding Acquisitions & Divestitures)
|
|
Year-over-Year
at Constant Currency (a)
|
|
|
|
|
|
|
|
|
|
Year-over-Year
|
|
Year-over-Year
|
|
PercentagePoint Impact
|
|
Current QuarterCurrency
|
|
Non GAAP Revenue by Segment
|
|
Q2'19
|
|
Q2'18
|
|
% Change
|
|
% Change
|
|
from Currency
|
|
Impact (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
$ 519
|
|
$ 537
|
|
(3%)
|
|
|
(1%)
|
|
-2 ppts
|
|
|
$ (12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
248
|
|
243
|
|
2%
|
|
|
6%
|
|
-4 ppts
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
448
|
|
426
|
|
5%
|
|
|
9%
|
|
-4 ppts
|
|
|
(18)
|
|
|
|
|
|
|
|
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Agilent (Core)
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$ 1,215
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$ 1,206
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1%
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4%
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-3 ppts
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$ (38)
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We compare the year-over-year change in revenue excluding the effect
of recent acquisitions and divestitures and foreign currency rate
fluctuations to assess the performance of our underlying business.
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(a) The constant currency year-over-year growth
percentage is calculated by recalculating all periods in the
comparison period at the foreign currency exchange rates used for
accounting during the last month of the current quarter, and then
using those revised values to calculate the year-over-year
percentage change.
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(b) The dollar impact from the current quarter currency
impact is equal to the total year-over-year dollar change less the
constant currency year-over-year change.
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The preliminary reconciliation of GAAP revenue adjusted for recent
acquisitions and divestitures and impact of currency is estimated
based on our current information.
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Page 6
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View source version on businesswire.com: https://www.businesswire.com/news/home/20190514005940/en/
