Highlights: SANTA CLARA, Calif.--(BUSINESS WIRE)--Mar. 26, 2009--
Agilent Technologies Inc. (NYSE:A) today announced a major restructuring
of its Electronic Measurement businesses in response to the most severe
global downturn in the company’s history. Fiscal 2009 revenue in the
company’s Electronic Measurement Segment is expected to be down roughly
30 percent from 2008 to the lowest level in the company’s 10-year
history. Revenue in the Semiconductor & Board Test Segment is expected
to be down over 50 percent from last year and off 65 percent from its
peak volume.
“We have been very aggressive to date in addressing the downturn in
electronic measurement markets,” said Bill Sullivan, Agilent president
and chief executive officer. “However, business remains severely
depressed, and there are no prospects for a meaningful recovery in the
foreseeable future. Therefore, we have no choice but to resize our
electronic measurement businesses for the realities of the marketplace.”
The company announced it would reduce costs in its Electronic
Measurement Segment by an annualized $300 million over the course of the
next four quarters, sizing the Segment to achieve a 12 percent operating
margin and a 21 percent ROIC at annualized revenues of $2.3 billion. It
also announced a further restructuring of its Semiconductor & Board Test
Segment to reduce annual costs by an additional $10 million. This
restructuring will affect approximately 2,700 employees and have a cash
cost of about $160 million.
Said Sullivan, “For Agilent to realize its full potential, we must have
a financially healthy company and a solidly profitable Electronic
Measurement business. We will move quickly to resize the EM businesses
to the new business levels, align resources to the best market
opportunities, and position the company for the new economic
environment.”
In order to fully fund the restructuring and conserve cash in an
environment of severely constrained financial markets, the company also
announced it was temporarily suspending its share repurchase program
until the end of its 2009 fiscal year.
About Agilent Technologies
Agilent Technologies Inc. (NYSE:A) is the world’s premier measurement
company and a technology leader in communications, electronics, life
sciences and chemical analysis. The company’s 19,000 employees serve
customers in more than 110 countries. Agilent had net revenues of $5.8
billion in fiscal 2008. Information about Agilent is available on the
Web at www.agilent.com.
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 future
revenues, earnings and profitability; the future demand for the
Company’s products and services, our planned restructuring activities,
including our current estimates of the scope, timing and cost of those
activities. 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
our customers’ businesses, unforeseen changes in the demand for current
and new products and technologies, the risk of additional costs and
delays associated with compliance with U.S. and international labor and
other laws associated with our planned restructuring activities, the
risk that a further decline in general economic conditions and the
global credit and equity markets will require changes to the planned
restructuring, and the risk that we are not able to realize the savings
expected from the restructuring activities.
In addition, other risks that Agilent faces in running its operations
include the ability to execute successfully through business cycles
while it continues to implement cost reductions; 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 our cost-cutting initiatives will impair our ability to
develop products and remain competitive and to operate effectively; the
impact of geopolitical uncertainties and global economic conditions on
our operations, our markets and our ability to conduct business; the
ability to improve asset performance to adapt to changes in demand; the
ability to successfully introduce new products at the right time, price
and mix; and other risks detailed in Agilent’s filings with the
Securities and Exchange Commission, including our Quarterly Report on
Form 10-Q for the fiscal quarter ended January 31, 2009. 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) Segment operating margin is defined as segment income
from operations divided by net revenues.
(2) Segment Return On Invested Capital is defined as income
(loss) from operations less other (income) expense and taxes,
annualized, divided by the average of the two most recent quarter-end
balances of assets less net current liabilities.
NOTE TO EDITORS: Further technology, corporate citizenship and executive
news is available on the Agilent news site at www.agilent.com/go/news.
Source: Agilent Technologies Inc.
Agilent Technologies Inc.
Editorial Contacts:
Amy Flores,
+1-408-345-8194
amy_flores@agilent.com
Jorgen
Tesselaar, +31 20 547 2825 (Europe and Asia)
jorgen_tesselaar@agilent.com
or
Investor
Contact:
Rodney Gonsalves, +1-408-345-8948
rodney_gonsalves@agilent.com