Excellent Start to 2018; Raising Full Year Guidance
Highlights:
-
Revenue of $1.21 billion, representing growth of 14 percent (core
revenue growth of 10 percent(2) versus midpoint
guidance of 5.25 percent)
-
GAAP net loss of $320 million, or $0.99 net loss per share. GAAP
results include a one-time tax provision of $533 million associated
with the recent enactment of U.S. Tax Reform legislation. (4)
-
Non-GAAP net income of $216 million, or $0.66 per share(1),
$0.10 above midpoint guidance of $0.56 per share, increase of 25% from
2017
-
Second-quarter fiscal year revenue guidance of $1.20 billion to $1.22
billion, and non-GAAP earnings guidance of $0.61 to $0.63 per share(3)
-
Increasing fiscal year 2018 core revenue growth guidance from a
midpoint of 4.25 percent to a midpoint of 5.5 percent(2).
Increasing fiscal year 2018 non-GAAP earnings guidance from a midpoint
of $2.53 to a midpoint of $2.65 per share(3).
-
Increasing fiscal year 2018 operating cash flow guidance from $970
million to $1,050 million
SANTA CLARA, Calif.--(BUSINESS WIRE)--Feb. 14, 2018--
Agilent Technologies, Inc. (NYSE:A) today reported revenue of $1.21
billion for the first-quarter ended January 31, 2018, up 14 percent year
over year (up 10 percent on a core basis(2)).
On a GAAP basis, including the $533 million charge related to U.S. Tax
Reform legislation, first-quarter net loss was $320 million, or $0.99
net loss per share. Last year’s first-quarter GAAP net income was $168
million, or $0.52 per share.
During the first quarter, Agilent had an adjustment related to U.S. Tax
Reform of $533 million, intangible amortization of $25 million, a
pension settlement gain of $5 million, transformation costs of $5
million, acquisition and integration costs of $3 million, and $3 million
in other costs. Excluding these items and a tax benefit of $28 million,
Agilent reported first-quarter non-GAAP net income of $216 million, or
$0.66 per share(1).
“We are very pleased with our strong start to the year,” said Mike
McMullen, Agilent CEO and President. “The Agilent team continued our
positive momentum and delivered another excellent quarter of operating
results.”
“Looking forward, we will keep our focus on driving sustainable
above-market growth and delivering value to shareholders through the
execution of our proven strategy,” continued McMullen. “Overall, we are
well-positioned to continue delivering excellent operating results.”
First-quarter revenue of $618 million from Agilent’s Life Sciences and
Applied Markets Group (LSAG) grew 14 percent year over year (up 11
percent on a core basis(2)), with broad strength
across all major end markets. LSAG’s operating margin for the quarter
was 25.8 percent.
First-quarter revenue of $408 million from Agilent CrossLab Group (ACG)
grew 12 percent year over year (up 9 percent on a core basis(2)).
Growth was strong across services and consumables. ACG’s operating
margin for the quarter was 21.6 percent.
First-quarter revenue of $185 million from Agilent’s Diagnostics and
Genomics Group (DGG) grew 13 percent year over year (up 8 percent on a
core basis(2)) led by strong demand for pathology
products and companion diagnostics services. DGG’s operating margin for
the quarter was 11.7 percent.
Agilent expects second-quarter 2018 revenue in the range of $1.20
billion to $1.22 billion. Second-quarter 2018 non-GAAP earnings are
expected to be in the range of $0.61 to $0.63 per share(3).
For fiscal year 2018, Agilent expects revenue of $4.885 billion to
$4.905 billion and non-GAAP earnings of $2.62 to $2.68 per share(3).
The guidance is based on January 31, 2018 currency exchange rates.
Conference Call
Agilent’s management will present more details about its first-quarter
fiscal 2018 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 “Q1 2018 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 February 14, 2018 at 4:30 p.m. (Pacific Time) after the
call and through February 21 by dialing +1 855-859-2056 (or +1
404-537-3406 from outside the United States) and entering pass code
1482568.
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 its
customers’ most challenging questions. The company generated revenues of
$4.47 billion in fiscal 2017 and employs 13,800 people worldwide.
Information about Agilent is available 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
revenue, earnings and profitability; planned new products; market
trends; the future demand for the company’s products and services;
customer expectations; and revenue and non-GAAP earnings guidance for
the second quarter and full fiscal year 2018. 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, technologies, and services;
unforeseen changes in the currency markets; customer purchasing
decisions and timing, and the risk that we are 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 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 of our 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
our annual report on Form 10-K for the fiscal year ended October 31,
2017. 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) Non-GAAP net income and non-GAAP earnings per share primarily
exclude the impacts of non-cash intangibles amortization, transformation
initiatives, acquisition and integration costs, pension settlement gain,
and Nucleic Acid Solutions Division (“NASD”) site costs. We also exclude
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. For Q1 FY18, the impact of
Tax Reform is also excluded. A reconciliation between non-GAAP net
income and GAAP net loss is set forth on page 5 of the attached tables
along with additional information regarding the use of this non-GAAP
measure.
(2) 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 Q1 FY18 GAAP revenue and core revenue
is set forth on page 7 of the attached tables along with additional
information regarding the use of this non-GAAP measure. Core revenue
growth rate as projected for full fiscal year 2018 excludes the impact
of currency, acquisitions and divestitures within the past 12 months.
Most of these exclude amounts that 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.
(3) Non-GAAP earnings per share as projected for Q2 FY18 and full fiscal
year 2018 excludes primarily the impacts of non-cash intangibles
amortization, transformation initiatives, acquisition and integration
costs, pension settlement gain, and Nucleic Acid Solutions Division
(“NASD”) site costs. We also exclude any tax benefits 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 Tax Reform. Most of these excluded amounts that
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 $25 million per quarter.
(4) For the three months ended January 31, 2018, our preliminary
provision for income taxes is $553 million. This includes a $533
provision charge for the impact of the U.S. Tax Cuts and Jobs Act (Tax
Reform) enactment. This charge primarily consists of: 1) an estimated
provision of $480 million for U.S. transition tax and correlative items
on deemed repatriated earnings of non-U.S. subsidiaries; and 2) an
estimated provision of $53 million associated with the decrease in the
US corporate tax rate from 35% to 21% and its impact on the Company’s US
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.
The final impact of Tax Reform may differ materially from these
estimates, due to, among other things, changes in interpretations,
analysis and assumptions made by the Company, additional guidance that
may be issued, and actions that the Company may undertake.
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
|
|
|
|
|
|
|
January 31,
|
|
Percent
|
|
|
|
|
2018
|
|
2017
|
|
Inc/(Dec)
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
$
|
1,211
|
|
|
$
|
1,067
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of products and services
|
|
|
|
538
|
|
|
|
493
|
|
|
9
|
%
|
|
Research and development
|
|
|
|
93
|
|
|
|
79
|
|
|
18
|
%
|
|
Selling, general and administrative
|
|
|
|
341
|
|
|
|
289
|
|
|
18
|
%
|
|
Total costs and expenses
|
|
|
|
972
|
|
|
|
861
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
239
|
|
|
|
206
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
9
|
|
|
|
4
|
|
|
125
|
%
|
|
Interest expense
|
|
|
|
(20
|
)
|
|
|
(20
|
)
|
|
—
|
|
|
Other income (expense), net
|
|
|
|
5
|
|
|
|
3
|
|
|
67
|
%
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
|
233
|
|
|
|
193
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
553
|
|
|
|
25
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(320
|
)
|
|
$
|
168
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.99
|
)
|
|
$
|
0.52
|
|
|
|
|
Diluted
|
|
|
$
|
(0.99
|
)
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
323
|
|
|
|
322
|
|
|
|
|
Diluted
|
|
|
|
323
|
|
|
|
326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
|
$
|
0.149
|
|
|
$
|
0.132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 1
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(In millions)
(Unaudited)
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
January 31,
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(320
|
)
|
|
$
|
168
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on derivative instruments
|
|
|
|
(7
|
)
|
|
|
1
|
|
|
Foreign currency translation
|
|
|
|
79
|
|
|
|
(3
|
)
|
|
Net defined benefit pension cost and post retirement plan costs:
|
|
|
|
|
|
|
Change in actuarial net loss
|
|
|
|
6
|
|
|
|
17
|
|
|
Change in net prior service benefit
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Other comprehensive income
|
|
|
|
77
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
|
$
|
(243
|
)
|
|
$
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary statement of comprehensive income is estimated based
on our current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 2
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED
BALANCE SHEET
(In millions, except par value and share
amounts)
(Unaudited)
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
October 31,
|
|
|
|
|
2018
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
2,887
|
|
|
$
|
2,678
|
|
|
Accounts receivable, net
|
|
|
|
751
|
|
|
|
724
|
|
|
Inventory
|
|
|
|
608
|
|
|
|
575
|
|
|
Other current assets
|
|
|
|
151
|
|
|
|
192
|
|
|
Total current assets
|
|
|
|
4,397
|
|
|
|
4,169
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
792
|
|
|
|
757
|
|
|
Goodwill
|
|
|
|
2,633
|
|
|
|
2,607
|
|
|
Other intangible assets, net
|
|
|
|
341
|
|
|
|
361
|
|
|
Long-term investments
|
|
|
|
140
|
|
|
|
138
|
|
|
Other assets
|
|
|
|
395
|
|
|
|
394
|
|
|
Total assets
|
|
|
$
|
8,698
|
|
|
$
|
8,426
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
292
|
|
|
$
|
305
|
|
|
Employee compensation and benefits
|
|
|
|
221
|
|
|
|
276
|
|
|
Deferred revenue
|
|
|
|
321
|
|
|
|
291
|
|
|
Short-term debt
|
|
|
|
345
|
|
|
|
210
|
|
|
Other accrued liabilities
|
|
|
|
182
|
|
|
|
181
|
|
|
Total current liabilities
|
|
|
|
1,361
|
|
|
|
1,263
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
1,800
|
|
|
|
1,801
|
|
|
Retirement and post-retirement benefits
|
|
|
|
241
|
|
|
|
234
|
|
|
Other long-term liabilities
|
|
|
|
770
|
|
|
|
293
|
|
|
Total liabilities
|
|
|
|
4,172
|
|
|
|
3,591
|
|
|
|
|
|
|
|
|
|
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; 323
million shares at January 31, 2018 and 322 million shares at
October 31, 2017, issued
|
|
|
|
3
|
|
|
|
3
|
|
|
Treasury stock at cost; 37 thousand shares at January 31, 2018 and
zero shares at October 31, 2017
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
Additional paid-in-capital
|
|
|
|
5,320
|
|
|
|
5,300
|
|
|
Accumulated deficit
|
|
|
|
(529
|
)
|
|
|
(126
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(269
|
)
|
|
|
(346
|
)
|
|
Total stockholders' equity
|
|
|
|
4,522
|
|
|
|
4,831
|
|
|
Non-controlling interest
|
|
|
|
4
|
|
|
|
4
|
|
|
Total equity
|
|
|
|
4,526
|
|
|
|
4,835
|
|
|
Total liabilities and equity
|
|
|
$
|
8,698
|
|
|
$
|
8,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary balance sheet is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 3
|
|
|
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
January 31,
|
|
January 31,
|
|
|
|
|
2018
|
|
2017
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(320
|
)
|
|
$
|
168
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
51
|
|
|
|
55
|
|
|
Share-based compensation
|
|
|
|
31
|
|
|
|
20
|
|
|
Excess and obsolete inventory related charges
|
|
|
|
5
|
|
|
|
7
|
|
|
Other non-cash expenses, net
|
|
|
|
1
|
|
|
|
2
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(5
|
)
|
|
|
(31
|
)
|
|
Inventory
|
|
|
|
(34
|
)
|
|
|
(26
|
)
|
|
Accounts payable
|
|
|
|
(3
|
)
|
|
|
9
|
|
|
Employee compensation and benefits
|
|
|
|
(62
|
)
|
|
|
(43
|
)
|
|
Change in assets and liabilities due to Tax Reform
|
|
|
|
533
|
|
|
|
—
|
|
|
Other assets and liabilities
|
|
|
|
18
|
|
|
|
(45
|
)
|
|
Net cash provided by operating activities (a) |
|
|
|
215
|
|
|
|
116
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Investments in property, plant and equipment
|
|
|
|
(60
|
)
|
|
|
(32
|
)
|
|
Payment to acquire cost method investments
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
Proceeds from divestitures
|
|
|
|
—
|
|
|
|
1
|
|
|
Acquisition of businesses and intangible assets, net of cash acquired
|
|
|
|
(6
|
)
|
|
|
(70
|
)
|
|
Net cash used in investing activities
|
|
|
|
(67
|
)
|
|
|
(101
|
)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Issuance of common stock under employee stock plans
|
|
|
|
25
|
|
|
|
18
|
|
|
Payment of taxes related to net share settlement of equity awards
|
|
|
|
(28
|
)
|
|
|
(12
|
)
|
|
Payment of dividends
|
|
|
|
(48
|
)
|
|
|
(42
|
)
|
|
Proceeds from debt and revolving credit facility
|
|
|
|
274
|
|
|
|
131
|
|
|
Repayment of debt and revolving credit facility
|
|
|
|
(139
|
)
|
|
|
(42
|
)
|
|
Treasury stock repurchases
|
|
|
|
(47
|
)
|
|
|
(111
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
|
37
|
|
|
|
(58
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate movements
|
|
|
|
24
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
209
|
|
|
|
(48
|
)
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
2,678
|
|
|
|
2,289
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
2,887
|
|
|
$
|
2,241
|
|
|
|
|
|
|
|
|
|
(a) Cash payments included in operating activities:
|
|
|
|
|
|
|
Income tax payments, net
|
|
|
$
|
32
|
|
|
$
|
27
|
|
|
Interest payments
|
|
|
$
|
29
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary cash flow is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 4
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
NON-GAAP NET INCOME AND
DILUTED EPS RECONCILIATIONS
(In millions, except per
share amounts)
(Unaudited)
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
January 31,
|
|
|
|
|
|
|
2018
|
|
Diluted
EPS
|
|
|
2017
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net (loss) income
|
|
|
$
|
(320
|
)
|
|
$
|
(0.99
|
)
|
(b) |
|
|
$
|
168
|
|
|
$
|
0.52
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization
|
|
|
|
25
|
|
|
|
0.08
|
|
|
|
|
|
31
|
|
|
|
0.10
|
|
|
Transformational initiatives
|
|
|
|
5
|
|
|
|
0.02
|
|
|
|
|
|
2
|
|
|
|
0.01
|
|
|
Acquisition and integration costs
|
|
|
|
3
|
|
|
|
0.01
|
|
|
|
|
|
16
|
|
|
|
0.05
|
|
|
Pension settlement gain
|
|
|
|
(5
|
)
|
|
|
(0.02
|
)
|
|
|
|
|
(32
|
)
|
|
|
(0.11
|
)
|
|
NASD site costs
|
|
|
|
2
|
|
|
|
0.01
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Special compliance costs
|
|
|
|
1
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Other
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
2
|
|
|
|
0.01
|
|
|
Adjustment for Tax Reform
|
|
|
|
533
|
|
|
|
1.63
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Adjustment for taxes (a) |
|
|
|
(28
|
)
|
|
|
(0.08
|
)
|
|
|
|
|
(15
|
)
|
|
|
(0.05
|
)
|
|
Non-GAAP net income
|
|
|
$
|
216
|
|
|
$
|
0.66
|
|
(c) |
|
|
$
|
172
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
January 31, 2018, management uses a non-GAAP effective tax rate of
18.0%. In the same periods last year, management used a non-GAAP
effective tax rate of 19.0%.
|
|
|
|
(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 327 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, transformational
initiatives, acquisition and integration costs, pension settlement
gain, NASD site costs, special compliance costs, and adjustment for
Tax Reform.
|
|
|
|
|
Transformational initiatives include expenses associated with
targeted cost reduction activities such as manufacturing transfers,
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 the post-separation resizing of
the IT infrastructure and streamlining of IT system as well as
company programs to transform our product lifecycle management (PLM)
system 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. The final impact of Tax Reform may differ
materially from these estimates, due to, among other things, changes
in interpretations, analysis and assumptions made, additional
guidance that may be issued, and actions that we may undertake.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
SEGMENT INFORMATION
(In
millions, except where noted)
(Unaudited)
PRELIMINARY
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
|
|
|
|
|
|
|
Q1'18
|
|
Q1'17
|
|
Revenue
|
|
|
$
|
618
|
|
|
$
|
540
|
|
|
Gross Margin, %
|
|
|
|
61.8
|
%
|
|
|
59.6
|
%
|
|
Income from Operations
|
|
|
$
|
159
|
|
|
$
|
126
|
|
|
Operating margin, %
|
|
|
|
25.8
|
%
|
|
|
23.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
|
|
|
|
|
|
Q1'18
|
|
Q1'17
|
|
Revenue
|
|
|
$
|
185
|
|
|
$
|
164
|
|
|
Gross Margin, %
|
|
|
|
54.4
|
%
|
|
|
54.8
|
%
|
|
Income from Operations
|
|
|
$
|
22
|
|
|
$
|
23
|
|
|
Operating margin, %
|
|
|
|
11.7
|
%
|
|
|
14.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
|
|
|
|
|
|
Q1'18
|
|
Q1'17
|
|
Revenue
|
|
|
$
|
408
|
|
|
$
|
363
|
|
|
Gross Margin, %
|
|
|
|
50.6
|
%
|
|
|
48.5
|
%
|
|
Income from Operations
|
|
|
$
|
88
|
|
|
$
|
74
|
|
|
Operating margin, %
|
|
|
|
21.6
|
%
|
|
|
20.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Q1'18
|
|
Q1'17
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
$
|
618
|
|
$
|
540
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
185
|
|
|
164
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
408
|
|
|
363
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent
|
|
|
$
|
1,211
|
|
$
|
1,067
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
(excluding Acquisitions & Divestitures)
|
|
|
Currency
Adjustments
|
Currency
Adjustments
|
|
Currency-Adjusted (a) |
|
|
|
|
|
|
|
|
Year-over-Year
|
|
|
|
|
|
|
|
|
Year-over-Year
|
|
Non GAAP Revenue by Segment
|
|
|
Q1'18
|
|
Q1'17
|
|
% Change
|
|
|
Q1'18
|
Q1'17
|
|
Q1'18
|
|
Q1'17
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
$
|
616
|
|
$
|
539
|
|
14
|
%
|
|
|
$
|
(3
|
)
|
$
|
(17
|
)
|
|
$
|
619
|
|
$
|
556
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
182
|
|
|
163
|
|
12
|
%
|
|
|
|
(1
|
)
|
|
(7
|
)
|
|
|
183
|
|
|
170
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
408
|
|
|
363
|
|
12
|
%
|
|
|
|
(3
|
)
|
|
(15
|
)
|
|
|
411
|
|
|
378
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent (Core)
|
|
|
$
|
1,206
|
|
$
|
1,065
|
|
13
|
%
|
|
|
$
|
(7
|
)
|
$
|
(39
|
)
|
|
$
|
1,213
|
|
$
|
1,104
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) 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. To determine the impact of currency
fluctuations, current and prior year period results for entities
reporting in currencies other than United States dollars are
converted into United States dollars at the actual exchange rate in
effect during the last month of the current period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary reconciliation of GAAP revenue adjusted for recent
acquisitions and divestitures and impact of currency is estimated
based on our current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 7
|
|
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|
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|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180214006237/en/
Source: Agilent Technologies, Inc.
Agilent Technologies, Inc.
INVESTOR CONTACT:
Alicia Rodriguez,
+1 408-345-8948
alicia_rodriguez@agilent.com
or
EDITORIAL
CONTACT:
Stefanie Notaney, +1 408-345-8955
stefanie.notaney@agilent.com