Agilent delivers outstanding quarter wrapping up an excellent 2018
Highlights:
Fourth Quarter
-
Q4 revenue of $1.29 billion, representing growth of 9 percent with
core revenue growth of 9 percent(1)
-
Q4 GAAP net income of $195 million, or $0.61 per share
-
Q4 non-GAAP net income of $262 million, or $0.81 per share(2),
an increase of 21 percent from 2017
-
Board authorizes new $1.75 billion share repurchase program
Full Year
-
Full year revenue of $4.91 billion, representing 10 percent growth and
core growth of 7 percent(1)
-
Full year GAAP net income of $316 million, or $0.97 per share
-
Full year non-GAAP net income of $907 million, or $2.79 per share(2),
an increase of 18 percent from 2017
Outlook
-
Fiscal year 2019 revenue guidance of $5.13 billion to $5.17 billion,
representing growth of 4.4 to 5.2 percent and core growth of 5.0 to
5.5 percent(1). Non-GAAP earnings guidance of $3.00 to
$3.05 per share(3)
-
First-quarter fiscal year 2019 revenue guidance of $1.265 billion to
$1.280 billion, representing growth of 4.4 to 5.7 percent and core
revenue growth of 4.5 to 5.5 percent(1). Non-GAAP earnings
guidance of $0.71 to $0.73 per share(3)
SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov. 19, 2018--
Agilent Technologies, Inc. (NYSE: A) today reported revenue of $1.29
billion for the fourth-quarter ended October 31, 2018, up 9 percent year
over year (up 9 percent on a core basis(1)).
Fourth-quarter GAAP net income was $195 million, or $0.61 per share.
Last year’s fourth-quarter GAAP net income was $177 million, or $0.54
per share.
“The Agilent team delivered an outstanding quarter to wrap up the fiscal
year with revenues and earnings per share ahead of expectations,” said
Mike McMullen, Agilent CEO and President. “Our performance this quarter
caps off an excellent 2018 as we achieved our highest annual core growth
rate and profitability since becoming a stand-alone life sciences
company in 2014.”
“During the quarter we continued our investment in growth introducing
new and differentiated products and services,” continued McMullen. “We
leveraged our strong balance sheet completing several acquisitions to
further strengthen our portfolio. We also returned over $600 million to
shareholders through stock buybacks and dividends this year.
“We enter fiscal 2019 with momentum. Our focus remains on executing our
shareholder value creation model to deliver superior earnings growth.”
Financial Highlights
Life Sciences and Applied Markets Group
Fourth-quarter revenue of $597 million from Agilent’s Life Sciences and
Applied Markets Group (LSAG) grew 8 percent year over year (up 9 percent
on a core basis(1)), with broad-based strength across major
end markets, platforms and regions. LSAG’s operating margin for the
quarter was 25.9 percent. Full-year revenue of $2.3 billion grew 9
percent year over year (up 7 percent on a core basis(1)).
LSAG’s operating margin for the year was 24.1 percent.
Agilent CrossLab Group
Fourth-quarter revenue of $441 million from Agilent CrossLab Group (ACG)
grew 9 percent year over year (up 9 percent on a core basis(1)).
Demand was excellent across both services and consumables. ACG’s
operating margin for the quarter was 24.7 percent. Full-year revenue of
$1.7 billion grew 11 percent year over year (up 8 percent on a core basis(1)).
ACG’s operating margin for the year was 23.3 percent.
Diagnostics and Genomics Group
Fourth-quarter revenue of $256 million from Agilent’s Diagnostics and
Genomics Group (DGG) grew 9 percent year over year (up 5 percent on a
core basis(1)) led by pharma growth and strong demand for
genomics and NASD products. DGG’s operating margin for the quarter was
23.3 percent. Full-year revenue of $943 million grew 10 percent year
over year (up 5 percent on a core basis(1)). DGG’s operating
margin for the year was 18.9 percent.
2019 First Quarter and Full Year Outlook
For fiscal year 2019, Agilent expects revenue of $5.13 billion to $5.17
billion, representing growth of 4.4 to 5.2 percent and core growth of
5.0 to 5.5 percent(1). Full-year 2019 non-GAAP earnings of
$3.00 to $3.05 per share(3). The guidance is based on October
31, 2018 currency exchange rates.
Agilent expects first-quarter 2019 revenue in the range of $1.265
billion to $1.280 billion, representing growth of 4.4 to 5.7 percent and
core revenue growth of 4.5 to 5.5 percent(1). First-quarter
2019 non-GAAP earnings are expected to be in the range of $0.71 to $0.73
per share(3).
New Share Repurchase Program
Agilent’s Board of Directors approved a new share repurchase program
authorizing the purchase of up to $1.75 billion of common stock. The
2018 share repurchase program commences on November 21, 2018, replacing
the previous program.
The number of shares to be repurchased and the timing of any repurchases
will depend on factors such as the share price, economic and market
conditions, and corporate and regulatory requirements. The share
repurchase program may be suspended, amended or discontinued at any time.
Conference Call
Agilent’s management will present more details about its fourth-quarter
FY2018 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 “Q4 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.
In addition, a telephone replay of the conference call will be available
at approximately November 19, 2018 at 4:30 p.m. (Pacific Time) after the
call and through November 26 by dialing +1 855-859-2056 (or +1
404-537-3406 from outside the United States) and entering pass code
6519506.
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 $4.91
billion in fiscal 2018 and employs 14,500 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; information regarding the company’s share
repurchase programs, and revenue and non-GAAP earnings guidance for the
first quarter and full fiscal year 2019. 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 quarterly report on Form 10-Q for the fiscal quarter ended July 31,
2018. 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 Q4 FY18 and full fiscal year 2018 GAAP
revenue and core revenue is set forth on pages 6 and 7 of the attached
tables along with additional information regarding the use of this
non-GAAP measure. Core revenue growth rate as projected for Q1 FY19 and
full fiscal year 2019 excludes the impact of currency, 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 asset impairments and intangibles
amortization, business exit and divestiture costs, transformational
initiatives, acquisition and integration costs, pension settlement gain,
gain on step acquisition of Lasergen, Nucleic Acid Solutions Division
(“NASD”) site costs and special compliance 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. 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 Q1 FY19 and full fiscal
year 2019 excludes primarily the impacts of non-cash asset impairments
and intangibles amortization, business exit and divestiture costs,
transformational initiatives, acquisition and integration costs, pension
settlement gain, Nucleic Acid Solutions Division (“NASD”) site costs and
special compliance 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 U.S. Tax Cuts and Jobs Act (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 $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
|
|
Years Ended
|
|
|
October 31,
|
|
October 31,
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
$
|
1,294
|
|
|
$
|
1,189
|
|
|
$
|
4,914
|
|
|
$
|
4,472
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of products and services
|
|
585
|
|
|
|
542
|
|
|
|
2,227
|
|
|
|
2,063
|
|
|
Research and development
|
|
104
|
|
|
|
89
|
|
|
|
385
|
|
|
|
339
|
|
|
Selling, general and administrative
|
|
356
|
|
|
|
325
|
|
|
|
1,374
|
|
|
|
1,229
|
|
|
Total costs and expenses
|
|
1,045
|
|
|
|
956
|
|
|
|
3,986
|
|
|
|
3,631
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
249
|
|
|
|
233
|
|
|
|
928
|
|
|
|
841
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
10
|
|
|
|
7
|
|
|
|
38
|
|
|
|
22
|
|
|
Interest expense
|
|
(18
|
)
|
|
|
(20
|
)
|
|
|
(75
|
)
|
|
|
(79
|
)
|
|
Other income (expense), net
|
|
3
|
|
|
|
6
|
|
|
|
55
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
244
|
|
|
|
226
|
|
|
|
946
|
|
|
|
803
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
49
|
|
|
|
49
|
|
|
|
630
|
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
195
|
|
|
$
|
177
|
|
|
$
|
316
|
|
|
$
|
684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.61
|
|
|
$
|
0.55
|
|
|
$
|
0.98
|
|
|
$
|
2.12
|
|
|
Diluted
|
$
|
0.61
|
|
|
$
|
0.54
|
|
|
$
|
0.97
|
|
|
$
|
2.10
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
319
|
|
|
|
322
|
|
|
|
321
|
|
|
|
322
|
|
|
Diluted
|
|
322
|
|
|
|
326
|
|
|
|
325
|
|
|
|
326
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
$
|
0.149
|
|
|
$
|
0.132
|
|
|
$
|
0.596
|
|
|
$
|
0.528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31,
|
|
October 31,
|
|
|
|
|
|
2018
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
2,247
|
|
|
$
|
2,678
|
|
|
|
Accounts receivable, net
|
|
776
|
|
|
|
724
|
|
|
|
Inventory
|
|
|
638
|
|
|
|
575
|
|
|
|
Other current assets
|
|
187
|
|
|
|
192
|
|
|
|
|
Total current assets
|
|
3,848
|
|
|
|
4,169
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
822
|
|
|
|
757
|
|
|
Goodwill and other intangible assets, net
|
|
3,464
|
|
|
|
2,968
|
|
|
Long-term investments
|
|
68
|
|
|
|
138
|
|
|
Other assets
|
|
|
339
|
|
|
|
394
|
|
|
|
|
Total assets
|
$
|
8,541
|
|
|
$
|
8,426
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
|
340
|
|
|
$
|
305
|
|
|
|
Employee compensation and benefits
|
|
304
|
|
|
|
276
|
|
|
|
Deferred revenue
|
|
324
|
|
|
|
291
|
|
|
|
Short-term debt
|
|
—
|
|
|
|
210
|
|
|
|
Other accrued liabilities
|
|
203
|
|
|
|
181
|
|
|
|
|
Total current liabilities
|
|
1,171
|
|
|
|
1,263
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,799
|
|
|
|
1,801
|
|
|
Retirement and post-retirement benefits
|
|
239
|
|
|
|
234
|
|
|
Other long-term liabilities
|
|
761
|
|
|
|
293
|
|
|
|
|
Total liabilities
|
|
3,970
|
|
|
|
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; 318 million shares at October 31, 2018
|
|
|
|
|
|
|
and 322 million shares at October 31, 2017, issued
|
|
3
|
|
|
|
3
|
|
|
|
Additional paid-in-capital
|
|
5,308
|
|
|
|
5,300
|
|
|
|
Accumulated deficit
|
|
(336
|
)
|
|
|
(126
|
)
|
|
|
Accumulated other comprehensive loss
|
|
(408
|
)
|
|
|
(346
|
)
|
|
|
|
Total stockholders' equity
|
|
4,567
|
|
|
|
4,831
|
|
|
|
Non-controlling interest
|
|
4
|
|
|
|
4
|
|
|
|
|
Total equity
|
|
4,571
|
|
|
|
4,835
|
|
|
|
|
|
Total liabilities and equity
|
$
|
8,541
|
|
|
$
|
8,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|
|
October 31,
|
|
October 31,
|
|
|
|
|
|
|
2018
|
|
2017
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
316
|
|
|
$
|
684
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
210
|
|
|
|
212
|
|
|
|
Share-based compensation
|
|
|
70
|
|
|
|
60
|
|
|
|
Excess and obsolete inventory related charges
|
|
|
26
|
|
|
|
24
|
|
|
|
Gain on step acquisition of Lasergen
|
|
|
(20
|
)
|
|
|
—
|
|
|
|
Asset impairment charges
|
|
|
21
|
|
|
|
—
|
|
|
|
Other non-cash expenses, net
|
|
|
9
|
|
|
|
7
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(65
|
)
|
|
|
(81
|
)
|
|
|
|
Inventory
|
|
|
(83
|
)
|
|
|
(61
|
)
|
|
|
|
Accounts payable
|
|
|
40
|
|
|
|
2
|
|
|
|
|
Employee compensation and benefits
|
|
|
31
|
|
|
|
38
|
|
|
|
|
Change in assets and liabilities due to Tax Act
|
|
|
552
|
|
|
|
—
|
|
|
|
|
Other assets and liabilities
|
|
|
(20
|
)
|
|
|
4
|
|
|
Net cash provided by operating activities (a) |
|
|
1,087
|
|
|
|
889
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Investments in property, plant and equipment
|
|
|
(177
|
)
|
|
|
(176
|
)
|
|
|
Proceeds from sale of property, plant and equipment
|
|
|
1
|
|
|
|
—
|
|
|
|
Payment to acquire cost method investments
|
|
|
(11
|
)
|
|
|
(1
|
)
|
|
|
Proceeds from divestitures
|
|
|
—
|
|
|
|
2
|
|
|
|
Change in restricted cash and cash equivalents, net
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
Payment in exchange for convertible note
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
Acquisition of businesses and intangible assets, net of cash acquired
|
|
|
(516
|
)
|
|
|
(128
|
)
|
|
Net cash used in investing activities
|
|
|
(704
|
)
|
|
|
(305
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Issuance of common stock under employee stock plans
|
|
|
56
|
|
|
|
66
|
|
|
|
Payment of taxes related to net share settlement of equity awards
|
|
|
(30
|
)
|
|
|
(14
|
)
|
|
|
Payment of dividends
|
|
|
(191
|
)
|
|
|
(170
|
)
|
|
|
Proceeds from revolving credit facility
|
|
|
483
|
|
|
|
400
|
|
|
|
Repayment of debt and revolving credit facility
|
|
|
(693
|
)
|
|
|
(290
|
)
|
|
|
Treasury stock repurchases
|
|
|
(422
|
)
|
|
|
(194
|
)
|
|
Net cash used in financing activities
|
|
|
(797
|
)
|
|
|
(202
|
)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate movements
|
|
|
(17
|
)
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(431
|
)
|
|
|
389
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
2,678
|
|
|
|
2,289
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,247
|
|
|
$
|
2,678
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Cash payments included in operating activities:
|
|
|
|
|
|
|
|
Income tax payments (refunds), net
|
|
$
|
102
|
|
|
$
|
63
|
|
|
|
|
Interest payments
|
|
$
|
80
|
|
|
$
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Years Ended
|
|
|
|
|
|
October 31,
|
|
October 31,
|
|
|
|
|
|
|
2018
|
|
Diluted
EPS
|
|
|
2017
|
Diluted
EPS
|
|
|
2018
|
|
Diluted
EPS
|
|
|
2017
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
195
|
|
$
|
0.61
|
|
|
$
|
177
|
$
|
0.54
|
|
$
|
316
|
|
$
|
0.97
|
|
|
$
|
684
|
|
$
|
2.10
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments
|
|
|
21
|
|
|
0.06
|
|
|
|
—
|
|
—
|
|
|
21
|
|
|
0.06
|
|
|
|
—
|
|
|
—
|
|
|
|
|
Intangible amortization
|
|
|
29
|
|
|
0.09
|
|
|
|
28
|
|
0.09
|
|
|
105
|
|
|
0.32
|
|
|
|
117
|
|
|
0.36
|
|
|
|
|
Business exit and divestiture costs
|
|
—
|
|
|
—
|
|
|
|
—
|
|
—
|
|
|
9
|
|
|
0.03
|
|
|
|
—
|
|
|
—
|
|
|
|
|
Transformational initiatives
|
|
|
11
|
|
|
0.03
|
|
|
|
7
|
|
0.02
|
|
|
25
|
|
|
0.08
|
|
|
|
12
|
|
|
0.04
|
|
|
|
|
Acquisition and integration costs
|
|
|
9
|
|
|
0.03
|
|
|
|
5
|
|
0.02
|
|
|
23
|
|
|
0.07
|
|
|
|
32
|
|
|
0.10
|
|
|
|
|
Pension settlement gain
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
—
|
|
|
(5
|
)
|
|
(0.02
|
)
|
|
|
(32
|
)
|
|
(0.10
|
)
|
|
|
|
Gain on step acquisition of Lasergen
|
|
—
|
|
|
—
|
|
|
|
—
|
|
—
|
|
|
(20
|
)
|
|
(0.06
|
)
|
|
|
—
|
|
|
—
|
|
|
|
|
NASD site costs
|
|
|
2
|
|
|
0.01
|
|
|
|
—
|
|
—
|
|
|
8
|
|
|
0.02
|
|
|
|
—
|
|
|
—
|
|
|
|
|
Special compliance costs
|
|
|
1
|
|
|
—
|
|
|
|
—
|
|
—
|
|
|
4
|
|
|
0.01
|
|
|
|
—
|
|
|
—
|
|
|
|
|
Other
|
|
|
2
|
|
|
0.01
|
|
|
|
—
|
|
—
|
|
|
(10
|
)
|
|
(0.03
|
)
|
|
|
5
|
|
|
0.02
|
|
|
|
|
Adjustment for Tax Reform
|
|
|
19
|
|
|
0.06
|
|
|
|
—
|
|
—
|
|
|
552
|
|
|
1.70
|
|
|
|
—
|
|
|
—
|
|
|
|
|
Adjustment for taxes (a) |
|
|
(27
|
)
|
|
(0.09
|
)
|
|
|
1
|
|
—
|
|
|
(121
|
)
|
|
(0.36
|
)
|
|
|
(50
|
)
|
|
(0.16
|
)
|
|
Non-GAAP net income
|
|
$
|
262
|
|
$
|
0.81
|
|
|
$
|
218
|
$
|
0.67
|
|
$
|
907
|
|
$
|
2.79
|
|
|
$
|
768
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and year
ended October 31, 2018 and 2017, management uses a non-GAAP
effective tax rate of 18.0%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 asset impairments, amortization of intangibles,
business exit and divestiture costs, transformational initiatives,
acquisition and integration costs, pension settlement gain, gain on
step acquisition of Lasergen, NASD site costs, special compliance
costs, and adjustment for Tax Reform.
|
|
|
|
|
Asset impairments include assets that have been written down
to their fair value.
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
Gain on step acquisition of Lasergen resulted from the
measurement at fair value of our equity interest held at the date of
business combination.
|
|
|
|
|
|
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 $499 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 $426 million,
payable over 8 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
Q4'18
|
|
Q4'17
|
|
Revenue
|
|
$
|
597
|
|
|
$
|
550
|
|
|
Gross Margin, %
|
|
|
62.0
|
%
|
|
|
61.1
|
%
|
|
Income from Operations
|
|
$
|
155
|
|
|
$
|
131
|
|
|
Operating margin, %
|
|
|
25.9
|
%
|
|
|
23.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
|
|
|
|
Q4'18
|
|
Q4'17
|
|
Revenue
|
|
$
|
256
|
|
|
$
|
235
|
|
|
Gross Margin, %
|
|
|
59.1
|
%
|
|
|
55.6
|
%
|
|
Income from Operations
|
|
$
|
59
|
|
|
$
|
51
|
|
|
Operating margin, %
|
|
|
23.3
|
%
|
|
|
21.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
|
|
|
|
Q4'18
|
|
Q4'17
|
|
Revenue
|
|
$
|
441
|
|
|
$
|
404
|
|
|
Gross Margin, %
|
|
|
51.3
|
%
|
|
|
49.6
|
%
|
|
Income from Operations
|
|
$
|
109
|
|
|
$
|
92
|
|
|
Operating margin, %
|
|
|
24.7
|
%
|
|
|
22.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
|
|
|
|
|
FY18
|
|
FY17
|
|
Revenue
|
|
$
|
2,270
|
|
|
$
|
2,081
|
|
|
Gross Margin, %
|
|
|
61.3
|
%
|
|
|
60.2
|
%
|
|
Income from Operations
|
|
$
|
547
|
|
|
$
|
468
|
|
|
Operating margin, %
|
|
|
24.1
|
%
|
|
|
22.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
|
|
|
|
FY18
|
|
FY17
|
|
Revenue
|
|
$
|
943
|
|
|
$
|
860
|
|
|
Gross Margin, %
|
|
|
56.5
|
%
|
|
|
55.2
|
%
|
|
Income from Operations
|
|
$
|
178
|
|
|
$
|
168
|
|
|
Operating margin, %
|
|
|
18.9
|
%
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
|
|
|
|
FY18
|
|
FY17
|
|
Revenue
|
|
$
|
1,701
|
|
|
$
|
1,531
|
|
|
Gross Margin, %
|
|
|
50.7
|
%
|
|
|
49.5
|
%
|
|
Income from Operations
|
|
$
|
397
|
|
|
$
|
338
|
|
|
Operating margin, %
|
|
|
23.3
|
%
|
|
|
22.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 asset impairments, amortization of intangibles,
business exit and divestiture costs, transformational initiatives,
acquisition and integration costs, pension settlement gain, gain on
step acquisition of Lasergen, 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
|
|
|
Q4'18
|
Q4'17
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
$
|
597
|
$
|
550
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
256
|
|
235
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
441
|
|
404
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent
|
|
|
$
|
1,294
|
$
|
1,189
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
(excluding Acquisitions & Divestitures)
|
|
Year-over-Year
at Constant Currency (a)
|
|
|
|
|
|
|
|
Year-over-Year
|
|
Year-over-Year
|
|
|
|
|
Non GAAP Revenue by Segment
|
|
|
Q4'18
|
Q4'17
|
% Change
|
|
% Change
|
Percentage Point
Impact from
Currency
|
|
Current Quarter
Currency Impact (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
$
|
596
|
$
|
550
|
8
|
%
|
|
|
9
|
%
|
-1 ppt
|
|
|
$
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
245
|
|
235
|
4
|
%
|
|
|
5
|
%
|
-1 ppt
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
435
|
|
404
|
8
|
%
|
|
|
9
|
%
|
-1 ppt
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent (Core)
|
|
|
$
|
1,276
|
$
|
1,189
|
7
|
%
|
|
|
9
|
%
|
-1 ppt
|
|
|
$
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary reconciliation of GAAP revenue adjusted for recent
acquisitions and divestitures and impact of currency 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
|
|
|
FY18
|
FY17
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
$
|
2,270
|
$
|
2,081
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
943
|
|
860
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
1,701
|
|
1,531
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent
|
|
|
$
|
4,914
|
$
|
4,472
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
(excluding Acquisitions & Divestitures)
|
|
Year-over-Year
at Constant Currency (a)
|
|
|
|
|
|
|
|
Year-over-Year
|
|
Year-over-Year
|
|
|
|
|
Non GAAP Revenue by Segment
|
|
|
FY18
|
FY17
|
% Change
|
|
% Change
|
Percentage Point
Impact from
Currency
|
|
Current Year
Currency Impact (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
$
|
2,261
|
$
|
2,081
|
9
|
%
|
|
|
7
|
%
|
2 ppts
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
924
|
|
860
|
7
|
%
|
|
|
5
|
%
|
2 ppts
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
1,696
|
|
1,531
|
11
|
%
|
|
|
8
|
%
|
3 ppts
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent (Core)
|
|
|
$
|
4,881
|
$
|
4,472
|
9
|
%
|
|
|
7
|
%
|
2 ppts
|
|
|
$
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) The dollar impact from the current year currency
impact is equal to the total year-over-year dollar change less the
constant currency year-over-year change.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181119005749/en/
Source: Agilent Technologies, Inc.
INVESTOR CONTACT:
Alicia Rodriguez
+1 408 345 8948
alicia_rodriguez@agilent.com
EDITORIAL CONTACT:
Stefanie Notaney
+1 408 345 8955
stefanie.notaney@agilent.com