[August 15, 2017] |
|
Agilent Technologies Reports Third-Quarter Fiscal Year 2017 Financial Results
Agilent Technologies, Inc. (NYSE: A) today reported revenue of $1.11
billion, up 7 percent year over year (up 7.5 percent on a core basis(2))
for the third fiscal quarter ended July 31, 2017.
Third-quarter GAAP net income was $175 million, or $0.54 per share. Last
year's third-quarter GAAP net income was $124 million, or $0.38 per
share.
During the third quarter, Agilent had intangible amortization of $27
million, acquisition and integration costs of $4 million, transformation
costs of $3 million, and $1 million in other costs. Excluding these
items and a tax benefit of $19 million, Agilent reported third-quarter
non-GAAP net income of $191 million, or $0.59 per share(1).
"Our team is executing very well. We had another great quarter
delivering above-market revenue growth, expanding operating margins and
growing our adjusted EPS," said Mike McMullen, Agilent President and
CEO. "We saw strength across all our business groups."
"Our focus remains on driving sustainable above-market growth and
providing long-term value to our shareholders," he added. "We launched
several new products that raise the bar on new capabilities for our
customers. We also closed the acquisition of Cobalt Light Systems,
enhancing our customer value proposition and providing us with immediate
entry into the attractive, fast-growing Raman spectroscopy market."
Third-quarter revenue of $531 million from Agilent's Life Sciences and
Applied Markets Group (LSAG) grew 5 percent year over year (up 7 percent
on a core basis(2)), with strength in chemical and
energy, pharma and environmental end markets. LSAG's operating margin
for the quarter was 21.3 percent.
Third-quarter revenue of $386 million from Agilent CrossLab Group (ACG)
grew 7 percent year over year (up 8 percent on a core basis(2)).
Both services and consumables saw solid growth across all end markets
and geographies. ACG's operating margin for the quarter was 23.4 percent.
Third-quarter revenue of $197 million from Agilent's Diagnostics and
Genomics Group (DGG) grew 9 percent year over year (up 8 percent on a
core basis(2)) led by pharma and diagnostic and
clinical end markets. DGG's operating margin for the quarter was 16.9
percent.
Agilent expects fourth-quarter 2017 revenue in the range of $1.15
billion to $1.17 billion. Fourth-quarter 2017 non-GAAP earnings are
expected to be in the range of $0.60 to $0.62 per share(3).
For fiscal year 2017, Agilent expects revenue of $4.435 billion to
$4.455 billion and non-GAAP earnings of $2.29 to $2.31 per share(3).
The guidance is based on July 31, 2017, currency exchange rates.
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
$4.20 billion in fiscal 2016 and employs about 13,000 people worldwide.
Information about Agilent is available at www.agilent.com.
Agilent's management will present more details about its third-quarter
FY2017 financial results on a conference call with investors today at
1:30 p.m. PT. This event will be webcast live in listen-only mode.
Listeners may log on at www.investor.agilent.com
and select "Q3 2017 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. PST today through August 22 by dialing +1 855
859-2056 (or +1 404 537 3406 from outside the United States) and
entering pass code 55782589.
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 fourth quarter and full fiscal year 2017. 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 quarter ended April 30, 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
excludes the impacts of acquisition and integration costs,
transformation initiatives, business exit and divestiture costs, and
non-cash intangibles amortization. We also exclude any tax benefits that
are not directly related to ongoing operations and which are either
isolated or is 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 6 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, the NMR
business and acquisitions and divestitures within the past 12 months.
Core revenue is a non-GAAP measure. A reconciliation between Q3 FY17
GAAP revenue and core revenue is set forth on page 8 of the attached
tables along with additional information regarding the use of this
non-GAAP measure. Core revenue growth as projected for full fiscal year
2017 excludes the impact of currency, the NMR business and 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.
(3) Non-GAAP earnings per share as projected for Q4 FY17 and full fiscal
year 2017 excludes primarily the future impact of acquisition and
integration costs, pension settlement gain, and non-cash intangibles
amortization. We also exclude any tax benefits that are not directly
related to ongoing operations and which are either isolated or is not
expected to occur again with any regularity or predictability. 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 $27 million per quarter.
(4) Free cash flow as projected for fiscal year 2017 is a non-GAAP
measure determined by deducting the projected capital expenditures for
fiscal year 2017 from the projected operating cash flow for fiscal year
2017.
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
|
|
|
|
|
July 31,
|
|
Percent
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Inc/(Dec)
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
1,114
|
|
|
$
|
1,044
|
|
|
7
|
%
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of products and services
|
|
|
518
|
|
|
|
502
|
|
|
3
|
%
|
Research and development
|
|
|
87
|
|
|
|
86
|
|
|
1
|
%
|
Selling, general and administrative
|
|
|
308
|
|
|
|
310
|
|
|
(1
|
%)
|
Total costs and expenses
|
|
|
913
|
|
|
|
898
|
|
|
2
|
%
|
|
|
|
|
|
|
|
Income from operations
|
|
|
201
|
|
|
|
146
|
|
|
38
|
%
|
|
|
|
|
|
|
|
Interest income
|
|
|
6
|
|
|
|
3
|
|
|
100
|
%
|
Interest expense
|
|
|
(19
|
)
|
|
|
(17
|
)
|
|
12
|
%
|
Other income (expense), net
|
|
|
5
|
|
|
|
2
|
|
|
150
|
%
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
193
|
|
|
|
134
|
|
|
44
|
%
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
18
|
|
|
|
10
|
|
|
80
|
%
|
|
|
|
|
|
|
|
Net income
|
|
$
|
175
|
|
|
$
|
124
|
|
|
41
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
Basic
|
|
$
|
0.55
|
|
|
$
|
0.38
|
|
|
|
Diluted
|
|
$
|
0.54
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income per share:
|
|
|
|
|
|
|
Basic
|
|
|
321
|
|
|
|
325
|
|
|
|
Diluted
|
|
|
326
|
|
|
|
328
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
0.132
|
|
|
$
|
0.115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 1
|
|
|
|
|
|
|
|
|
AGILENT TECHNOLOGIES, INC.
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
(In millions, except per share amounts)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
July 31,
|
|
Percent
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Inc/(Dec)
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
3,283
|
|
|
$
|
3,091
|
|
|
6
|
%
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of products and services
|
|
|
1,521
|
|
|
|
1,482
|
|
|
3
|
%
|
Research and development
|
|
|
250
|
|
|
|
245
|
|
|
2
|
%
|
Selling, general and administrative
|
|
|
904
|
|
|
|
932
|
|
|
(3
|
%)
|
Total costs and expenses
|
|
|
2,675
|
|
|
|
2,659
|
|
|
1
|
%
|
|
|
|
|
|
|
|
Income from operations
|
|
|
608
|
|
|
|
432
|
|
|
41
|
%
|
|
|
|
|
|
|
|
Interest income
|
|
|
15
|
|
|
|
8
|
|
|
88
|
%
|
Interest expense
|
|
|
(59
|
)
|
|
|
(53
|
)
|
|
11
|
%
|
Other income (expense), net
|
|
|
13
|
|
|
|
6
|
|
|
117
|
%
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
577
|
|
|
|
393
|
|
|
47
|
%
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
70
|
|
|
|
57
|
|
|
23
|
%
|
|
|
|
|
|
|
|
Net income
|
|
$
|
507
|
|
|
$
|
336
|
|
|
51
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
Basic
|
|
$
|
1.57
|
|
|
$
|
1.03
|
|
|
|
Diluted
|
|
$
|
1.56
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income per share:
|
|
|
|
|
|
|
Basic
|
|
|
322
|
|
|
|
326
|
|
|
|
Diluted
|
|
|
325
|
|
|
|
329
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
0.396
|
|
|
$
|
0.345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 2
|
|
|
AGILENT TECHNOLOGIES, INC.
|
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
(In millions)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
July 31,
|
|
July 31,
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
175
|
|
|
$
|
124
|
|
|
$
|
507
|
|
|
$
|
336
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on derivative instruments
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
(11
|
)
|
Amounts reclassified into earnings related to derivative instruments
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
(2
|
)
|
|
|
-
|
|
Foreign currency translation
|
|
|
57
|
|
|
|
(48
|
)
|
|
|
61
|
|
|
|
41
|
|
Net defined benefit pension cost and post retirement plan costs:
|
|
|
|
|
|
|
|
|
Change in actuarial net loss
|
|
|
8
|
|
|
|
8
|
|
|
|
34
|
|
|
|
29
|
|
Change in net prior service benefit
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
(13
|
)
|
Other comprehensive income (loss)
|
|
|
60
|
|
|
|
(46
|
)
|
|
|
86
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
$
|
235
|
|
|
$
|
78
|
|
|
$
|
593
|
|
|
$
|
382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary statement of comprehensive income is estimated based
on our current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 3
|
|
|
AGILENT TECHNOLOGIES, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
(In millions, except par value and share amounts)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31,
|
|
October 31,
|
|
|
2017
|
|
2016(a)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,563
|
|
|
$
|
2,289
|
|
Accounts receivable, net
|
|
|
678
|
|
|
|
631
|
|
Inventory
|
|
|
566
|
|
|
|
533
|
|
Other current assets
|
|
|
189
|
|
|
|
182
|
|
Total current assets
|
|
|
3,996
|
|
|
|
3,635
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
716
|
|
|
|
639
|
|
Goodwill
|
|
|
2,612
|
|
|
|
2,517
|
|
Other intangible assets, net
|
|
|
375
|
|
|
|
408
|
|
Long-term investments
|
|
|
137
|
|
|
|
135
|
|
Other assets
|
|
|
425
|
|
|
|
460
|
|
Total assets
|
|
$
|
8,261
|
|
|
$
|
7,794
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
289
|
|
|
$
|
257
|
|
Employee compensation and benefits
|
|
|
230
|
|
|
|
235
|
|
Deferred revenue
|
|
|
301
|
|
|
|
269
|
|
Short-term debt
|
|
|
280
|
|
|
|
-
|
|
Other accrued liabilities
|
|
|
141
|
|
|
|
184
|
|
Total current liabilities
|
|
|
1,241
|
|
|
|
945
|
|
|
|
|
|
|
Long-term debt
|
|
|
1,801
|
|
|
|
1,904
|
|
Retirement and post-retirement benefits
|
|
|
323
|
|
|
|
360
|
|
Other long-term liabilities
|
|
|
285
|
|
|
|
339
|
|
Total liabilities
|
|
|
3,650
|
|
|
|
3,548
|
|
|
|
|
|
|
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; 322
million shares at July 31, 2017 and 614 million shares at October
31, 2016, issued
|
|
|
3
|
|
|
|
6
|
|
Treasury stock at cost; zero shares at July 31, 2017 and 290
million shares at October 31, 2016
|
|
|
-
|
|
|
|
(10,508
|
)
|
Additional paid-in-capital
|
|
|
5,282
|
|
|
|
9,159
|
|
(Accumulated deficit) retained earnings
|
|
|
(260
|
)
|
|
|
6,089
|
|
Accumulated other comprehensive loss
|
|
|
(417
|
)
|
|
|
(503
|
)
|
Total stockholders' equity
|
|
|
4,608
|
|
|
|
4,243
|
|
Non-controlling interest
|
|
|
3
|
|
|
|
3
|
|
Total equity
|
|
|
4,611
|
|
|
|
4,246
|
|
Total liabilities and equity
|
|
$
|
8,261
|
|
|
$
|
7,794
|
|
|
|
|
|
|
(a) Includes the impact of the adoption of ASU 2015-15.
|
|
|
|
|
|
The preliminary balance sheet is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
Page 4
|
|
|
AGILENT TECHNOLOGIES, INC.
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
(In millions)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
|
|
|
|
|
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
|
|
|
|
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
175
|
|
|
$
|
124
|
|
|
$
|
507
|
|
|
$
|
336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
51
|
|
|
|
60
|
|
|
|
160
|
|
|
|
190
|
|
|
|
Share-based compensation
|
|
|
13
|
|
|
|
11
|
|
|
|
48
|
|
|
|
47
|
|
|
|
Excess and obsolete inventory related charges
|
|
|
4
|
|
|
|
4
|
|
|
|
19
|
|
|
|
16
|
|
|
|
Other non-cash expenses, net
|
|
|
3
|
|
|
|
8
|
|
|
|
5
|
|
|
|
16
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
19
|
|
|
|
-
|
|
|
|
(29
|
)
|
|
|
19
|
|
|
|
|
|
Inventory
|
|
|
(17
|
)
|
|
|
2
|
|
|
|
(46
|
)
|
|
|
(11
|
)
|
|
|
|
|
Accounts payable
|
|
|
5
|
|
|
|
26
|
|
|
|
11
|
|
|
|
(27
|
)
|
|
|
|
|
Employee compensation and benefits
|
|
|
(18
|
)
|
|
|
(1
|
)
|
|
|
(11
|
)
|
|
|
(14
|
)
|
|
|
|
|
Other assets and liabilities
|
|
|
(7
|
)
|
|
|
(40
|
)
|
|
|
(63
|
)
|
|
|
(13
|
)
|
Net cash provided by operating activities (a)
|
|
|
228
|
|
|
|
194
|
|
|
|
601
|
|
|
|
559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Investments in property, plant and equipment
|
|
|
(43
|
)
|
|
|
(24
|
)
|
|
|
(118
|
)
|
|
|
(87
|
)
|
|
|
Proceeds from divestitures
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
Proceeds from sale of investment securities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
Payment to acquire cost method investment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(80
|
)
|
|
|
Loan to equity method investment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
Change in restricted cash and cash equivalents, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
245
|
|
|
|
Payment in exchange for convertible note
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
Acquisition of businesses and intangible assets, net of cash acquired
|
|
|
(57
|
)
|
|
|
-
|
|
|
|
(127
|
)
|
|
|
(235
|
)
|
Net cash used in investing activities
|
|
|
(101
|
)
|
|
|
(24
|
)
|
|
|
(245
|
)
|
|
|
(160
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock under employee stock plans
|
|
|
32
|
|
|
|
27
|
|
|
|
58
|
|
|
|
59
|
|
|
|
Payment of taxes related to net share settlement of equity awards
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(13
|
)
|
|
|
(6
|
)
|
|
|
Payment of dividends
|
|
|
(42
|
)
|
|
|
(37
|
)
|
|
|
(127
|
)
|
|
|
(112
|
)
|
|
|
Proceeds from revolving credit facility
|
|
|
115
|
|
|
|
-
|
|
|
|
343
|
|
|
|
255
|
|
|
|
Repayment of revolving credit facility
|
|
|
(76
|
)
|
|
|
-
|
|
|
|
(163
|
)
|
|
|
(20
|
)
|
|
|
Treasury stock repurchases
|
|
|
-
|
|
|
|
(94
|
)
|
|
|
(194
|
)
|
|
|
(388
|
)
|
Net cash provided by (used in) financing activities
|
|
|
29
|
|
|
|
(105
|
)
|
|
|
(96
|
)
|
|
|
(212
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate movements
|
|
|
18
|
|
|
|
(5
|
)
|
|
|
14
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
174
|
|
|
|
60
|
|
|
|
274
|
|
|
|
196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
2,389
|
|
|
|
2,139
|
|
|
|
2,289
|
|
|
|
2,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,563
|
|
|
$
|
2,199
|
|
|
$
|
2,563
|
|
|
$
|
2,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Cash payments included in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax payments (refunds), net
|
|
$
|
15
|
|
|
$
|
33
|
|
|
$
|
56
|
|
|
$
|
54
|
|
|
|
|
|
Interest payments
|
|
$
|
29
|
|
|
$
|
29
|
|
|
$
|
69
|
|
|
$
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary cash flow is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 5
|
|
|
AGILENT TECHNOLOGIES, INC.
|
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS
|
(In millions, except per share amounts)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
July 31,
|
|
July 31,
|
|
|
|
|
|
|
|
2017
|
|
|
Diluted EPS
|
|
|
2016
|
|
|
Diluted EPS
|
|
|
2017
|
|
|
Diluted EPS
|
|
|
2016
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income
|
|
$
|
175
|
|
|
$
|
0.54
|
|
|
$
|
124
|
|
|
$
|
0.38
|
|
|
$
|
507
|
|
|
$
|
1.56
|
|
|
$
|
336
|
|
|
$
|
1.02
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
0.01
|
|
|
|
|
|
Intangible amortization
|
|
|
27
|
|
|
|
0.08
|
|
|
|
37
|
|
|
|
0.11
|
|
|
|
89
|
|
|
|
0.27
|
|
|
|
120
|
|
|
|
0.36
|
|
|
|
|
|
Business exit and divestiture costs
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
0.02
|
|
|
|
|
|
Transformational initiatives
|
|
|
3
|
|
|
|
0.01
|
|
|
|
11
|
|
|
|
0.03
|
|
|
|
5
|
|
|
|
0.02
|
|
|
|
32
|
|
|
|
0.10
|
|
|
|
|
|
Acquisition and integration costs
|
|
|
4
|
|
|
|
0.01
|
|
|
|
11
|
|
|
|
0.03
|
|
|
|
27
|
|
|
|
0.08
|
|
|
|
28
|
|
|
|
0.09
|
|
|
|
|
|
Pension curtailment gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15
|
)
|
|
|
(0.05
|
)
|
|
|
|
|
Pension settlement gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
(0.10
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
|
Other
|
|
|
1
|
|
|
|
-
|
|
|
|
2
|
|
|
|
0.01
|
|
|
|
5
|
|
|
|
0.02
|
|
|
|
5
|
|
|
|
0.02
|
|
|
|
|
|
Adjustment for taxes (a)
|
|
|
(19
|
)
|
|
|
(0.05
|
)
|
|
|
(30
|
)
|
|
|
(0.08
|
)
|
|
|
(51
|
)
|
|
|
(0.16
|
)
|
|
|
(57
|
)
|
|
|
(0.18
|
)
|
Non-GAAP Net income
|
|
$
|
191
|
|
|
$
|
0.59
|
|
|
$
|
160
|
|
|
$
|
0.49
|
|
|
$
|
550
|
|
|
$
|
1.69
|
|
|
$
|
458
|
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and nine months
ended July 31, 2017, management uses a non-GAAP effective tax rate
of 16.2% and 18.0%, respectively. In the same periods last year,
management used a non-GAAP effective tax rate of 20.0%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 curtailment gain and
pension settlement gain.
|
|
|
|
Asset impairments include assets that have been written down
to their fair value.
|
|
|
|
|
|
Business exit and divestiture costs include costs associated
with the exit of the NMR business and other business divestitures.
|
|
|
|
|
|
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 curtailment gain resulted from certain retirement
plans benefit reductions.
|
|
|
|
|
|
Pension settlement gain resulted from transfer of the
substitutional portion of our Japanese pension plan to the
government.
|
|
|
|
|
|
Other includes certain legal costs and settlements in
addition to other miscellaneous adjustments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 6
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AGILENT TECHNOLOGIES, INC.
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SEGMENT INFORMATION
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(In millions, except where noted)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
|
|
|
|
|
Q3'17
|
|
Q3'16
|
Revenue
|
|
$
|
531
|
|
|
$
|
504
|
|
Gross Margin, %
|
|
|
59.7
|
%
|
|
|
57.8
|
%
|
Income from Operations
|
|
$
|
113
|
|
|
$
|
96
|
|
Operating margin, %
|
|
|
21.3
|
%
|
|
|
19.1
|
%
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
|
|
|
|
Q3'17
|
|
Q3'16
|
Revenue
|
|
$
|
197
|
|
|
$
|
180
|
|
Gross Margin, %
|
|
|
52.7
|
%
|
|
|
55.8
|
%
|
Income from Operations
|
|
$
|
33
|
|
|
$
|
34
|
|
Operating margin, %
|
|
|
16.9
|
%
|
|
|
18.8
|
%
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
|
|
|
|
Q3'17
|
|
Q3'16
|
Revenue
|
|
$
|
386
|
|
|
$
|
360
|
|
Gross Margin, %
|
|
|
49.9
|
%
|
|
|
48.7
|
%
|
Income from Operations
|
|
$
|
90
|
|
|
$
|
82
|
|
Operating margin, %
|
|
|
23.4
|
%
|
|
|
22.7
|
%
|
|
|
|
|
|
|
|
|
|
|
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 curtailment gain and
pension settlement gain.
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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.
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The preliminary segment information is estimated based on our
current information.
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Page 7
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AGILENT TECHNOLOGIES, INC.
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RECONCILIATIONS OF REVENUE BY SEGMENT EXCLUDING THE NMR BUSINESS,
|
ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS
(CORE)
|
(in millions)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
Year-over-Year
|
|
|
|
|
|
|
|
|
|
|
|
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GAAP
|
|
|
|
|
|
|
|
|
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|
Year-over-Year
|
|
|
|
|
|
|
|
|
GAAP Revenue by Segment
|
|
Q3'17
|
|
Q3'16
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
$
|
531
|
|
$
|
504
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
197
|
|
|
180
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
386
|
|
|
360
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Agilent
|
|
$
|
1,114
|
|
$
|
1,044
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Non-GAAP
(excluding NMR and Acquisitions)
|
|
Currency Adjustments
|
|
Currency-Adjusted (a)
|
|
|
|
|
|
|
Year-over-Year
|
|
|
|
|
|
|
|
Year-over-Year
|
Non GAAP Revenue by Segment
|
|
Q3'17
|
|
Q3'16
|
|
% Change
|
|
|
Q3'17
|
|
Q3'17
|
|
Q3'16
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Sciences and Applied Markets Group
|
|
$
|
531
|
|
$
|
500
|
|
6
|
%
|
|
$
|
(4
|
)
|
|
$
|
535
|
|
$
|
500
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics and Genomics Group
|
|
|
194
|
|
|
180
|
|
8
|
%
|
|
|
(1
|
)
|
|
|
195
|
|
|
180
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent CrossLab Group
|
|
|
384
|
|
|
360
|
|
7
|
%
|
|
|
(3
|
)
|
|
|
387
|
|
|
360
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agilent (Core)
|
|
$
|
1,109
|
|
$
|
1,040
|
|
7
|
%
|
|
$
|
(8
|
)
|
|
$
|
1,117
|
|
$
|
1,040
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|
|
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(a) We compare the year-over-year change in revenue
excluding the effect of the NMR business, 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 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 respective prior periods.
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|
The preliminary reconciliation of GAAP revenue adjusted for the NMR
business, recent acquisitions and divestitures and impact of
currency is estimated based on our current information.
|
|
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Page 8
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170815006015/en/
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