Highlights:
- Revenue of $1.27 billion represents 6 percent reported growth;
and up 6 percent(1) on a core basis driven by strength in the
pharma, diagnostics, environmental and forensics markets
- GAAP net income of $191 million or EPS of $0.60
- Non-GAAP net income of $240 million or EPS of $0.76 (2), up 13
percent year-over-year
- Raises full-year revenue and non-GAAP EPS guidance
- Signed definitive agreement to acquire BioTek Instruments, a
global leader in life science instrumentation, strengthening
leadership position in the cell analysis segment
Agilent Technologies, Inc. (NYSE: A) today reported revenue of
$1.27 billion for the third quarter ended July 31, 2019, up 6
percent year-over-year (and up 6 percent on a core basis(1)).
On a GAAP basis, third quarter net income was $191 million or
$0.60 per share. This compares with $236 million or $0.73 per share
in the third quarter of 2018. Non-GAAP net income(2) was $240
million or $0.76 per share during the quarter, compared with $217
million or $0.67 per share during the third quarter a year ago.
“The Agilent team delivered very strong results in the third
quarter, exceeding both our top and bottom-line expectations,” said
Mike McMullen, Agilent president and CEO. “Building on this
performance, we are increasing our guidance for the full year. In
the quarter, we also announced the pending acquisition of BioTek,
continuing our investments in high growth markets. BioTek will
significantly expand our presence in the fast-growing field of cell
analysis.”
Financial Highlights
Life Sciences and Applied Markets Group
Third quarter revenue of $544 million from Agilent’s Life
Sciences and Applied Markets Group (LSAG) was up 1 percent
year-over-year (and flat on a core basis(1)). Demand in the pharma,
environmental and forensics markets was strong, offset by expected
weakness in the food market. LSAG’s operating margin for the
quarter was 21.7 percent.
Agilent CrossLab Group
Third quarter revenue of $467 million from the Agilent CrossLab
Group (ACG) grew 10 percent year-over-year (up 11 percent on a core
basis(1)). Growth was broad-based across all regions and market
segments. ACG’s operating margin for the quarter was 26.2
percent.
Diagnostics and Genomics Group
Third quarter revenue of $263 million from Agilent’s Diagnostics
and Genomics Group (DGG) grew 11 percent year-over-year (up 13
percent on a core basis(1)). Growth in the company’s Nucleic Acid
Solutions Division (NASD) and in the diagnostics and clinical
markets drove the strong results. DGG’s operating margin for the
quarter was 19.1 percent.
Full-Year and Fourth Quarter Outlook
For fiscal year 2019, the company is raising revenue guidance at
the midpoint, to a range of $5.105 billion to $5.125 billion.
Full-year non-GAAP earnings guidance is being increased to a range
of $3.07 to $3.09 per share(3).
Agilent expects fourth quarter 2019 revenue in the range of
$1.31 billion to $1.33 billion. Fourth quarter 2019 non-GAAP
earnings are expected to be in the range of $0.84 to $0.86 per
share(3).
Both the fiscal year and fourth quarter guidance excludes any
impact of the pending BioTek acquisition. The acquisition is still
expected to be completed in Agilent’s fiscal fourth quarter,
subject to regulatory approvals and customary closing
conditions.
Conference Call
Agilent’s management will present more details about its third
quarter fiscal year 2019 financial results on a conference call
with investors today at 1:30 p.m. (Pacific Time). This event will
be webcast live in listen-only mode. Listeners may log on at
www.investor.agilent.com and select “Q3 2019 Agilent Technologies
Inc. Earnings Conference Call” in the “News & Events — Calendar
of Events” section. The webcast will remain available on the
company’s website for 90 days.
Additional financial information can be found at
www.investor.agilent.com by selecting “Financial Results” in the
“Financial Information” section.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is a global leader in life
sciences, diagnostics and applied chemical markets. With more than
50 years of insight and innovation, Agilent instruments, software,
services, solutions and people provide trusted answers to
customers' most challenging questions. The company generated
revenues of $4.91 billion in fiscal 2018 and employs 15,550 people
worldwide. Information about Agilent is available at
www.agilent.com. To receive the latest Agilent news, subscribe to
the Agilent Newsroom.
Follow Agilent on LinkedIn, Twitter, and Facebook.
Forward-Looking Statements
This news release contains forward-looking statements as defined
in the Securities Exchange Act of 1934 and is subject to the safe
harbors created therein. The forward-looking statements contained
herein include, but are not limited to, information regarding
Agilent’s revenue and non-GAAP earnings guidance for the fourth
quarter and full fiscal year 2019, the acquisition of BioTek and
the effects on Agilent’s growth, and future amortization of
intangibles. These forward-looking statements involve risks and
uncertainties that could cause Agilent’s results to differ
materially from management’s current expectations. Such risks and
uncertainties include, but are not limited to, the BioTek
acquisition not being timely completed, if completed at all; the
ability to integrate BioTek’s operations with Agilent’s, retain key
employees, meet customer expectations, realize efficiencies from
the combined businesses and realize anticipated tax benefits;
unforeseen changes in the strength of Agilent’s customers’
businesses; unforeseen changes in the demand for current and new
products, technologies, and services; unforeseen changes in the
currency markets; customer purchasing decisions and timing, and the
risk that Agilent is not able to realize the savings expected from
integration and restructuring activities. In addition, other risks
that Agilent faces in running its operations include the ability to
execute successfully through business cycles; the ability to meet
and achieve the benefits of its cost-reduction goals and otherwise
successfully adapt its cost structures to continuing changes in
business conditions; ongoing competitive, pricing and gross-margin
pressures; the risk that its cost-cutting initiatives will impair
its ability to develop products and remain competitive and to
operate effectively; the impact of geopolitical uncertainties and
global economic conditions on its operations, its markets and its
ability to conduct business; the ability to improve asset
performance to adapt to changes in demand; the ability of its
supply chain to adapt to changes in demand; the ability to
successfully introduce new products at the right time, price and
mix; the ability of Agilent to successfully integrate recent
acquisitions; the ability of Agilent to successfully comply with
certain complex regulations; and other risks detailed in Agilent’s
filings with the Securities and Exchange Commission, including its
quarterly report on Form 10-Q for the quarter ended April 30, 2019.
Forward-looking statements are based on the beliefs and assumptions
of Agilent’s management and on currently available information.
Agilent undertakes no responsibility to publicly update or revise
any forward-looking statement.
(1) Core revenue growth excludes the impact of currency and
acquisitions and divestitures within the past 12 months. Core
revenue is a non-GAAP measure. A reconciliation between Q3 FY19
GAAP revenue and core revenue is set forth on page 6 of the
attached tables along with additional information regarding the use
of this non-GAAP measure. Core revenue growth rate as projected for
Q4 FY19 and full fiscal year 2019 excludes the impact of currency
and acquisitions and divestitures within the past 12 months. Most
of the excluded amounts pertain to events that have not yet
occurred and are not currently possible to estimate with a
reasonable degree of accuracy and could differ materially.
Therefore, no reconciliation to GAAP amounts has been provided for
the projection.
(2) Non-GAAP net income and non-GAAP earnings per share
primarily exclude the impacts of non-cash intangibles amortization,
transformational initiatives, acquisition and integration costs,
pension settlement gain, Nucleic Acid Solutions Division (“NASD”)
site costs and special compliance costs. Agilent also excludes any
tax benefits or expenses that are not directly related to ongoing
operations and which are either isolated or are not expected to
occur again with any regularity or predictability including the
impact of the 2017 Tax Act. A reconciliation between non-GAAP net
income and GAAP net income is set forth on page 4 of the attached
tables along with additional information regarding the use of this
non-GAAP measure.
(3) Non-GAAP earnings per share as projected for Q4 FY19 and
full fiscal year 2019 excludes primarily the impacts of non-cash
intangibles amortization, transformational initiatives, acquisition
and integration costs, pension settlement gain, Nucleic Acid
Solutions Division (“NASD”) site costs and special compliance costs
and mergers and acquisitions announced but not closed. Agilent also
excludes any tax benefits or expenses that are not directly related
to ongoing operations and which are either isolated or are not
expected to occur again with any regularity or predictability. Most
of these excluded amounts pertain to events that have not yet
occurred and are not currently possible to estimate with a
reasonable degree of accuracy and could differ materially.
Therefore, no reconciliation to GAAP amounts has been provided.
Future amortization of intangibles is expected to be approximately
$25 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
Nine Months Ended
July 31,
July 31,
2019
2018 (a)
2019
2018 (a)
Net revenue
$
1,274
$
1,203
$3,796
$
3,620
Costs and expenses: Cost of products and services
582
544
1,728
1,648
Research and development
101
97
302
283
Selling, general and administrative
366
341
1,075
1,029
Total costs and expenses
1,049
982
3,105
2,960
Income from operations
225
221
691
660
Interest income
10
9
30
28
Interest expense
(18
)
(18
)
(53
)
(57
)
Other income (expense), net
5
30
20
71
Income before taxes
222
242
688
702
Provision (benefit) for income taxes
31
6
(189
)
581
Net income
$
191
$
236
$877
$
121
Net income per share: Basic
$
0.61
$
0.74
$2.78
$
0.38
Diluted
$
0.60
$
0.73
$2.74
$
0.37
Weighted average shares used in computing net income per
share: Basic
312
320
316
322
Diluted
316
324
320
326
(a) Adjusted to include the
impact of the adoption of ASU 2017-07 (pension expense
reclassification) as of 11/1/2018. There is no impact to net income
or net income per share. The preliminary income
statement is estimated based on our current information.
Page 1
AGILENT TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE
SHEET (In millions, except par value and share amounts)
(Unaudited) PRELIMINARY
July 31,
October 31,
2019
2018
ASSETS Current assets: Cash and cash equivalents
$
1,765
$
2,247
Accounts receivable, net
856
776
Inventory
660
638
Other current assets
176
187
Total current assets
3,457
3,848
Property, plant and equipment, net
839
822
Goodwill and other intangible assets, net
3,618
3,464
Long-term investments
99
68
Other assets
612
339
Total assets
$
8,625
$
8,541
LIABILITIES AND EQUITY Current liabilities: Accounts
payable
$
316
$
340
Employee compensation and benefits
270
304
Deferred revenue
344
324
Short-term debt
504
— Other accrued liabilities
188
203
Total current liabilities
1,622
1,171
Long-term debt
1,294
1,799
Retirement and post-retirement benefits
225
239
Other long-term liabilities
737
761
Total liabilities
3,878
3,970
Total Equity: Stockholders' equity: Preferred stock; $0.01
par value; 125 million shares authorized; none issued and
outstanding — — Common stock; $0.01 par value, 2 billion shares
authorized; 310 million shares at July 31, 2019 and 318 million
shares at October 31, 2018, issued
3
3
Additional paid-in-capital
5,270
5,308
Accumulated deficit
(122
)
(336
)
Accumulated other comprehensive loss
(404
)
(408
)
Total stockholders' equity
4,747
4,567
Non-controlling interest —
4
Total equity
4,747
4,571
Total liabilities and equity
$
8,625
$
8,541
The preliminary balance sheet is estimated
based on our current information. Page 2
AGILENT
TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (In millions) (Unaudited)
PRELIMINARY
Nine Months Ended
July 31,
July 31,
2019
2018
Cash flows from operating activities: Net income
$
877
$
121
Adjustments to reconcile net income to net cash provided by
(used in) operating activities: Depreciation and amortization
162
154
Share-based compensation
57
56
Excess and obsolete inventory related charges
12
22
Other non-cash (income) expenses, net
4
(13
)
Changes in assets and liabilities: Accounts receivable, net
(58
)
(9
)
Inventory
(31
)
(66
)
Accounts payable —
(9
)
Employee compensation and benefits
(35
)
(24
)
Change in assets and liabilities due to Tax Act —
533
Other assets and liabilities
(281
)
(50
)
Net cash provided by operating activities (a)
707
715
Cash flows from investing activities: Investments in
property, plant and equipment
(125
)
(141
)
Payment to acquire fair value investments
(21
)
(11
)
Payment in exchange for convertible note
(2
)
(2
)
Payment to acquire intangible assets
(1
)
— Acquisition of businesses and intangible assets, net of cash
acquired
(248
)
(437
)
Net cash used in investing activities
(397
)
(591
)
Cash flows from financing activities: Issuance of common
stock under employee stock plans
52
53
Payment of taxes related to net share settlement of equity awards
(15
)
(29
)
Payment of dividends
(155
)
(144
)
Proceeds from revolving credit facility —
483
Repayment of revolving credit facility —
(593
)
Repayment of debt —
(100
)
Purchase of non-controlling interest
(4
)
— Treasury stock repurchases
(674
)
(336
)
Net cash used in financing activities
(796
)
(666
)
Effect of exchange rate movements
3
(5
)
Net decrease in cash, cash equivalents and restricted cash
(483
)
(547
)
Cash, cash equivalents and restricted cash at beginning of
period
2,254
2,686
Cash, cash equivalents and restricted cash at end of period
$
1,771
$
2,139
Reconciliation of cash, cash equivalents and
restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents
$
1,765
$
2,131
Restricted cash, included in other assets
6
8
Total cash, cash equivalents and restricted cash
$
1,771
$
2,139
(a) Cash payments included in operating activities:
Income tax payments (refunds), net
$
108
$
86
Interest payments
$
61
$
68
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 Nine Months Ended July 31, July
31,
2019
Diluted EPS
2018
Diluted EPS
2019
Diluted EPS
2018
Diluted EPS GAAP net income
$
191
$
0.60
$
236
$
0.73
$
877
$
2.74
$
121
$
0.37
Non-GAAP adjustments: Intangible amortization
25
0.08
26
0.08
79
0.25
76
0.23
Business exit and divestiture costs — —
1
— — —
9
0.03
Transformational initiatives
11
0.03
5
0.02
25
0.08
14
0.04
Acquisition and integration costs
12
0.04
7
0.02
32
0.10
14
0.04
Pension settlement gain — — — — — —
(5
)
(0.02
)
Gain on step acquisition of Lasergen — —
(20
)
(0.06
)
— —
(20
)
(0.06
)
NASD site costs
6
0.02
2
0.01
12
0.04
6
0.02
Special compliance costs
1
—
1
—
2
0.01
3
0.01
Other
11
0.03
1
—
17
0.05
(12
)
(0.03
)
Adjustment for Tax Reform — — — — — —
533
1.63
Tax benefit on intra-entity asset transfer — — — —
(299
)
(0.93
)
— — Adjustment for taxes (a)
(17
)
(0.04
)
(42
)
(0.13
)
(33
)
(0.11
)
(94
)
(0.28
)
Non-GAAP net income
$
240
$
0.76
$
217
$
0.67
$
712
$
2.23
$
645
$
1.98
(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, 2019, management used a non-GAAP effective tax rate of
16.67% and 16.75%, respectively. In the same periods last year,
management used a non-GAAP effective tax rate of 18%. We
provide non-GAAP net income and non-GAAP net income per share
amounts in order to provide meaningful supplemental information
regarding our operational performance and our prospects for the
future. These supplemental measures exclude, among other things,
charges related to amortization of intangibles, business exit and
divestiture costs, transformational initiatives, acquisition and
integration costs, pension settlement gain, gain on step
acquisition of Lasergen, NASD site costs, special compliance costs,
adjustment for Tax Reform, and tax benefit on intra-entity asset
transfer.
Business exit and divestiture costs
include costs associated with business divestitures.
Transformational initiatives
include expenses associated with targeted cost reduction activities
such as manufacturing transfers including costs to move
manufacturing due to new tariffs and tariff remediation actions,
small site consolidations, legal entity and other business
reorganizations, insourcing or outsourcing of activities. Such
costs may include move and relocation costs, one-time termination
benefits and other one-time reorganization costs. Included in this
category are also expenses associated with company programs to
transform our product lifecycle management (PLM) system, human
resources and financial systems.
Acquisition and Integration costs
include all incremental expenses incurred to effect a business
combination. Such acquisition costs may include advisory, legal,
accounting, valuation, and other professional or consulting fees.
Such integration costs may include expenses directly related to
integration of business and facility operations, the transfer of
assets and intellectual property, information technology systems
and infrastructure and other employee-related costs.
Pension settlement gain resulted
from transfer of the substitutional portion of our Japanese pension
plan to the government.
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 $480 million for U.S.
transition tax and correlative items on deemed repatriated earnings
of non-U.S. subsidiaries and an estimated provision of $53 million
associated with the decrease in the U.S. corporate tax rate from
35% to 21% and its impact on our U.S. deferred tax assets and
liabilities. The taxes payable associated with the transition tax,
net of tax attributes, on deemed repatriation of foreign earnings
is approximately $440 million, payable over 8 years.
Tax benefit on intra-entity asset transfer relates to our
operations in Singapore along with our application of the new
accounting rules for income tax consequences of intra-entity
transfer of assets as adopted on November 1, 2018. Our
management uses non-GAAP measures to evaluate the performance of
our core businesses, to estimate future core performance and to
compensate employees. Since management finds this measure to be
useful, we believe that our investors benefit from seeing our
results “through the eyes” of management in addition to seeing our
GAAP results. This information facilitates our management’s
internal comparisons to our historical operating results as well as
to the operating results of our competitors. Our management
recognizes that items such as amortization of intangibles can have
a material impact on our cash flows and/or our net income. Our GAAP
financial statements including our statement of cash flows portray
those effects. Although we believe it is useful for investors to
see core performance free of special items, investors should
understand that the excluded items are actual expenses that may
impact the cash available to us for other uses. To gain a complete
picture of all effects on the company’s profit and loss from any
and all events, management does (and investors should) rely upon
the GAAP income statement. The non-GAAP numbers focus instead upon
the core business of the company, which is only a subset, albeit a
critical one, of the company’s performance. Readers are
reminded that non-GAAP numbers are merely a supplement to, and not
a replacement for, GAAP financial measures. They should be read in
conjunction with the GAAP financial measures. It should be noted as
well that our non-GAAP information may be different from the
non-GAAP information provided by other companies. The
preliminary non-GAAP net income and diluted EPS reconciliation is
estimated based on our current information. Page 4
AGILENT TECHNOLOGIES, INC. SEGMENT INFORMATION (In
millions, except where noted) (Unaudited)
PRELIMINARY Life Sciences and Applied Markets
Group Q3'19 Q3'18 Revenue
$
544
$
540
Gross Margin, %
60.5%
61.3%
Income from Operations
$
118
$
122
Operating margin, %
21.7%
22.7%
Diagnostics and Genomics Group Q3'19
Q3'18 Revenue
$
263
$
237
Gross Margin, %
55.7%
56.8%
Income from Operations
$
50
$
43
Operating margin, %
19.1%
18.0%
Agilent CrossLab Group Q3'19
Q3'18 Revenue
$
467
$
426
Gross Margin, %
52.1%
50.1%
Income from Operations
$
122
$
98
Operating margin, %
26.2%
23.1%
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
amortization of intangibles, business exit and divestiture costs,
transformational initiatives, acquisition and integration costs,
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 Q3'19
Q3'18 % Change
Life Sciences and Applied Markets Group
$ 544
$ 540
1%
Diagnostics and Genomics
Group
263
237
11%
Agilent CrossLab Group
467
426
10%
Agilent
$ 1,274
$ 1,203
6%
Non-GAAP(excluding Acquisitions
& Divestitures) Year-over-Yearat Constant Currency
(a) Year-over-Year
Year-over-Year Percentage PointImpact
fromCurrency Current QuarterCurrency Impact(b)
Non GAAP Revenue by Segment
Q3'19 Q3'18 % Change %
Change Life Sciences
and Applied Markets Group
$ 532
$ 540
(2%)
— -2 ppts
$
(7)
Diagnostics and Genomics Group
263
237
11%
13%
-2 ppts
(4)
Agilent CrossLab Group
460
426
8%
11%
-3 ppts
(11)
Agilent (Core)
$ 1,255
$ 1,203
4%
6%
-2 ppts
$
(22)
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190814005700/en/
INVESTOR CONTACT: Ankur Dhingra +1 408-345-8948
ankur_dhingra@agilent.com
MEDIA CONTACT: Tom Beermann +1 408-553-2914
tom.beermann@agilent.com
Agilent Technologies (NYSE:A)
Historical Stock Chart
From Aug 2024 to Sep 2024
Agilent Technologies (NYSE:A)
Historical Stock Chart
From Sep 2023 to Sep 2024