Delivers solid results; increases full-year
core growth and EPS forecast
Highlights:
- Revenue of $1.61 billion represents 5% reported growth; and up
7% on a core(1) basis.
- GAAP net income of $274 million with earnings per share (EPS)
of 91 cents, up 30% from the second quarter of 2021.
- Non-GAAP(2) net income of $340 million with EPS of $1.13, up
16% from the second quarter of 2021.
- Full-year revenue is expected to be in the range of $6.67
billion to $6.73 billion, representing reported growth of 5.6% to
6.5% and increased core(1) growth to a range of 8% to 9%. Fiscal
year 2022 non-GAAP(3) EPS is increased to an estimated range of
$4.86 to $4.93 per share.
- Third-quarter revenue expected to be in the range of $1.625
billion to $1.650 billion with non-GAAP(3) EPS of $1.20 to
$1.22.
Agilent Technologies Inc. (NYSE: A) today reported revenue of
$1.61 billion for the second quarter ended April 30, 2022, an
increase of 5% compared to the second quarter of 2021 and up 7% on
a core(1) basis.
Second-quarter GAAP net income was $274 million, or 91 cents per
share. This compares with $216 million, or 70 cents per share, in
the second quarter of fiscal year 2021. Non-GAAP(2) net income was
$340 million, or $1.13 per share during the quarter, compared with
$299 million or 97 cents per share during the second quarter a year
ago.
“The Agilent team delivered once again, demonstrating the
resilience and strength of our business model,” said Agilent
President and CEO Mike McMullen. “We delivered 7% core revenue
growth, exceeded our EPS expectations and continued to build order
backlog, all despite macro challenges including temporary COVID-19
shutdowns in China. Our momentum continues and we have again raised
our full-year outlook.”
Financial Highlights
In the first quarter of 2022, Agilent implemented certain
changes to its segment reporting structure. Prior period segment
information has been recast to reflect these changes. These changes
have no impact on Agilent’s consolidated financial statements.
Life Sciences and Applied Markets Group
Agilent’s Life Sciences and Applied Markets Group (LSAG)
reported second-quarter revenue of $896 million, a year over year
increase of 2% (up 4% on a core(1) basis). LSAG’s operating margin
for the quarter was 25.5%.
Agilent CrossLab Group
The Agilent CrossLab Group (ACG) reported second-quarter revenue
of $353 million, a year over year increase of 7% (up 10% on a
core(1) basis). ACG’s operating margin for the quarter was
24.6%.
Diagnostics and Genomics Group
The Diagnostics and Genomics Group (DGG) reported second-quarter
revenue of $358 million, a year over year increase of 14% (up 15%
on a core(1) basis). DGG’s operating margin for the quarter was
25.5%.
Full Year and Third-Quarter Outlook
Agilent has increased fiscal year 2022 non-GAAP(3) EPS to an
estimated range of $4.86 to $4.93 per share and continues to expect
revenue of $6.67 billion to $6.73 billion for the full-year
outlook, representing reported growth of 5.6% to 6.5% and resulting
in an increase in core(1) growth to a range of 8% to 9%.
The outlook for fiscal 2022 third-quarter revenue is expected to
be in a range of $1.625 billion to $1.650 billion. Fiscal
third-quarter non-GAAP(3) earnings guidance is in a range of $1.20
to $1.22 per share.
The outlook is based on April 30, 2022, currency exchange
rates.
Conference Call
Agilent’s management will present additional details regarding
the company’s second-quarter 2022 financial results on a conference
call with investors today at 1:30 p.m. PDT. This event will be
broadcast live online in listen-only mode. To listen to the
webcast, select the “Q2 2022 Agilent Technologies Inc. Earnings
Conference Call” link on the Agilent Investor Relations website.
The webcast will remain on the company site for 90 days.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is a global leader in the
life sciences, diagnostics, and applied chemical markets,
delivering insight and innovation that advance the quality of life.
Agilent’s full range of solutions includes instruments, software,
services, and expertise that provide trusted answers to our
customers' most challenging questions. The company generated
revenue of $6.32 billion in fiscal 2021 and employs 17,000 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 growth prospects, business, financial results, revenue,
and non-GAAP earnings guidance for Q3 and fiscal year 2022 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, 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; the adverse impacts of and risks posed
by the COVID-19 pandemic; and other risks detailed in Agilent’s
filings with the Securities and Exchange Commission, including its
quarterly report on Form 10-Q for the fiscal quarter ended January
31, 2022. 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. Reconciliations between GAAP revenue
and core revenue for Q2 fiscal year 2022 are 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 Q3 fiscal year 2022 and full fiscal year 2022 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 asset impairments,
intangibles amortization, transformational initiatives, acquisition
and integration costs, change in fair value of contingent
consideration, loss on extinguishment of debt, business exit and
divestiture costs and net loss (gain) on equity securities. 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.
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 Q3 fiscal year
2022 and full fiscal year 2022 exclude primarily the impacts of
non-cash intangibles amortization, transformational initiatives,
and acquisition and integration 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. 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 $48 million per
quarter.
AGILENT TECHNOLOGIES, INC. CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (In millions, except per share
amounts) (Unaudited) PRELIMINARY
Three Months Ended Six Months Ended April 30,
April 30,
2022
2021
2022
2021
Net revenue
$
1,607
$
1,525
$
3,281
$
3,073
Costs and expenses: Cost of products and services
746
708
1,510
1,418
Research and development
115
109
232
212
Selling, general and administrative
386
420
803
827
Total costs and expenses
1,247
1,237
2,545
2,457
Income from operations
360
288
736
616
Interest income
1
1
2
1
Interest expense
(21
)
(20
)
(42
)
(39
)
Other income (expense), net
(7
)
4
(44
)
7
Income before taxes
333
273
652
585
Provision for income taxes
59
57
95
81
Net income
$
274
$
216
$
557
$
504
Net income per share: Basic
$
0.92
$
0.71
$
1.86
$
1.65
Diluted
$
0.91
$
0.70
$
1.84
$
1.64
Weighted average shares used in computing net income per
share: Basic
299
304
300
305
Diluted
301
307
302
308
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
April 30,
October 31,
2022
2021
ASSETS Current assets: Cash and cash equivalents
$
1,186
$
1,484
Short-term investments
21
91
Accounts receivable, net
1,237
1,172
Inventory
937
830
Other current assets
262
222
Total current assets
3,643
3,799
Property, plant and equipment, net
1,010
945
Goodwill and other intangible assets, net
4,854
4,956
Long-term investments
190
185
Other assets
758
820
Total assets
$
10,455
$
10,705
LIABILITIES AND EQUITY Current liabilities: Accounts
payable
$
503
$
446
Employee compensation and benefits
347
493
Deferred revenue
511
441
Short-term debt
175
—
Other accrued liabilities
277
328
Total current liabilities
1,813
1,708
Long-term debt
2,730
2,729
Retirement and post-retirement benefits
187
220
Other long-term liabilities
603
659
Total liabilities
5,333
5,316
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; 299
million shares at April 30, 2022 and 302 million shares at October
31, 2021, issued and outstanding
3
3
Additional paid-in-capital
5,292
5,320
Retained earnings
160
348
Accumulated other comprehensive loss
(333
)
(282
)
Total stockholders' equity
5,122
5,389
Total liabilities and stockholders' equity
$
10,455
$
10,705
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
Six Months Ended
April 30,
April 30,
2022
2021
Cash flows from operating activities: Net income
$
557
$
504
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
164
153
Share-based compensation
71
66
Excess and obsolete inventory related charges
10
14
Loss on extinguishment of debt
—
17
Asset impairment charges
—
2
Net loss (gain) on equity securities
62
(15
)
Change in fair value of contingent consideration
(25
)
—
Other non-cash expenses, net
9
2
Changes in assets and liabilities: Accounts receivable, net
(108
)
(17
)
Inventory
(124
)
(80
)
Accounts payable
54
51
Employee compensation and benefits
(144
)
(3
)
Other assets and liabilities
12
16
Net cash provided by operating activities (a)
538
710
Cash flows from investing activities: Investments in
property, plant and equipment
(139
)
(72
)
Acquisition of businesses and intangible assets, net of cash
acquired
(18
)
(547
)
Payment to acquire equity securities
(3
)
(8
)
Proceeds from sale of equity securities
6
—
Payment in exchange for convertible note
(1
)
(2
)
Net cash used in investing activities
(155
)
(629
)
Cash flows from financing activities: Issuance of common
stock under employee stock plans
27
26
Payment of taxes related to net share settlement of equity awards
(64
)
(73
)
Issuance of senior notes
—
848
Debt issuance costs
—
(7
)
Payment of dividends
(126
)
(118
)
Repayment of senior notes
—
(417
)
Proceeds from commercial paper
575
1,232
Repayment of commercial paper
(400
)
(1,102
)
Treasury stock repurchases
(681
)
(539
)
Net cash used in financing activities
(669
)
(150
)
Effect of exchange rate movements
(16
)
9
Net decrease in cash, cash equivalents and restricted cash
(302
)
(60
)
Cash, cash equivalents and restricted cash at beginning of
period
1,490
1,447
Cash, cash equivalents and restricted cash at end of period
$
1,188
$
1,387
Reconciliation of cash, cash equivalents and
restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents
$
1,186
$
1,380
Restricted cash, included in other assets
2
7
Total cash, cash equivalents and restricted cash
$
1,188
$
1,387
(a) Cash payments included in operating activities:
Income tax payments, net
$
134
$
116
Interest payments
$
40
$
36
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 Six Months
Ended April 30, April 30,
2022
DilutedEPS
2021
DilutedEPS
2022
DilutedEPS
2021
DilutedEPS GAAP net income
$
274
$
0.91
$
216
$
0.70
$
557
$
1.84
$
504
$
1.64
Non-GAAP adjustments: Asset impairments
—
—
2
0.01
—
—
2
0.01
Intangible amortization
50
0.17
46
0.15
101
0.34
90
0.29
Transformational initiatives
9
0.03
9
0.03
13
0.04
20
0.06
Acquisition and integration costs
8
0.03
13
0.04
15
0.05
22
0.07
Change in fair value of contingent consideration
(28
)
(0.09
)
—
—
(25
)
(0.08
)
—
—
Loss on extinguishment of debt
—
—
12
0.04
—
—
17
0.06
Business exit and divestiture costs
7
0.02
3
0.01
7
0.02
4
0.01
Net loss (gain) on equity securities
16
0.05
(11
)
(0.04
)
61
0.20
(11
)
(0.04
)
Other
—
—
3
0.01
—
—
6
0.02
Adjustment for taxes (a)
4
0.01
6
0.02
(21
)
(0.07
)
(27
)
(0.09
)
Non-GAAP net income
$
340
$
1.13
$
299
$
0.97
$
708
$
2.34
$
627
$
2.03
(a) The adjustment for taxes excludes tax benefits that management
believes are not directly related to on-going operations and which
are either isolated or cannot be expected to occur again with any
regularity or predictability. For the three months ended April 30,
2022, management used a non-GAAP effective tax rate of 13.92%. For
the six months ended April 30, 2022, management used a non-GAAP
effective tax rate of 14.00%. For the three and six months ended
April 30, 2021, management used a non-GAAP effective tax rate of
14.75%. 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, transformational initiatives,
acquisition and integration costs, change in fair value of
contingent consideration, loss on extinguishment of debt, business
exit and divestiture costs and net loss (gain) on equity
securities.
Asset impairments include assets that have been
written down to their fair value.
Transformational
initiatives include expenses associated with targeted cost
reduction activities such as manufacturing transfers including
costs to move manufacturing, 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.
Change in
fair value of contingent consideration represents changes in
the fair value estimate of acquisition-related contingent
consideration.
Loss on extinguishment of debt relates to the
net loss recorded on the redemption of the remaining $300 million
of the $400 million outstanding 3.2% 2022 senior notes due on
October 1, 2022, called on March 5, 2021 and settled on April 5,
2021.
Business exit and divestiture costs include costs
associated with business divestitures.
Net loss (gain) on equity
securities relates to the realized and unrealized
mark-to-market adjustments for our marketable and non-marketable
equity securities.
Other includes certain legal costs and
settlements, special compliance costs and acceleration of
share-based compensation expense 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 4
AGILENT TECHNOLOGIES, INC. SEGMENT
INFORMATION (In millions, except where noted)
(Unaudited) PRELIMINARY
Quarter-over-Quarter Life Sciences and Applied
Markets Group Q2'22 Q2'21 Revenue
$
896
$
881
Gross Margin, %
59.0
%
59.9
%
Income from Operations
$
228
$
226
Operating margin, %
25.5
%
25.7
%
Diagnostics and Genomics Group Q2'22
Q2'21 Revenue
$
358
$
315
Gross Margin, %
56.0
%
53.4
%
Income from Operations
$
91
$
69
Operating margin, %
25.5
%
21.9
%
Agilent CrossLab Group Q2'22
Q2'21 Revenue
$
353
$
329
Gross Margin, %
47.1
%
45.3
%
Income from Operations
$
87
$
69
Operating margin, %
24.6
%
21.0
%
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,
transformational initiatives, acquisition and integration costs,
change in fair value of contingent consideration and business exit
and divestiture 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 Q2'22
Q2'21 % Change Life Sciences and Applied
Markets Group
$
896
$
881
2
%
Diagnostics and Genomics Group
358
315
14
%
Agilent CrossLab Group
353
329
7
%
Agilent
$
1,607
$
1,525
5
%
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 Q2'22 Q2'21 % Change %
Change Life Sciences and Applied Markets Group
$
896
$
881
2
%
4
%
-2 ppts
$
(16
)
Diagnostics and Genomics Group
355
315
13
%
15
%
-2 ppts
(8
)
Agilent CrossLab Group
353
329
7
%
10
%
-3 ppts
(8
)
Agilent (Core)
$
1,604
$
1,525
5
%
7
%
-2 ppts
$
(32
)
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/20220524006053/en/
Investor Contact: Parmeet Ahuja +1 408-345-8948
parmeet_ahuja@agilent.com
Media Contact: Tom Beermann +1 408-553-2914
tom.beermann@agilent.com
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