Achieved Record Orders, Revenue and Operating
Margin
Keysight Technologies, Inc. (NYSE: KEYS) today reported
financial results for the fourth fiscal quarter of 2019 ended
October 31, 2019.
“Keysight delivered a very strong finish to the year with both
revenue and earnings exceeding the high-end of our guidance for the
quarter. Record-setting quarterly and annual revenue was driven by
growth across our portfolio of differentiated solutions, and
broad-based momentum across multiple end markets. We continued to
execute on our strategy and growth initiatives, while exceeding our
commitments to customers and shareholders,” said Ron Nersesian,
Keysight president and CEO.
Fourth Quarter Financial Summary
- GAAP revenue grew 7 percent to reach $1.120
billion, when compared with $1.047 billion last year.
- Non-GAAP revenue grew 7 percent to reach
$1.122 billion. Non-GAAP core revenue, which also excludes the
impact of foreign currency changes and revenue associated with
businesses acquired or divested within the last twelve months,
increased 7 percent.
- GAAP net income was $195 million, or $1.02 per
share, compared with GAAP net loss of $114 million, or $(0.61) per
share, in the fourth quarter of 2018.
- Non-GAAP net income was $254 million, or $1.33
per share, compared with $193 million, or $1.01 per share in the
fourth quarter of 2018.
- As of October 31, 2019, cash and cash
equivalents totaled $1.598 billion.
Fiscal year 2019 Financial Summary
- GAAP revenue grew 11 percent over last year
and totaled $4.303 billion. Non-GAAP revenue grew 10 percent to
reach $4.312 billion. Non-GAAP core revenue grew 11 percent
year-over-year.
- GAAP net income was $621 million, or $3.25 per
share, compared with $165 million, or $0.86 per share in fiscal
2018. Non-GAAP net income was $902 million, or $4.72 per share,
compared with $618 million, or $3.24 per share in fiscal 2018.
- Keysight acquired approximately 2.1 million
shares in the open market at an average share price of $76.32, for
a total consideration of $160 million during fiscal year 2019.
Keysight has $410 million remaining under the current $500 million
share repurchase authorization implemented in May 2019.
Reporting Segments
- Communications Solutions Group (CSG)
CSG reported record revenue of $706 million
in the fourth quarter, up 7 percent, driven by continued strength
across the 5G wireless ecosystem and strength in US aerospace,
defense and government investment.
- Electronic Industrial Solutions Group
(EISG)
EISG reported revenue of $284 million in the
fourth quarter, up 3 percent, driven by strength in the broad
portfolio of products that serve our general electronics market and
on-going investments in next-generation automotive and energy
technologies, partially offset by semiconductor measurement
solutions.
- Ixia Solutions Group (ISG)
ISG revenue grew 15 percent in the fourth
quarter to $132 million. Double-digit revenue growth in both
network test and network visibility solutions was driven by
investments in 400GE and enterprise networks.
Outlook
Keysight’s first fiscal quarter of 2020 revenue is expected to
be in the range of $1.045 billion to $1.065 billion.
Non-GAAP earnings per share for the first fiscal quarter of 2020
are expected to be in the range of $1.04 to $1.10, which exclude
items that pertain to future events and are not currently estimable
with a reasonable degree of accuracy. Therefore, no reconciliation
to GAAP amounts has been provided. Further information is discussed
in the section titled “Use of Non-GAAP Financial Measures”
below.
Webcast
Keysight’s management will present more details about its fourth
quarter FY2019 financial results and its first quarter FY2020
outlook on a conference call with investors today at 1:30 p.m. PT.
This event will be webcast in listen-only mode. Listeners may log
on to the call at www.investor.keysight.com under the “Upcoming
Events” section and select “Q4 2019 Keysight Technologies Inc.
Earnings Conference Call” to participate or dial +1 833-245-9654
(U.S. only) or +1 647-689-4226 (International) and enter passcode
4447158.
The webcast will remain on the company site for 90 days. A
telephone replay of the conference call will be available at
approximately 4:30 p.m. PT after the call and remain available for
one week. The replay may be accessed by dialing +1 800-585-8367 (or
+1 416-621-4642 from outside the U.S.) and entering passcode
4447158.
Forward-Looking Statements
This communication contains forward-looking statements as
defined in the Securities Exchange Act of 1934 and is subject to
the safe harbors created therein. These forward-looking statements
involve risks and uncertainties that could significantly affect the
expected results and are based on certain key assumptions of
Keysight’s management and on currently available information. Due
to such uncertainties and risks, no assurances can be given that
such expectations or assumptions will prove to have been correct,
and readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date hereof.
Keysight undertakes no responsibility to publicly update or revise
any forward-looking statement. The forward-looking statements
contained herein include, but are not limited to, information and
future guidance on the company’s goals, priorities, revenues,
demand, financial condition, earnings, impacts of US export control
regulations, the continued strengths and expected growth of the
markets the company sells into, operations, operating earnings, and
tax rates that involve risks and uncertainties that could cause
Keysight’s results to differ materially from management’s current
expectations. Such risks and uncertainties include, but are not
limited to, changes in the demand for current and new products,
technologies, and services; customer purchasing decisions and
timing, and the risk that we are not able to realize the savings or
benefits expected from integration or restructuring activities. The
words “estimate,” “expect,” “intend,” “will,” “should,” “forecast,”
and similar expressions, as they relate to the company, are
intended to identify forward-looking statements.
In addition to the risks above, other risks that Keysight faces
include those detailed in Keysight’s filings with the Securities
and Exchange Commission, including our Form 10-K for the fiscal
year ended Oct. 31, 2018 and Keysight’s quarterly report on Form
10-Q for the period ended July 31, 2019.
Segment Data
Segment data reflects the results of our reportable segments
under our management reporting system. Segment revenue excludes the
impact of fair value adjustments to acquisition-related deferred
revenue balances. Segment data are provided on page 6 of the
attached tables.
Use of Non-GAAP Financial Measures
In addition to financial information prepared in accordance with
U.S. GAAP (“GAAP”), this document also contains certain non-GAAP
financial measures based on management’s view of performance,
including:
- Non-GAAP Revenue
- Non-GAAP Core Revenue
- Non-GAAP Net Income
- Non-GAAP Net Income per share
Income per share is based on weighted average diluted share
count. See the attached supplemental schedules for reconciliations
of each non-GAAP financial measure to its most directly comparable
GAAP financial measure for the three months ended October 31, 2019,
and fiscal year 2019. Following the reconciliations is a discussion
of the items adjusted from our non-GAAP financial measures and the
company’s reasons for including or excluding certain categories of
income or expenses from our non-GAAP results.
About Keysight Technologies
Keysight Technologies, Inc. (NYSE: KEYS) is a leading technology
company that helps enterprises, service providers and governments
accelerate innovation to connect and secure the world. Keysight's
solutions optimize networks and bring electronic products to market
faster and at a lower cost with offerings from design simulation,
to prototype validation, to manufacturing test, to optimization in
networks and cloud environments. Customers span the worldwide
communications ecosystem, aerospace and defense, automotive,
energy, semiconductor and general electronics end markets. Keysight
generated revenues of $4.3B in fiscal year 2019. More information
is available at www.keysight.com.
Additional information about Keysight Technologies is available
in the newsroom at www.keysight.com/go/news, Keysight blog, and on
Facebook, LinkedIn, Twitter and YouTube.
Source: IR-KEYS
KEYSIGHT TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In millions, except per share
amounts)
(Unaudited)
PRELIMINARY
Three months ended
October 31,
Percent
2019
2018(a)
Inc/(Dec)
Orders
$
1,194
$
1,124
6
%
Net revenue
$
1,120
$
1,047
7
%
Costs and expenses:
Cost of products and services
455
462
(2
)%
Research and development
176
160
11
%
Selling, general and administrative
286
311
(8
)%
Goodwill impairment
-
709
‒
Other operating expense (income), net
(5
)
(15
)
(72
)%
Total costs and expenses
912
1,627
(44
)%
Income (loss) from operations
208
(580
)
‒
Interest income
6
4
70
%
Interest expense
(20
)
(20
)
1
%
Other income (expense), net
9
12
(22
)%
Income (loss) before taxes
203
(584
)
‒
Provision (benefit) for income taxes
8
(470
)
‒
Net Income (loss)
$
195
$
(114
)
‒
Net income (loss) per share:
Basic
$
1.04
$
(0.61
)
Diluted
$
1.02
$
(0.61
)
Weighted average shares used in computing
net income (loss) per share:
Basic
187
187
Diluted
191
187
(a) Restated to include the impact of
adoption of ASU 2017-07, Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Benefit Cost, on
November 1, 2018. There is no impact to net income or net income
per share.
Page 1
KEYSIGHT TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In millions, except per share
amounts)
(Unaudited)
PRELIMINARY
Year ended
October 31,
Percent
2019
2018(a)
Inc/(Dec)
Orders
$
4,441
$
4,082
9
%
Net revenue
$
4,303
$
3,878
11
%
Costs and expenses:
Cost of products and services
1,769
1,767
‒
Research and development
688
624
10
%
Selling, general and administrative
1,155
1,205
(4
)%
Goodwill impairment
-
709
‒
Other operating expense (income), net
(20
)
(33
)
(40
)%
Total costs and expenses
3,592
4,272
(16
)%
Income (loss) from operations
711
(394
)
‒
Interest income
23
12
90
%
Interest expense
(80
)
(83
)
(3
)%
Other income (expense), net
61
54
16
%
Income (loss) before taxes
715
(411
)
‒
Provision (benefit) for income taxes
94
(576
)
‒
Net Income
$
621
$
165
277
%
Net income per share:
Basic
$
3.31
$
0.88
Diluted
$
3.25
$
0.86
Weighted average shares used in computing
net income per share:
Basic
188
187
Diluted
191
191
(a) Restated to include the impact of
adoption of ASU 2017-07, Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Benefit Cost, on
November 1, 2018. There is no impact to net income or net income
per share.
Page 2
KEYSIGHT TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEET
(In millions, except par value
and share amounts)
PRELIMINARY
October 31,
October 31,
2019
2018
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
1,598
$
913
Accounts receivable, net
668
624
Inventory
705
619
Other current assets
244
222
Total current assets
3,215
2,378
Property, plant and equipment, net
576
555
Goodwill
1,209
1,171
Other intangible assets, net
490
645
Long-term investments
46
46
Long-term deferred tax assets
755
750
Other assets
332
279
Total assets
$
6,623
$
5,824
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt
$
-
$
499
Accounts payable
253
242
Employee compensation and benefits
278
276
Deferred revenue
334
334
Income and other taxes payable
55
42
Other accrued liabilities
83
69
Total current liabilities
1,003
1,462
Long-term debt
1,788
1,291
Retirement and post-retirement
benefits
357
224
Long-term deferred revenue
176
127
Other long-term liabilities
295
287
Total liabilities
3,619
3,391
Stockholders' Equity:
Preferred stock; $0.01 par value; 100
million shares authorized; none issued and outstanding
-
-
Common stock; $0.01 par value; 1 billion
shares authorized; 194 million shares at October 31, 2019, and 191
million shares at October 31, 2018, issued
2
2
Treasury stock at cost; 6.5 million shares
at October 31, 2019 and 4.4 million shares at October 31, 2018
(342
)
(182
)
Additional paid-in-capital
2,013
1,889
Retained earnings
1,909
1,212
Accumulated other comprehensive loss
(578
)
(488
)
Total stockholders' equity
3,004
2,433
Total liabilities and equity
$
6,623
$
5,824
Page 3
KEYSIGHT TECHNOLOGIES, INC. CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (In millions) PRELIMINARY
Year ended
October 31,
2019
2018(a)
(unaudited) Cash flows from operating activities: Net income
$
621
$
165
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation
96
103
Amortization
212
207
Share-based compensation
82
59
Deferred tax benefit
(2
)
(789
)
Excess and obsolete inventory related charges
27
25
Gain on sale of assets and divestitures
(1
)
(20
)
Goodwill impairment
-
709
Pension curtailment and settlement loss
2
1
Other non-cash expenses (income), net
(4
)
15
Changes in assets and liabilities: Accounts receivable
(26
)
(89
)
Inventory
(92
)
(61
)
Accounts payable
13
22
Employee compensation and benefits
-
63
Deferred revenue
112
75
Income taxes payable
(16
)
181
Retirement and post-retirement benefits
(37
)
(127
)
Other assets and liabilities
11
16
Net cash provided by operating activities(b)
998
555
Cash flows from investing activities: Purchases of property,
plant and equipment
(120
)
(132
)
Proceeds from the sale of assets and divestitures
2
29
Acquisition of businesses and intangible assets, net of cash
acquired
(88
)
(5
)
Proceeds from the sale of investments
7
-
Other investing activities
3
-
Net cash used in investing activities
(196
)
(108
)
Cash flows from financing activities: Issuance of common
stock under employee stock plans
67
64
Payment of taxes related to net share settlement of equity awards
(26
)
(18
)
Treasury stock repurchases(c)
(159
)
(120
)
Proceeds from issuance of long-term debt
500
-
Debt issuance costs
(4
)
-
Proceeds from short term borrowings
-
40
Repayment of debt and credit facility
(500
)
(300
)
Payment of acquisition-related contingent consideration
-
(6
)
Other financing activities
-
(1
)
Net cash used in financing activities
(122
)
(341
)
Effect of exchange rate movements
3
(9
)
Net increase in cash and cash equivalents and restricted
cash
683
97
Cash, cash equivalents and restricted cash at beginning of
period
917
820
Cash, cash equivalents and restricted cash at end of period
$
1,600
$
917
(a) Restated to include the impact of adoption of ASU
2016-15, Classification of Certain Cash Receipts and Cash Payments,
and ASU 2016-18, Restricted Cash, on November 1, 2018. (b)
Cash payments included in operating activities: Income tax
payments, net
$
(103
)
$
(27
)
Interest payment on debt
$
(76
)
$
(79
)
(c) For the year ended October 31, 2019, we repurchased
2,093,570 shares of common stock for $160 million, held as treasury
stock and accounted for at trade date using the cost method. There
were $1 million of stock repurchases pending settlements as of
October 31, 2019. For the year ended October 31, 2018, we
repurchased 2,075,460 shares of common stock for $120 million, held
as treasury stock and accounted for at trade date using the cost
method. Page 4
KEYSIGHT TECHNOLOGIES,
INC.
RECONCILIATION OF NON-GAAP
CORE REVENUE
(In millions)
(Unaudited)
PRELIMINARY
Q4'19
Q4'18
Percent
Inc/(Dec)
FY19
FY18
Percent
Inc/(Dec)
GAAP Revenue
$
1,120
$
1,047
7
%
$
4,303
$
3,878
11
%
Amortization of acquisition-related
balances
2
4
9
36
Non-GAAP Revenue
$
1,122
$
1,051
7
%
$
4,312
$
3,914
10
%
Less: Revenue from acquisition or
divestitures included in segment results
(10
)
(5
)
(19
)
(22
)
Currency impacts
4
-
37
-
Non-GAAP Core Revenue
$
1,116
$
1,046
7
%
$
4,330
$
3,892
11
%
Non-GAAP core revenue excludes impact of
currency and revenue from acquisitions or divestitures closed
within the last twelve months.
Please refer page 8 for discussion on our
non-GAAP financial measures.
Page 5
KEYSIGHT TECHNOLOGIES, INC. SEGMENT RESULTS
INFORMATION (In millions, except where noted)
(Unaudited) PRELIMINARY
Communications Solutions Group YoY Q4'19
Q4'18 % Chg Revenue
$
706
$
661
7
%
Gross margin, %
62.9
%
60.1
%
Income from operations
$
199
$
159
Operating margin, %
28
%
24
%
Electronic Industrial Solutions Group
YoY Q4'19 Q4'18 % Chg Revenue
$
284
$
275
3
%
Gross margin, %
62.4
%
58.7
%
Income from operations
$
79
$
64
Operating margin, %
28
%
23
%
Ixia Solutions Group YoY Q4'19
Q4'18 % Chg Revenue
$
132
$
115
15
%
Gross margin, %
71.7
%
70.3
%
Income from operations
$
12
$
(1
)
Operating margin, %
9
%
(1
)%
Restated for (1) the organizational change completed
in Q1'19 to align our services business with its customers and end
markets. With this change, services, which was previously reported
as Services Solutions Group (SSG), is now reported as part of the
Communications Solutions Group (CSG) and Electronic Industrial
Solutions Group (EISG); and (2) the retrospective application of
ASU 2017-07, Improving the Presentation of Net Periodic Pension
Cost and Net Periodic Postretirement Benefit Cost, which the
company adopted on November 1, 2018. Net revenue for Ixia
Solutions Group excludes the impact of amortization of
acquisition-related balances of $2 million and $4 million for Q4'19
and Q4'18, respectively. Segment revenue and income from operations
are consistent with the respective non-GAAP measures as discussed
on Page 8. Page 6
KEYSIGHT TECHNOLOGIES,
INC.
NON-GAAP NET INCOME AND
DILUTED EPS RECONCILIATIONS
(In millions, except per share
amounts)
(Unaudited)
PRELIMINARY
Three months ended
Year ended
October 31,
October 31,
2019
2018
2019
2018
Net Income
Diluted EPS
Net Income
Diluted EPS(a)
Net Income
Diluted EPS
Net Income
Diluted EPS
GAAP Net income (loss)
$
195
$
1.02
$
(114
)
$
(0.61
)
$
621
$
3.25
$
165
$
0.86
Non-GAAP adjustments:
Amortization of acquisition-related
balances
60
0.31
55
0.28
224
1.17
265
1.38
Share-based compensation
16
0.08
11
0.06
82
0.43
59
0.31
Acquisition and integration costs
5
0.03
7
0.03
11
0.06
49
0.25
Goodwill impairment
-
-
709
3.71
-
-
709
3.72
Restructuring and related costs
2
0.01
1
0.01
9
0.05
17
0.09
Northern California wildfire-related
costs
-
-
-
-
-
-
7
0.04
Other
2
0.01
20
0.12
(16
)
(0.09
)
24
0.14
Adjustment for taxes(b)
(26
)
(0.13
)
(496
)
(2.59
)
(29
)
(0.15
)
(677
)
(3.55
)
Non-GAAP Net income
$
254
$
1.33
$
193
$
1.01
$
902
$
4.72
$
618
$
3.24
Weighted average shares outstanding -
diluted
191
187
191
187
(a) EPS impact on non-GAAP adjustments and
non-GAAP net income is based on an adjusted shares outstanding of
191 million for three months ended October 31, 2018.
(b) For both the three and twelve months
ended October 31, 2019 management uses a non-GAAP effective tax
rate of 12%. For the three and twelve months ended October 31, 2018
management uses a non-GAAP effective tax rate of 12% and 14%,
respectively.
Historical amounts are reclassified to
conform with current presentation.
Please refer page 8 for discussion on our
non-GAAP financial measures.
Page 7
Non-GAAP Financial Measures
Management uses both GAAP and non-GAAP financial measures to
analyze and assess the overall performance of the business, to make
operating decisions and to forecast and plan for future periods. We
believe that our investors benefit from seeing our results “through
the eyes of management” in addition to seeing our GAAP results.
This information enhances investors’ understanding of the
continuing performance of our business and facilitates comparison
of performance to our historical and future periods.
Our non-GAAP financial measures may not be comparable to
similarly titled measures used by other companies, including
industry peer companies, limiting the usefulness of these measures
for comparative purposes.
These non-GAAP measures should be considered supplemental to and
not a substitute for financial information prepared in accordance
with GAAP. The discussion below presents information about each of
the non-GAAP financial measures and the company’s reasons for
including or excluding certain categories of income or expenses
from our non-GAAP results. In future periods, we may exclude such
items and may incur income and expenses similar to these excluded
items. Accordingly, adjustments for these items and other similar
items in our non-GAAP presentation should not be interpreted as
implying that these items are non-recurring, infrequent or
unusual.
Non-GAAP Revenue includes recognition of acquired deferred
revenue that was written down to fair value in purchase accounting.
Management believes that excluding fair value purchase accounting
adjustments more closely correlates with the ordinary and ongoing
course of the acquired company’s operations and facilitates
analysis of revenue growth and business trends.
Non-GAAP Core Revenue is non-GAAP revenue (see Non-GAAP Revenue
above) excluding the impact of foreign currency changes and revenue
associated with businesses acquired and divested within the last
twelve months. We exclude the impact of foreign currency changes as
currency rates can fluctuate based on factors that are not within
our control and can obscure revenue growth trends. As the nature,
size and number of acquisitions can vary significantly from period
to period and as compared to our peers, we exclude revenue
associated with recently acquired businesses to facilitate
comparisons of revenue growth and analysis of underlying business
trends.
Non-GAAP Income from Operations, Non-GAAP Net Income and
Non-GAAP Diluted EPS may include the following types of
adjustments:
- Acquisition-related Items: We exclude the impact of certain
items recorded in connection with business combinations from our
non-GAAP financial measures that are either non-cash or not normal,
recurring operating expenses due to their nature, variability of
amounts and lack of predictability as to occurrence or timing.
These amounts may include non-cash items such as the amortization
of acquired intangible assets and amortization of items associated
with fair value purchase accounting adjustments, including
recognition of acquired deferred revenue (see Non-GAAP Revenue
above). We also exclude other acquisition and integration costs
associated with business acquisitions that are not normal recurring
operating expenses, including amortization of amounts paid to
redeem acquires’ unvested stock-based compensation awards, and
legal, accounting and due diligence costs. We exclude these charges
to facilitate a more meaningful evaluation of our current operating
performance and comparisons to our past operating performance.
- Share-based Compensation Expense: We exclude share-based
compensation expense from our non-GAAP financial measures because
share-based compensation expense can vary significantly from period
to period based on the company’s share price, as well as the
timing, size and nature of equity awards granted. Management
believes the exclusion of this expense facilitates the ability of
investors to compare the company’s operating results with those of
other companies, many of which also exclude share-based
compensation expense in determining their non-GAAP financial
measures.
- Goodwill Impairment charges: We exclude goodwill impairment
charges from our non-GAAP financial measures, as such charges are
non-recurring and do not reduce company's liquidity. In addition,
the company's peer industry group companies may record impairment
charges at different times, excluding such charges permits more
accurate comparison of company's financial performance with those
of its peers.
- Restructuring and Related Costs: We exclude incremental
expenses associated with restructuring initiatives, usually aimed
at material changes in the business or cost structure. Such costs
may include employee separation costs, asset impairments,
facility-related costs, contract termination fees, and costs to
move operations from one location to another. These activities can
vary significantly from period to period based on the timing, size
and nature of restructuring plans; therefore, we do not consider
such costs to be normal, recurring operating expenses. We believe
that these costs do not reflect expected future operating expenses
and do not contribute to a meaningful evaluation of the company’s
current operating performance or comparisons to our operating
performance in other periods.
- Northern California wildfire-related costs and Other Items: We
exclude certain other significant income or expense items that may
occur occasionally and are not normal, recurring, cash operating,
from our non-GAAP financial measures. Such items are evaluated on
an individual basis based on both quantitative and qualitative
factors and generally represent items that we would not anticipate
occurring as part of our normal business on a regular basis. While
not all-inclusive, examples of certain other significant items
excluded from non-GAAP financial measures would include net
unrealized gains on equity investments still held, and significant
non recurring events like litigation settlements, realized gains or
losses associated with our employee benefit plans, costs related to
unusual disaster like Northern California wildfires, gain on sale
of assets and small divestitures, separation and related costs,
etc.
- Estimated Tax Rate: We utilize a consistent methodology for
long-term projected non-GAAP tax rate. When projecting this
long-term rate, we exclude any tax benefits or expenses that are
not directly related to ongoing operations and which are either
isolated or cannot be expected to occur again with any regularity
or predictability. Additionally, we evaluate our current long-term
projections, current tax structure and other factors, such as
existing tax positions in various jurisdictions and key tax
holidays in major jurisdictions where Keysight operates. This tax
rate could change in the future for a variety of reasons, including
but not limited to significant changes in geographic earnings mix
including acquisition activity, or fundamental tax law changes in
major jurisdictions where Keysight operates. The above reasons also
limit our ability to reasonably estimate the future GAAP tax rate
and provide a reconciliation of the expected non-GAAP earnings per
share for the first fiscal quarter of 2020 to the GAAP
equivalent.
Management recognizes these items can have a material impact on
our cash flows and/or our net income. Our GAAP financial
statements, including our Condensed Consolidated 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 costs 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 Condensed Consolidated Statement of Operations
prepared in accordance with GAAP. The non-GAAP measures focus
instead upon the core business of the company, which is only a
subset, albeit a critical one, of the company’s performance.
Page 8
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version on businesswire.com: https://www.businesswire.com/news/home/20191126005822/en/
EDITORIAL CONTACT: Denise Idone + 1 631-849-3500
denise.idone@keysight.com
INVESTOR CONTACT: Jason Kary +1 707-577-6916
jason.kary@keysight.com
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