San Jose Business Journal -- SANTA CLARA, Calif.--(BUSINESS WIRE)--Agilent Technologies Inc. (NYSE:A) today reported revenues of $1.58 billion for the fourth fiscal quarter ended Oct. 31, 2010, 35 percent above one year ago, or 26 percent excluding the effects of the Varian acquisition and recent divestitures(2). Fourth-quarter GAAP net income was $232 million, or $0.66 per diluted share. Last year’s fourth-quarter GAAP net income was $25 million, or $0.07 per share.
During the fourth quarter, Agilent had Varian-related integration costs of $43 million, intangible amortization of $30 million and restructuring charges of $18 million. It also recognized a tax benefit of $42 million and a $54 million gain from the closure of pre-Agilent spin-off income tax audits. Excluding these items and $1 million of other net charges, Agilent reported fourth-quarter adjusted net income of $228 million, or $0.65 per share(1).
Bill Sullivan, Agilent president and CEO, said, “This past quarter marked the completion of Agilent’s transformation, a milestone in our company’s history. We saw continued organic growth performance and strength across all Agilent platforms and regions. I am pleased to report that the Varian integration continues to go very smoothly.”
Chemical Analysis revenues were up 73 percent above one year ago, or 17 percent on an organic basis. Growth continued to be strong across Agilent’s applied markets. Environmental, petrochemical, food and forensics markets all reflected double-digit organic growth.
Life Sciences revenues grew 35 percent over last year, or 17 percent on an organic basis. Double-digit organic growth was seen across academia and government markets, as well as from pharmaceutical and biotech customers.
Electronic Measurement revenues were up 23 percent over a year ago, or 35 percent excluding the effects of the Network Solutions divestiture. All of Agilent’s electronic measurement end markets - communications, aerospace and defense, industrial, computers and semiconductor - posted strong double-digit organic growth in the quarter.
Fourth-quarter ROIC was 24 percent(4), compared with 18 percent(4) one year ago. Inventory Days on Hand decreased by five days to 92 days. Receivables Days Sales Outstanding, at 49, grew three days compared with a year ago, due to the Varian acquisition. Agilent generated $367 million of cash from operations during the fourth quarter. Net cash at the end of the fourth quarter was $598 million(5).
Looking ahead, Sullivan said, “Our business outlook for 2011 remains strong. We are starting the new fiscal year with an industry-leading product portfolio and expect to continue the momentum with strong organic growth and great market opportunities created by the Varian product portfolio.”
Fiscal first-quarter 2011 revenues are expected to be in the range of $1.53 billion to $1.55 billion. Fiscal first-quarter non-GAAP earnings are expected to be in the range of $0.55 to $0.57 per share(3).
For the full fiscal year 2011, Agilent expects revenues of $6.1 billion to $6.3 billion. Non-GAAP earnings are expected to be in the range of $2.30 to $2.50 per share(3).
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is the world’s premier measurement company and a technology leader in chemical analysis, life sciences, electronics and communications. The company’s 18,500 employees serve customers in more than 100 countries. Agilent had net revenues of $5.4 billion in fiscal 2010. Information about Agilent is available on the Web at www.agilent.com.
Agilent’s management will present more details about its fourth-quarter FY2010 financial results on a conference call with investors today at 5:30 a.m. (Pacific). This event will be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select “Q4 2010 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 investor materials can be found on http://www.investor.agilent.com/phoenix.zhtml?c=103274&p=irol-gaap.
A telephone replay of the conference call will be available at 9:30 a.m. (Pacific) today through Nov. 19, 2010. The replay number is +1 888 286-8010; international callers may dial +1 (617) 801-6888. The passcode is 18241300.
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 revenues, earnings and profitability; the future demand for the Company’s products and services; and revenue and non-GAAP earnings guidance for the first quarter and full fiscal year 2011. 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 and technologies, and the risk that we are not able to realize the savings expected from the restructuring activities.
In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles while it continues to implement cost reductions; 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 Varian, Inc. 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 July 31, 2010. 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 net income per share are defined to exclude primarily the impacts of integration costs, acquisition fair value adjustments, transformation initiatives, non-cash intangibles amortization as well as disposals of businesses net of their tax effects. A reconciliation between non-GAAP earnings and GAAP net earnings is set forth on page 5 of the attached tables along with additional information regarding the use of this non-GAAP measure.
(2) Revenues, excluding the impact of the Varian acquisition and recent divestitures, are a non-GAAP measure and are defined to exclude the fair value adjustment to acquisition related deferred revenue balances for the Varian acquisition and exclude the impacts of the Varian acquisition and the divestitures of our Network Systems and Hycor businesses. A reconciliation between non-GAAP revenues and GAAP revenues is set forth on page 8 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 Q111 and full fiscal year 2011 excludes primarily the impacts of integration costs, acquisition fair value adjustments, future restructuring, and asset impairment charges and non-cash intangibles amortization. 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. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately $28 million per quarter.
(4) Return On Invested Capital is a non-GAAP measure and is defined as income (loss) from operations less other (income) expense and taxes, annualized, divided by the average of the two most recent quarter-end balances of assets less net current liabilities. The reconciliation of ROIC can be found on page 7 of the attached tables, along with additional information regarding the use of this non-GAAP measure.
(5) Net Cash is a non-GAAP measure and is defined as (A) the sum of (1) cash and cash equivalents, (2) restricted cash and cash equivalents and (3) investments – debt securities less (B) the sum of (1) short-term debt, (2) long-term debt and (3) senior notes. The reconciliation of Net Cash can be found on page 9 of the attached tables, along with additional information regarding the use of this non-GAAP measure.
