Exhibit 99.1
EDITORIAL CONTACTS:
Michele Drake
+1 650 752 5296
michele_drake@agilent.com
Jorgen Tesselaar (Europe and Asia)
+31 20 547 2825
jorgen_tesselaar@agilent.com
INVESTOR CONTACT:
Hilliard Terry
+1 650 752 5329
hilliard_terry@agilent.com
Agilent Technologies Reports First Quarter 2004 Results
PALO ALTO, Calif., Feb. 17, 2004 — Agilent Technologies Inc. (NYSE: A) today reported orders of $1.73 billion for the first fiscal quarter ended Jan. 31, 2004, 27 percent above one year ago. Revenues during the quarter were $1.64 billion, 16 percent ahead of last year. First quarter GAAP net earnings of $71 million, or $0.14 per diluted share, compared to a loss of $369 million, or $0.78 per share, in last year’s first quarter.
Excluding $32 million of net restructuring and amortization charges, Agilent reported first quarter operating net income of $103 million, or $0.21 per share, versus a loss on a comparable basis of $109 million, or $0.23 per share, one year ago.
“We are pleased with our performance in the first quarter of this year,” said Ned Barnholt, Agilent chairman, president and chief executive officer. “Stronger economic activity in most of our markets drove these results, coupled with our ability to achieve lower structural costs sooner than anticipated.”
“During the quarter, we achieved a $1.40 billion operating breakeven cost structure, three quarters earlier than planned(1). For the second consecutive quarter, Agilent generated positive free cash flow from operations,(2)” said Barnholt. The company ended the quarter with $1.7 billion of cash and equivalents, up $71 million from the prior quarter. Inventory days-on-hand improved by 15 from one year ago to 107. Capital spending of $29 million was $40 million below the level of depreciation.
During the first quarter, Semiconductor Products orders were up 53 percent from last year to the highest levels since the year 2000. Automated Test segment orders, while down from the seasonally strong fourth quarter, were up 74 percent from last year. Life Sciences and Chemical Analysis orders were 15 percent above one year ago, while Test and Measurement segment orders were up 8 percent. Overall, the company’s book-to-bill ratio was 1.05 in the first quarter, compared to 1.03 in the fourth quarter of last year and 0.96 one year ago.
Looking ahead, Barnholt said, “The markets we serve are clearly gaining some traction, and Agilent has both the cost structure and the innovative new products to take full advantage of the recovery. Without the normal first quarter drop, we are somewhat cautious about assuming the usual seasonal rise in second quarter activity.”
“We are maintaining our prior second quarter guidance of earnings before restructuring and amortization charges in the range of $0.20 to $0.25 per share(3) on revenues of $1.65 billion to $1.70 billion. For the year 2004, we are comfortable with the current range of analyst expectations for both revenues and operating EPS,” said Barnholt.
Segment Results
Test and Measurement
(in millions)
| Q1:F04 | Q1:F03 | Q4:F03 | ||||||
Orders | 642 | 594 | 645 | |||||
Revenues | 642 | 633 | 631 | |||||
Operating Profit(4) | 4 | (132 | ) | (11 | ) |
Test and Measurement returned to profitability in the first quarter as a result of aggressive restructuring. Orders during the quarter of $642 million were 8 percent above one year ago and flat versus the seasonally strong fourth quarter of fiscal 2003. Compared to last year, orders were stronger in both communications, driven by demand for wireless handset testers, and in general purpose test, where orders were up 13 percent. Revenues of $642 million were 1 percent above last year and 2 percent ahead of three months earlier.
First quarter operating profits of $4 million were improved by $136 million compared to one year ago, despite only $9 million higher revenues. Profits were up $15 million versus the fourth quarter on a revenue gain of $11 million.
Automated Test
(in millions)
| Q1:F04 | Q1:F03 | Q4:F03 | |||||
Orders | 200 | 115 | 260 | ||||
Revenues | 219 | 136 | 260 | ||||
Operating Profit(4) | 20 | (48 | ) | 45 |
First quarter Automated Test orders of $200 million were 74 percent above one year ago, with significant year-to-year growth in all product lines. Sequentially, orders were down 23 percent from the seasonally strong fourth quarter, largely because of seasonal weakness in consumer-driven flash memory test. Revenues of $219 million were 61 percent above last year and down 16 percent from a strong Q4.
Segment profits were positive for the third consecutive quarter. First quarter profits of $20 million were up $68 million from one year ago on an $83 million increase in revenues. Compared to the fourth quarter, profits were down $25 million on a revenue decline of $41 million. Return on invested capital (ROIC) during the quarter was about 9 percent(5).
Semiconductor Products
(in millions)
| Q1:F04 | Q1:F03 | Q4:F03 | |||||
Orders | 582 | 381 | 493 | ||||
Revenues | 469 | 367 | 463 | ||||
Operating Profit(4) | 60 | (48 | ) | 40 |
Semiconductor Products had a very strong first quarter, with orders of $582 million, up 53 percent from last year and 18 percent ahead of the seasonally strong fourth quarter. Compared to last year, personal systems products orders were up 73 percent, with strength across the board but particularly notable in mobile phone components. Networking orders were also up, 14 percent ahead of last year. Revenues of $469 million were 28 percent above one year ago and 1 percent ahead of the fourth quarter. Semiconductor Products’ book-to-bill ratio of 1.24 compares to 1.04 last year and 1.06 three months ago.
Segment profits reflected the benefits of higher volumes, better yields and cumulative restructuring, generating a segment ROIC of 28 percent(5). Profits of $60 million were $108 million higher than last year on $102 million higher volume. Compared to the fourth quarter, profits were up $20 million on only $6 million higher volume.
Life Sciences and Chemical Analysis
(in millions)
| Q1:F04 | Q1:F03 | Q4:F03 | ||||
Orders | 307 | 268 | 333 | |||
Revenues | 313 | 276 | 321 | |||
Operating Profit(4) | 49 | 34 | 53 |
Life Sciences and Chemical Analysis showed signs of improving momentum during the first quarter, with orders of $307 million up 15 percent from last year and down only 8 percent from the seasonally strong fourth quarter. Life Sciences orders were up 10 percent year-to-year, while Chemical Analysis orders were up 18 percent due to particular strength in Asia. Revenues of $313 million were 13 percent above last year and down only 2 percent from the fourth quarter’s record level.
Segment profits reached $49 million in the quarter, up $15 million from one year ago on a $37 million increase in revenues. Profits were down $4 million from the fourth quarter’s record result on an $8 million drop in volume. During the quarter, the segment achieved an ROIC of 32 percent(5).
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is a global technology leader in communications, electronics, life sciences and chemical analysis. The company’s 28,000 employees serve customers in more than 110 countries. Agilent had net revenue of $6.1 billion in fiscal year 2003. Information about Agilent is available on the Web at www.agilent.com.
Agilent management will host a live webcast of its quarterly conference call with the investment community in listen-only mode today at 1:30 p.m. (PT). Listeners may log on at www.investor.agilent.com and select “Conference Calls” in the “Recent News and Events” box. The webcast will remain on the company site for 90 days.
A telephone replay of the conference call will be available starting at 4:30 p.m. (PT) today through Feb. 24 by dialing + 1 719 457 0820 and entering pass code 540723.
Forward-Looking Statements
This news release contains forward-looking statements (including, without limitation, information regarding expected revenues and earnings, the markets we serve, our ability to take advantage of the recovery and seasonality) that involve risks and uncertainties that could cause results of Agilent to differ materially from management’s current expectations.
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 workforce and other 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 on our markets and our ability to conduct business; the successful implementation of Agilent’s ERP and other information systems and the ability to realize the benefits from these and other IT systems investments; the ability to improve asset performance to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix and other risks detailed in Agilent’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended Oct. 31, 2003.
# # #
| (1) | Agilent’s operating breakeven cost structure of $1.40 billion can be reconciled to GAAP breakeven cost structure as follows: Total GAAP costs and expenses: $1.56 billion less restructuring of $.05 billion, less cost of sales decrement of $.09 billion (35% x $243 million), less IT projects of $.02 billion. |
| (2) | Free cash flow is defined as Net Cash provided by operating activities less Investments in property, plant and equipment. |
| (3) | Agilent’s expected range of EPS for Q204 and full year 2004 excludes restructuring, which cannot be estimated, and amortization of intangibles, which is expected to be $5 million in the second quarter and about $20 million for the year. Non-GAAP tax rate is assumed to be 31 percent. |
| (4) | Before restructuring charges in all periods. |
| (5) | Refer to financial results tables for ROIC. |
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three Months Ended January 31, | Percent Inc/(Dec) | |||||||||
| 2004 | 2003 | |||||||||
Orders | $ | 1,731 | $ | 1,358 | 27 | % | ||||
Net revenue | $ | 1,643 | $ | 1,412 | 16 | % | ||||
Costs and expenses: | ||||||||||
Cost of products and services | 904 | 880 | 3 | % | ||||||
Research and development | 229 | 277 | (17 | )% | ||||||
Selling, general and administrative | 431 | 511 | (16 | )% | ||||||
Total costs and expenses | 1,564 | 1,668 | (6 | )% | ||||||
Income (loss) from operations | 79 | (256 | ) | 131 | % | |||||
Other income (expense), net | 4 | 4 | — | % | ||||||
Income (loss) before taxes | 83 | (252 | ) | 133 | % | |||||
Provision (benefit) for taxes | 12 | (140 | ) | (109 | )% | |||||
Income (loss) before cumulative effect of accounting change | 71 | (112 | ) | 163 | % | |||||
Cumulative effect of adopting SFAS No. 142 (net of tax benefit of $11 million) | — | (257 | ) | 100 | % | |||||
Net income (loss) | $ | 71 | $ | (369 | ) | 119 | % | |||
Net income (loss) per share - | ||||||||||
Basic | ||||||||||
Income (loss) before cumulative effect of accounting change | $ | 0.15 | $ | (0.24 | ) | |||||
Cumulative effect of adopting SFAS No. 142, net | — | (0.54 | ) | |||||||
Net income (loss) | $ | 0.15 | $ | (0.78 | ) | |||||
Diluted | ||||||||||
Income (loss) before cumulative effect of accounting change | $ | 0.14 | $ | (0.24 | ) | |||||
Cumulative effect of adopting SFAS No. 142, net | — | (0.54 | ) | |||||||
Net income (loss) | $ | 0.14 | $ | (0.78 | ) | |||||
Weighted average shares used in computing net income (loss) per share: | ||||||||||
Basic | 480 | 471 | ||||||||
Diluted | 490 | 471 | ||||||||
Historical amounts were reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Excluding Restructuring, Amortization of Intangibles, Tax Valuation Allowance
and Non-Operational Items
(Unaudited)
(In millions, except per share amounts) | |||||||||||
| Three Months Ended January 31, | Percent Inc/(Dec) | ||||||||||
| 2004 | 2003 | ||||||||||
Orders | $ | 1,731 | $ | 1,358 | 27 | % | |||||
| $ | 1,643 | $ | 1,412 | 16 | % | ||||||
Net Revenue | |||||||||||
Costs and expenses: | |||||||||||
Cost of products and services | 887 | 864 | 3 | % | |||||||
Research and development | 219 | 273 | (20 | )% | |||||||
Selling, general and administrative | 400 | 477 | (16 | )% | |||||||
Total costs and expenses | 1,506 | 1,614 | (7 | )% | |||||||
Income (loss) from operations | 137 | (202 | ) | 168 | % | ||||||
Other income (expense), net | 12 | 7 | 71 | % | |||||||
Income (loss) before taxes | 149 | (195 | ) | 176 | % | ||||||
Provision (benefit) for taxes | 46 | (86 | ) | (153 | )% | ||||||
Non-GAAP net income (loss) | $ | 103 | $ | (109 | ) | 194 | % | ||||
Non-GAAP net income (loss) per share: | |||||||||||
Basic | $ | 0.21 | $ | (0.23 | ) | ||||||
Diluted | $ | 0.21 | $ | (0.23 | ) | ||||||
Weighted average shares used in computing non-GAAP net income (loss) per share: | |||||||||||
Basic | 480 | 471 | |||||||||
Diluted | 490 | 471 | |||||||||
The above non-GAAP condensed consolidated statement of operations has been adjusted to exclude the following items and reconcile to GAAP net income (loss): |
| ||||||||||
Net income (loss) per GAAP | $ | 71 | $ | (369 | ) | ||||||
Non-GAAP adjustments: | |||||||||||
Other intangibles | 11 | 12 | |||||||||
Restructuring and Asset Impairment | 45 | 42 | |||||||||
Write down of equity securities | 8 | 5 | |||||||||
SFAS No. 142 adoption | — | 268 | |||||||||
Other | 2 | (2 | ) | ||||||||
Adjustment for income taxes | (34 | ) | (65 | ) | |||||||
Non-GAAP net income (loss) | $ | 103 | $ | (109 | ) | ||||||
We provide non-GAAP financial information in order to provide meaningful supplemental information regarding our operational performance and to enhance our investors’ overall understanding of our core current financial performance and our prospects for the future. We believe that our investors benefit from seeing our results “through the eyes” of management in addition to the GAAP presentation. Management measures segment and enterprise performance using measures such as are disclosed in this release. This information facilitates management’s internal comparisons to the company’s historical operating results and comparisons to competitors operating results.
Non-GAAP information allows for greater transparency to supplemental information used by management in its financial and operational decision making. Historically, we have reported similar non-GAAP information to our investors and believe that the inclusion of comparative numbers provides consistency in our financial reporting.
This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s earnings and earnings per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.
Historical amounts were reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC
RECONCILIATION FROM GAAP TO NON-GAAP
NET INCOME
THREE MONTHS ENDED JANUARY 31, 2004
(Unaudited)
| Non-GAAP Adjustments | |||||||||||||||||||||||||
| (In millions, except per share amounts) | GAAP | Other Intangibles | Restructuring and Asset Impairment | Write Down of Equity Securities | Other | Adjustment for Income Taxes | Non-GAAP | ||||||||||||||||||
Orders | $ | 1,731 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,731 | |||||||||||
Net revenue | $ | 1,643 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,643 | |||||||||||
Costs and expenses: | |||||||||||||||||||||||||
Cost of products and services | 904 | (9 | ) | (8 | ) | — | — | — | 887 | ||||||||||||||||
Research and development | 229 | — | (10 | ) | — | — | — | 219 | |||||||||||||||||
Selling, general and administrative | 431 | (2 | ) | (27 | ) | — | (2 | ) | — | 400 | |||||||||||||||
Total costs and expenses | 1,564 | (11 | ) | (45 | ) | — | (2 | ) | — | 1,506 | |||||||||||||||
Income from operations | 79 | 11 | 45 | — | 2 | — | 137 | ||||||||||||||||||
Other income (expense), net | 4 | — | — | 8 | — | — | 12 | ||||||||||||||||||
Income from operations before taxes | 83 | 11 | 45 | 8 | 2 | — | 149 | ||||||||||||||||||
Provision for taxes | 12 | — | — | — | — | 34 | 46 | ||||||||||||||||||
Net income | $ | 71 | $ | 11 | $ | 45 | $ | 8 | $ | 2 | $ | (34 | ) | $ | 103 | ||||||||||
Net income per share - Basic and Diluted: | |||||||||||||||||||||||||
Basic | $ | 0.15 | $ | 0.02 | $ | 0.09 | $ | 0.02 | $ | — | $ | (0.07 | ) | $ | 0.21 | ||||||||||
Diluted | $ | 0.14 | $ | 0.02 | $ | 0.09 | $ | 0.02 | $ | — | $ | (0.06 | ) | $ | 0.21 | ||||||||||
Weighted average shares used in computing net income per share: | |||||||||||||||||||||||||
Basic | 480 | 480 | 480 | 480 | 480 | 480 | 480 | ||||||||||||||||||
Diluted | 490 | 490 | 490 | 490 | 490 | 490 | 490 | ||||||||||||||||||
We provide non-GAAP financial information in order to provide meaningful supplemental information regarding our operational performance and to enhance our investors’ overall understanding of our core current financial performance and our prospects for the future. We believe that our investors benefit from seeing our results “through the eyes” of management in addition to the GAAP presentation. Management measures segment and enterprise performance using measures such as those that are disclosed in this release. This information facilitates management’s internal comparisons to the company’s historical operating results and comparisons to competitors’ operating results.
Non-GAAP information allows for greater transparency to supplemental information used by management in its financial and operational decision making. Historically, we have reported similar non-GAAP information to our investors and believe that the inclusion of comparative numbers provides consistency in our financial reporting.
This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s earnings and earnings per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.
AGILENT TECHNOLOGIES, INC
RECONCILIATION FROM GAAP TO NON-GAAP
NET LOSS
THREE MONTHS ENDED JANUARY 31, 2003
(Unaudited)
| Non-GAAP Adjustments | |||||||||||||||||||||||||||||||
| (In millions, except per share amounts) | GAAP | Other Intangibles | Restructuring and Asset | Write Down of Equity | SFAS No. 142 Adoption | Other | Adjustment for Income Taxes | Non-GAAP | |||||||||||||||||||||||
Orders | $ | 1,358 | $ | — | $ | — | $ | — | $ | — | — | $ | — | $ | 1,358 | ||||||||||||||||
Net revenue | $ | 1,412 | $ | — | $ | — | $ | — | — | — | $ | — | $ | 1,412 | |||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||||||||||
Cost of products and services | 880 | (10 | ) | (6 | ) | — | — | — | — | 864 | |||||||||||||||||||||
Research and development | 277 | — | (4 | ) | — | — | — | — | 273 | ||||||||||||||||||||||
Selling, general and administrative | 511 | (2 | ) | (32 | ) | — | — | — | — | 477 | |||||||||||||||||||||
Total costs and expenses | 1,668 | (12 | ) | (42 | ) | — | — | — | — | 1,614 | |||||||||||||||||||||
Loss from operations | (256 | ) | 12 | 42 | — | — | — | — | (202 | ) | |||||||||||||||||||||
Other income (expense), net | 4 | — | — | 5 | — | (2 | ) | — | 7 | ||||||||||||||||||||||
Loss before taxes | (252 | ) | 12 | 42 | 5 | — | (2 | ) | — | (195 | ) | ||||||||||||||||||||
Benefit for taxes | (140 | ) | — | — | — | (11 | ) | — | 65 | (86 | ) | ||||||||||||||||||||
Loss before cumulative effect of accounting change | (112 | ) | 12 | 42 | 5 | 11 | (2 | ) | (65 | ) | (109 | ) | |||||||||||||||||||
Cumulative effect of adopting SFAS No. 142 | |||||||||||||||||||||||||||||||
(net of tax benefit of $11 million) | (257 | ) | — | — | — | 257 | — | — | — | ||||||||||||||||||||||
Net loss | $ | (369 | ) | $ | 12 | $ | 42 | $ | 5 | $ | 268 | (2 | ) | $ | (65 | ) | $ | (109 | ) | ||||||||||||
Net loss per share - Basic and Diluted: | |||||||||||||||||||||||||||||||
Loss before cumulative effect of accounting change | $ | (0.24 | ) | $ | 0.03 | $ | 0.09 | $ | 0.01 | $ | 0.02 | $ | — | $ | (0.14 | ) | $ | (0.23 | ) | ||||||||||||
Cumulative effect of adopting SFAS No. 142, net | (0.54 | ) | — | — | — | 0.54 | — | — | — | ||||||||||||||||||||||
Net loss | $ | (0.78 | ) | $ | 0.03 | $ | 0.09 | $ | 0.01 | $ | 0.56 | $ | — | $ | (0.14 | ) | $ | (0.23 | ) | ||||||||||||
Weighted average shares used in computing net loss per share: | |||||||||||||||||||||||||||||||
Basic and diluted | 471 | 471 | 471 | 471 | 471 | 471 | 471 | 471 | |||||||||||||||||||||||
We provide non-GAAP financial information in order to provide meaningful supplemental information regarding our operational performance and to enhance our investors’ overall understanding of our core current financial performance and our prospects for the future. We believe that our investors benefit from seeing our results “through the eyes” of management in addition to the GAAP presentation. Management measures segment and enterprise performance using measures such as those that are disclosed in this release. This information facilitates management’s internal comparisons to the company’s historical operating results and comparisons to competitors’ operating results.
Non-GAAP information allows for greater transparency to supplemental information used by management in its financial and operational decision making. Historically, we have reported similar non-GAAP information to our investors and believe that the inclusion of comparative numbers provides consistency in our financial reporting.
This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s earnings and earnings per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions, except par value and share amounts)
(Unaudited)
January 31, 2004 | October 31, 2003 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,678 | $ | 1,607 | ||||
Accounts receivable, net | 1,064 | 1,086 | ||||||
Inventory | 1,056 | 995 | ||||||
Current deferred tax assets | 10 | 10 | ||||||
Other current assets | 178 | 191 | ||||||
Total current assets | 3,986 | 3,889 | ||||||
Property, plant and equipment, net | 1,419 | 1,447 | ||||||
Goodwill and other intangible assets, net | 410 | 402 | ||||||
Long-term deferred tax assets | 23 | 27 | ||||||
Other assets | 546 | 532 | ||||||
Total assets | $ | 6,384 | $ | 6,297 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 416 | $ | 441 | ||||
Employee compensation and benefits | 474 | 566 | ||||||
Deferred revenue | 284 | 262 | ||||||
Income and other taxes payable | 269 | 326 | ||||||
Other accrued liabilities | 302 | 311 | ||||||
Total current liabilities | 1,745 | 1,906 | ||||||
Senior convertible debentures | 1,150 | 1,150 | ||||||
Other liabilities | 420 | 417 | ||||||
Total liabilities | 3,315 | 3,473 | ||||||
Commitments and contingencies | — | — | ||||||
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; 480 million shares at January 31, 2004 and 476 million shares at October 31, 2003 issued and outstanding | 5 | 5 | ||||||
Additional paid-in capital | 5,050 | 4,984 | ||||||
Accumulated deficit | (2,088 | ) | (2,159 | ) | ||||
Accumulated comprehensive income (loss) | 102 | (6 | ) | |||||
Total stockholders’ equity | 3,069 | 2,824 | ||||||
Total liabilities and stockholders’ equity | $ | 6,384 | $ | 6,297 | ||||
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
Three months January 31, 2004 | ||||
Cash flows from operating activities: | ||||
Net income | $ | 71 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 69 | |||
Amortization | 12 | |||
Inventory-related charges | 1 | |||
Deferred taxes | (7 | ) | ||
Asset impairment charges | 12 | |||
Changes in assets and liabilities: | ||||
Accounts receivable | 51 | |||
Inventory | (65 | ) | ||
Accounts payable | 7 | |||
Employee compensation and benefits | (92 | ) | ||
Income taxes and other taxes payable | (30 | ) | ||
Other current assets and liabilities | 30 | |||
Other long-term assets and liabilities | (19 | ) | ||
Net cash provided by operating activities * | 40 | |||
Cash flows from investing activities: | ||||
Investments in property, plant and equipment | (29 | ) | ||
Purchased intangibles | (5 | ) | ||
Net cash used in investing activities | (34 | ) | ||
Cash flows from financing activities: | ||||
Issuance of common stock under employee stock plans | 66 | |||
Net repayments of notes payable and short-term borrowings | (1 | ) | ||
Net cash provided by financing activities | 65 | |||
Change in cash and cash equivalents | 71 | |||
Cash and cash equivalents at beginning of period | 1,607 | |||
Cash and cash equivalents at end of period | $ | 1,678 | ||
* Cash payments included in operating activities: | ||||
Restructuring | $ | 37 | ||
Income tax payments | $ | 26 | ||
Pension trust fund contributions | $ | 78 | ||
AGILENT TECHNOLOGIES, INC.
TEST AND MEASUREMENT INFORMATION
(In millions, except percent changes)
(Unaudited)
Three months ended January 31, 2004 | Three months ended January 31, 2003 | Yr vs.Yr % change | Three months ended October 31, 2003 | Sequential % change | |||||||||||||
Orders | $ | 642 | $ | 594 | 8 | % | $ | 645 | — | % | |||||||
Net Revenue | $ | 642 | $ | 633 | 1 | % | $ | 631 | 2 | % | |||||||
Income (loss) from operations | $ | 4 | $ | (132 | ) | 103 | % | $ | (11 | ) | 136 | % | |||||
Q1 FY04 vs Q4 FY03 BY MARKET SEGMENT
| Orders | Net Revenue | |||||||||||||||||
Q1 FY04 $ Amount | Sequential % change | % of Segment | Q1 FY04 $ Amount | Sequential % change | % of Segment | |||||||||||||
Communications test | $ | 445 | — | % | 69 | % | $ | 446 | 5 | % | 69 | % | ||||||
General purpose test | 197 | (1 | )% | 31 | % | 196 | (4 | )% | 31 | % | ||||||||
| $ | 642 | — | % | 100 | % | $ | 642 | 2 | % | 100 | % | |||||||
Q1 FY04 vs Q1 FY03 BY MARKET SEGMENT
| Orders | Net Revenue | |||||||||||
Q1 FY04 $ Amount | Yr vs.Yr % change | Q1 FY04 $ Amount | Yr vs.Yr % change | |||||||||
Communications test | $ | 445 | 6 | % | $ | 446 | (2 | )% | ||||
General purpose test | 197 | 13 | % | 196 | 9 | % | ||||||
| $ | 642 | 8 | % | $ | 642 | 1 | % | |||||
Income (loss) from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with accounting principles generally accepted in the United States (GAAP). Income (loss) from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and some residual corporate charges.
In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.
Historical amounts have been reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
AUTOMATED TEST INFORMATION
(In millions, except percent changes)
(Unaudited)
Three months ended January 31, 2004 | Three months ended January 31, 2003 | Yr vs.Yr % change | Three months ended October 31, 2003 | Sequential % change | ||||||||||||
Orders | $ | 200 | $ | 115 | 74 | % | $ | 260 | (23 | )% | ||||||
Net Revenue | $ | 219 | $ | 136 | 61 | % | $ | 260 | (16 | )% | ||||||
Income (loss) from operations | $ | 20 | $ | (48 | ) | 142 | % | $ | 45 | (56 | )% | |||||
Q1 FY04 vs Q4 FY03 BY MARKET SEGMENT
| Orders | Net Revenue | |||||||||||||||||
Q1 FY04 $ Amount | Sequential % change | % of Segment | Q1 FY04 $ Amount | Sequential % change | % of Segment | |||||||||||||
Semiconductor test | $ | 162 | (26 | )% | 81 | % | $ | 179 | (19 | )% | 82 | % | ||||||
Manufacturing test | 38 | (7 | )% | 19 | % | 40 | 3 | % | 18 | % | ||||||||
| $ | 200 | (23 | )% | 100 | % | $ | 219 | (16 | )% | 100 | % | |||||||
Q1 FY04 vs Q1 FY03 BY MARKET SEGMENT
| Orders | Net Revenue | |||||||||||
Q1 FY04 $ Amount | Yr vs.Yr % change | Q1 FY04 $ Amount | Yr vs.Yr % change | |||||||||
Semiconductor test | $ | 162 | 88 | % | $ | 179 | 67 | % | ||||
Manufacturing test | 38 | 31 | % | 40 | 38 | % | ||||||
| $ | 200 | 74 | % | $ | 219 | 61 | % | |||||
Income (loss) from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with accounting principles generally accepted in the United States (GAAP). Income (loss) from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and some residual corporate charges.
In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.
Historical amounts have been reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
SEMICONDUCTOR PRODUCTS INFORMATION
(In millions, except percent changes)
(Unaudited)
Three months ended January 31, 2004 | Three months ended January 31, 2003 | Yr vs.Yr % change | Three months ended October 31, 2003 | Sequential % change | ||||||||||||
Orders | $ | 582 | $ | 381 | 53 | % | $ | 493 | 18 | % | ||||||
Net Revenue | $ | 469 | $ | 367 | 28 | % | $ | 463 | 1 | % | ||||||
Income (loss) from operations | $ | 60 | $ | (48 | ) | 225 | % | $ | 40 | 50 | % | |||||
Q1 FY04 vs Q4 FY03 BY MARKET SEGMENT
| Orders | Net Revenue | |||||||||||||||||
Q1 FY04 $ Amount | Sequential % change | % of Segment | Q1 FY04 $ Amount | Sequential % change | % of Segment | |||||||||||||
Networking | $ | 149 | (11 | )% | 26 | % | $ | 149 | (3 | )% | 32 | % | ||||||
Personal systems | 433 | 33 | % | 74 | % | 320 | 4 | % | 68 | % | ||||||||
| $ | 582 | 18 | % | 100 | % | $ | 469 | 1 | % | 100 | % | |||||||
Q1 FY04 vs Q1 FY03 BY MARKET SEGMENT
| Orders | Net Revenue | |||||||||||
Q1 FY04 $ Amount | Yr vs.Yr % change | Q1 FY04 $ Amount | Yr vs.Yr % change | |||||||||
Networking | $ | 149 | 14 | % | $ | 149 | 19 | % | ||||
Personal systems | 433 | 73 | % | 320 | 32 | % | ||||||
| $ | 582 | 53 | % | $ | 469 | 28 | % | |||||
Income (loss) from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with accounting principles generally accepted in the United States (GAAP). Income (loss) from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and some residual corporate charges.
In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products that will be delivered within six months.
Historical amounts have been reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
LIFE SCIENCES AND CHEMICAL ANALYSIS INFORMATION
(In millions, except percent changes)
(Unaudited)
Three months Ended January 31, 2004 | Three months ended January 31, 2003 | Yr vs.Yr % change | Three months ended October 31, 2003 | Sequential % change | |||||||||||
Orders | $ | 307 | $ | 268 | 15 | % | $ | 333 | (8 | )% | |||||
Net Revenue | $ | 313 | $ | 276 | 13 | % | $ | 321 | (2 | )% | |||||
Income from operations | $ | 49 | $ | 34 | 44 | % | $ | 53 | (8 | )% | |||||
Income from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with accounting principles generally accepted in the United States (GAAP). Income from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and some residual corporate charges.
In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.
Historical amounts have been reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
Segment Income (Loss) from Operations
Reconciliation of Reporting Segments to Agilent Non-GAAP Income (Loss)
(In millions)
(Unaudited)
Three months ended January 31, | Three months ended October 31, | ||||||||||
| 2004 | 2003 | 2003 | |||||||||
Test and Measurement | $ | 4 | $ | (132 | ) | $ | (11 | ) | |||
Semiconductor Products | 60 | (48 | ) | 40 | |||||||
Automated Test | 20 | (48 | ) | 45 | |||||||
Life Sciences and Chemical Analysis | 49 | 34 | 53 | ||||||||
Residual corporate charges | 4 | (8 | ) | (5 | ) | ||||||
Non-GAAP income (loss) from operations - Agilent | $ | 137 | $ | (202 | ) | $ | 122 | ||||
Income (loss) from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with accounting principles generally accepted in the United States (GAAP). Income (loss) from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and residual corporate charges.
Historical amounts were reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
ORDERS AND NET REVENUE FROM OPERATIONS
BY GEOGRAPHY
(In millions, except percent changes)
(Unaudited)
| Three Months Ended January 31, | Percent Inc/(Dec) | ||||||||
| 2004 | 2003 | ||||||||
ORDERS | |||||||||
Americas | $ | 550 | $ | 496 | 11 | % | |||
Europe | 372 | 295 | 26 | % | |||||
Asia Pacific | 809 | 567 | 43 | % | |||||
Total | $ | 1,731 | $ | 1,358 | 27 | % | |||
NET REVENUE | |||||||||
Americas | $ | 573 | $ | 576 | (1 | )% | |||
Europe | 363 | 296 | 23 | % | |||||
Asia Pacific | 707 | 540 | 31 | % | |||||
Total | $ | 1,643 | $ | 1,412 | 16 | % | |||
In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.
Historical amounts were reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
Reconciliation of Segment ROIC
(In millions)
(Unaudited)
| Q1 FY04 ATG | Q1 FY04 SPG | Q1 FY04 LSCA | ||||||||||
Numerator: | ||||||||||||
Segment income from operations | $ | 20 | $ | 60 | $ | 49 | ||||||
Less: | ||||||||||||
Other income and taxes | 8 | (4 | ) | 17 | ||||||||
Segment return | 12 | 64 | 32 | |||||||||
Segment return annualized | $ | 48 | $ | 256 | $ | 128 | ||||||
Denominator: | ||||||||||||
Segment assets | $ | 645 | $ | 1,165 | $ | 587 | ||||||
Less: | ||||||||||||
Net current liabilities * | 106 | 281 | 164 | |||||||||
Invested capital | $ | 539 | $ | 884 | $ | 423 | ||||||
Average Invested capital | $ | 531 | $ | 910 | $ | 395 | ||||||
ROIC | 9 | % | 28 | % | 32 | % | ||||||
ROIC calculation:(current quarter non-GAAP net profit * 4)/(average of the two most recent quarter-end balances of Segment Invested Capital)
* Includes accounts payable, employee compensation and benefits and other accrued liabilities.
We provide non-GAAP financial information in order to provide meaningful supplemental information regarding our operational performance and to enhance our investors’ overall understanding of our core current financial performance and our prospects for the future. We believe that our investors benefit from seeing our results “through the eyes” of management in addition to the GAAP presentation. Management measures segment and enterprise performance using measures such as those that are disclosed in this release. This information facilitates management’s internal comparisons to the company’s historical operating results and comparisons to competitors’ operating results.
Non-GAAP information allows for greater transparency to supplemental information used by management in its financial and operational decision making. Historically, we have reported similar non-GAAP information to our investors and believe that the inclusion of comparative numbers provides consistency in our financial reporting.
This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s earnings and earnings per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.
