10-K/APeriod: FY2001

AGILENT TECHNOLOGIES, INC. Annual Report (Amendment), Year Ended Oct 31, 2001

Filed February 1, 2002For Securities:A

Summary

Agilent Technologies, Inc. filed an amended 10-K for the fiscal year ended October 31, 2001, primarily to correct an omission of a financial statement page. The core financial performance for the year showed a net loss from continuing operations of $406 million, a significant decrease from the $672 million profit in the prior year. This decline was primarily driven by increased costs and expenses, particularly in cost of products, R&D, and SG&A, outpacing revenue growth. A substantial positive impact came from the gain on the sale of discontinued operations, specifically the Healthcare Solutions Group to Philips, which contributed $646 million after taxes, leading to a reported net earnings of $174 million for the fiscal year. Despite the operational loss from continuing segments, the company's balance sheet indicates a solid liquidity position with $1.17 billion in cash and cash equivalents. However, accounts receivable and inventory saw declines compared to the previous year, suggesting potential shifts in sales cycles or inventory management. The company also incurred significant restructuring charges in 2001, reflecting efforts to adapt to economic conditions. Investors should note the substantial debt offering of $1.15 billion in convertible debentures in November 2001, which provides financial flexibility but also introduces potential dilution and future interest obligations.

Key Highlights

  • 1Reported a net loss of $406 million from continuing operations for the fiscal year ended October 31, 2001, a sharp decline from a $672 million profit in fiscal 2000.
  • 2Recorded a significant gain of $646 million (net of taxes) from the sale of its Healthcare Solutions Group (HSG) to Philips.
  • 3Total net revenue decreased to $8.396 billion from $9.361 billion in the prior year.
  • 4Cash and cash equivalents increased to $1.17 billion at year-end 2001, up from $996 million.
  • 5Significant restructuring charges of $175 million were announced and partially recognized in 2001 to reduce workforce and costs.
  • 6Acquired Objective Systems Integrators, Inc. (OSI) for approximately $716 million in January 2001.
  • 7Completed a private offering of $1.15 billion in 3% senior convertible debentures due 2021 in November 2001.

Frequently Asked Questions

The primary reason for the decrease in earnings from continuing operations was an increase in total costs and expenses, including cost of products, research and development, and selling, general, and administrative expenses, which outpaced revenue growth. This led to an operating loss of $778 million from continuing operations, compared to an operating income of $924 million in the prior year.

The sale of the Healthcare Solutions Group (HSG) to Koninklijke Philips Electronics N.V. for $1.7 billion resulted in a significant after-tax gain of $646 million. This gain was crucial in offsetting the operational losses from continuing businesses and contributed to the company reporting a net earning of $174 million for fiscal year 2001.

As of October 31, 2001, Agilent Technologies had $1.17 billion in cash and cash equivalents, an increase from $996 million at the end of fiscal year 2000. This indicates a strong liquidity position to manage its operations and financial obligations.

Yes, in November 2001, Agilent announced a private offering of $1.15 billion in 3% senior convertible debentures due 2021. These debentures are convertible into common stock, which could dilute future earnings per share. The company also amended its revolving credit agreements with new financial covenants that limit debt relative to equity and require minimum EBITDA levels.