01—Abstract
Summary
Summary of the 10-K filed December 21, 2009. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. filed its 10-K for the fiscal year ended October 31, 2009, reporting a challenging year marked by a significant revenue decline of 22% to $4.48 billiona, primarily due to the global economic downturn.
This resulted in a net loss of $31 millionb, a reversal from the $693 million net income in the prior year. The company implemented substantial restructuring activities, including workforce reductions, aiming for annual savings of approximately $525 million. Despite the weak financial performance, Agilent continued its strategic initiatives, notably the planned $1.5 billion acquisition of Varian, Inc., which was approved by Varian shareholders and awaited regulatory approvals.
The company's liquidity remained solid, with cash and cash equivalents increasing to $2.48 billionc by year-end. Agilent operates across three main segments: Electronic Measurement, Bio-analytical Measurement, and Semiconductor and Board Test. All segments experienced revenue declines in fiscal year 2009.
The Electronic Measurement segment saw a 30%d revenue drop, Bio-analytical Measurement decreased by 6%, and Semiconductor and Board Test declined by a significant 54%. Management noted signs of market stabilization towards the end of the fiscal year but anticipated a gradual recovery. The company also announced changes to its reporting segments for fiscal year 2010, consolidating electronic measurement and semiconductor and board test into a single segment, and splitting the bio-analytical measurement segment into Life Sciences and Chemical Analysis.
02—Key points
Key Highlights
- Revenue decreased by 22% to $4.48 billion in fiscal year 2009, impacted by the global economic downturn.
- Agilent reported a net loss of $31 million for fiscal year 2009, compared to a net income of $693 million in fiscal year 2008.
- The company initiated significant restructuring programs, leading to workforce reductions and expected annual savings of approximately $525 million.
- Agilent announced plans to acquire Varian, Inc. for an estimated $1.5 billion, a transaction subject to customary closing conditions and regulatory approvals.
- Cash and cash equivalents increased to $2.48 billion as of October 31, 2009, indicating a strong liquidity position.
- All three business segments—Electronic Measurement, Bio-analytical Measurement, and Semiconductor and Board Test—experienced revenue declines in fiscal year 2009.
- The company plans to reorganize its reporting segments starting in fiscal year 2010.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2009, Agilent Technologies, Inc. lost $0.01.
- Revenue$4.48B100.0%
- Cost of revenue−$2.19B48.9%
- Gross profit$2.29B51.1%
- Operating costs−$2.25B50.1%
- Operating income$47.0M1.0%
- Interest, other & tax−$78.0M1.7%
- Net income−$31.0M0.7%
Where FY2009 revenue went
$4.48B- Cost of revenue: $2.19B, 49% of revenue
- SG&A: $1.60B, 36% of revenue
- R&D: $642.0M, 14% of revenue
- Operating income: $47.0M, 1.0% of revenue
Kept 1.0% as operating incomeOperating income $47.0M · 1.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed December 21, 2009Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $4.48B$5.77B | −22.4% |
| Cost of Revenue | $2.19B$2.58B | −15.1% |
| Gross Profit | $2.29B$3.20B | −28.3% |
| R&D Expenses | $642.00M$704.00M | −8.8% |
| SG&A Expenses | $1.60B$1.70B | −5.5% |
| Operating Expenses | $4.43B$4.98B | −10.9% |
| Operating Income | $47.00M$795.00M | −94.1% |
| Interest Expense | $88.00M$123.00M | −28.5% |
| Net Income | -$31.00M$693.00M | −104.5% |
| EPS (Basic) | $-0.09$1.91 | −104.7% |
| EPS (Diluted) | $-0.09$1.87 | −104.8% |
| Shares Outstanding (Basic) | 346.00M363.00M | −4.7% |
| Shares Outstanding (Diluted) | 346.00M371.00M | −6.7% |
05—Questions
Frequently Asked Questions
What was Agilent's financial performance in fiscal year 2009?
Agilent experienced a challenging fiscal year 2009. Revenue decreased by 22% to $4.48 billion compared to $5.77 billion in 2008. This decline led to a net loss of $31 million for the year, a significant decrease from the $693 million net income reported in fiscal year 2008. The downturn was attributed to the broad global economic recession impacting all of Agilent's business segments.
What are the key strategic initiatives Agilent undertook or planned during this period?
Agilent undertook significant restructuring activities to reduce costs and improve efficiency, including workforce reductions and facility consolidations, with expected annual savings of $525 million. Strategically, Agilent announced its intention to acquire Varian, Inc. for approximately $1.5 billion, a move aimed at strengthening its position in the life sciences and applied markets. The company also planned to reorganize its reporting segments starting in fiscal year 2010.
How did the different business segments perform?
All segments faced headwinds in fiscal year 2009. The Electronic Measurement segment's revenue dropped by 30%, the Bio-analytical Measurement segment saw a 6% decline, and the Semiconductor and Board Test segment experienced a sharp 54% decrease in revenue. Management noted some signs of market stabilization towards the end of the year but anticipated a gradual recovery.
What is Agilent's financial position, particularly regarding liquidity?
Agilent maintained a strong liquidity position. Cash and cash equivalents, including short-term investments, increased to $2.48 billion as of October 31, 2009, up from $1.43 billion in the prior year. This increase, combined with existing cash reserves, provided the company with substantial financial flexibility, including resources to fund the planned Varian acquisition.
06—Continue