01—Abstract
Summary
Summary of the 10-K filed December 22, 2014. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported its fiscal year 2014 results, marked by a significant strategic separation of its electronic measurement business into a new entity, Keysight Technologies, Inc., which was completed on November 1, 2014.
This separation effectively reshaped Agilent's operational focus towards its life sciences, diagnostics, and chemical analysis segments. The company reported total net revenue of $6.981 billiona, a 3% increase year-over-year, with notable growth in the Life Sciences and Diagnostics (up 3%) and Chemical Analysis (up 5%) businesses, while the Electronic Measurement business saw a 2% increase before its spin-off. Management highlighted positive order growth across all segments, driven by demand in pharmaceutical, biotechnology, food safety, and environmental markets, alongside improvements in communications and semiconductor test markets within the electronic measurement segment.
Agilent also announced its decision to exit the Nuclear Magnetic Resonance (NMR) business in the fourth quarter of fiscal 2014, incurring approximately $68 millionb in related charges. Financially, the company generated operating cash flow of $711 million. While net income decreased to $504 million from $724 million in fiscal 2013, this was influenced by pre-separation costs of $191 million and debt redemption expenses.
The company maintained a strong balance sheet with $3.028 billionc in cash and cash equivalents. Key strategic moves and operational adjustments position Agilent for continued focus on its core measurement and analytical solutions businesses moving forward.
02—Key points
Key Highlights
- Agilent completed the separation of its Electronic Measurement business into Keysight Technologies, Inc. on November 1, 2014.
- Total net revenue increased by 3% to $6.981 billion, with Life Sciences & Diagnostics revenue up 3% and Chemical Analysis revenue up 5%.
- Order growth was positive across all segments, indicating continued demand for Agilent's solutions.
- The company announced its exit from the Nuclear Magnetic Resonance (NMR) business, incurring $68 million in restructuring charges.
- Operating cash flow was $711 million, and the company ended the fiscal year with $3.028 billion in cash and cash equivalents.
- Significant pre-separation costs of $191 million impacted the reported net income for fiscal year 2014.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Agilent Technologies, Inc. kept $0.14.
- Revenue$4.05B100.0%
- Cost of revenue−$2.07B51.2%
- Gross profit$1.98B48.8%
- Operating costs−$1.56B38.5%
- Operating income$419.0M10.4%
- Interest, other & tax$130.0M3.2%
- Net income$549.0M13.6%
Where FY2014 revenue went
$4.05B- Cost of revenue: $2.07B, 51% of revenue
- SG&A: $1.20B, 30% of revenue
- Operating income: $419.0M, 10% of revenue
- R&D: $358.0M, 8.8% of revenue
Kept 10% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed December 22, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $4.05B$3.89B | +4.0% |
| Cost of Revenue | $2.07B$1.99B | +4.3% |
| Gross Profit | $1.98B$1.91B | +3.6% |
| R&D Expenses | $358.00M$337.00M | +6.2% |
| SG&A Expenses | $1.20B$1.18B | +1.3% |
| Operating Expenses | $3.63B$3.51B | +3.4% |
| Operating Income | $419.00M$386.00M | +8.5% |
| Interest Expense | $110.00M$107.00M | +2.8% |
| Net Income | $549.00M$734.00M | −25.2% |
| EPS (Basic) | $1.65$2.15 | −23.3% |
| EPS (Diluted) | $1.62$2.13 | −23.9% |
| Shares Outstanding (Basic) | 333.00M341.00M | −2.3% |
| Shares Outstanding (Diluted) | 338.00M345.00M | −2.0% |
05—Questions
Frequently Asked Questions
What was the primary strategic event for Agilent in fiscal year 2014?
The most significant strategic event was the completion of the separation of Agilent's electronic measurement business into a new, publicly traded company named Keysight Technologies, Inc. This transaction was finalized on November 1, 2014, allowing Agilent to focus on its core life sciences, diagnostics, and chemical analysis businesses.
How did Agilent's financial performance fare in fiscal year 2014, considering the separation?
Agilent reported a 3% increase in total net revenue to $6.981 billion. The Life Sciences and Diagnostics segment saw a 3% revenue increase, and the Chemical Analysis segment grew by 5%. The Electronic Measurement business also showed a 2% revenue increase before its separation. Despite these revenue gains, net income decreased to $504 million from $724 million in the prior year, largely due to $191 million in pre-separation expenses and costs associated with debt redemption.
What is the impact of Agilent exiting the NMR business?
Agilent decided to exit its Nuclear Magnetic Resonance (NMR) business in the fourth quarter of fiscal year 2014 due to lack of growth and profitability. This decision resulted in approximately $68 million in restructuring and other related costs, including workforce reductions and asset write-downs. The company expects this move to positively impact operating profit by approximately $10 million in fiscal year 2015.
What is the company's financial health as indicated by its balance sheet?
Agilent maintained a strong financial position, ending the fiscal year with $3.028 billion in cash and cash equivalents. The company generated $711 million in net cash from operating activities, indicating solid operational cash flow despite the impact of separation costs. The balance sheet appears healthy, with substantial liquidity to support ongoing operations and future growth initiatives.
06—Continue