SANTA CLARA, Calif., March 26, 2009
Agilent Technologies Inc. (NYSE: A) today announced a major restructuring of its Electronic Measurement businesses in response to the most severe global downturn in the company's history. Fiscal 2009 revenue in the company's Electronic Measurement Segment is expected to be down roughly 30 percent from 2008 to the lowest level in the company's 10-year history. Revenue in the Semiconductor & Board Test Segment is expected to be down over 50 percent from last year and off 65 percent from its peak volume.
"We have been very aggressive to date in addressing the downturn in electronic measurement markets," said Bill Sullivan, Agilent president and chief executive officer. "However, business remains severely depressed, and there are no prospects for a meaningful recovery in the foreseeable future. Therefore, we have no choice but to resize our electronic measurement businesses for the realities of the marketplace."
The company announced it would reduce costs in its Electronic Measurement Segment by an annualized $300 million over the course of the next four quarters, sizing the Segment to achieve a 12 percent operating margin and a 21 percent ROIC at annualized revenues of $2.3 billion. It also announced a further restructuring of its Semiconductor & Board Test Segment to reduce annual costs by an additional $10 million. This restructuring will affect approximately 2,700 employees and have a cash cost of about $160 million.
Said Sullivan, "For Agilent to realize its full potential, we must have a financially healthy company and a solidly profitable Electronic Measurement business. We will move quickly to resize the EM businesses to the new business levels, align resources to the best market opportunities, and position the company for the new economic environment."
In order to fully fund the restructuring and conserve cash in an environment of severely constrained financial markets, the company also announced it was temporarily suspending its share repurchase program until the end of its 2009 fiscal year.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is the world's premier measurement company and a technology leader in communications, electronics, life sciences and chemical analysis. The company's 19,000 employees serve customers in more than 110 countries. Agilent had net revenues of $5.8 billion in fiscal 2008. Information about Agilent is available on the Web at www.agilent.com.
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, our planned restructuring activities, including our current estimates of the scope, timing and cost of those activities. 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, the risk of additional costs and delays associated with compliance with U.S. and international labor and other laws associated with our planned restructuring activities, the risk that a further decline in general economic conditions and the global credit and equity markets will require changes to the planned restructuring, 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 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 Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2009. 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.
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Jorgen Tesselaar (Europe and Asia)