Form 8-K Keysight Technologies, For: Jan 16
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 16, 2019
KEYSIGHT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-36334 | 46-4254555 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
of incorporation) | Identification No.) | |||
1400 Fountaingrove Parkway Santa Rosa CA | 95403 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code (800) 829-4444
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 8.01 Other Events.
On January 16, 2019, Keysight Technologies, Inc. (the "Company") issued a press release to announce the completion of an organizational change to align its services business with its customers and end markets. A copy of the press release is attached hereto as Exhibit 99.1. The new segment reporting structure also reflects the retrospective application of ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which we adopted on November 1, 2018.
This Current Report on Form 8-K including Exhibit 99.1 should be read in conjunction with the Annual Report on Form 10-K and other filings. The information contained in this report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in this report shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following is furnished as an exhibit to this report and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended:
Exhibit No. | Description | |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
KEYSIGHT TECHNOLOGIES, INC. | ||
By: | /s/ Jeffrey K. Li | |
Name: | Jeffrey K. Li | |
Title: | Vice President, Assistant General Counsel and | |
Assistant Secretary | ||
Date: January 16, 2019 | ||
3
EXHIBIT INDEX
Exhibit No. | Description | |
4
Exhibit 99.1
Keysight Technologies Announces Change to Segment Reporting
SANTA ROSA, Calif., Jan. 16, 2019 - Keysight Technologies, Inc. (NYSE: KEYS), a leading technology company that helps enterprises, service providers, and governments accelerate innovation to connect and secure the world, today announced that, in the first quarter of fiscal year 2019, it completed an organizational change to align its services business with its customers and end markets.
The alignment of services to the Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) segments is a logical next step in Keysight’s customer solutions oriented go-to-market strategy, to fully reflect our services delivery within the markets served and further enable services growth. With this change from four reported segments to three, services, which was previously reported as Services Solutions Group (SSG), will now be reported in the segment in which the services are delivered.
Beginning in the first quarter of fiscal year 2019, the company will report segment operating results for: Communications Solutions Group (CSG), Electronic Industrial Solutions Group (EISG) and Ixia Solutions Group (ISG).
Historical Financial Information
Historical financial segment information under the new operating segment structure for the four quarters and full year for fiscal years 2016, 2017 and 2018 is provided below. In addition, the new segment reporting structure also reflects the retrospective application of ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which the company adopted on November 1, 2018. Additional segment information is available on the company’s website at investor.keysight.com. Keysight historical results in aggregate remain unchanged.
About Keysight Technologies
Keysight Technologies, Inc. (NYSE: KEYS) is a leading technology company that helps enterprises, service providers, and governments accelerate innovation to connect and secure the world. Keysight's solutions optimize networks and bring electronic products to market faster and at a lower cost with offerings from design simulation, to prototype validation, to manufacturing test, to optimization in networks and cloud environments. Customers span the worldwide communications ecosystem, aerospace and defense, automotive, energy, semiconductor and general electronics end markets. Keysight generated revenues of $3.9B in fiscal year 2018. More information is available at www.keysight.com.
# # #
1
Additional information about Keysight Technologies is available in the newsroom at www.keysight.com/go/news and on Facebook, Google+, LinkedIn, Twitter and YouTube.
EDITORIAL CONTACT:
Denise Idone
+ 1 631-849-3500
INVESTOR CONTACT:
Jason Kary
+1 707-577-6916
Source: IR-KEYS
2
Keysight Technologies, Inc.
Communications Solutions Group (CSG)
Restated for ASU 2017-07 and Services Solutions Group (SSG) Realignment
(Unaudited)
2018 | Q1 | Q2 | Q3 | Q4 | FY18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 420 | $ | — | $ | 80 | $ | 500 | $ | 536 | $ | — | $ | 91 | $ | 627 | $ | 515 | $ | — | $ | 89 | $ | 604 | $ | 566 | $ | — | $ | 94 | $ | 661 | $ | 2,037 | $ | — | $ | 354 | $ | 2,392 | |||||||||||||||||||||||||
Cost of goods sold | 164 | 2 | 48 | 214 | 206 | 2 | 54 | 262 | 197 | 2 | 54 | 253 | 205 | 2 | 56 | 263 | 772 | 8 | 212 | 992 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | 60.9 | % | 57.2 | % | 61.7 | % | 58.2 | % | 61.7 | % | 58.1 | % | 63.7 | % | 60.1 | % | 62.1 | % | 58.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | 80 | 3 | — | 84 | 87 | 3 | — | 89 | 81 | 3 | 1 | 85 | 83 | 3 | 1 | 87 | 331 | 11 | 2 | 345 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 118 | 4 | 20 | 142 | 120 | 3 | 23 | 146 | 124 | 3 | 22 | 149 | 124 | 3 | 26 | 153 | 486 | 13 | 91 | 590 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | (2 | ) | — | — | (2 | ) | (2 | ) | — | (1 | ) | (3 | ) | (2 | ) | — | — | (2 | ) | (1 | ) | — | (1 | ) | (2 | ) | (7 | ) | — | (2 | ) | (9 | ) | ||||||||||||||||||||||||||||||||
Income from operations | 59 | (8 | ) | 12 | 63 | 126 | (9 | ) | 14 | 132 | 114 | (7 | ) | 13 | 120 | 155 | (8 | ) | 12 | 159 | 454 | (33 | ) | 51 | 474 | ||||||||||||||||||||||||||||||||||||||||
Operating margin % | 14.0 | % | 12.6 | % | 23.5 | % | 21.0 | % | 22.2 | % | 19.8 | % | 27.4 | % | 24.1 | % | 22.3 | % | 19.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 1,700 | $ | 240 | $ | 1,940 | $ | 1,801 | $ | 254 | $ | 2,055 | $ | 1,801 | $ | 258 | $ | 2,059 | $ | 1,854 | $ | 261 | $ | 2,115 | $ | 1,854 | $ | 261 | $ | 2,115 | |||||||||||||||||||||||||||||||||||
2017 | Q1 | Q2 | Q3 | Q4 | FY17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 434 | $ | — | $ | 76 | $ | 510 | $ | 424 | $ | — | $ | 78 | $ | 502 | $ | 418 | $ | — | $ | 86 | $ | 504 | $ | 462 | $ | — | $ | 86 | $ | 548 | $ | 1,738 | $ | — | $ | 326 | $ | 2,064 | |||||||||||||||||||||||||
Cost of goods sold | 171 | 1 | 46 | 218 | 164 | 1 | 47 | 212 | 163 | 1 | 48 | 212 | 171 | 1 | 50 | 223 | 669 | 3 | 192 | 865 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | 60.5 | % | 57.2 | % | 61.3 | % | 57.7 | % | 61.2 | % | 58.1 | % | 62.9 | % | 59.4 | % | 61.5 | % | 58.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | 76 | 2 | — | 78 | 73 | 2 | — | 75 | 75 | 1 | — | 77 | 78 | 2 | — | 80 | 302 | 6 | 1 | 310 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 117 | 2 | 19 | 137 | 114 | 2 | 20 | 136 | 116 | 1 | 20 | 138 | 116 | 2 | 23 | 140 | 463 | 6 | 82 | 551 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | (2 | ) | — | — | (2 | ) | (2 | ) | — | (1 | ) | (3 | ) | (1 | ) | — | (1 | ) | (2 | ) | (2 | ) | — | — | (2 | ) | (7 | ) | — | (2 | ) | (9 | ) | ||||||||||||||||||||||||||||||||
Income from operations | 72 | (4 | ) | 11 | 79 | 75 | (5 | ) | 11 | 81 | 66 | (3 | ) | 17 | 80 | 98 | (4 | ) | 13 | 107 | 311 | (16 | ) | 53 | 347 | ||||||||||||||||||||||||||||||||||||||||
Operating margin % | 16.7 | % | 15.6 | % | 17.6 | % | 16.1 | % | 15.7 | % | 15.9 | % | 21.3 | % | 19.5 | % | 17.9 | % | 16.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 1,661 | $ | 198 | $ | 1,859 | $ | 1,674 | $ | 207 | $ | 1,881 | $ | 1,679 | $ | 230 | $ | 1,909 | $ | 1,739 | $ | 237 | $ | 1,976 | $ | 1,739 | $ | 237 | $ | 1,976 | |||||||||||||||||||||||||||||||||||
2016 | Q1 | Q2 | Q3 | Q4 | FY16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 440 | $ | — | $ | 73 | $ | 513 | $ | 446 | $ | — | $ | 72 | $ | 519 | $ | 424 | $ | — | $ | 79 | $ | 503 | $ | 442 | $ | — | $ | 83 | $ | 525 | $ | 1,752 | $ | — | $ | 309 | $ | 2,060 | |||||||||||||||||||||||||
Cost of goods sold | 175 | 1 | 44 | 221 | 174 | 1 | 44 | 219 | 162 | 1 | 45 | 209 | 176 | 2 | 48 | 225 | 687 | 6 | 182 | 874 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | 60.1 | % | 57.0 | % | 61.1 | % | 57.8 | % | 61.7 | % | 58.5 | % | 60.3 | % | 57.1 | % | 60.8 | % | 57.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | 76 | 2 | 2 | 79 | 76 | 1 | 2 | 79 | 75 | 1 | — | 77 | 76 | 2 | — | 78 | 303 | 6 | 4 | 313 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 113 | 2 | 18 | 133 | 115 | 2 | 19 | 137 | 112 | 3 | 19 | 133 | 117 | 3 | 20 | 141 | 457 | 11 | 76 | 544 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | (3 | ) | — | — | (3 | ) | (2 | ) | — | — | (3 | ) | (2 | ) | — | — | (2 | ) | (2 | ) | — | — | (3 | ) | (9 | ) | — | (2 | ) | (11 | ) | ||||||||||||||||||||||||||||||||||
Income from operations | 78 | (5 | ) | 11 | 83 | 84 | (5 | ) | 7 | 87 | 77 | (5 | ) | 15 | 86 | 75 | (7 | ) | 16 | 84 | 314 | (23 | ) | 49 | 340 | ||||||||||||||||||||||||||||||||||||||||
Operating margin % | 17.7 | % | 16.2 | % | 18.9 | % | 16.7 | % | 18.1 | % | 17.2 | % | 17.1 | % | 15.9 | % | 17.9 | % | 16.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 1,744 | $ | 198 | $ | 1,942 | $ | 1,798 | $ | 204 | $ | 2,002 | $ | 1,792 | $ | 210 | $ | 2,002 | $ | 1,805 | $ | 210 | $ | 2,015 | $ | 1,805 | $ | 210 | $ | 2,015 | |||||||||||||||||||||||||||||||||||
Keysight adopted ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, retrospectively effective November 1, 2018.
Segment data reflect the results of our reportable segments under Keysight's management reporting system which are not necessarily in conformity with GAAP financial measures. Net revenue for Communications Solutions Group excludes the impact of fair value adjustments to acquisition related deferred revenue balances for the Anite acquisition of $5 million for Q1'16, $4 million for Q2'16, $3 million for Q3'16, $1 million for Q2'17 and $1 million for Q2'18, respectively. Income from operations of our reporting segments exclude, among other things, charges related to the amortization of acquisition-related balances, share based compensation, restructuring and related costs, acquisition and integration costs, separation and related costs, Northern California wildfire-related costs and Goodwill impairment.
The sum of the quarters may not tie to total due to rounding.
1
Keysight Technologies, Inc.
Electronic Industrial Solutions Group (EISG)
Restated for ASU 2017-07 and Services Solutions Group (SSG) Realignment
(Unaudited)
2018 | Q1 | Q2 | Q3 | Q4 | FY18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 203 | $ | 26 | $ | 229 | $ | 255 | $ | — | $ | 26 | $ | 282 | $ | 258 | $ | — | $ | 27 | $ | 285 | $ | 249 | $ | — | $ | 27 | $ | 275 | $ | 965 | $ | — | $ | 106 | $ | 1,071 | |||||||||||||||||||||||||||
Cost of goods sold | 83 | 1 | 15 | 99 | 99 | 1 | 16 | 116 | 95 | 1 | 16 | 112 | 98 | 1 | 15 | 114 | 375 | 3 | 62 | 441 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | 59.0 | % | 56.6 | % | 61.3 | % | 59.0 | % | 63.1 | % | 60.9 | % | 60.6 | % | 58.7 | % | 61.1 | % | 58.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | 33 | 1 | — | 34 | 36 | 1 | — | 37 | 36 | 1 | — | 37 | 36 | 1 | — | 37 | 141 | 4 | 1 | 145 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 50 | 2 | 6 | 58 | 55 | 1 | 7 | 63 | 55 | 1 | 7 | 63 | 54 | 1 | 7 | 61 | 212 | 5 | 27 | 245 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | (4 | ) | — | (1 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||
Income from operations | 37 | (3 | ) | 4 | 38 | 67 | (3 | ) | 4 | 68 | 74 | (3 | ) | 5 | 75 | 63 | (3 | ) | 4 | 64 | 241 | (12 | ) | 17 | 245 | ||||||||||||||||||||||||||||||||||||||||
Operating margin % | 18.5 | % | 16.9 | % | 26.0 | % | 23.9 | % | 28.5 | % | 26.5 | % | 25.5 | % | 23.3 | % | 25.0 | % | 22.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 774 | $ | 72 | $ | 846 | $ | 813 | $ | 75 | $ | 888 | $ | 828 | $ | 77 | $ | 905 | $ | 812 | $ | 76 | $ | 888 | $ | 812 | $ | 76 | $ | 888 | |||||||||||||||||||||||||||||||||||
2017 | Q1 | Q2 | Q3 | Q4 | FY17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 192 | $ | — | $ | 24 | $ | 216 | $ | 220 | $ | — | $ | 24 | $ | 244 | $ | 218 | $ | — | $ | 21 | $ | 239 | $ | 206 | $ | — | $ | 24 | $ | 230 | $ | 836 | $ | — | $ | 93 | $ | 929 | |||||||||||||||||||||||||
Cost of goods sold | 77 | — | 14 | 91 | 84 | — | 13 | 98 | 85 | — | 14 | 99 | 80 | — | 13 | 93 | 326 | 1 | 54 | 381 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | 59.9 | % | 57.6 | % | 61.8 | % | 60.0 | % | 61.1 | % | 58.7 | % | 61.3 | % | 59.6 | % | 61.1 | % | 59.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | 28 | — | — | 28 | 31 | — | — | 32 | 30 | — | — | 30 | 32 | 1 | — | 33 | 121 | 2 | — | 123 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 46 | 1 | 6 | 53 | 49 | 1 | 6 | 55 | 49 | — | 5 | 55 | 50 | 1 | 6 | 56 | 194 | 3 | 23 | 219 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | — | — | — | (1 | ) | (3 | ) | — | (1 | ) | (4 | ) | |||||||||||||||||||||||||||||||||||
Income from operations | 42 | (1 | ) | 4 | 44 | 57 | (2 | ) | 5 | 61 | 55 | (1 | ) | 2 | 56 | 45 | (2 | ) | 5 | 48 | 199 | (6 | ) | 15 | 209 | ||||||||||||||||||||||||||||||||||||||||
Operating margin % | 21.7 | % | 20.4 | % | 26.1 | % | 24.8 | % | 25.3 | % | 23.4 | % | 21.8 | % | 21.0 | % | 23.8 | % | 22.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 746 | $ | 59 | $ | 805 | $ | 764 | $ | 63 | $ | 827 | $ | 772 | $ | 65 | $ | 837 | $ | 798 | $ | 68 | $ | 866 | $ | 798 | $ | 68 | $ | 866 | |||||||||||||||||||||||||||||||||||
2016 | Q1 | Q2 | Q3 | Q4 | FY16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 191 | $ | — | $ | 22 | $ | 213 | $ | 193 | $ | — | $ | 24 | $ | 216 | $ | 191 | $ | — | $ | 24 | $ | 215 | $ | 201 | $ | — | $ | 25 | $ | 226 | $ | 776 | $ | — | $ | 94 | $ | 870 | |||||||||||||||||||||||||
Cost of goods sold | 82 | — | 13 | 96 | 78 | 1 | 14 | 93 | 75 | — | 14 | 89 | 81 | 1 | 15 | 97 | 316 | 2 | 56 | 375 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | 57.2 | % | 55.0 | % | 59.4 | % | 57.0 | % | 60.7 | % | 58.3 | % | 59.6 | % | 57.2 | % | 59.2 | % | 56.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | 27 | — | — | 28 | 27 | — | 1 | 29 | 27 | — | — | 27 | 27 | 1 | — | 28 | 108 | 2 | 1 | 112 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 46 | 1 | 5 | 52 | 47 | 1 | 6 | 54 | 46 | 1 | 6 | 52 | 47 | 1 | 6 | 54 | 186 | 4 | 23 | 212 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | (1 | ) | — | — | (1 | ) | (4 | ) | — | — | (4 | ) | |||||||||||||||||||||||||||||||||||
Income from operations | 38 | (2 | ) | 3 | 38 | 40 | (2 | ) | 3 | 42 | 44 | (2 | ) | 4 | 47 | 47 | (3 | ) | 4 | 48 | 169 | (8 | ) | 14 | 175 | ||||||||||||||||||||||||||||||||||||||||
Operating margin % | 19.7 | % | 18.1 | % | 20.9 | % | 19.1 | % | 23.1 | % | 21.5 | % | 23.3 | % | 21.4 | % | 21.8 | % | 20.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 748 | $ | 59 | $ | 807 | $ | 770 | $ | 63 | $ | 833 | $ | 773 | $ | 64 | $ | 837 | $ | 773 | $ | 63 | $ | 836 | $ | 773 | $ | 63 | $ | 836 | |||||||||||||||||||||||||||||||||||
Keysight adopted ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, retrospectively effective November 1, 2018.
Segment data reflect the results of our reportable segments under Keysight's management reporting system which are not necessarily in conformity with GAAP financial measures. Income from operations of our reporting segments exclude, among other things, charges related to the amortization of acquisition-related balances, share based compensation, restructuring and related costs, acquisition and integration costs, separation and related costs, Northern California wildfire-related costs and Goodwill impairment.
The sum of the quarters may not tie to total due to rounding.
2
Keysight Technologies, Inc.
Ixia Solutions Group (ISG)
Restated for ASU 2017-07 and Services Solutions Group (SSG) Realignment
(Unaudited)
2018 | Q1 | Q2 | Q3 | Q4 | FY18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 127 | $ | — | $ | — | $ | 127 | $ | 90 | $ | — | $ | — | $ | 90 | $ | 119 | $ | — | $ | — | $ | 119 | $ | 115 | $ | — | $ | — | $ | 115 | $ | 451 | $ | — | $ | — | $ | 451 | |||||||||||||||||||||||||
Cost of goods sold | 31 | — | — | 31 | 22 | — | — | 22 | 29 | — | — | 29 | 34 | — | — | 34 | 116 | — | — | 116 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | 75.6 | % | 75.5 | % | 75.8 | % | 75.6 | % | 75.6 | % | 75.5 | % | 70.5 | % | 70.3 | % | 74.3 | % | 74.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | 25 | — | — | 26 | 30 | — | — | 30 | 31 | — | — | 31 | 32 | — | — | 32 | 118 | 1 | — | 119 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 52 | — | — | 53 | 46 | 1 | — | 47 | 49 | 1 | — | 50 | 49 | 1 | — | 49 | 196 | 3 | — | 199 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Income from operations | 18 | — | — | 18 | (7 | ) | (2 | ) | — | (10 | ) | 10 | (1 | ) | — | 9 | — | (1 | ) | — | (1 | ) | 21 | (4 | ) | — | 16 | ||||||||||||||||||||||||||||||||||||||
Operating margin % | 14.5 | % | 14.1 | % | (8.4 | )% | (10.6 | )% | 8.1 | % | 7.1 | % | 0.4 | % | (0.5 | )% | 4.7 | % | 3.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 2,056 | $ | — | $ | 2,056 | $ | 2,018 | $ | — | $ | 2,018 | $ | 2,036 | $ | — | $ | 2,036 | $ | 1,327 | $ | — | $ | 1,327 | $ | 1,327 | $ | — | $ | 1,327 | |||||||||||||||||||||||||||||||||||
2017 | Q1 | Q2(a) | Q3 | Q4 | FY17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except margins data) | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | As Reported | ASU 2017-07 | SSG | Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net revenue | — | — | — | — | $ | 12 | $ | — | $ | — | $ | 12 | $ | 120 | $ | — | $ | — | $ | 120 | $ | 124 | $ | — | $ | — | $ | 124 | $ | 256 | $ | — | $ | — | $ | 256 | |||||||||||||||||||||||||||||
Cost of goods sold | — | — | — | — | 3 | — | — | 3 | 27 | — | — | 27 | 30 | — | — | 30 | 60 | — | — | 60 | |||||||||||||||||||||||||||||||||||||||||||||
Gross margin % | — | — | — | — | 77.1 | % | 77.0 | % | 77.0 | % | 76.8 | % | 76.2 | % | 76.2 | % | 76.6 | % | 76.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
Research and development | — | — | — | — | 4 | — | — | 4 | 21 | — | — | 21 | 25 | — | — | 26 | 50 | — | — | 51 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | — | — | — | — | 7 | — | — | 7 | 47 | — | — | 47 | 49 | — | — | 49 | 103 | — | — | 103 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating expense (income), net | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Income from operations | — | — | — | — | (2 | ) | — | — | (2 | ) | 24 | — | — | 24 | 20 | — | — | 20 | 42 | — | — | 42 | |||||||||||||||||||||||||||||||||||||||||||
Operating margin % | — | — | — | — | (12.9 | )% | (13.1 | )% | 19.9 | % | 19.6 | % | 16.4 | % | 16.2 | % | 16.6 | % | 16.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
Segment assets | — | — | — | — | $ | 1,959 | $ | — | $ | 1,959 | $ | 2,055 | $ | — | $ | 2,055 | $ | 2,063 | $ | — | $ | 2,063 | $ | 2,063 | $ | — | $ | 2,063 | |||||||||||||||||||||||||||||||||||||
(a) The Ixia Solutions Group operating results include activity for 13 days during the period, from the date of acquisition, April 18, 2017, through April 30, 2017.
Keysight adopted ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, retrospectively effective November 1, 2018.
Segment data reflect the results of our reportable segments under Keysight's management reporting system which are not necessarily in conformity with GAAP financial measures. Net revenue for Ixia Solutions Group excludes the impact of fair value adjustments to acquisition related deferred revenue balances for the Ixia acquisition of $4 million for Q2'17, $31 million for Q3'17, $24 million for Q4'17, $19 million for Q1'18, $8 million for Q2'18, $4 million for Q3'18 and $4 million for Q4'18, respectively. Income from operations of our reporting segments exclude, among other things, charges related to the amortization of acquisition-related balances, share based compensation, restructuring and related costs, acquisition and integration costs, separation and related costs, Northern California wildfire-related costs, Goodwill impairment.
The sum of the quarters may not tie to total due to rounding.
3