Company Increases Fiscal Year 2007 Guidance MELBOURNE, Fla., Oct.
25 /PRNewswire-FirstCall/ -- Harris Corporation (NYSE:HRS) today
reported revenue for the first quarter of fiscal year 2007 of $947
million, a 25 percent increase compared to $760 million in the
prior- year quarter. Orders in the first quarter increased 53
percent to $1.1 billion and were higher in each of the company's
four business segments. GAAP net income increased 67 percent to
$83.9 million, or $.60 per diluted share, compared to net income in
the prior year of $50.3 million, or $.36 per diluted share. "Harris
has begun the new fiscal year with an excellent first quarter,
posting solid revenue and earnings growth," said Howard L. Lance,
chairman, president, and chief executive officer. "Organic revenue
growth continued very strong at 18 percent. Orders grew in each
business segment, significantly outpacing revenue, and the new
opportunity funnel continues to be strong. Our increased
investments in research and development have created very
successful products, such as our Falcon(R) III tactical radios and
TRuepoint(R) microwave radios. Acquisitions in our Broadcast
business are being integrated and are contributing to the company's
expanding backlog. Our cash position is excellent and cash flow
from operations continues to be solid." Non-GAAP net income for the
first quarter increased 48 percent to $96.8 million, or $.69 per
diluted share, compared to prior-year quarter non- GAAP net income
of $65.4 million, or $.47 per diluted share. Non-GAAP earnings in
the first quarter of fiscal year 2007 exclude an after-tax charge
of $12.9 million, or $.09 per diluted share, associated with the
previously announced impairment of an investment in Terion, Inc., a
privately held wireless communications company. Non-GAAP earnings
in the first quarter of the prior year exclude a $15.1 million
after-tax charge, or $.11 per diluted share, associated with
cost-reduction actions and inventory write-downs in the company's
Broadcast Communications segment. The company increased non-GAAP
earnings guidance for its fiscal year 2007 from a previous range of
$2.65 to $2.75 per diluted share to a new range of $2.70 to $2.80
per diluted share. Revised fiscal year 2007 non-GAAP earnings
guidance represents a year-over-year increase of 24 percent
compared to non- GAAP earnings for fiscal year 2006. Non-GAAP
earnings guidance for fiscal year 2007 excludes the $.09 per
diluted share charge related to the Terion investment, as well as
anticipated integration costs estimated at $.12 per diluted share
after minority interest and a significant gain related to the
planned combination of the Harris Microwave Communications Division
and Stratex Networks, Inc. On the day the combination is completed,
the gain will be calculated based on the closing price of Stratex
Networks common stock. If the combination had been completed
October 24, 2006, the gain from the combination would have been
$.82 per diluted share. Details related to non-GAAP earnings are
provided in the attached Reconciliation of Non-GAAP Financial
Measures in Tables 5 and 6 and accompanying notes. Government
Communications Systems Revenue in the Government Communications
Systems segment increased 6 percent to $459 million in the first
quarter, compared to $433 million in the year-ago quarter.
Operating income was $53.0 million, compared to $53.4 million in
the prior-year quarter, which benefited from a higher percentage of
fixed-price production programs. Operating performance continues to
be excellent. Revenue growth in the segment was led by the ramp-up
of the new five-year, $600 million contract with the U.S. Census
Bureau for its Field Data Collection Automation program. Harris is
integrating multiple automated systems that will enable census
takers to electronically collect data in door- to-door interviews
during the 2010 Census. Higher revenue also resulted from the FAA
Telecommunications Infrastructure (FTI) program. The 15-year, $2.2
billion FTI program is creating the most secure, efficient and
advanced network of its kind in the U.S. government. Harris
recently completed the transition of FTI's new Satellite Network to
serve operational requirements and the new Mission Support network
that provides the FAA's administrative functions. Higher revenue
also came from the continuing ramp-up of the 10-year, $1 billion
Patriot technical services program for the National Reconnaissance
Office. Additional programs contributing to higher revenue in the
first quarter included several classified programs as well as
weapons data links, avionics, commercial satellite antenna systems,
and other communication electronics. RF Communications Revenue in
the RF Communications segment was $264 million in the first
quarter, a 54 percent increase compared to the year-ago quarter.
Orders more than doubled compared to the prior-year quarter. Orders
substantially outpaced sales, further increasing the segment's
already substantial backlog. Operating income for the segment rose
51 percent to $87.7 million in the first quarter. Revenue and order
growth was strong in both U.S. and international markets,
reflecting worldwide demand and customer preference for our high-
performance, feature-rich tactical radios. Orders in the first
quarter included multiple new requirements for Falcon II radios
from the U.S. Army and the Marine Corps for HF and multiband
radios. Orders were also received for the new Falcon III multiband
handheld radios. Significant international orders included HF and
VHF radios for the governments of Algeria, Georgia, Dominican
Republic, Panama, and Indonesia. After the close of the quarter,
Harris received its first international order for the Falcon III
handheld radio from the Australian Army. In early October, Harris
introduced the Falcon III multiband, multi- mission manpack radio
and has received several orders from the Department of Defense and
other U.S. government customers. The Falcon III manpack radio
provides significant new capabilities, including wideband secure
networking, a four-fold increase in frequency range to 2 GHz, and a
significant reduction in weight and size compared to competitive
products. With its extended frequency coverage, the manpack radio
combines traditional multiband radio features with new capabilities
such as commercial L-Band SATCOM and wideband mobile ad-hoc
networking, allowing simultaneous transmission of multiple video
streams, voice, and situational awareness data. Harris expects the
manpack radio to be the first radio to market with high-speed,
wideband networking certified by the National Security Agency
(NSA). The Falcon III manpack radio is expected to begin shipping
in the first quarter of fiscal year 2008. Microwave Communications
Revenue in the Microwave Communications segment increased 24
percent to $94 million in the first quarter. Orders exceeded sales
for the seventh consecutive quarter. Operating income in the
quarter was $7.9 million, compared to operating income of $3.0
million in the prior-year quarter. Operating margin was 8.4 percent
on higher sales and higher gross margins provided by the new
TRuepoint family of products. Demand in North American markets was
driven primarily by mobile operators that are upgrading and
expanding networks for high bandwidth voice, data, and video
services and by private networks upgrading for increased
reliability, survivability, and interoperability. International
demand increased significantly, driven by network expansions for a
diverse and growing customer base throughout West Africa, East
Africa, the Middle East, and Eastern Europe. Major orders in the
quarter came from regional operators in Nigeria, Tanzania, Kenya,
Iraq, and Mexico. Harris also received the first order from a major
European telecommunications systems integrator for high-capacity
TRuepoint radios for a large 3G operator in Indonesia, with
follow-on requirements expected in the second quarter. Also, Harris
secured a five-year supplier agreement during the quarter with
Africa's largest mobile phone operator, MTN Group. Harris will
supply digital microwave radios for backhaul and access
applications across MTN's extensive networks in Africa. As
previously announced, Harris signed an agreement on September 5,
2006, to combine its Microwave Communications segment with Stratex
Networks. This combination is expected to close early in the third
quarter of the current fiscal year. The new company will be called
Harris Stratex Networks. The combined company would have had annual
revenue of $600 million for the 12-months ended June 30, 2006.
Harris will be the majority shareholder with approximately 56
percent ownership of the new company. "The combined company is
expected to generate increased revenue and profitability and will
be better able to compete as a result of increased scale, global
reach, and product breadth," Lance said. Broadcast Communications
Revenue in the Broadcast Communications segment was $140 million in
the first quarter, up 59 percent compared to $88 million in the
prior-year quarter, primarily as a result of contributions from
three acquisitions made in fiscal year 2006 - Leitch Technology
Corporation, Optimal Solutions, Inc. and Aastra Digital Video.
Operating income was $8.8 million in the first quarter, compared to
non-GAAP operating income of $6.0 million in the prior year.
Prior-year operating income excluded an $18.0 million charge for
cost- reduction actions. Component shortages from vendors and a
slip in shipments for the segment's video distribution and
networking equipment had a negative impact on revenue and operating
income in the quarter. New environmental regulations in the
European Union, which became effective on July 1, 2006, caused a
spike in demand for lead-free electronic components, resulting in
industry-wide supply chain shortages. Orders more than doubled in
the quarter and were higher than revenue. Even without the benefit
of recent acquisitions, orders increased 35 percent. Strong orders
in the quarter were led by the software systems area of the
business, including an order with British Sky Broadcasting for the
new H-Class(TM) Airtime Sales system, an advanced, scalable
solution for controlling, monitoring and executing complex
advertising campaigns. Also during the quarter, Harris received
orders for software systems from two major station groups,
including Allbritton Communications and its ABC affiliate stations
for air-time sales, traffic and billing software systems. These
software solutions were added to the Harris product suite through
the April 2006 acquisition of Optimal Solutions, Inc., and provide
new technology allowing stations to centralize their data
collection to support more efficient operations. Orders for video
distribution and networking equipment also were strong, increasing
20 percent over the prior year and building backlog. The combined
strength in demand for HD digital distribution and conversion
equipment in North America and the Pacific Rim drove higher orders.
Orders included a multi-million dollar order for deployment of
servers, networking equipment, and digital asset management
solutions for two U.S. military bases. Harris equipment will
digitally transport, ingest, store, add metadata, analyze, and
archive large quantities of video produced during military training
exercises. The video will come from more than 60 different sources,
including night- vision cameras, handheld camcorders, and fixed
camera locations. Providing video infrastructure and networking
solutions for U.S. military bases is a new market for Harris.
Outlook "Overall strong performance continued in the first quarter,
with orders once again outpacing revenue by a healthy margin. This
bodes well for our increased expectations in fiscal year 2007,"
Lance said. "Clearly, our RF Communications segment continued to
lead company growth with stellar performance. Visibility has
increased, and we expect the strong worldwide demand for tactical
radios to continue. The Government Communications Systems segment
has returned to revenue growth, is executing well in major program
areas, and its opportunity pipeline remains robust. With the recent
acquisitions and continuing emphasis on new product development,
our Broadcast business is extremely well positioned with an
expanding portfolio of end-to- end broadcast solutions. In our
Microwave Communications segment, across-the- board performance
improvements and stronger markets have come together at an ideal
time for the planned merger with Stratex Networks. Fiscal year 2007
should be another excellent year with continued growth and market
expansion in each of our business segments." Harris will host a
conference call today at 5:00 p.m., Eastern Time, to discuss the
above items. Interested individuals are invited to listen to the
call by using a dial-in number: (719) 457-2641, access code:
4378389. The conference call also will be broadcast live via the
Internet at http://www.harris.com/. A replay of the teleconference
will be available beginning at 8:00 p.m., Eastern Time, and will
run until midnight, Eastern Time, on Wednesday, November 1. To
access the replay, please call (719) 457-0820, access code:
4378389. A recording of the call will also be available on Harris'
website beginning at 7:00 p.m., Eastern Time, on October 25. Harris
is an international communications and information technology
company serving government and commercial markets in more than 150
countries. With headquarters in Melbourne, Florida, the company has
annual sales of $3.5 billion and nearly 14,000 employees -
including more than 6,000 engineers and scientists - dedicated to
the development of best-in-class assured communications(TM)
products, systems, and services. The company's operating divisions
serve markets for government communications, RF communications,
broadcast communications, and microwave communications. Additional
information about Harris Corporation is available at
http://www.harris.com/. Non-GAAP Financial Measures This press
release contains non-GAAP financial measures within the meaning of
Regulation G promulgated by the SEC, including net income and
earnings per share for the first quarter of fiscal 2007 excluding
the impact of the impairment in our Terion investment and earnings
per share guidance for fiscal 2007 also excluding the impact of
integration activities and the gain associated with the planned
combination of our Harris Microwave Communications business and
Stratex Networks, Inc. Harris management believes that these
non-GAAP financial measures, when considered together with the GAAP
financial measures, provide information that is useful to investors
in understanding period-over-period operating results separate and
apart from items that may, or could, have a disproportionately
positive or negative impact on results in any particular period.
Management also believes that these non-GAAP financial measures
enhance the ability of investors to analyze Harris business trends
and to better understand the company's performance. In addition,
the company may utilize non-GAAP financial measures as a guide in
its forecasting, budgeting, and long-term planning process and to
measure operating performance for some management compensation
purposes. Any analysis of non-GAAP financial measures should be
used only in conjunction with results presented in accordance with
GAAP. Forward-Looking Statement Statements in this press release
that are not historical facts are forward-looking statements that
reflect management's current expectations, assumptions, and
estimates of future performance and economic conditions. Such
statements are made in reliance upon the safe harbor provisions of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements in this
release include but are not limited to: earnings guidance for
fiscal 2007; the potential value of contract awards and potential
contract awards; the closing, timing and impact of the announced
combination of the Microwave Communications Division and Stratex
Networks; and statements regarding outlook, including expected
revenue growth. The Company cautions investors that any
forward-looking statements are subject to risks and uncertainties
that may cause actual results and future trends to differ
materially from those matters expressed in or implied by such
forward-looking statements. The Company's consolidated results and
the forward-looking statements could be affected by many factors,
including but not limited to: our participation in markets that are
often subject to uncertain economic conditions which makes it
difficult to estimate growth in our markets and, as a result,
future income and expenditures; our dependence on the U.S.
government for a significant portion of our revenues, and the loss
of this relationship or a shift in U.S. government funding could
have adverse consequences on our future business; potential changes
in U.S. government or customer priorities due to program reviews or
revisions to strategic objectives, including termination of or
potential failure to fund U.S. government contracts; risks inherent
with large long-term fixed-price contracts, particularly the
ability to contain cost overruns; the performance of critical
subcontractors or suppliers; financial and government and
regulatory risks relating to international sales and operations,
including fluctuations in foreign currency exchange rates and the
effectiveness of our currency hedging program; our ability to
continue to develop new products that achieve market acceptance;
the consequences of future geo-political events, which may affect
adversely the markets in which we operate, our ability to insure
against risks, our operations or our profitability; strategic
acquisitions and the risks and uncertainties related thereto,
including our ability to manage and integrate acquired businesses;
potential claims that we are infringing the intellectual property
rights of third parties; the successful resolution of patent
infringement claims and the ultimate outcome of other
contingencies, litigation and legal matters; customer credit risk;
the fair values of our portfolio of passive investments, which
values are subject to significant price volatility or erosion;
risks inherent in developing new technologies; the potential impact
of hurricanes on our operations in Florida and the potential impact
of earthquakes on our operations in California; the ability to
recruit and retain qualified personnel; and general economic
conditions in the markets in which we operate. Further information
relating to factors that may impact the Company's results and
forward-looking statements are disclosed in the Company's filings
with the SEC. Harris disclaims any intention or obligation, other
than imposed by law, to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise. Attachments: Financial Statements (six tables). Table
1 HARRIS CORPORATION FY'07 First Quarter Summary CONDENSED
CONSOLIDATED STATEMENT OF INCOME Quarter Ended September 29,
September 30, 2006 2005 (in millions, except per share amounts)
Revenue from product sales and services $946.8 $759.7 Cost of
product sales and services (640.9) (536.6) Engineering, selling and
administrative expenses (169.4) (139.7) Non-operating loss (18.5)
(0.6) Interest income 2.4 3.2 Interest expense (9.8) (6.4) Income
before income taxes 110.6 79.6 Income taxes (26.7) (29.3) Net
income $83.9 $50.3 Net Income Per Common Share Basic $.63 $.38
Diluted $.60 $.36 Cash dividends paid per common share $.11 $.08
Basic weighted average shares outstanding 132.9 132.5 Diluted
weighted average shares outstanding 141.7 141.1 Table 2 HARRIS
CORPORATION FY'07 First Quarter Summary BUSINESS SEGMENT
INFORMATION Quarter Ended September 29, September 30, 2006 2005 (in
millions) Revenue Government Communications Systems $ 459.2 $ 432.5
RF Communications 263.7 170.9 Microwave Communications 93.6 75.3
Broadcast Communications 139.8 87.7 Corporate eliminations (9.5)
(6.7) $ 946.8 $ 759.7 Income Before Income Taxes Segment Operating
Income (Loss): Government Communications Systems $53.0 $53.4 RF
Communications 87.7 58.1 Microwave Communications 7.9 3.0 Broadcast
Communications 8.8 (12.0) Headquarters expense (16.4) (15.5)
Corporate eliminations (4.5) (3.6) Non-operating loss (18.5) (0.6)
Net interest (7.4) (3.2) $ 110.6 $79.6 Table 3 HARRIS CORPORATION
FY'07 First Quarter Summary CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS Quarter Ended September 29, September 30, 2006 2005 (in
millions) Operating Activities Net income $83.9 $50.3 Adjustments
to reconcile net income to net cash provided by (used in) operating
activities: Depreciation and amortization 27.3 20.2 Non-current
deferred income tax (7.1) 0.3 (Increase) decrease in: Accounts and
notes receivable (1.2) 38.0 Inventories (31.1) (31.7) Increase
(decrease) in: Accounts payable and accrued expenses (43.6) (33.5)
Advance payments and unearned income (5.0) 2.2 Income taxes 25.0
24.4 Other 6.0 15.3 Net cash provided by operating activities 54.2
85.5 Investing Activities Additions of plant and equipment (21.7)
(14.6) Additions of capitalized software (13.3) (9.4) Cash paid for
short-term investments available-for-sale (7.5) (177.4) Proceeds
from the sale of short-term investments available-for-sale 120.1
44.0 Net cash provided by (used in) investing activities 77.6
(157.4) Financing Activities Proceeds from borrowings 4.1 309.1
Repayment of borrowings (5.3) (14.9) Proceeds from exercise of
employee stock options 4.9 11.5 Repurchases of common stock (6.9)
(6.0) Cash dividends (14.7) (10.6) Net cash provided by (used in)
financing activities (17.9) 289.1 Effect of exchange rate changes
on cash and cash equivalents 0.9 0.9 Net increase in cash and cash
equivalents 114.8 218.1 Cash and cash equivalents, beginning of
year 181.3 377.6 Cash and cash equivalents, end of quarter $ 296.1
$ 595.7 Table 4 HARRIS CORPORATION FY'07 First Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEET September 29, June 30, 2006
2006 (in millions) Assets Cash and cash equivalents $296.1 $181.3
Short-term investments --- 112.6 Receivables 560.4 560.6
Inventories 498.9 468.9 Current deferred income taxes 107.5 105.0
Property, plant and equipment 403.2 393.4 Goodwill 953.3 951.1
Identifiable intangible assets 186.7 193.4 Non-current notes
receivable 6.1 4.3 Other assets 178.2 171.7 $3,190.4 $3,142.3
Liabilities and Shareholders' Equity Short-term debt $0.8 $0.2
Accounts payable and accrued expenses 539.7 582.5 Advance payments
and unearned income 125.0 129.9 Income taxes payable 65.7 38.1
Current portion of long-term debt 149.1 1.4 Non-current deferred
income taxes 21.4 28.6 Long-term debt 550.0 699.5 Shareholders'
equity 1,738.7 1,662.1 $3,190.4 $3,142.3 HARRIS CORPORATION FY'07
First Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
AND REGULATION G DISCLOSURE To supplement our consolidated
financial statements presented in accordance with accounting
principles generally accepted in the United States (GAAP), we
provide additional measures of segments' operating income (loss);
non-operating income (loss); cost of product sales and services;
engineering, selling and administrative expenses; income before
income taxes; income taxes; net income; and net income per diluted
share adjusted to exclude certain costs, expenses, gains and
losses. Management of Harris believes that these non-GAAP financial
measures provide information that is useful to investors in
understanding period-over-period operating results separate and
apart from items that may, or could, have a disproportionate
positive or negative impact on results in any particular period.
Management also believes that these non- GAAP measures enhance the
ability of an investor to analyze trends in Harris' business and to
better understand our performance. In addition, the Company may
utilize non-GAAP financial measures as a guide in its budgeting and
long- term planning process and to measure operating performance
for some management compensation purposes. Any analysis of non-GAAP
financial measures should be used only in conjunction with results
presented in accordance with GAAP. A reconciliation of these
non-GAAP financial measures with the most directly comparable
financial measures calculated in accordance with GAAP follows:
Table 5 HARRIS CORPORATION FY'07 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Consolidated
Statement Of Income Quarter Ended Quarter Ended September 29, 2006
September 30, 2005 As Adjust- Non- As Adjust- Non- Reported ment
GAAP Reported ment GAAP (in millions, except per share amounts)
Revenue from product sales and services $946.8 $- $946.8 $759.7 $-
$759.7 Cost of product sales and services (A) (640.9) - (640.9)
(536.6) 11.3 (525.3) Engineering, selling and administrative
expenses (B) (169.4) - (169.4) (139.7) 6.7 (133.0) Non-operating
income (loss) (C) (18.5) 19.8 1.3 (0.6) - (0.6) Interest income 2.4
- 2.4 3.2 - 3.2 Interest expense (9.8) - (9.8) (6.4) - (6.4) Income
before income taxes 110.6 19.8 130.4 79.6 18.0 97.6 Income taxes
(26.7) (6.9) (33.6) (29.3) (2.9) (32.2) Net income $83.9 $12.9
$96.8 $50.3 $15.1 $65.4 Net income per diluted common share $.60
$.09 $.69 $.36 $.11 $.47 Table 6 HARRIS CORPORATION FY'07 First
Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
BUSINESS SEGMENT INFORMATION Quarter Ended Quarter Ended September
29, 2006 September 30, 2005 As Adjust- Non- As Adjust- Non-
Reported ment GAAP Reported ment GAAP (in millions) Revenue
Government Communications Systems $459.2 $- $459.2 $432.5 $- $432.5
RF Communications 263.7 - 263.7 170.9 - 170.9 Microwave
Communications 93.6 - 93.6 75.3 - 75.3 Broadcast Communications
139.8 - 139.8 87.7 - 87.7 Corporate eliminations (9.5) - (9.5)
(6.7) - (6.7) $946.8 $- $946.8 $759.7 $- $759.7 Income Before
Income Taxes Segment Operating Income (Loss): Government
Communications Systems $53.0 $- $53.0 $53.4 $- $53.4 RF
Communications 87.7 - 87.7 58.1 - 58.1 Microwave Communications 7.9
- 7.9 3.0 - 3.0 Broadcast Communications (D) 8.8 - 8.8 (12.0) 18.0
6.0 Headquarters expense (16.4) - (16.4) (15.5) - (15.5) Corporate
eliminations (4.5) - (4.5) (3.6) - (3.6) Non-operating income
(loss)(C) (18.5) 19.8 1.3 (0.6) - (0.6) Net interest (7.4) - (7.4)
(3.2) - (3.2) $110.6 $19.8 $130.4 $79.6 $18.0 $97.6 HARRIS
CORPORATION FY'07 First Quarter Summary RECONCILIATION OF GAAP TO
NON-GAAP MEASUREMENTS Notes to tables 5 and 6: Note A - Adjustments
to cost of product sales and services for the first quarter of
fiscal 2006 relate to inventory write-downs associated with cost
reduction actions including the transfer of European manufacturing
to the United States and outsourcing of other manufacturing
activity in the Broadcast Communications segment. Note B -
Adjustments to engineering, selling and administrative expenses for
the first quarter of fiscal 2006 relate to severance and other
costs associated with cost reduction actions including the transfer
of European manufacturing to the United States and outsourcing of
other manufacturing activity in the Broadcast Communications
segment. Note C - Adjustment to non-operating income (loss) for the
first quarter of fiscal 2007 relate to the previously announced
impairment to our investment in Terion, Inc. ("Terion"). Note D -
Adjustments to Broadcast Communications segment operating income
for the first quarter of fiscal 2006 are due to severance,
inventory write downs and other costs associated with cost
reduction actions including the transfer of European manufacturing
to the United States and outsourcing of other manufacturing
activity. As noted in the release, the company's fiscal 2007
non-GAAP earnings guidance is $2.70 to $2.80 per diluted share,
excluding the impact of the impairment to our investment in Terion
noted above and the impact of the previously announced merger
transaction with Stratex Networks, Inc. On a GAAP basis earnings
will include: * The $.09 per diluted share impact from the
impairment of our investment in Terion. * The estimated $.12 per
diluted share impact, after minority interest, from the one-time
charges associated with the previously announced merger transaction
with Stratex Networks, Inc. These charges include expenses related
to integration and the impact from both a step-up in inventory and
a write-down of deferred revenue as of the closing date of the
transaction. * The gain that Harris will recognize as a result of
the merger transaction, which will be based on the stock price of
Stratex Networks, Inc. as of the closing date and the net book
value of our Microwave Communications business as of the closing
date. Due to these variables, we believe that the precise amount of
the gain cannot be reasonably determined at this time. If the
transaction had closed on October 24, 2006, however, the gain would
have been $.82 per diluted share, based on the closing price of
Stratex Network's stock on that date and the current net book value
of our Microwave Communications business. DATASOURCE: Harris
Corporation CONTACT: Investor Relations, Pamela Padgett,
+1-321-727-9383, or , or Media, Tom Hausman, +1-321-727-9131, or ,
both of Harris Corporation, or for additional information, contact
Web site: http://www.harris.com/
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