Company Increases Fiscal Year 2008 EPS Guidance MELBOURNE, Fla.,
Nov. 1 /PRNewswire-FirstCall/ -- Harris Corporation (NYSE:HRS)
reported that revenue for the first quarter of fiscal year 2008
increased 30 percent to $1.2 billion, compared to $947 million in
the prior- year quarter. Organic revenue growth was 13 percent.
Orders in the first quarter of fiscal 2008 were $1.4 billion, an
increase of 24 percent compared to the prior-year quarter. Net
income was $100 million, or $.73 per diluted share, compared to
$83.9 million, or $.60 per diluted share, in the prior-year
quarter. Non-GAAP net income, excluding acquisition-related costs,
was $104 million, or $.76 per diluted share, compared to $96.8
million, or $.69 per diluted share, in the prior-year quarter. The
prior-year quarter benefited from a favorable tax settlement of $12
million, or $.08 per diluted share. A reconciliation of GAAP to
non-GAAP financial measures is provided on Tables 5 and 6 along
with accompanying notes. "Excellent first quarter growth included
strong sales of our Falcon(R) tactical radio systems and organic
growth across the Government Communications Systems segment in
Civil and National Intelligence Programs, and IT Services," said
Howard L. Lance, chairman, president, and chief executive officer.
"Revenue in the quarter also benefited from the June 2007
acquisition of Multimax Incorporated and from Harris Stratex
Networks, Inc., formed in January 2007. Orders were significantly
higher than revenue, providing solid momentum for continued growth
throughout fiscal year 2008." Defense Communications and
Electronics First quarter revenue in the Defense Communications and
Electronics segment was $429 million, an increase of 13 percent
compared to the prior-year quarter. Operating income increased 21
percent to $132 million. RF Communications Division revenue
increased 20 percent compared to the prior-year quarter. Tactical
radio demand was strong in both the U.S. government and
international markets and across all product lines, including
Falcon II HF (high-frequency) and multiband radios, and Falcon III
handheld radios and vehicular systems. RF Communications backlog
increased in the first quarter to about $1 billion. Harris Falcon
II and Falcon III radios are being installed in new Mine Resistant
Ambush Protected (MRAP) vehicles for the U.S. Army, Navy and Marine
Corps. During the quarter, Harris received $26 million in
additional MRAP orders from the U.S. Navy. Delivery of MRAP
vehicles continues to be a priority for the Pentagon. Also during
the quarter, Harris received a $104 million order for Falcon II HF
radios and a $42 million order for Falcon II multiband radios from
the U.S. Army. The company received $68 million in orders from the
U.S. Navy for Falcon II HF and multiband radios and Falcon III
handheld radios. Harris received a $25 million order to provide the
U.S. Marine Corps with remote control systems that allow radio use
at a distance up to 3.5 kilometers. In the international market,
Harris was awarded a $76 million contract to supply the government
of Pakistan with Falcon II HF radios. Orders were also received in
the quarter from the governments of Algeria, Kazakhstan, Saudi
Arabia, and the United Arab Emirates Royal Guards. In the Defense
Programs business, revenue declined 3 percent. Year-over- year
revenue increased on a number of major communications programs,
including the CDL (Common Data Link) Hawklink program for the U.S.
Navy, the U.S. Army WIN-T (Warfighter Information Network-Tactical)
program, the LMST (Lightweight Multiband Satellite Terminal)
program for the U.S. Marine Corps, and the MIDS (Multifunctional
Information Distribution System) terminals program for Department
of Defense aircraft. Aircraft electronics revenue declined in the
quarter, primarily as a result of the transition of the F-35
Lightning II program from the development phase to the low-rate
initial production phase. Government Communications Systems First
quarter revenue in the Government Communications Systems segment
was $490 million, an increase of 43 percent compared to the
prior-year quarter. Organic revenue increased 16 percent, excluding
the impact of the acquisition of Multimax. The segment includes
Civil and National Intelligence Programs, and IT Services. Revenue
drivers in the segment included the continued rollout of long-term
systems integration contracts, including the FDCA (Field Data
Collection Automation) program for the U.S. Census Bureau, the FTI
(FAA Telecommunications Infrastructure) program, and equipment
upgrades for the FAA VSCS (Voice Switching and Control System)
program. The segment also had growth in classified development
programs for National Intelligence customers and the Patriot IT
services program for the NRO (National Reconnaissance Office).
Segment revenue also benefited from the NMCI (Navy/Marine Corps
Intranet) program and the NETCENTS program for the U.S. Air Force,
both part of the Multimax acquisition. Operating income for the
segment was $43 million in the first quarter. Operating income
benefited from strong year-over-year organic revenue growth, the
Multimax acquisition, and the successful re-negotiation of pricing
on an IT services contract. Income was negatively impacted by
additional schedule and cost overruns on commercial satellite
reflector programs. During the quarter, Harris was among a number
of companies awarded the 5- year ALLIANT Government-Wide
Acquisition Contract by the U.S. General Services Administration.
ALLIANT will allow Harris to provide integrated IT product and
services solutions to support a number of federal agencies. Also
during the quarter, Harris won a $25 million IT services contract
with the U.S. Navy, an $11 million program with NOAA (National
Oceanic and Atmospheric Administration), and an $8 million
follow-on IT services program with the U.S. Army. Broadcast
Communications First quarter revenue in the Broadcast
Communications segment was $147 million, an increase of 5 percent
compared to the prior-year quarter. Operating income was $10
million, an increase of 18 percent compared to the prior-year
quarter. The segment is benefiting from cost-reduction actions
completed in the prior year. Double-digit growth continued in the
Video Infrastructure & Digital Media business, which provides
systems for routing, master control, networking, test and
measurement, multi-image processing, servers and graphics. Revenue
in Software Systems was slightly higher than the prior-year
quarter, while revenue in Transmission Systems declined, due to
lower international transmitter sales and the exit from the radio
resale business, which occurred during the fourth quarter of fiscal
2007. Sales of digital transmitters improved, as broadcasters
prepared for the February 2009 FCC- mandated transition to digital
broadcast technology. The Broadcast Communications segment
continued to benefit from the Harris ONE(TM) initiative to provide
interoperable, end-to-end workflow solutions that span the entire
broadcast delivery chain. Harris integrated products are focused on
the industry's transition to digital and high-definition services
and on emerging media business and advertising models. Orders in
the first quarter were greater than revenue. Major orders included
H-Class(TM) media software for Sony Entertainment Television, OSi-
Traffic(TM) systems for Nexstar Broadcasting Group, NEXIO(TM) video
servers for the American Forces Network and PBS (Public
Broadcasting System), a significant order for digital signage
infrastructure from the Venetian Hotel Macao, and an order from the
Saudi Arabia Ministry of Culture and Information for products that
span the company's high-definition portfolio. The company shipped
its first CENTRIO(TM) multiviewers in the quarter. CENTRIO, an
award-winning multi-image processor, has gained early market
recognition as a solution for streamlining complex, large-system,
multi- display monitoring applications. Orders for the new system
have been very strong. Harris Stratex Networks, Inc. First quarter
revenue for the Harris Stratex Networks segment was $172 million,
an increase of 7 percent compared to the prior-year quarter on a
pro forma, non-GAAP basis (as if the former Harris Microwave
Communications segment and Stratex Networks had been combined since
the beginning of fiscal year 2007). The segment reported a first
quarter operating loss of $1 million. Non-GAAP operating income,
excluding integration costs associated with the business
combination, was $7 million and was flat with the prior-year
quarter. The segment's higher mix of lower margin, low-capacity
radio shipments dampened operating performance in the quarter.
Orders in the first quarter were higher than revenue and reflected
strong demand for wireless infrastructure systems across North
America and international markets. Demand continues to be driven by
geographic footprint expansion, increased bandwidth requirements to
support new services such as 3G and WiMAX, and network hardening
and interoperability requirements for public safety. New market
demand also is coming from the adoption of IP network technology,
as operators converge voice and data networks to provide more
advanced, revenue- producing services at lower costs. Harris
Stratex Networks' portfolio of products delivers software-scalable
systems to achieve capacity migration, broad frequency coverage,
and network support for both traditional voice and IP traffic.
Harris Stratex Networks (NASDAQ:HSTX) management will host a
conference call and webcast (http://www.harrisstratex.com/) today
at 5:30 p.m., Eastern Time, to discuss financial results for their
fiscal year first quarter. Outlook and Guidance Harris increased
its non-GAAP earnings guidance for fiscal year 2008 from a range of
$3.30 to $3.40 to a new range of $3.35 to $3.45 per diluted share,
excluding integration charges related to the acquisition of
Multimax and the formation of Harris Stratex Networks. Non-GAAP
earnings guidance represents a year-over-year increase of 21
percent compared to non-GAAP earnings for fiscal year 2007. The
corresponding fiscal year 2008 GAAP earnings guidance is in a range
of $3.28 to $3.38 per diluted share. Revenue in fiscal year 2008
also is expected to increase 21 percent above fiscal year 2007. A
reconciliation of GAAP to non-GAAP earnings guidance is provided on
Table 7 and in the accompanying notes. Harris will host a
conference call today at 4:30 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) 325-4792, access code:
2463742. 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 Thursday, November 8. To
access the replay, please call (719) 457-0820, access code:
2463742. A recording of the call will also be available on the
Harris website beginning at 7:00 p.m., Eastern Time, on November 1.
Harris is an international communications and information
technology company serving government, defense and commercial
markets in more than 150 countries. Headquartered in Melbourne,
Florida, the company has annual revenue of over $4 billion and more
than 16,000 employees -- including nearly 7,000 engineers and
scientists. Harris is dedicated to developing best-in- class
assured communications(TM) products, systems, and services.
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 2008 excluding
the impact of costs associated with our acquisition of Multimax in
our Government Communications Systems segment and integration costs
associated with the formation of Harris Stratex Networks; and
earnings per share guidance for fiscal 2008 also excluding the
impact of integration costs associated with the formation of Harris
Stratex Networks and the acquisition of Multimax. 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 understand Harris performance. In
addition, Harris 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. Attachments: Financial Statements (eight tables).
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 2008;
the potential value of contract awards and potential contract
awards; 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, as 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; changes in our
effective tax rate that may have an adverse effect on our results
of operations; the impact of the results of Harris Stratex
Networks, which may vary significantly and may be difficult to
forecast; the potential impact of natural disasters on our
significant operations in Florida, California and other locations;
general economic conditions in the markets in which we operate;
changes in future business conditions that could cause business
investments and/or recorded goodwill to become impaired; and our
ability to attract and retain key employees. 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. Table 1 HARRIS CORPORATION FY'08 First Quarter
Summary Condensed Consolidated Statement of Income (Unaudited)
Quarter Ended Sept. 28, Sept. 29, 2007 2006 (In millions, except
per share amounts) Revenue from product sales and services
$1,230.50 $946.8 Cost of product sales and services (849.6) (640.9)
Engineering, selling and administrative expenses (216.9) (169.4)
Non-operating income (loss) 1.7 (18.5) Interest income 2.0 2.4
Interest expense (15.1) (9.8) Income before income taxes and
minority interest 152.6 110.6 Income taxes (52.8) (26.7) Minority
interest in Harris Stratex Networks, Inc., net of tax 0.4 --- Net
income $100.2 $83.9 Net income per common share Basic $0.76 $0.63
Diluted $0.73 $0.60 Cash dividends paid per common share $0.15
$0.11 Basic weighted average shares outstanding 132.6 132.9 Diluted
weighted average shares outstanding 137.9 141.7 Table 2 HARRIS
CORPORATION FY'08 First Quarter Summary Business Segment
Information (Unaudited) Quarter Ended Sept. 28, Sept. 29, 2007 2006
(In millions) Revenue Defense Communications and Electronics
$429.20 $380.90 Government Communications Systems 489.9 341.7
Broadcast Communications 146.7 139.8 Harris Stratex Networks 172.3
93.6 Corporate eliminations (7.6) (9.2) $1,230.50 $946.80 Income
Before Income Taxes And Minority Interest Segment Operating Income
(Loss): Defense Communications and Electronics $131.80 $108.90
Government Communications Systems 42.7 31.6 Broadcast
Communications 10.4 8.8 Harris Stratex Networks (1.0) 7.9
Headquarters expense (18.6) (16.4) Corporate eliminations (1.3)
(4.3) Non-operating income (loss) 1.7 (18.5) Net interest (13.1)
(7.4) $152.60 $110.60 Table 3 HARRIS CORPORATION FY'08 First
Quarter Summary CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) Quarter Ended Sept. 28, Sept. 29, 2007 2006 (In
millions) Operating Activities Net income $100.2 $83.9 Adjustments
to reconcile net income to net cash provided by (used in) operating
activities: Depreciation and amortization 41.9 27.3 Non-current
deferred income tax 7.0 (7.1) Gain on the sale of securities
available-for-sale (2.1) --- Minority interest in Harris Stratex
Networks, Inc., net of tax (0.4) --- (Increase) decrease in:
Accounts and notes receivable (8.7) (1.2) Inventories (55.4) (31.1)
Increase (decrease) in: Accounts payable and accrued expenses
(52.1) (43.6) Advance payments and unearned income (4.6) (5.0)
Income taxes 18.2 25.0 Other 20.1 6.0 Net cash provided by
operating activities 64.1 54.2 Investing Activities Cash paid for
acquired businesses (1.5) --- Additions of property, plant and
equipment (22.2) (21.7) Additions of capitalized software (10.3)
(13.3) Proceeds from the sale of securities available-for-sale 3.1
--- Cash paid for short-term investments available-for-sale (4.0)
(7.5) Proceeds from the sale of short-term investments
available-for-sale 9.3 120.1 Net cash provided by (used in)
investing activities (25.6) 77.6 Financing Activities Proceeds from
borrowings 2.2 4.1 Repayment of borrowings (5.9) (5.3) Proceeds
from exercise of employee stock options 11.8 4.9 Repurchases of
common stock (50.0) (6.9) Cash dividends (20.6) (14.7) Net cash
used in financing activities (62.5) (17.9) Effect of exchange rate
changes on cash and cash equivalents (0.7) 0.9 Net increase
(decrease) in cash and cash equivalents (24.7) 114.8 Cash and cash
equivalents, beginning of year 368.3 181.3 Cash and cash
equivalents, end of quarter $343.6 $296.1 Supplemental disclosure
of noncash investing and financing activities Common stock issued
in exchange for 3.5% convertible debentures, due fiscal 2023 $163.5
$--- Table 4 HARRIS CORPORATION FY'08 First Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) Sept. 28, June 29,
2007 2007 (In millions) Assets Cash and cash equivalents $343.60
$368.30 Short-term investments 15.1 20.4 Marketable equity
securities 35.2 40.5 Receivables 758.1 748.5 Inventories 612.2
556.8 Current deferred income taxes 105.9 94.3 Property, plant and
equipment 460.7 459.2 Goodwill 1,532.80 1,525.20 Identifiable
intangible assets 406.9 417.9 Other assets 180.3 174.9 $4,450.80
$4,406.00 Liabilities and Shareholders' Equity Short-term debt
$408.50 $410.00 Accounts payable and accrued expenses 674.7 725.6
Advance payments and unearned income 123.9 128.5 Income taxes
payable 43.3 64.2 Current portion of long-term debt 159.4 309.8
Non-current deferred income taxes 43 61.8 Long-term debt 408.1
408.9 Other long-term liabilities 117.3 66.5 Minority interest in
Harris Stratex Networks, Inc. 329.5 326.9 Shareholders' equity
2,143.10 1,903.80 $4,450.80 $4,406.00 HARRIS CORPORATION FY'08
First Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
AND REGULATION G DISCLOSURE To supplement our condensed
consolidated financial statements presented in accordance with U.S.
generally accepted accounting principles (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 and minority interest; income taxes; minority
interest; net income; and net income per diluted share adjusted to
exclude certain costs, expenses, gains and losses. 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. Harris management also
believes that these non-GAAP financial measures enhance the ability
of investors to analyze Harris business trends and to understand
Harris performance. In addition, Harris 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. 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'08 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Condensed
Consolidated Statement of Income (Unaudited) Quarter Ended Quarter
Ended September 28, 2007 September 29, 2006 As Adjust- Non- As
Adjust- Non- Reported ment GAAP Reported ment GAAP (In millions,
except per share amounts) Revenue from product sales and services
$1,230.5 $--- $1,230.5 $946.8 $--- $946.8 Cost of product sales and
services (A) (849.6) 0.8 (848.8) (640.9) --- (640.9) Engineering,
selling and administrative expenses(B) (216.9) 8.1 (208.8) (169.4)
--- (169.4) Non-operating income (loss) (C) 1.7 --- 1.7 (18.5) 19.8
1.3 Interest income 2.0 --- 2.0 2.4 --- 2.4 Interest expense (15.1)
--- (15.1) (9.8) --- (9.8) Income before income taxes and minority
interest 152.6 8.9 161.5 110.6 19.8 130.4 Income taxes (52.8) (2.2)
(55.0) (26.7) (6.9) (33.6) Minority interest in Harris Stratex
Networks, net of tax 0.4 (2.8) (2.4) --- --- --- Net income $100.2
$3.9 $104.1 $83.9 $12.9 $96.8 Net income per diluted common share
$.73 $.03 $.76 $.60 $.09 $.69 Table 6 HARRIS CORPORATION FY'08
First Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Business Segment Information (Unaudited) Quarter Ended Quarter
Ended September 28, 2007 September 29, 2006 As Adjust- Non- As
Adjust- Non- Reported ment GAAP Reported ment GAAP (In millions)
Revenue Defense Communications and Electronics $429.2 $--- $429.2
$380.9 $--- $380.9 Government Communications Systems 489.9 ---
489.9 341.7 --- 341.7 Broadcast Communications 146.7 --- 146.7
139.8 --- 139.8 Harris Stratex Networks 172.3 --- 172.3 93.6 ---
93.6 Corporate eliminations (7.6) --- (7.6) (9.2) --- (9.2)
$1,230.5 $--- $1,230.5 $946.8 $--- $946.8 Income Before Income
Taxes and Minority Interest Segment Operating Income (Loss):
Defense Communications and Electronics $131.8 $--- $131.8 $108.9
$--- $108.9 Government Communications Systems (D) 42.7 0.6 43.3
31.6 --- 31.6 Broadcast Communications 10.4 --- 10.4 8.8 --- 8.8
Harris Stratex Networks (E) (1.0) 8.3 7.3 7.9 --- 7.9 Headquarters
expense (18.6) --- (18.6) (16.4) --- (16.4) Corporate eliminations
(1.3) --- (1.3) (4.3) --- (4.3) Non-operating income (loss)(C) 1.7
--- 1.7 (18.5) 19.8 1.3 Net interest (13.1) --- (13.1) (7.4) ---
(7.4) $152.6 $8.9 $161.5 $110.6 $19.8 $130.4 Table 7 HARRIS
CORPORATION Reconciliation of FY'08 GAAP EPS Guidance to Non-GAAP
EPS Guidance (Unaudited) Earnings Per Diluted Share GAAP Earnings
Per Share Guidance for FY'08 $3.28 to $3.38 Charges associated with
the combination with Stratex Networks, Inc. (F) $0.06 Charges
associated with the acquisition of Multimax Incorporated (G) $0.01
Non-GAAP Earnings Per Share Guidance for FY'08 $3.35 to $3.45 Table
8 HARRIS CORPORATION FY'08 First Quarter Summary Comparison of
Harris Stratex Networks Segment GAAP and Non-GAAP Revenue and
Operating Income to that Reported by Harris Stratex Networks, Inc.
(Unaudited) Quarter Ended Quarter Ended September 28, 2007
September 29, 2006 As Reported by As Reported by Harris Harris
Stratex Stratex Harris Networks Harris Networks (In millions)
Revenue - As Reported $172.3 $172.3 $93.6 $93.6 Adjustments:
Stratex Networks, Inc. revenue: Quarter ended September 29, 2006
67.3 Revenue - Non-GAAP $172.3 $172.3 $93.6 $160.9 Operating
Income(Loss) - As Reported (H) $(1.0) $(1.0) $7.9 $5.3 Adjustments:
Stratex combination- related costs 8.3 8.3 FAS 123R expense 2.4 0.4
Other identifiable intangible amortization 3.6 Stratex Networks,
Inc. operating income: Quarter ended September 29, 2006 6.0 Harris
corporate allocations 1.6 Operating Income - Non-GAAP $7.3 $13.3
$7.9 $13.3 HARRIS CORPORATION FY'08 First Quarter Summary
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)
Notes to tables 5 through 8: Note A - Adjustments to cost of
product sales and services for the quarter ended September 28, 2007
are due to the step up in fixed assets and integration costs
associated with the combination between Stratex Networks, Inc.
("Stratex") and our former Microwave Communications Division ($0.8
million). Note B - Adjustments to engineering, selling and
administrative expenses for the quarter ended September 28, 2007
are due to the step up in fixed assets and integration costs
associated with the Stratex combination ($7.5 million); and
integration costs associated with the acquisition of Multimax
Incorporated ("Multimax") ($0.6 million). Note C - The adjustment
to non-operating income (loss) for the quarter ended September 29,
2006 is due to the impairment to our investment in Terion, Inc.
($19.8 million). Note D - Adjustments to our Government
Communications Systems segment operating income for the quarter
ended September 28, 2007 are due to integration costs associated
with the acquisition of Multimax ($0.6 million). Note E -
Adjustments to our Harris Stratex Networks segment operating income
(loss) for the quarter ended September 28, 2007 are due to the step
up in fixed assets and integration costs associated with the
Stratex combination ($8.3 million). Note F - Adjustment for the
estimated $0.06 per diluted share impact, after minority interest,
due to the step up in fixed assets and integration costs associated
with the Stratex combination. Note G - Adjustment for the estimated
$0.01 per diluted share impact for the estimated impact from
integration and other charges associated with the acquisition of
Multimax. Note H - The difference between the GAAP operating income
(loss) recorded during the quarter ended September 29, 2006 by
Harris versus Harris Stratex Networks, Inc. is due to $1.6 million
of corporate allocations expense and $1.0 million of other expense.
DATASOURCE: Harris Corporation CONTACT: Investor Relations, Pamela
Padgett +1-321-727-9383, , or Media, Jim Burke +1-321-727-9131, Web
site: http://www.harris.com/ http://www.harrisstratex.com/
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