MELBOURNE, Fla., Oct. 29 /PRNewswire-FirstCall/ -- Harris
Corporation (NYSE:HRS) reported revenue of $1.37 billion in its
fiscal quarter ended September 26, 2008, an increase of 11 percent
compared to $1.23 billion in the prior-year quarter. Net income in
the first quarter of fiscal 2009 was $119 million, or $.88 per
diluted share, compared to net income of $100 million, or $.73 per
diluted share, in the prior-year quarter. Net income in the first
quarter included pre-tax charges of $9 million for previously
announced cost-reduction actions and $8 million for an impairment
related to AuthenTec, Inc. securities. "Our strong momentum
continued in the first quarter, with double-digit organic revenue
and earnings growth," said Howard L. Lance, chairman, president and
chief executive officer. "Each of our business segments delivered
higher revenue, as our investments in new products, new
capabilities, and international expansion are allowing us to serve
a broad and diversified list of global customers. "In addition, our
financial position remains very strong. We ended the first quarter
with $345 million of cash and short-term investments; we have no
long-term debt maturing until 2016; we have a new five-year, $750
million revolving credit facility; and we continue to expect to
generate $650 million to $700 million in cash flow from operations
this fiscal year. Harris is in an excellent position to weather the
current financial crisis and continue to execute our tactical and
strategic plans." RF Communications First quarter revenue in the RF
Communications segment was $415 million, an increase of 31 percent
compared to $317 million in the prior-year quarter. Operating
income was $142 million, an increase of 28 percent compared to $111
million in the first quarter of fiscal 2008. Operating margin was
excellent at 34.2 percent of revenue. Revenue was higher in both
U.S. and international markets. International revenue growth
accelerated and represented over 35 percent of total revenue in the
first quarter, compared to 27 percent of revenue for all of fiscal
2008. International revenue in the first quarter was driven by
major deliveries to Iraq, the Philippines, Norway, Poland,
Pakistan, the United Arab Emirates, Algeria, Romania, Brunei, the
United Kingdom, the Republic of Georgia, Macedonia, and Saudi
Arabia. International revenue growth is expected to remain strong
throughout fiscal year 2009 and beyond, as U.S. allies implement
defense communications modernization programs. Good orders momentum
in the segment continued in the first quarter. Orders are expected
to accelerate in the second quarter and be above revenue for fiscal
2009. Strong worldwide demand for tactical radio systems continues
to be driven by on-going modernization programs, force
restructuring and expansion, increased interoperability
requirements, and requirements for more versatile and adaptable
communication systems. New orders reflected success in penetrating
an increasingly diverse customer base with a wide variety of
products. Harris received $98 million in orders from the U.S. Army
to provide Falcon II(R) high-frequency (HF) tactical radios, which
enable communications across long distances, over mountainous
terrain, and in urban environments. Harris received $60 million in
orders from a customer in the Middle East for Falcon II HF and
multiband tactical radios, and $36 million in orders from a
customer in Central Asia for integrated communications systems
incorporating a wide range of products, including Falcon II HF and
VHF tactical radios as well as new products including Falcon
Watch(TM) remote surveillance systems and RF-7800W high-capacity
line-of-sight (HCLOS) radios. Also during the quarter, Harris
received orders from an expanding list of other international
customers including Estonia, Belize, Ukraine, Kazakhstan,
Kyrgyzstan, Djibouti, Ethiopia, Uganda, Kenya, Indonesia, and
France. Customer demand is building for the new Falcon III(R)
multiband manpack radio (AN/PRC-117G), the first JTRS-approved
wideband/narrowband tactical radio. Orders for the 117G were
received from a number of new and repeat customers including the
U.S. Special Operations Command, U.S. Air Force, U.S. Marine Corps,
and U.S. Coast Guard. During the quarter, the Falcon III 117G
manpack received a number of additional technical certifications
and achieved "JTRS-approved" status. Customers are using the 117G
for a broad range of ground, airborne and SATCOM applications. New
applications include surveillance sensor reception, air defense
systems, and use in Unmanned Aerial Vehicles and other light
reconnaissance aircraft. Based on customer feedback regarding the
increased power, flexibility, small footprint, and networking
capabilities of the Falcon III multiband manpack, Harris expects
customers will continue to find additional applications for the new
radio. Work continues on further enhancements to the Falcon III
product family. At the recent annual meeting of the Association of
the U.S. Army (AUSA), Harris demonstrated a four-channel Falcon III
multiband vehicular radio system designed to meet requirements of
the JTRS radio program. This modular, cost-effective radio system
can be configured in two-, three-, and four-channel variants
covering a wide range of vehicular applications. In another new
product launch, Harris has introduced the RF-7800B Broadband Global
Area Network (BGAN) terminal. The RF-7800B provides
high-performance satellite communications connectivity for beyond
line-of-sight, SATCOM-on-the-move, and SATCOM-at-the-quick-halt
applications. These ruggedized SATCOM terminals are designed to
military standards for operations in harsh environments. Government
Communications Systems The Government Communications Systems
segment - including the Defense Programs, National Intelligence
Programs, Civil Programs, and IT Services businesses - reported
first quarter revenue of $609 million, compared to $604 million in
the prior-year quarter. The fiscal 2008 first quarter benefited
from $22 million of non-recurring products and services revenue
under the Patriot IT services program for the NRO (National
Reconnaissance Office). Operating income in the first quarter was
$66 million, compared to $64 million in the prior-year quarter.
Operating margin was 10.9 percent in the quarter. Segment programs
that contributed to higher revenue in the first quarter included
the FDCA (Field Data Collection Automation) program for the U.S.
Census Bureau, several classified programs, the Global Geospatial
Intelligence (GGI) program for the National Geospatial-Intelligence
Agency (NGA), avionics shipments for the F-35 Joint Strike Fighter
program, and the NETCENTS IT services program for the U.S. Air
Force. Other revenue decreases resulted from the successful
completion of the FAA Voice Switching and Control Systems (VSCS)
refurbishment phase and completion of the MAF/TIGER program for the
Census Bureau. During the quarter, Harris was awarded new
classified programs with a combined value of more than $110
million. In addition, Harris received a $53 million contract
modification by the U.S. Navy to supply Ku-band Common Data Link
(CDL) Hawklink systems for the MH-60R helicopter. Also in the
quarter, Harris was awarded a $20 million contract as part of the
Networx telecommunications contract to modernize the radio
infrastructure for the FBI in the western half of the U.S. Harris
recently announced that its new Highband Networking Radio(TM)
system will be deployed to the U.S. Army 101st Airborne Assault
Division 2nd Brigade Combat Team in Baghdad. This is the first
combat deployment of the new radio system, which will provide
secure, high-bandwidth, on-the-move communications among users of
widely dispersed local area networks, allowing seamless
communication of voice, video and data to all levels of command. In
a new business area, Harris was awarded a one-year, $14 million
contract to develop and implement the U.S. Department of Defense
Military Health System global Healthcare Artifact and Image
Management Solution (HAIMS). Harris will develop a multi-hospital
military health network with image-sharing capabilities. The
contract has four single-year incentive options. Following the
close of the quarter, the Harris National Intelligence Programs
business was awarded more than $180 million in contracts to provide
ground processing and communications systems for classified
programs. In addition, Harris was awarded a $140 million order
under a new multi-vendor, five-year IDIQ (Indefinite Delivery
Indefinite Quantity) contract to provide systems integration and IT
services to the NGA under the agency's Applied IT Solutions (AITS)
contract. Also after the quarter close, Harris was awarded a
potential $37 million contract modification by the U.S. Navy Space
and Naval Warfare Systems Command to supply multiband shipboard
satellite communications terminals for the Arleigh Burke class of
guided missile destroyers. Broadcast Communications First quarter
revenue in the Broadcast Communications segment was $158 million,
an 8 percent increase compared to $147 million in the prior-year
quarter. Sales of Transmission Systems increased at double-digit
rates in the first quarter, driven by the over-the-air digital TV
rollout in U.S. markets. The continuing global broadcast and media
transition to digital and HD (high definition) operations drove
higher year-over-year revenue for Infrastructure and Networking
Solutions, including multiviewers and video networking equipment.
Media and Workflow revenue was slightly lower than in the
prior-year quarter, with stronger sales of server products offset
by lower sales of automation and software systems. Operating income
in the first quarter of fiscal 2009 was $5 million and included $4
million in charges for cost-reduction actions expected to improve
future operating performance. In addition to headcount reductions
and facilities consolidation actions in the first quarter,
additional initiatives focused on supply chain and operations cost
reductions to improve gross margins. The segment continues to
redirect spending to support expansion in growing international
markets in the Middle East, Asia Pacific, Eastern Europe, and Latin
America. Harris is localizing more sales and marketing resources in
international markets and has also announced a number of products
which are optimized for international applications. Key
international new products include the NEXIO AMP(TM) advanced media
platform - the first video server to offer 1080p HD; the new
Maxiva(TM) digital transmitter family - which boasts the lowest
power utilization of any transmitter on the market; and the
innovative InfoCaster(TM) digital signage solution. The Harris
ONE(TM) solution for interoperable workflow is having excellent
success in international markets. Harris is uniquely capable of
providing IT-centric, file-based workflows; broadcast technology
for plant infrastructure; transmission competencies; and the media
software to tie it all together. Significant Harris ONE solution
orders in the quarter included Southern Cross Broadcasting in
Australia, Guam Educational Telecommunications Corporation, the
Czech Republic's Barrandov Studios, TV2 Denmark, ProSiebenSat.1
Produktion in Munich, Germany, PowerTurk, and Abu Dhabi Media
Company. Additional international orders came from customers in
China, Taiwan, India, and Vietnam. Other significant orders in the
quarter included systems for major U.S. broadcast and
telecommunication companies. In addition, Harris is providing the
NBA's 29 arenas with NEXIO(TM) HD servers, which will be used for
editing game highlights. For Canadian network CTV, Harris is
providing multiple Inscriber G7(TM) HD graphics systems to be
networked together for multiple newsrooms throughout the country.
In Las Vegas, Harris is providing its new InfoCaster(TM) digital
signage systems to drive broadcast-quality graphics and live
video/audio content to more than 150 screens throughout World
Market Center Las Vegas, a dynamic new venue for the home and
hospitality furnishings industry. Harris Stratex Networks, Inc.
Harris Stratex Networks revenue for the first quarter of fiscal
2009 was $196 million, an increase of 14 percent compared to $172
million in the prior-year quarter. Revenue increased 5 percent
compared to sequential fourth quarter revenue of $187 million.
Segment operating income was $8 million, which included $3 million
of restructuring charges. Harris Stratex Networks (NASDAQ:HSTX) is
a 56 percent majority-owned subsidiary of Harris. The company
reported good year-over-year growth in North America microwave
revenue and strong double-digit growth in International microwave
revenue. Strong year-over-year and sequential revenue growth was
achieved in Africa and in the combined Latin America and Asia
Pacific regions. Revenue improvement was driven in large part by
the continuing success of the company's Eclipse(TM) IP product
platform. The company has significantly increased the percent of
product sales that is now attributed to higher-capacity IP-capable
products. Market demand for microwave systems continues to be
driven by the transition to IP networks, the evolution to 4G
technologies, and wireless network infrastructure expansion in
emerging regions of the world. Outlook Harris reconfirmed its
earnings guidance for fiscal 2009 in a range of $4.05 to $4.15 per
diluted share. Fiscal 2009 earnings guidance represents a
year-over-year increase of 19 to 22 percent, compared to non-GAAP
earnings in fiscal 2008. Revenue in fiscal 2009 is expected to
increase by 8-10 percent compared to fiscal 2008. A reconciliation
of GAAP to non-GAAP financial measures is provided in Table 7 along
with the accompanying notes. Harris will host a conference call
today at 4:30 p.m. Eastern Time (ET) to discuss its first quarter
fiscal 2009 financial results. The dial-in number for the
teleconference is (913) 905-1087 and the access code is 5419433.
Please allow at least 10 minutes prior to the scheduled start time
to connect to the teleconference. Harris encourages you to listen
via web cast, which will be broadcast live at
http://www.harris.com/conference-call . A replay of the
teleconference will be available beginning at 8:00 p.m. ET on
October 29 and will run until midnight ET on Wednesday, November 5.
To access the replay, please call (719) 457-0820, access code
5419433. A recording of the call will also be available on the
Harris website beginning at 7:00 p.m. ET on October 29. About
Harris Corporation Harris is an international communications and
information technology company serving government and commercial
markets in more than 150 countries. Headquartered in Melbourne,
Florida, the company has annual revenue of $5.4 billion and 16,500
employees - including nearly 7,000 engineers and scientists. Harris
is dedicated to developing best-in-class assured communications (R)
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 earnings per share for fiscal 2008, excluding
the impact of costs associated with our acquisitions and
integration costs associated with the formation of Harris Stratex
Networks. 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 Statements
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 2009; the potential value
of contract awards; and statements regarding outlook, including
expected revenue, orders and cash flow. 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 revenue, 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; 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;
the inability of our subcontractors to perform, or our key
suppliers to deliver components or parts; 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. The forward-looking statements
contained in this release are made as of the date of this release,
and 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'09 First Quarter Summary
CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited) Quarter
Ended September 26, September 28, 2008 2007 (In millions, except
per share amounts) Revenue from product sales and services $1,367.7
$1,230.5 Cost of product sales and services (928.4) (849.6)
Engineering, selling and administrative expenses (240.3) (216.9)
Non-operating income (loss) (8.1) 1.7 Interest income 1.7 2.0
Interest expense (13.1) (15.1) Income before income taxes and
minority interest 179.5 152.6 Income taxes (61.4) (52.8) Minority
interest in Harris Stratex Networks, Inc., net of tax 0.6 0.4 Net
income $118.7 $100.2 Net income per common share Basic $.89 $.76
Diluted $.88 $.73 Cash dividends paid per common share $.20 $.15
Basic weighted average shares outstanding 133.1 132.6 Diluted
weighted average shares outstanding 134.4 137.9 Table 2 HARRIS
CORPORATION FY'09 First Quarter Summary BUSINESS SEGMENT
INFORMATION (Unaudited) Quarter Ended September 26, September 28,
2008 2007 (In millions) Revenue RF Communications $415.2 $316.5
Government Communications Systems 609.1 603.9 Broadcast
Communications 158.2 146.7 Harris Stratex Networks 195.8 172.3
Corporate eliminations (10.6) (8.9) $1,367.7 $1,230.5 Income Before
Income Taxes and Minority Interest Segment Operating Income (Loss):
RF Communications $142.1 $110.8 Government Communications Systems
66.3 63.8 Broadcast Communications 5.3 10.4 Harris Stratex Networks
7.9 (1.0) Unallocated Corporate expense (18.9) (18.6) Corporate
eliminations (3.7) (1.4) Non-operating income (loss) (8.1) 1.7 Net
interest (11.4) (13.1) $179.5 $152.6 Table 3 HARRIS CORPORATION
FY'09 First Quarter Summary CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (Unaudited) Quarter Ended September 26, September 28,
2008 2007 (In millions) Operating Activities Net income $118.7
$100.2 Adjustments to reconcile net income to net cash provided by
(used in) operating activities: Depreciation and amortization 42.5
41.9 Share-based compensation 9.0 10.2 Non-current deferred income
taxes (3.1) 7.0 Impairment of securities available-for-sale 7.6 ---
Gain on the sale of securities available-for-sale --- (2.1)
Minority interest in Harris Stratex Networks, Inc., net of tax
(0.6) (0.4) (Increase) decrease in: Accounts and notes receivable
(121.4) (8.7) Inventories (66.8) (55.4) Increase (decrease) in:
Accounts payable and accrued expenses 33.4 (52.1) Advance payments
and unearned income (14.4) (4.6) Income taxes 35.9 18.2 Other (3.3)
12.6 Net cash provided by operating activities 37.5 66.8 Investing
Activities Cash paid for acquired businesses --- (1.5) Additions of
property, plant and equipment (24.8) (22.2) Additions of
capitalized software (6.9) (10.3) Cash paid for short-term
investments available-for-sale (1.2) (4.0) Proceeds from the sale
of short-term investments available-for-sale 1.8 9.3 Proceeds from
the sale of securities available-for-sale --- 3.1 Net cash used in
investing activities (31.1) (25.6) Financing Activities Proceeds
from borrowings 78.5 2.2 Repayment of borrowings (9.2) (5.9)
Proceeds from exercise of employee stock options 5.3 16.5
Repurchases of common stock (81.6) (57.4) Cash dividends (26.9)
(20.6) Net cash used in financing activities (33.9) (65.2) Effect
of exchange rate changes on cash and cash equivalents (0.3) (0.7)
Net decrease in cash and cash equivalents (27.8) (24.7) Cash and
cash equivalents, beginning of year 370.0 368.3 Cash and cash
equivalents, end of quarter $342.2 $343.6 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'09 First Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) September 26, June
27, 2008 2008 (In millions) Assets Cash and cash equivalents $342.2
$370.0 Short-term investments 2.5 3.1 Marketable equity securities
3.8 19.3 Receivables 981.5 859.0 Inventories 677.2 610.4 Current
deferred income taxes 121.0 117.2 Other current assets 73.1 67.7
Property, plant and equipment 482.9 482.2 Goodwill 1,538.2 1,547.3
Identifiable intangible assets 351.8 367.0 Other non-current assets
109.3 115.4 $4,683.5 $4,558.6 Liabilities and Shareholders' Equity
Short-term debt $88.2 $8.5 Accounts payable 409.8 390.8
Compensation and benefits 172.8 181.6 Other accrued items 263.4
239.1 Advance payments and unearned income 131.9 146.4 Income taxes
payable 60.9 22.9 Current portion of long-term debt 0.7 5.7
Non-current deferred income taxes 27.2 29.8 Long-term debt 827.9
831.8 Other long-term liabilities 96.5 97.7 Minority interest in
Harris Stratex Networks, Inc. 330.7 330.3 Shareholders' equity
2,273.5 2,274.0 $4,683.5 $4,558.6 HARRIS CORPORATION FY'09 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); 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'09
First Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statement of Income (Unaudited) Quarter
Ended Quarter Ended September 26, 2008 September 28, 2007 As
Adjust- Non- As Adjust- Non- Reported ment GAAP Reported ment GAAP
(In millions, except per share amounts) Revenue from product sales
and services $1,367.7 $--- $1,367.7 $1,230.5 $--- $1,230.5 Cost of
product sales and services(A) (928.4) --- (928.4) (849.6) 0.8
(848.8) Engineering, selling and administrative expenses(B) (240.3)
--- (240.3) (216.9) 8.1 (208.8) Non-operating income (loss) (8.1)
--- (8.1) 1.7 --- 1.7 Interest income 1.7 --- 1.7 2.0 --- 2.0
Interest expense (13.1) --- (13.1) (15.1) --- (15.1) Income before
income taxes and minority interest 179.5 --- 179.5 152.6 8.9 161.5
Income taxes (61.4) --- (61.4) (52.8) (2.2) (55.0) Minority
interest in Harris Stratex Networks, Inc., net of tax 0.6 --- 0.6
0.4 (2.8) (2.4) Net income $118.7 $--- $118.7 $100.2 $3.9 $104.1
Net income per diluted common share $.88 $--- $.88 $.73 $.03 $.76
Table 6 HARRIS CORPORATION FY'09 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Business Segment
Information (Unaudited) Quarter Ended Quarter Ended September 26,
2008 September 28, 2007 As Adjust- Non- As Adjust- Non- Reported
ment GAAP Reported ment GAAP (In millions) Revenue RF Communi-
cations $415.2 $--- $415.2 $316.5 $--- $316.5 Government
Communications Systems 609.1 --- 609.1 603.9 --- 603.9 Broadcast
Communi- cations 158.2 --- 158.2 146.7 --- 146.7 Harris Stratex
Networks 195.8 --- 195.8 172.3 --- 172.3 Corporate eliminations
(10.6) --- (10.6) (8.9) --- (8.9) $1,367.7 $--- $1,367.7 $1,230.5
$--- $1,230.5 Income Before Income Taxes and Minority Interest
Segment Operating Income (Loss): RF Communi- cations $142.1 $---
$142.1 $110.8 $--- $110.8 Government Communications Systems(C) 66.3
--- 66.3 63.8 0.6 64.4 Broadcast Communi- cations 5.3 --- 5.3 10.4
--- 10.4 Harris Stratex Networks(D) 7.9 --- 7.9 (1.0) 8.3 7.3
Unallocated Corporate expense (18.9) --- (18.9) (18.6) --- (18.6)
Corporate eliminations (3.7) --- (3.7) (1.4) --- (1.4)
Non-operating income (loss) (8.1) --- (8.1) 1.7 --- 1.7 Net
interest (11.4) --- (11.4) (13.1) --- (13.1) $179.5 $--- $179.5
$152.6 $8.9 $161.5 Table 7 HARRIS CORPORATION Reconciliation of
FY'08 GAAP EPS to Non-GAAP EPS and Reconciliation of FY'09 GAAP EPS
Guidance to FY'08 GAAP and Non-GAAP EPS (Unaudited) Guidance for
Fiscal Year Fiscal Year Percent 2008 2009 Growth GAAP Earnings Per
Diluted Share $3.26 $4.05 to $4.15 24% to 27% Charges associated
with the combination with Stratex Networks, Inc. (E) $0.11 Charges
associated with the acquisition of Multimax Incorporated (F) $0.01
Charges associated with the acquisition of Zandar Technologies plc
(G) $0.01 Non-GAAP Earnings Per Diluted Share $3.39 $4.05 to $4.15
19% to 22% Table 8 HARRIS CORPORATION FY'09 First Quarter Summary
Comparison of Harris Stratex Networks Segment GAAP and Non-GAAP
Operating Income to that Reported by Harris Stratex Networks, Inc.
(Unaudited) Quarter Ended Quarter Ended September 26, 2008
September 28, 2007 As Reported by As Reported by Harris Harris
Stratex Stratex Harris Networks Harris Networks (In millions)
Operating Income(Loss) -- As Reported(H) $7.9 $6.8 $(1.0) $---
Adjustments: Stratex combination- related costs --- 0.6 8.3 8.3
Restructuring --- 3.3 --- --- FAS 123R expense --- 1.1 --- 2.4
Other identifiable intangible amortization --- 3.2 --- 3.6
Operating Income -- Non-GAAP $7.9 $15.0 $7.3 $14.3 HARRIS
CORPORATION FY'09 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 --
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 D -- 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 E -- Adjustment for the $.11 per diluted share
impact, after minority interest, of a step up in fixed assets and
integration costs associated with the Stratex combination. Note F
-- Adjustment for the $.01 per diluted share impact of integration
and other charges associated with our acquisition of Multimax. Note
G -- Adjustment for the $.01 per diluted share impact of
integration and other charges associated with our acquisition of
Zandar. Note H -- The difference between the GAAP operating income
(loss) recorded during the quarter ended September 26, 2008 by us
versus by Harris Stratex Networks, Inc. is due to $1.1 million of
adjustments that were recorded by Harris Stratex Networks, Inc. in
its quarter ended June 27, 2008 after we had filed our fiscal 2008
Form 10-K; therefore, we recorded these adjustments in our quarter
ended September 26, 2008. The difference between the GAAP operating
income (loss) recorded during the quarter ended September 28, 2007
by us versus by Harris Stratex Networks, Inc. is due to $1.0
million of adjustments that were recorded by Harris Stratex
Networks, Inc. as part of a restatement that was filed on September
25, 2008. DATASOURCE: Harris Corporation CONTACT: Investor
Relations: Pamela Padgett, +1-321-727-9383, , Media: Jim Burke,
+1-321-727-9131, , both of Harris Corporation; For additional
information, contact Harris Corporation at Web site:
http://www.harris.com/ http://www.harris.com/conference-call
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