Harris Corporation Reports Record Earnings Per Share of $.57 on 27%
Revenue Growth in Fourth Quarter MELBOURNE, Fla., July 28
/PRNewswire-FirstCall/ -- Harris Corporation (NYSE:HRS) today
announced results for its fiscal 2004 fourth quarter. The company
reported strong revenue growth and improved operating performance
across each of its government and commercial businesses. Revenue in
the fourth quarter of fiscal 2004 increased 27 percent to $723
million, compared to $571 million in the prior-year quarter. Fourth
quarter results include the previously announced sale of the tools
and test systems product line, which is reported as discontinued
operations, and charges associated with cost-reduction actions. Net
income for the fourth quarter of fiscal 2004 was $38.2 million, or
$.57 per diluted share, compared to $0.7 million, or $.01 per
diluted share in the prior-year quarter. Net income in the fourth
quarter of fiscal 2003 also included charges associated with
cost-reduction actions. Non-GAAP income from continuing operations
in the fourth quarter, which excludes charges associated with
cost-reduction actions, increased 44 percent to $38.2 million, or
$.57 per diluted share. This compares to non-GAAP income from
continuing operations of $26.5 million, or $.40 per diluted share
in the prior-year quarter, which excludes charges associated with
cost-reduction actions, the discontinuation of telecom products,
and the exit of the telecom switch business. Total revenue for
fiscal year 2004 increased 22 percent to $2.52 billion, compared to
$2.06 billion in fiscal 2003. Net income for the fiscal year
increased 123 percent to $132.8 million, or $1.99 per diluted
share. This compares to prior-year net income of $59.5 million, or
$.90 per diluted share. "Improved fourth quarter financial results
in our commercial businesses -- Broadcast Communications and
Microwave Communications -- are encouraging," said Howard L. Lance,
chairman, president, and chief executive officer. "We delivered
top-line growth in both businesses as revenue increased 19 percent
in Microwave and 15 percent in Broadcast, compared to the
prior-year quarter. The Microwave division returned to
profitability, excluding the impact of fourth quarter
cost-reduction actions. Profitability in the Broadcast segment also
improved. Fourth quarter cost-reduction actions implemented in both
businesses will support further profitability improvement in fiscal
2005. "Our two government businesses continued to deliver strong
revenue growth and excellent operating performance," Lance added.
"Government Communications Systems and RF Communications divisions
are expected to continue to benefit from their diverse customer
base and broad portfolio of tactical and strategic programs that
support U.S. government and international customers." Government
Communications Systems Fourth quarter revenue in the Government
Communications Systems segment increased 37 percent to $435
million, compared to $317 million in the prior- year quarter.
Operating income increased 40 percent to $42.2 million. The
division continued to demonstrate outstanding performance on
defense, intelligence, civil, and technical service programs.
Segment revenue exhibited strong momentum across the entire
business. Major contributors to growth during the quarter included
numerous classified programs, the FAA Telecommunications
Infrastructure (FTI) program, the Iraqi Media Network (IMN)
program, the MAF/Tiger database modernization program for the U.S.
Census Bureau, and additional Department of Defense programs for
avionics, satellite communications, and missile defense. Following
the quarter, Harris completed the acquisition of Orkand Corporation
for $66 million in cash. Orkand revenue was $84 million for the 12
months ended June 2004. The acquisition is expected to be
immediately accretive to earnings. Orkand adds significant scale to
the company's mission-critical services business and provides
insight into business development opportunities with several new
customers including the Department of State, Department of Labor,
Department of the Interior, Department of Health and Human
Services, Department of Energy, and the U.S. Postal Service. RF
Communications The RF Communications segment reported a 21 percent
increase in fourth quarter revenue to $120 million, compared to $99
million in the prior-year quarter. Operating income increased 18
percent to $31.4 million in the fourth quarter. Harris' Falcon(R)
II tactical radio is well known as the "radio of choice" on the
battlefield and has experienced unprecedented demand. The
interoperability of the Falcon family of radios has become
increasingly important as countries seek communications superiority
for joint missions. Orders in the quarter included a $15 million
contract to provide tactical radios for forces being deployed to
Iraq and Afghanistan as part of the U.S. Army
rapid-fielding-initiative. Additional orders came from the U.S.
Marine Corps, U.S. Air Force, and from NATO members Romania,
Latvia, Norway, and France. Additional orders were received from
Pakistan, Albania, Oman, Uganda, and Tunisia. The next generation
radio for the U.S. government, the Falcon III(TM), is currently
under development and incorporates JTRS (Joint Tactical Radio
System) technology and waveforms, and will be compatible with
radios currently in the field. Microwave Communications Fourth
quarter revenue grew 19 percent in the Microwave Communications
segment. Revenue reached $97 million, compared to $81 million in
the prior year. Revenue improvement was driven by growth in the
Middle East and Africa. This included a project with MTN Nigeria to
supply, design, and implement Harris MegaStar(R) radios for its
high-capacity GSM network, and a project with MTC-Vodafone in
Kuwait utilizing Harris NetBoss(R) software as the foundation of an
Integrated Network Management System. The segment reported a fourth
quarter loss of $5.8 million, compared to a loss of $9.2 million in
the prior year. Gross margin improved in the quarter both
sequentially and compared to the prior year, and the segment
returned to profitability, excluding the impact of a $7.3 million
charge for cost- reduction actions. There was an $8.6 million
charge for cost reductions in the prior-year quarter. Results in
the fourth quarter do not reflect the future benefit of the
cost-reduction actions announced in the quarter, which are expected
to have a payback period of less than 12 months. The actions
include a workforce reduction of 100 worldwide and the transfer of
140 jobs related to administration and support functions in Redwood
Shores, California, to the lower-cost operations in Research
Triangle Park, North Carolina. The division also established
production and support for the new TRuepoint(TM) microwave radio
family at its San Antonio, Texas, facility where the successful
Constellation(R) and MegaStar(R) product lines are manufactured.
During the quarter, Harris' new TRuepoint(TM) 5000 radio was
selected for wireless infrastructure projects in Argentina,
Indonesia, and Romania. Broadcast Communications Revenue in the
Broadcast Communications segment grew 15 percent to $89 million, up
from $77 million in the prior-year quarter. Revenue from the IMN
project drove the increase. During the fourth quarter, the
Broadcast division won a $6.5 million order for 12 high-power DTV
transmitters from a major station group and an order for 17 HD
Radio(TM) transmitters from Clear Channel, the largest radio
broadcaster in the U.S. Automation orders were received from Sky
Italia Roma, PCTV in Mexico, and Corinthian Television in the
United Kingdom. The segment reported income of $3.9 million in the
fourth quarter. Cost- reduction actions taken in the fourth quarter
included a headcount reduction of 100 in the U.S. and Europe and
are expected to provide further profitability improvement in fiscal
2005. The related charges of approximately $4 million in the
quarter were offset by the reversal of a previously established
reserve for the consolidation of the company's European broadcast
operations. The prior-year quarter had an operating loss of $2.4
million and included a $4.4 million charge associated with
cost-reduction actions. "The rebound in revenue to $89 million and
the improvement in profitability are encouraging," said Lance. "We
also have realigned the organization into five market-focused,
customer-facing business units to drive revenue growth and improve
customer responsiveness. To further support this effort, we have
added bench-strength to an already seasoned management team."
Financial Position The company's financial position and level of
liquidity continue to be very strong. Positive cash flow provided
by operations during fiscal 2004 totaled $270 million, compared to
$153 million in the prior year. Cash and cash equivalents on hand
at the end of the year were $628 million, substantially greater
than the $411 million total debt outstanding. Days sales
outstanding and inventory turnover for the fiscal year improved
significantly compared to the prior year. Outlook "Harris is
uniquely positioned to leverage opportunities in both the
government and commercial communications markets," said Lance. "In
our Broadcast and Microwave businesses, we have taken additional
cost-reduction actions, realigned organization structures to better
serve our markets, and introduced important new products. We expect
the contribution from our commercial businesses to increase the
overall profitability of Harris in fiscal 2005. "In our government
businesses, strong demand for mobility, interoperability, and speed
of communications around the world supports continued momentum. We
have a sizeable program backlog and numerous new opportunities that
we are pursuing. Although we continue to be cautious regarding
total U.S. government spending levels, we will benefit from our
well-diversified customer and program base. We believe that the
long overdue transformation of the global defense communications
infrastructure currently underway is absolutely critical to provide
greater national security, and it will remain an area of great
focus and investment. "We are confident in our ability to deliver
earnings growth for fiscal 2005 in the range of $2.25 to $2.35 per
diluted share," Lance said. "This represents growth of 15 to 20
percent compared to income from continuing operations of $1.96 per
diluted share on a non-GAAP basis for fiscal 2004." Harris
Corporation is an international communications technology company
focused on providing assured communications(TM) products, systems
and services for government and commercial customers. The company's
operating divisions serve markets for government communications,
tactical radio, broadcast, and microwave systems. Harris provides
systems and service to customers in more than 150 countries.
Additional information about Harris Corporation is available at
http://www.harris.com/. NOTE: In conjunction with the quarterly
earnings release, the company will conduct a conference call on
Wednesday, July 28 at 5 p.m. (ET). Interested individuals are
invited to listen to the call by using a dial-in number: (719)
457-2621, access code: 662982. The conference call also will be
broadcast live via the Internet at
http://www.harris.com/conference-call and a replay will be
available at the same site. Non-GAAP Financial Measures This press
release contains non-GAAP financial measures within the meaning of
Regulation G promulgated by the SEC, including segment operating
income (loss), income from continuing operations, and income from
continuing operations per diluted common share adjusted to exclude
certain costs, expenses, and gains and losses. A reconciliation of
the difference between each non-GAAP financial measure, with the
most directly comparable financial measure calculated in accordance
with GAAP, is included in this release. 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: expectations for strong performance in our government-
related businesses, the potential value of contract awards and
potential contract awards, and earnings guidance for fiscal 2005.
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:
uncertain economic conditions which make it difficult to estimate
growth in our markets and, as a result, future income and
expenditures; the telecommunications downturn, which has had and
may continue to have a negative effect on our telecom businesses;
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; 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; the fair values of our portfolio of
passive investments, which values are subject to significant price
volatility or erosion; 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 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; 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 demand for financing and customer credit risk;
cost reductions, which may not yield the benefits we expect and
could have adverse effects on our future business; the impact of
competitive products and pricing; risks inherent in developing new
technologies; 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 to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise. Table 1 HARRIS CORPORATION FY'04 Fourth Quarter
Summary Condensed Consolidated Statement of Income (in millions,
except per Quarter Ended Fiscal Year Ended share amounts) July 2,
June 27, July 2, June 27, 2004 2003 2004 2003 Revenue from product
sales and services $722.8 $571.3 $2,518.6 $2,060.6 Cost of product
sales and services (541.5) (431.9) (1,888.3) (1,543.2) Engineering,
selling and administrative expenses (124.8) (124.7) (421.0) (414.1)
Non-operating income (loss) (3.6) 1.6 (11.0) 23.7 Interest income
1.8 1.1 6.2 6.1 Interest expense (6.0) (6.1) (24.5) (24.9) Income
from continuing operations before income taxes 48.7 11.3 180.0
108.2 Income taxes (15.6) (4.0) (54.3) (37.9) Income from
continuing operations 33.1 7.3 125.7 70.3 Discontinued operations
net of income taxes 5.1 (6.6) 7.1 (10.8) Net income $38.2 $0.7
$132.8 $59.5 Net Income Per Common Share Basic Continuing
operations $.50 $.11 $1.90 $1.06 Discontinued operations .08 (.10)
.11 (0.16) $.58 $.01 $2.01 $.90 Diluted Continuing operations $.49
$.11 $1.88 $1.06 Discontinued operations .08 (.10) .11 (0.16) $.57
$.01 $1.99 $.90 Cash dividends paid per common share $.10 $.08 $.40
$.32 Average basic shares outstanding 66.2 66.3 66.2 66.2 Average
diluted shares outstanding 67.0 66.4 66.9 66.4 Table 2 HARRIS
CORPORATION FY'04 Fourth Quarter Summary Business Segment
Information (in millions) Quarter Ended Fiscal Year Ended July 2,
June 27, July 2, June 27, 2004 2003 2004 2003 Revenue Government
Communications Systems $435.4 $316.7 $1,506.1 $1,137.4 RF
Communications 119.5 99.0 430.4 325.7 Microwave Communications 96.9
81.4 329.8 297.5 Broadcast Communications 89.1 77.2 287.2 315.2
Corporate eliminations (18.1) (3.0) (34.9) (15.2) $722.8 $571.3
$2,518.6 $2,060.6 Income From Continuing Operations Before Income
Taxes Segment Operating Income (Loss): Government Communications
Systems $42.2 $30.1 $153.4 $104.9 RF Communications 31.4 26.6 118.9
84.3 Microwave Communications (5.8) (9.2) (12.1) (24.3) Broadcast
Communications 3.9 (2.4) 8.1 8.0 Headquarters expense (12.5) (30.4)
(51.7) (69.6) Corporate eliminations (2.7) -- (7.3) --
Non-operating income (loss) (3.6) 1.6 (11.0) 23.7 Net interest
(4.2) (5.0) (18.3) (18.8) $48.7 $11.3 $180.0 $108.2 Table 3 HARRIS
CORPORATION FY'04 Fourth Quarter Summary CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (in millions) Fiscal Year Ended July 2,
June 27, 2004 2003 Operating Activities Net income $132.8 $59.5
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: Depreciation and amortization 55.1 56.4
Non-current deferred income tax 23.2 5.6 Gain on the sale of
securities available for sale (2.3) (21.2) Gain on the sale of
LiveTV, LLC -- (18.8) Gain on the sale of the tools and test
systems product line (18.9) -- (Increase) decrease in: Accounts and
notes receivable (27.4) (37.0) Unbilled costs and inventories 46.7
33.1 Increase (decrease) in: Accounts payable and accrued expenses
46.8 39.5 Advance payments and unearned income 22.6 24.3 Income
taxes (25.7) (2.7) Other 17.4 14.1 Net cash provided by operating
activities 270.3 152.8 Investing Activities Additions of plant and
equipment (66.4) (73.0) Cash paid for strategic investments (2.8)
(5.4) Proceeds from the sale of securities available for sale 7.9
30.1 Proceeds from the sale of LiveTV, LLC -- 19.0 Proceeds from
the sale of the tools and test systems product line 44.7 -- Net
cash used in investing activities (16.6) (29.3) Financing
Activities Proceeds from borrowings 6.6 182.8 Payments of
borrowings (30.2) (62.9) Proceeds from sale of Common Stock 37.0
2.3 Repurchase of Common Stock (56.5) (6.0) Cash dividends (26.6)
(21.2) Net cash provided by (used in) financing activities (69.7)
95.0 Effect of exchange rate changes on cash and cash equivalents
0.9 (2.1) Net increase in cash and cash equivalents 184.9 216.4
Cash and cash equivalents at beginning of year 442.6 226.2 Cash and
cash equivalents at end of year $627.5 $442.6 Table 4 HARRIS
CORPORATION FY'04 Fourth Quarter Summary CONDENSED CONSOLIDATED
BALANCE SHEET (in millions) July 2, June 27, 2004 2003 Assets Cash
and cash equivalents $627.5 $442.6 Marketable securities 16.1 23.1
Receivables 457.5 415.7 Unbilled costs and accrued earnings 111.1
164.8 Inventories 220.9 203.1 Current deferred income taxes 114.1
83.1 Income taxes receivable 6.6 5.2 Plant and equipment 283.3
281.6 Goodwill 223.3 214.3 Non-current notes receivable 18.1 28.0
Non-current deferred income taxes -- 21.1 Net assets of
discontinued operations -- 36.7 Other assets 147.3 156.0 $2,225.8
$2,075.3 Liabilities and Shareholders' Equity Short-term debt $9.9
$32.0 Accounts payable and accrued expenses 403.8 352.3 Advance
payments and unearned income 129.1 106.2 Non-current deferred
income taxes 2.8 -- Long-term debt 401.4 401.6 Shareholders' equity
1,278.8 1,183.2 $2,225.8 $2,075.3 HARRIS CORPORATION FY'04 Fiscal
Year 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), income
from continuing operations, and income from continuing operations
per diluted common share adjusted to exclude certain costs,
expenses, and 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 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'04
Fourth Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES Condensed Consolidated Statement Of Income (in millions,
Quarter Ended Quarter Ended except per July 2, 2004 June 27, 2003
share amounts) As Non- As Non- Reported Adjustment GAAP Reported
Adjustment GAAP Revenue from product sales and services $722.8 $--
$722.8 $571.3 $-- $571.3 Cost of product sales and services(A)
(541.5) -- (541.5) (431.9) 8.6 (423.3) Engineering, selling and
administrative expenses(B) (124.8) 7.3 (117.5) (124.7) 20.8 (103.9)
Non-operating income (loss) (3.6) -- (3.6) 1.6 -- 1.6 Interest
income 1.8 -- 1.8 1.1 -- 1.1 Interest expense (6.0) -- (6.0) (6.1)
-- (6.1) Income from continuing operations before income taxes 48.7
7.3 56.0 11.3 29.4 40.7 Income taxes (15.6) (2.2) (17.8) (4.0)
(10.2) (14.2) Income from continuing operations $33.1 $5.1 $38.2
$7.3 $19.2 $26.5 Income from continuing operations per diluted
common share $.49 $.08 $.57 $.11 $.29 $.40 (in millions, Fiscal
Year Ended Fiscal Year Ended except per July 2, 2004 June 27, 2003
share amounts) As Non- As Non- Reported Adjustment GAAP Reported
Adjustment GAAP Revenue from product sales and services $2,518.6
$-- $2,518.6 $2,060.6 $-- $2,060.6 Cost of product sales and
services(A) (1,888.3) -- (1,888.3) (1,543.2) 8.6 (1,534.6)
Engineering, selling and administrative expenses(B) (421.0) 7.3
(413.7) (414.1) 29.1 (385.0) Non-operating income (loss) (11.0) --
(11.0) 23.7 -- 23.7 Interest income 6.2 -- 6.2 6.1 -- 6.1 Interest
expense (24.5) -- (24.5) (24.9) -- (24.9) Income from continuing
operations before income taxes 180.0 7.3 187.3 108.2 37.7 145.9
Income taxes (54.3) (2.2) (56.5) (37.9) (13.2) (51.1) Income from
continuing operations $125.7 $5.1 $130.8 $70.3 $24.5 $94.8 Income
from continuing operations per diluted common share $1.88 $.08
$1.96 $1.06 $.37 $1.43 Table 6 HARRIS CORPORATION FY'04 Fourth
Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Business Segment Information Quarter Ended Quarter Ended (in
millions) July 2, 2004 June 27, 2003 As Non- As Non- Reported
Adjustment GAAP Reported Adjustment GAAP Revenue Government
Communications Systems $435.4 $-- $435.4 $316.7 $-- $316.7 RF
Communications Microwave 119.5 -- 119.5 99.0 -- 99.0 Communications
96.9 -- 96.9 81.4 -- 81.4 Broadcast Communications 89.1 -- 89.1
77.2 -- 77.2 Corporate eliminations (18.1) -- (18.1) (3.0) -- (3.0)
$722.8 $-- $722.8 $571.3 $-- $571.3 Income From Continuing
Operations Before Income Taxes Segment Operating Income (Loss):
Government Communications Systems $42.2 $-- $42.2 $30.1 $-- $30.1
RF Communications 31.4 -- 31.4 26.6 -- 26.6 Microwave
Communications(C) (5.8) 7.3 1.5 (9.2) 8.6 (0.6) Broadcast
Communications(D) 3.9 -- 3.9 (2.4) 4.4 2.0 Headquarters expense(E)
(12.5) -- (12.5) (30.4) 16.4 (14.0) Corporate eliminations (2.7) --
(2.7) -- -- -- Non-operating income (loss) (3.6) -- (3.6) 1.6 --
1.6 Net interest (4.2) -- (4.2) (5.0) -- (5.0) $48.7 $7.3 $56.0
$11.3 $29.4 $40.7 Fiscal Year Ended Fiscal Year Ended (in millions)
July 2, 2004 June 27, 2003 As Non- As Non- Reported Adjustment GAAP
Reported Adjustment GAAP Revenue Government Communications Systems
$1,506.1 $-- $1,506.1 $1,137.4 $-- $1,137.4 RF Communications 430.4
-- 430.4 325.7 -- 325.7 Microwave Communications 329.8 -- 329.8
297.5 -- 297.5 Broadcast Communications 287.2 -- 287.2 315.2 --
315.2 Corporate eliminations (34.9) -- (34.9) (15.2) -- (15.2)
$2,518.6 $-- $2,518.6 $2,060.6 $-- $2,060.6 Income From Continuing
Operations Before Income Taxes Segment Operating Income (Loss):
Government Communications Systems $153.4 $-- $153.4 $104.9 $--
$104.9 RF Communications 118.9 -- 118.9 84.3 -- 84.3 Microwave
Communications(C)(12.1) 7.3 (4.8) (24.3) 16.9 (7.4) Broadcast
Communications(D) 8.1 -- 8.1 8.0 4.4 12.4 Headquarters expense(E)
(51.7) -- (51.7) (69.6) 16.4 (53.2) Corporate eliminations (7.3) --
(7.3) -- -- -- Non-operating income (loss) (11.0) -- (11.0) 23.7 --
23.7 Net interest (18.3) -- (18.3) (18.8) -- (18.8) $180.0 $7.3
$187.3 $108.2 $37.7 $145.9 HARRIS CORPORATION FY'04 Fiscal Year
Summary RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES Notes
to tables 5 and 6: Note A -- Adjustments to cost of product sales
and services for the year and quarter ended June 27, 2003 relate to
inventory write-offs in our Microwave Communications segment
associated with the exit of our WinRoLL and RapidNet wireless local
loop products ($5.8 million), MDL microwave radio products ($1.3
million) and the shut-down of our Brazilian manufacturing plant
($1.5 million). Note B -- Adjustments to engineering, selling and
administrative expenses for the year and quarter ended July 2, 2004
relate to severance, moving, and other costs associated with cost
reduction actions aimed at reducing expenses in our Microwave
Communications segment, including the consolidation of
administrative and support functions at its Durham, North Carolina
location and the production support of its TRuepoint(TM) microwave
radio family in its San Antonio, Texas manufacturing facility ($7.3
million). Adjustments to engineering, selling and administrative
expenses for the year and quarter ended June 27, 2003 relate to
severance, moving, and other costs associated with cost reduction
actions aimed at reducing expenses in our corporate headquarters
($4.0 million) and Broadcast Communications segment ($4.4 million)
as well as the disposal of assets remaining from our previously
exited telecom switch business ($12.4 million). Adjustments to
engineering, selling and administrative expenses for the year ended
June 27, 2003 also relate to severance, moving, and other costs
associated with the consolidation of our Microwave Communications
segment's R&D in the U.S. from three locations to one location
in Durham, North Carolina ($8.3 million). Note C -- Adjustments to
Microwave Communications segment operating income (loss) for the
year and quarter ended July 2, 2004 relate to severance, moving,
and other costs associated with cost reduction actions aimed at
reducing expenses in our Microwave Communications segment,
including the consolidation of administrative and support functions
at its Durham, North Carolina location and the production support
of its TRuepoint(TM) microwave radio family in its San Antonio,
Texas manufacturing facility ($7.3 million). Adjustments to
Microwave Communications segment operating income for the year and
quarter ended June 27, 2003 relate to inventory write-offs
associated with the exit of the WinRoll, RapidNet wireless local
loop products ($5.8 million) and MDL microwave radio products ($1.3
million) and the shut-down of this segment's Brazilian
manufacturing plant ($1.5 million). Adjustments to Microwave
Communications segment operating income for the year ended June 27,
2003 also relate to severance, moving, and other costs associated
with the consolidation of our Microwave Communications segment's
R&D in the U.S. from three locations to one location in Durham,
North Carolina ($8.3 million). Note D -- Adjustments to Broadcast
Communications segment's operating income (loss) for the year and
quarter ended June 27, 2003 relate to severance, moving, and other
costs associated with cost reduction actions aimed at reducing
operating expenses ($4.4 million). Note E -- Adjustments to
headquarters expense for the year and quarter ended June 27, 2003
relate to severance and other costs associated with cost reduction
actions aimed at reducing headquarters infrastructure expense ($4.0
million) as well as the disposal of assets remaining from our
previously exited telecom switch business ($12.4 million).
http://www.harris.com/conference-callDATASOURCE: Harris Corporation
CONTACT: Media inquiries, Tom Hausman, +1-321-727-9131, or , or
investor relations, Pamela Padgett, +1-321-727-9383, or , both of
Harris Corporation Web site: http://www.harris.com/
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