Wednesday, January 15, 2003 11:44:00 AM
OT:Harris Corporation Revenue Climbs 16% in Second Quarter
RELATED SYMBOLS: (HRS)
MELBOURNE, Fla., Jan 15, 2003 (BUSINESS WIRE) -- Harris Corporation (NYSE:HRS)
today reported that second quarter fiscal 2003 revenue climbed 16 percent to
$523.9 million, compared to $451.5 million in the second quarter of the prior
year. Quarter highlights included accelerating growth in Harris' two government
businesses and better-than-anticipated improvement in the company's microwave
business. New orders were higher than sales.
Second quarter net income was $16.3 million or $.25 per share. Net income and
earnings per share were reduced by expenses related to the previously announced
cost reduction actions in the company's microwave business. These expenses
lowered pretax income by $8.3 million and net income per share by $.08. Absent
these cost reduction expenses, net income per share would have been $.33. The
$.33 exceeded analysts' consensus expectations of $.26 per share, which was
established on the same basis.
Government Communications Systems
Second quarter sales in the company's Government Communications Systems segment
climbed 24 percent to $272.7 million and orders were higher than sales. Sales
growth was all organic and was across all areas of the business. Operating
income increased 21 percent to $24.5 million. The outstanding financial
performance resulted from Harris' broad spectrum of recent wins, solid
government funding, and excellent execution by the management team. The
expanding backlog includes contracts with the Department of Defense, FAA, and
other government agencies. Harris is providing communication and information
products and systems for the nation's increased emphasis on defense and
security. New business during the second quarter included contracts for
classified programs, digital map systems for new aircraft, satellite GPS
systems, and technical service contracts.
RF Communications
The RF Communications segment reported record sales of $75.3 million, an
increase of 17 percent compared to the prior-year quarter. Segment operating
income was also a record, increasing 68 percent to $19.1 million. Income
improvement reflected increased sales volume and manufacturing efficiencies. The
War on Terrorism has created unparalleled demand for Harris' industry-leading
Falcon(R) II tactical radios. The division has expanded capacity to meet
continuing new demands for its product line from the U.S., NATO, and Partnership
for Peace countries around the world. Development activities at the division are
continuing on schedule for two programs that are redefining the world's tactical
radios of the future - the U.S. Joint Tactical Radio System Program and the
United Kingdom's Bowman Tactical Radio Programme.
Broadcast Communications
Broadcast Communications segment sales of $94.2 million increased 19 percent,
compared to the prior-year quarter. As anticipated, new opportunities
materialized in international markets, including China, Germany, Romania, and
the Middle East. During the second quarter, Harris won international contracts
for analog transmission, automation, and studio integration products and
services, and received a $64 million order for the radio broadcast
infrastructure of S.N. Radiocomunicatii S.A., Romania's state-owned broadcast
organization.
Digital equipment sales in the U.S. increased modestly compared to the
prior-year quarter. While there was some recovery of average selling prices for
digital transmitters compared to the first quarter of fiscal 2003,
smaller-market broadcasters continued to install the minimum amount of equipment
necessary to temporarily comply with the FCC's digital conversion mandate. These
purchases of lower-power equipment continue to seed the market in preparation
for the full digital transition and support Harris' current formidable market
position for the long term.
The business reported operating income of $6.0 million, up sharply from the
first quarter's $1.9 million operating income, but a decline of 38 percent from
last year's comparable quarter, reflecting a shift in product mix that included
a higher proportion of lower-margin analog products sold primarily in the
international market.
Microwave Communications
Sales in the Microwave Communications segment were $75.6 million, up 4 percent
compared to the prior-year quarter and increasing 35 percent compared to the
first quarter of fiscal 2003. Strength continued in North America where sales
increased as a result of capacity upgrades by cellular and PCS providers and
from Harris' solid position in the private network business. While capital
constraints still remain a concern in the international market, improvement in
Harris' international microwave business was encouraging. Eastern Europe,
Africa, and Asia all showed relative strength. The segment reported an operating
loss of $8.2 million. Included in the loss was $8.3 million of expenses related
to previously announced cost-reduction actions in the quarter. Excluding these
expenses, the microwave business was essentially breakeven during the second
quarter.
Network Support
Second quarter sales were $12.1 million in the company's Network Support
segment. The business reported an operating loss of $2.5 million. Continued
cost-cutting programs helped to minimize losses in this telecom business.
Cash Flows
The company's financial position continues to be very strong. Positive cash flow
provided by operations in the first two quarters was $63.5 million, compared to
a use of $14.7 million cash in the same period of the prior year. Cash on hand
at the end of the quarter was $379.9 million, compared to $226.2 million at the
end of fiscal 2002. During the first quarter, Harris improved its cash position
by approximately $145 million with a private placement of convertible
debentures. Also in the first quarter, Harris paid down $30 million in long-term
debt which had become due. The company's current debt-to-total-capital ratio is
26.3 percent.
First Half of Fiscal 2003
Harris sales in the first two quarters of fiscal 2003 were $974.1 million,
versus $894.9 million in the comparable period of fiscal 2002. Net income was
$36.2 million, compared to $33.5 million in the first half of fiscal 2002.
Outlook
"Performance in our two government businesses continues to accelerate,
responding to national and worldwide requirements for defense and other secure
communications," said Phillip W. Farmer, chairman and CEO. "The growth in these
businesses is entirely organic and builds on the vast communications
technologies that represent the core strength of Harris. Harris continues to
lead the infrastructure transition to digital TV and radio, and we are
encouraged by this quarter's improvement in our international microwave
business. Our team in microwave has been relentless in driving down costs and,
as a result, we have now achieved a breakeven cost structure in the microwave
business.
"Given the continuing outstanding performance in our government businesses and
increased expectations for microwave, we have greater confidence with a fiscal
2003 net income per share forecast of $1.30 to $1.40, and now believe, excluding
the impact of the second quarter expenses associated with microwave's cost
reduction actions, earnings could be at the high end of that range."
Harris Corporation is an international communications equipment company focused
on providing product, system and service solutions for government and commercial
customers. The company's five operating divisions serve markets for government
communications, tactical radio, broadcast, microwave, and network support
systems. 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, January 15, 2003, at 2 p.m. (ET).
Interested individuals are invited to listen to the call by using a dial-in
number: 719/457-2629, access code: 152698. The conference call will also be
broadcast live via the Internet at http://www.harris.com/conference-call.
Forward-Looking Statement
This press release contains 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. These statements may be identified by their use
of forward-looking terminology, such as "believes," "expects," "may," "should,"
"would," "will," "intends," "plans," "estimates," "anticipates," and similar
words. 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. Forward-looking statements in this release include
the potential value to the Company of recent program awards, earnings guidance
for fiscal 2003, breakeven level of sales for the telecom businesses and
expected cost reductions and their impact. 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 makes it difficult to
estimate growth in the Company's markets and, as a result, future income and
expenditures; the severe telecommunications slow-down, which has and may
continue to have a negative impact on the Company's telecom businesses; the
ability to meet cost reduction goals; financial and government and regulatory
risks relating to international sales and operations, including fluctuations in
foreign currency exchange rates and the effectiveness of the Company's currency
hedging program; government import and export policies and other government
regulations; the fair values of the Company's portfolio of passive investments,
which are subject to significant price volatility or erosion; the Company's
ability to continue to develop new products that achieve market acceptance;
strategic acquisitions and the risks and uncertainties related thereto,
including the ability to manage and integrate acquired businesses; potential
changes in government or customer priorities due to program reviews or revisions
to strategic objectives, including potential failure to fund government
contracts; risks inherent with large long-term fixed price contracts,
particularly the ability to contain cost overruns; termination of government
contracts; the performance of critical subcontractors or suppliers; potential
claims that the Company is infringing the intellectual property of third
parties; the successful resolution of patent infringement claims and litigation,
and the ultimate outcome of other litigation and legal matters; the impact of
competitive products and pricing; the ability to recruit and retain qualified
personnel; and general economic conditions in the markets in which the Company
operates. 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 hereof and Harris disclaims any intention or obligation to update
or revise any forward-looking statements or to update the reasons why actual
results could differ materially from those projected in the forward-looking
statements, whether as a result of new information, future events, or otherwise.
Table 1
HARRIS CORPORATION
FY'03 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in millions, except
per share amounts) Quarter Ended Two Quarters Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2002 2001 2002 2001
--------- -------- --------- ---------
Revenue from product sales and
services $523.9 $451.5 $974.1 $894.9
Cost of product sales and
services (388.7) (333.8) (724.0) (664.6)
Engineering, selling and
administrative expenses (108.9) (97.5) (205.7) (197.1)
Non-operating income 3.1 7.8 19.3 25.7
Interest income 1.9 3.5 3.5 6.7
Interest expense (6.6) (6.7) (12.3) (14.9)
--------- -------- --------- ---------
Income before income taxes 24.7 24.8 54.9 50.7
Income taxes (8.4) (8.4) (18.7) (17.2)
--------- -------- --------- ---------
Net income $16.3 $16.4 $36.2 $33.5
========= ======== ========= =========
Net Income Per Common Share
Basic $.25 $.25 $.55 $.51
Diluted .25 $.25 $.55 $.51
Cash dividends paid per common
share $.08 $.05 $.16 $.10
Average basic shares
outstanding 66.2 65.9 66.2 65.8
Average diluted shares
outstanding 66.3 66.3 66.4 66.2
Table 2
HARRIS CORPORATION
FY'03 Second Quarter Summary
BUSINESS SEGMENT INFORMATION
(in millions) Quarter Ended Two Quarters Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2002 2001 2002 2001
-------- -------- -------- --------
Revenue
Government Communications
Systems $272.7 $220.5 $524.7 $436.5
RF Communications 75.3 64.1 139.1 117.2
Microwave Communications 75.6 72.7 131.6 152.5
Network Support 12.1 15.9 25.3 29.3
Broadcast Communications 94.2 79.4 162.1 161.7
Corporate eliminations (6.0) (1.1) (8.7) (2.3)
-------- -------- -------- --------
$523.9 $451.5 $974.1 $894.9
======== ======== ======== ========
Income Before Income Taxes
Segment Operating Income (Loss):
Government Communications
Systems $24.5 $20.2 $48.2 $38.9
RF Communications 19.1 11.4 33.9 19.8
Microwave Communications (8.2) (6.4) (15.5) (11.8)
Network Support (2.5) (2.1) (5.2) (6.4)
Broadcast Communications 6.0 9.7 7.9 17.2
Headquarters expense (12.6) (12.6) (24.9) (24.5)
Non-operating income 3.1 7.8 19.3 25.7
Net interest (4.7) (3.2) (8.8) (8.2)
-------- -------- -------- --------
$24.7 $24.8 $54.9 $50.7
======== ======== ======== ========
Table 3
HARRIS CORPORATION
FY'03 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions) Two Quarters Ended
Dec. 27, Dec. 28,
2002 2001
---------- ----------
Operating Activities
Net income $36.2 $33.5
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 26.2 26.4
Non-current deferred income tax 3.4 12.8
Gain on the sale of securities available for
sale (9.4) (30.8)
Gain on the sale of LiveTV, LLC (18.8) -
Gain on the sale of GE Harris Energy Control
Systems, LLC - (10.3)
(Increase) decrease in:
Accounts and notes receivable 9.2 (0.8)
Unbilled costs and inventories (7.3) 13.1
Increase (decrease) in:
Accounts payable and accrued expenses (2.4) (70.2)
Advance payments and unearned income 24.4 8.3
Income taxes 0.8 (31.9)
Other 1.2 35.2
---------- ----------
Net cash provided by (used in) operating
activities 63.5 (14.7)
---------- ----------
Investing Activities
Cash paid for acquired businesses - (8.6)
Additions of plant and equipment (29.6) (19.4)
Cash paid for strategic investments (2.3) (2.2)
Proceeds from the sale of securities available
for sale 12.4 37.5
Proceeds from the sale of LiveTV, LLC 19.0 -
Proceeds from the sale of GE Harris Energy
Control Systems, LLC - 23.0
---------- ----------
Net cash provided by (used in) investing
activities (0.5) 30.3
---------- ----------
Financing Activities
Increase (decrease) in debt, net 102.0 (32.5)
Proceeds from sale of Common Stock 0.9 4.0
Purchase of Common Stock for treasury (2.4) -
Cash dividends (10.6) (6.6)
---------- ----------
Net cash provided by (used in) financing
activities 89.9 (35.1)
---------- ----------
Effect of exchange rate changes on cash and cash
equivalents 0.8 0.9
---------- ----------
Net increase (decrease) in cash and cash
equivalents 153.7 (18.6)
Cash and cash equivalents at beginning of year 226.2 103.0
---------- ----------
Cash and cash equivalents at end of quarter $379.9 $84.4
========== ==========
Table 4
HARRIS CORPORATION
FY'03 Second Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
Dec. 27, June 28,
2002 2002
--------- ---------
Assets
Cash and cash equivalents $379.9 $226.2
Marketable securities 30.5 52.2
Receivables 372.7 380.3
Unbilled costs and accrued earnings 189.7 178.6
Inventories 229.4 233.2
Current deferred income taxes 98.7 82.3
Income taxes receivable - 0.7
Plant and equipment 274.6 270.6
Goodwill 222.6 215.2
Non-current notes receivable 29.3 30.9
Non-current deferred income taxes 22.6 26.0
Other assets 158.6 162.3
--------- ---------
$2,008.6 $1,858.5
========= =========
Liabilities and Shareholders' Equity
Short-term debt $13.7 $25.9
Accounts payable and accrued expenses 315.1 317.6
Advance payments and unearned income 106.5 82.1
Income taxes payable 8.6 -
Long-term debt 401.9 283.0
Shareholders' equity 1,162.8 1,149.9
--------- ---------
$2,008.6 $1,858.5
========= =========
CONTACT: Harris Corporation, Melbourne
Media: Tom Hausman, 321/727-9131
Tom.Hausman@harris.com
or
Investor Relations: Pamela Padgett, 321/727-9383
Pamela.Padgett@harris.com
or
For additional information,
contact Harris Corporation at webmaster@harris.com
URL: http://www.businesswire.com
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-0-
KEYWORD: FLORIDA
INDUSTRY KEYWORD: TELECOMMUNICATIONS
HARDWARE
GOVERNMENT
COMPUTERS/ELECTRONICS
AEROSPACE/DEFENSE
EARNINGS
SOURCE:
Harris
Corporation
(Wall Street)
Daniel Nieves
RELATED SYMBOLS: (HRS)
MELBOURNE, Fla., Jan 15, 2003 (BUSINESS WIRE) -- Harris Corporation (NYSE:HRS)
today reported that second quarter fiscal 2003 revenue climbed 16 percent to
$523.9 million, compared to $451.5 million in the second quarter of the prior
year. Quarter highlights included accelerating growth in Harris' two government
businesses and better-than-anticipated improvement in the company's microwave
business. New orders were higher than sales.
Second quarter net income was $16.3 million or $.25 per share. Net income and
earnings per share were reduced by expenses related to the previously announced
cost reduction actions in the company's microwave business. These expenses
lowered pretax income by $8.3 million and net income per share by $.08. Absent
these cost reduction expenses, net income per share would have been $.33. The
$.33 exceeded analysts' consensus expectations of $.26 per share, which was
established on the same basis.
Government Communications Systems
Second quarter sales in the company's Government Communications Systems segment
climbed 24 percent to $272.7 million and orders were higher than sales. Sales
growth was all organic and was across all areas of the business. Operating
income increased 21 percent to $24.5 million. The outstanding financial
performance resulted from Harris' broad spectrum of recent wins, solid
government funding, and excellent execution by the management team. The
expanding backlog includes contracts with the Department of Defense, FAA, and
other government agencies. Harris is providing communication and information
products and systems for the nation's increased emphasis on defense and
security. New business during the second quarter included contracts for
classified programs, digital map systems for new aircraft, satellite GPS
systems, and technical service contracts.
RF Communications
The RF Communications segment reported record sales of $75.3 million, an
increase of 17 percent compared to the prior-year quarter. Segment operating
income was also a record, increasing 68 percent to $19.1 million. Income
improvement reflected increased sales volume and manufacturing efficiencies. The
War on Terrorism has created unparalleled demand for Harris' industry-leading
Falcon(R) II tactical radios. The division has expanded capacity to meet
continuing new demands for its product line from the U.S., NATO, and Partnership
for Peace countries around the world. Development activities at the division are
continuing on schedule for two programs that are redefining the world's tactical
radios of the future - the U.S. Joint Tactical Radio System Program and the
United Kingdom's Bowman Tactical Radio Programme.
Broadcast Communications
Broadcast Communications segment sales of $94.2 million increased 19 percent,
compared to the prior-year quarter. As anticipated, new opportunities
materialized in international markets, including China, Germany, Romania, and
the Middle East. During the second quarter, Harris won international contracts
for analog transmission, automation, and studio integration products and
services, and received a $64 million order for the radio broadcast
infrastructure of S.N. Radiocomunicatii S.A., Romania's state-owned broadcast
organization.
Digital equipment sales in the U.S. increased modestly compared to the
prior-year quarter. While there was some recovery of average selling prices for
digital transmitters compared to the first quarter of fiscal 2003,
smaller-market broadcasters continued to install the minimum amount of equipment
necessary to temporarily comply with the FCC's digital conversion mandate. These
purchases of lower-power equipment continue to seed the market in preparation
for the full digital transition and support Harris' current formidable market
position for the long term.
The business reported operating income of $6.0 million, up sharply from the
first quarter's $1.9 million operating income, but a decline of 38 percent from
last year's comparable quarter, reflecting a shift in product mix that included
a higher proportion of lower-margin analog products sold primarily in the
international market.
Microwave Communications
Sales in the Microwave Communications segment were $75.6 million, up 4 percent
compared to the prior-year quarter and increasing 35 percent compared to the
first quarter of fiscal 2003. Strength continued in North America where sales
increased as a result of capacity upgrades by cellular and PCS providers and
from Harris' solid position in the private network business. While capital
constraints still remain a concern in the international market, improvement in
Harris' international microwave business was encouraging. Eastern Europe,
Africa, and Asia all showed relative strength. The segment reported an operating
loss of $8.2 million. Included in the loss was $8.3 million of expenses related
to previously announced cost-reduction actions in the quarter. Excluding these
expenses, the microwave business was essentially breakeven during the second
quarter.
Network Support
Second quarter sales were $12.1 million in the company's Network Support
segment. The business reported an operating loss of $2.5 million. Continued
cost-cutting programs helped to minimize losses in this telecom business.
Cash Flows
The company's financial position continues to be very strong. Positive cash flow
provided by operations in the first two quarters was $63.5 million, compared to
a use of $14.7 million cash in the same period of the prior year. Cash on hand
at the end of the quarter was $379.9 million, compared to $226.2 million at the
end of fiscal 2002. During the first quarter, Harris improved its cash position
by approximately $145 million with a private placement of convertible
debentures. Also in the first quarter, Harris paid down $30 million in long-term
debt which had become due. The company's current debt-to-total-capital ratio is
26.3 percent.
First Half of Fiscal 2003
Harris sales in the first two quarters of fiscal 2003 were $974.1 million,
versus $894.9 million in the comparable period of fiscal 2002. Net income was
$36.2 million, compared to $33.5 million in the first half of fiscal 2002.
Outlook
"Performance in our two government businesses continues to accelerate,
responding to national and worldwide requirements for defense and other secure
communications," said Phillip W. Farmer, chairman and CEO. "The growth in these
businesses is entirely organic and builds on the vast communications
technologies that represent the core strength of Harris. Harris continues to
lead the infrastructure transition to digital TV and radio, and we are
encouraged by this quarter's improvement in our international microwave
business. Our team in microwave has been relentless in driving down costs and,
as a result, we have now achieved a breakeven cost structure in the microwave
business.
"Given the continuing outstanding performance in our government businesses and
increased expectations for microwave, we have greater confidence with a fiscal
2003 net income per share forecast of $1.30 to $1.40, and now believe, excluding
the impact of the second quarter expenses associated with microwave's cost
reduction actions, earnings could be at the high end of that range."
Harris Corporation is an international communications equipment company focused
on providing product, system and service solutions for government and commercial
customers. The company's five operating divisions serve markets for government
communications, tactical radio, broadcast, microwave, and network support
systems. 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, January 15, 2003, at 2 p.m. (ET).
Interested individuals are invited to listen to the call by using a dial-in
number: 719/457-2629, access code: 152698. The conference call will also be
broadcast live via the Internet at http://www.harris.com/conference-call.
Forward-Looking Statement
This press release contains 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. These statements may be identified by their use
of forward-looking terminology, such as "believes," "expects," "may," "should,"
"would," "will," "intends," "plans," "estimates," "anticipates," and similar
words. 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. Forward-looking statements in this release include
the potential value to the Company of recent program awards, earnings guidance
for fiscal 2003, breakeven level of sales for the telecom businesses and
expected cost reductions and their impact. 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 makes it difficult to
estimate growth in the Company's markets and, as a result, future income and
expenditures; the severe telecommunications slow-down, which has and may
continue to have a negative impact on the Company's telecom businesses; the
ability to meet cost reduction goals; financial and government and regulatory
risks relating to international sales and operations, including fluctuations in
foreign currency exchange rates and the effectiveness of the Company's currency
hedging program; government import and export policies and other government
regulations; the fair values of the Company's portfolio of passive investments,
which are subject to significant price volatility or erosion; the Company's
ability to continue to develop new products that achieve market acceptance;
strategic acquisitions and the risks and uncertainties related thereto,
including the ability to manage and integrate acquired businesses; potential
changes in government or customer priorities due to program reviews or revisions
to strategic objectives, including potential failure to fund government
contracts; risks inherent with large long-term fixed price contracts,
particularly the ability to contain cost overruns; termination of government
contracts; the performance of critical subcontractors or suppliers; potential
claims that the Company is infringing the intellectual property of third
parties; the successful resolution of patent infringement claims and litigation,
and the ultimate outcome of other litigation and legal matters; the impact of
competitive products and pricing; the ability to recruit and retain qualified
personnel; and general economic conditions in the markets in which the Company
operates. 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 hereof and Harris disclaims any intention or obligation to update
or revise any forward-looking statements or to update the reasons why actual
results could differ materially from those projected in the forward-looking
statements, whether as a result of new information, future events, or otherwise.
Table 1
HARRIS CORPORATION
FY'03 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in millions, except
per share amounts) Quarter Ended Two Quarters Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2002 2001 2002 2001
--------- -------- --------- ---------
Revenue from product sales and
services $523.9 $451.5 $974.1 $894.9
Cost of product sales and
services (388.7) (333.8) (724.0) (664.6)
Engineering, selling and
administrative expenses (108.9) (97.5) (205.7) (197.1)
Non-operating income 3.1 7.8 19.3 25.7
Interest income 1.9 3.5 3.5 6.7
Interest expense (6.6) (6.7) (12.3) (14.9)
--------- -------- --------- ---------
Income before income taxes 24.7 24.8 54.9 50.7
Income taxes (8.4) (8.4) (18.7) (17.2)
--------- -------- --------- ---------
Net income $16.3 $16.4 $36.2 $33.5
========= ======== ========= =========
Net Income Per Common Share
Basic $.25 $.25 $.55 $.51
Diluted .25 $.25 $.55 $.51
Cash dividends paid per common
share $.08 $.05 $.16 $.10
Average basic shares
outstanding 66.2 65.9 66.2 65.8
Average diluted shares
outstanding 66.3 66.3 66.4 66.2
Table 2
HARRIS CORPORATION
FY'03 Second Quarter Summary
BUSINESS SEGMENT INFORMATION
(in millions) Quarter Ended Two Quarters Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
2002 2001 2002 2001
-------- -------- -------- --------
Revenue
Government Communications
Systems $272.7 $220.5 $524.7 $436.5
RF Communications 75.3 64.1 139.1 117.2
Microwave Communications 75.6 72.7 131.6 152.5
Network Support 12.1 15.9 25.3 29.3
Broadcast Communications 94.2 79.4 162.1 161.7
Corporate eliminations (6.0) (1.1) (8.7) (2.3)
-------- -------- -------- --------
$523.9 $451.5 $974.1 $894.9
======== ======== ======== ========
Income Before Income Taxes
Segment Operating Income (Loss):
Government Communications
Systems $24.5 $20.2 $48.2 $38.9
RF Communications 19.1 11.4 33.9 19.8
Microwave Communications (8.2) (6.4) (15.5) (11.8)
Network Support (2.5) (2.1) (5.2) (6.4)
Broadcast Communications 6.0 9.7 7.9 17.2
Headquarters expense (12.6) (12.6) (24.9) (24.5)
Non-operating income 3.1 7.8 19.3 25.7
Net interest (4.7) (3.2) (8.8) (8.2)
-------- -------- -------- --------
$24.7 $24.8 $54.9 $50.7
======== ======== ======== ========
Table 3
HARRIS CORPORATION
FY'03 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions) Two Quarters Ended
Dec. 27, Dec. 28,
2002 2001
---------- ----------
Operating Activities
Net income $36.2 $33.5
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 26.2 26.4
Non-current deferred income tax 3.4 12.8
Gain on the sale of securities available for
sale (9.4) (30.8)
Gain on the sale of LiveTV, LLC (18.8) -
Gain on the sale of GE Harris Energy Control
Systems, LLC - (10.3)
(Increase) decrease in:
Accounts and notes receivable 9.2 (0.8)
Unbilled costs and inventories (7.3) 13.1
Increase (decrease) in:
Accounts payable and accrued expenses (2.4) (70.2)
Advance payments and unearned income 24.4 8.3
Income taxes 0.8 (31.9)
Other 1.2 35.2
---------- ----------
Net cash provided by (used in) operating
activities 63.5 (14.7)
---------- ----------
Investing Activities
Cash paid for acquired businesses - (8.6)
Additions of plant and equipment (29.6) (19.4)
Cash paid for strategic investments (2.3) (2.2)
Proceeds from the sale of securities available
for sale 12.4 37.5
Proceeds from the sale of LiveTV, LLC 19.0 -
Proceeds from the sale of GE Harris Energy
Control Systems, LLC - 23.0
---------- ----------
Net cash provided by (used in) investing
activities (0.5) 30.3
---------- ----------
Financing Activities
Increase (decrease) in debt, net 102.0 (32.5)
Proceeds from sale of Common Stock 0.9 4.0
Purchase of Common Stock for treasury (2.4) -
Cash dividends (10.6) (6.6)
---------- ----------
Net cash provided by (used in) financing
activities 89.9 (35.1)
---------- ----------
Effect of exchange rate changes on cash and cash
equivalents 0.8 0.9
---------- ----------
Net increase (decrease) in cash and cash
equivalents 153.7 (18.6)
Cash and cash equivalents at beginning of year 226.2 103.0
---------- ----------
Cash and cash equivalents at end of quarter $379.9 $84.4
========== ==========
Table 4
HARRIS CORPORATION
FY'03 Second Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
Dec. 27, June 28,
2002 2002
--------- ---------
Assets
Cash and cash equivalents $379.9 $226.2
Marketable securities 30.5 52.2
Receivables 372.7 380.3
Unbilled costs and accrued earnings 189.7 178.6
Inventories 229.4 233.2
Current deferred income taxes 98.7 82.3
Income taxes receivable - 0.7
Plant and equipment 274.6 270.6
Goodwill 222.6 215.2
Non-current notes receivable 29.3 30.9
Non-current deferred income taxes 22.6 26.0
Other assets 158.6 162.3
--------- ---------
$2,008.6 $1,858.5
========= =========
Liabilities and Shareholders' Equity
Short-term debt $13.7 $25.9
Accounts payable and accrued expenses 315.1 317.6
Advance payments and unearned income 106.5 82.1
Income taxes payable 8.6 -
Long-term debt 401.9 283.0
Shareholders' equity 1,162.8 1,149.9
--------- ---------
$2,008.6 $1,858.5
========= =========
CONTACT: Harris Corporation, Melbourne
Media: Tom Hausman, 321/727-9131
Tom.Hausman@harris.com
or
Investor Relations: Pamela Padgett, 321/727-9383
Pamela.Padgett@harris.com
or
For additional information,
contact Harris Corporation at webmaster@harris.com
URL: http://www.businesswire.com
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Copyright (C) 2003 Business Wire. All rights reserved.
-0-
KEYWORD: FLORIDA
INDUSTRY KEYWORD: TELECOMMUNICATIONS
HARDWARE
GOVERNMENT
COMPUTERS/ELECTRONICS
AEROSPACE/DEFENSE
EARNINGS
SOURCE:
Harris
Corporation
(Wall Street)
Daniel Nieves
Daniel Nieves
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