HARMAN Reports First Quarter Fiscal 2016 Results
October 29, 2015 | By Business Wire News
STAMFORD, Conn.
Harman International Industries, Incorporated (NYSE:HAR), the premier connected technologies company for automotive, consumer and enterprise markets, today announced results for the first quarter ended September 30, 2015.
This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20151029005394/en/
Net sales for the first quarter were $1.6 billion, an increase of 14 percent compared to the prior year or 23 percent excluding the impact of foreign currency translation (ex-FX). Excluding the impact of acquisitions and foreign currency translation, net sales increased 13 percent compared to the prior year. Connected Car net sales increased eight percent (19 percent ex-FX), due to platform expansions, higher take rates, and stronger automotive production. Lifestyle Audio net sales increased 14 percent (21 percent ex-FX) due to higher consumer audio and car audio sales. Net sales in Professional Solutions decreased three percent (increased one percent ex-FX). Connected Services net sales were $174 million compared to $68 million in the prior year, due to the expansion of the Company’s services portfolio, primarily as a result of the acquisition of Symphony Teleca (STC).
Excluding restructuring, non-recurring charges and acquisition-related items, first quarter operating income increased 24 percent to $158 million compared to $128 million in the prior year, and EBITDA increased 20 percent to $197 million compared to $164 million in the prior year. Earnings per diluted share increased 13 percent to $1.48 compared to $1.31 in the prior year.
On a GAAP basis, first quarter operating income increased 14 percent to $131 million compared to $116 million in the prior year, EBITDA increased 23 percent to $188 million compared to $153 million in the prior year, and earnings per diluted share increased two percent to $1.20 compared to $1.18 in the prior year. The Company recorded $26 million of restructuring, non-recurring charges and acquisition-related items compared to $12 million in the prior year. The increase was primarily due to non-cash amortization of acquired intangible assets.
“HARMAN is off to a solid start to deliver on our fiscal 2016 targets with double-digit revenue and earnings growth in the first quarter, driven by robust demand for connected systems and services in the car,” said Dinesh C. Paliwal, the Company’s Chairman, President and CEO. “Demand from automakers for embedded infotainment and car audio solutions remains strong as evidenced by the $1.1 billion in new automotive awards in the quarter, building on our industry-leading backlog of $23 billion as of the end of fiscal 2015.”
| FY 2016 Key Figures – Total Company | Three Months Ended September 30, | |||||||
|
Increase |
||||||||
| $ millions (except per share data) | 3M FY16 | 3M FY15 |
Including |
Excluding |
||||
| Net sales | 1,631 | 1,429 | 14% | 23% | ||||
| Gross profit | 487 | 415 | 18% | 25% | ||||
| Percent of net sales | 29.9% | 29.0% | ||||||
| SG&A | 356 | 299 | 19% | 27% | ||||
| Operating income | 131 | 116 | 14% | 20% | ||||
| Percent of net sales | 8.1% | 8.1% | ||||||
| EBITDA1 | 188 | 153 | 23% | 30% | ||||
| Percent of net sales | 11.5% | 10.7% | ||||||
| Net Income attributable to HARMAN International Industries, Incorporated | 87 | 83 | 5% | 10% | ||||
| Diluted earnings per share | 1.20 | 1.18 | 2% | 7% | ||||
| Restructuring & non-recurring costs | 3 | 12 | ||||||
| Acquisition-related items | 23 | 0 | ||||||
|
Non-GAAP – operational1 |
||||||||
| Gross profit | 489 | 418 | 17% | 25% | ||||
| Percent of net sales | 30.0% | 29.2% | ||||||
| SG&A | 331 | 290 | 14% | 22% | ||||
| Operating income | 158 | 128 | 24% | 31% | ||||
| Percent of net sales | 9.7% | 8.9% | ||||||
| EBITDA | 197 | 164 | 20% | 27% | ||||
| Percent of net sales | 12.1% | 11.5% | ||||||
| Net Income attributable to HARMAN International Industries, Incorporated | 107 | 92 | 16% | 23% | ||||
| Diluted earnings per share | 1.48 | 1.31 | 13% | 19% | ||||
| Shares outstanding – diluted (in millions) | 73 | 70 | ||||||
| 1 A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. | ||||||||
Summary of Operations – Gross Margin and SG&A (Non-GAAP)
Gross margin for the first quarter of fiscal year 2016 increased 80 basis points to 30.0 percent. The improvement was primarily due to the impact of higher sales volume leveraging a more efficient fixed production cost base, as well as the expansion of our services portfolio.
In the first quarter of fiscal year 2016, SG&A expense as a percentage of net sales was consistent with the prior year at 20.3 percent.
Investor Call Today October 29, 2015
At 11:00 a.m. EDT today, HARMAN’s management will host an analyst and investor conference call to discuss the first quarter results. Those who wish to participate via audio in the earnings conference call should dial 1 (800) 272-6255 (U.S.) or +1 (303) 223-2685 (International) ten minutes before the call and reference HARMAN, Access Code: 21779582.
In addition, HARMAN invites you to visit the Investors section of its website at: www.harman.com where visitors can sign-up for email alerts and conveniently download copies of historical earnings releases and supporting slide presentations, among other documents. The fiscal first quarter earnings release and supporting materials were posted on the site at approximately 8:00 a.m. EDT today.
A replay of the call will also be available following its completion at approximately 1:00 p.m. EDT. The replay will be available through Friday, January 29, 2016 at 1:00 p.m. EDT. To listen to the replay, dial 1 (800) 633 8284 (U.S.) or +1 (402) 977 9140 (International), Access Code: 21779582. If you need technical assistance, call the toll-free Global Crossing Customer Care Line at 1 (800) 473 0602 (U.S.) or +1 (303) 446 4604 (International).
General Information
HARMAN (harman.com) designs and engineers connected products and solutions for automakers, consumers, and enterprises worldwide, including connected car systems, audio and visual products, enterprise automation solutions; and connected services. With leading brands including AKG®, Harman Kardon®, Infinity®, JBL®, Lexicon®, Mark Levinson® and Revel®, HARMAN is admired by audiophiles, musicians and the entertainment venues where they perform around the world. More than 25 million automobiles on the road today are equipped with HARMAN audio and connected car systems. The Company’s software services power billions of mobile devices and systems that are connected, integrated and secure across all platforms, from work and home to car and mobile. HARMAN has a workforce of approximately 28,000 people across the Americas, Europe, and Asia and reported sales of $6.4 billion during the 12 months ended September 30, 2015. The Company’s shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.
A reconciliation of the non-GAAP measures included in this press release to the most comparable GAAP measures is provided in the tables contained at the end of this press release. HARMAN does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.
Forward-Looking Information
Except for historical information contained herein, the matters discussed in this earnings presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One should not place undue reliance on these statements. The Company bases these statements on particular assumptions that it has made in light of its industry experience, as well as its perception of historical trends, current market conditions, current economic data, expected future developments and other factors that the Company believes are appropriate under the circumstances. These statements involve risks, uncertainties and assumptions that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to: (1) the Company’s ability to maintain profitability if there are delays in its product launches or increased pricing pressure from its customers; (2) the loss of one or more significant customers, the loss of a significant platform with an automotive customer or the in-sourcing of certain services by the Company’s automotive customers; (3) fluctuations in currency exchange rates, particularly with respect to the value of the U.S. Dollar and the Euro; (4) fluctuations in the price and supply of raw materials including, without limitation, petroleum, copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components; (5) the inability of the Company’s suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; (6) the Company’s ability to maintain a competitive technological advantage through innovation and leading product designs; (7) the Company’s ability to integrate successfully its recently completed and future acquisitions; (8) the Company’s ability to attract and retain qualified senior management and to prepare and implement an appropriate succession plan for its critical organizational positions; (9) the Company’s failure to maintain the value of its brands and implementing a sufficient brand protection program; and (10) other risks detailed in the Harman International Industries, Incorporated Annual Report on Form 10-K for the fiscal year ended June 30, 2015 and other filings made by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement except as required by law.
This earnings release also makes reference to the Company’s awarded business or “backlog”, which represents the estimated future lifetime net sales for all customers. The Company’s future awarded business does not represent firm customer orders. The Company reports its awarded business primarily based on written award letters. To validate these awards, the Company uses various assumptions including global vehicle production forecasts, customer take rates for the Company’s products, revisions to product life cycle estimates and the impact of annual price reductions and exchange rates, among other factors. These assumptions are updated and reported externally on an annual basis.
APPENDIX
Connected Car
| FY 2016 Key Figures – Connected Car | Three Months Ended September 30 | |||||||
|
Increase |
||||||||
| $ millions (except per share data) |
3M |
3M |
Including |
Excluding |
||||
| Net sales | 755 | 700 | 8% | 19% | ||||
| Gross profit | 178 | 164 | 9% | 17% | ||||
| Percent of net sales | 23.5% | 23.4% | ||||||
| SG&A | 91 | 91 | (1%) | 11% | ||||
| Operating income | 87 | 73 | 20% | 24% | ||||
| Percent of net sales | 11.5% | 10.4% | ||||||
| EBITDA1 | 106 | 90 | 18% | 23% | ||||
| Percent of net sales | 14.0% | 12.8% | ||||||
| Restructuring & non-recurring costs | 0 | 1 | ||||||
| Acquisition-related items | 1 | 0 | ||||||
|
Non-GAAP – operational1 |
||||||||
| Gross profit | 179 | 165 | 8% | 17% | ||||
| Percent of net sales | 23.7% | 23.6% | ||||||
| SG&A | 91 | 91 | (1%) | 11% | ||||
| Operating income | 88 | 74 | 19% | 23% | ||||
| Percent of net sales | 11.7% | 10.6% | ||||||
| EBITDA | 105 | 90 | 17% | 22% | ||||
| Percent of net sales | 13.9% | 12.8% | ||||||
| 1 A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. | ||||||||
Net sales in the first quarter of fiscal 2016 were $755 million, an increase of eight percent (19 percent ex-FX) compared to the prior year. The increase in net sales was due to the expansion of recently launched platforms, higher take rates and stronger automotive production.
On a non-GAAP basis in the first quarter of fiscal 2016, gross margin increased 10 basis points to 23.7 percent compared to the prior year. SG&A expenses as a percent of sales declined 100 basis points to 12.0 percent compared to the prior year due to improved operating leverage on higher sales.
Connected Car Highlights
During the quarter, the Connected Car division won follow-on awards with BMW, Daimler, GAC Motor, Suzuki and Tata for their next-generation embedded infotainment solutions. In addition, HARMAN continued to demonstrate its leadership in connectivity solutions, including telematics control units (TCUs). Building on the Company’s earlier TCU win with Daimler, which launches globally later this calendar year, HARMAN won a follow-on award from Daimler to supply next generation TCUs across car lines worldwide.
During the quarter, HARMAN launched embedded infotainment solutions on a number of new vehicle models, including the Audi A4, the Mercedes C-Class Coupe, the Mini Clubman and the Volkswagen Tiguan.
At the Frankfurt Auto Show in September, HARMAN demonstrated several key technologies, including its latest embedded infotainment platform with features such as augmented navigation, gesture control and Over-the-Air (OTA) updates. The Company also highlighted its strategy for enhancing automotive cyber security through its unique 5+1 security framework.
Lifestyle Audio
| FY 2016 Key Figures – Lifestyle Audio | Three Months Ended September 30 | |||||||
|
Increase |
||||||||
| $ millions (except per share data) |
3M |
3M |
Including |
Excluding |
||||
| Net sales* | 462 | 406 | 14% | 21% | ||||
| Gross profit | 151 | 130 | 16% | 22% | ||||
| Percent of net sales | 32.6% | 32.0% | ||||||
| SG&A | 103 | 81 | 27% | 35% | ||||
| Operating income | 48 | 49 | (3%) | 1% | ||||
| Percent of net sales | 10.3% | 12.1% | ||||||
| EBITDA1 | 61 | 58 | 6% | 10% | ||||
| Percent of net sales | 13.3% | 14.3% | ||||||
| Restructuring & non-recurring costs | 1 | 4 | ||||||
| Acquisition-related items | 7 | 0 | ||||||
|
Non-GAAP – operational1 |
||||||||
| Gross profit | 151 | 132 | 15% | 21% | ||||
| Percent of net sales | 32.7% | 32.4% | ||||||
| SG&A | 96 | 79 | 21% | 29% | ||||
| Operating income | 55 | 53 | 5% | 10% | ||||
| Percent of net sales | 12.0% | 12.9% | ||||||
| EBITDA | 64 | 62 | 4% | 8% | ||||
| Percent of net sales | 13.8% | 15.1% | ||||||
|
1 A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. |
||||||||
| *Includes intercompany revenues of less than $1 million. | ||||||||
Net sales in the first quarter of fiscal 2016 were $462 million, an increase of 14 percent (21 percent ex-FX) compared to the prior year primarily due to new product introductions in consumer audio and the acquisition of Bang & Olufsen car audio business.
On a non-GAAP basis in the first quarter of fiscal 2016, gross margin improved by 30 basis points to 32.7 percent compared to the prior year, primarily due to improved operating leverage as a result of higher sales volume. SG&A expenses as a percentage of sales increased 130 basis points to 20.7 percent, primarily due to increased investments in research and development to support several new car audio programs included in the Company’s backlog.
Lifestyle Audio Highlights
During the quarter, HARMAN secured new car audio business with Audi, BMW, Great Wall, Hyundai and Toyota, among others. New vehicles launched in the quarter included the Alfa Romeo Giulia (Harman/Kardon), the Lexus RX (Mark Levinson), and the McLaren 570S (Bowers & Wilkins).
HARMAN continued its industry leadership in portable speakers, recording its 15 millionth worldwide portable speaker sale since its launch of the category. In the quarter, the Company launched its third generation of portable speakers, expanding its portfolio with the JBL™ Xtreme, the most powerful speaker in its class.
In September, HARMAN debuted 58 new products at the IFA consumer electronics trade show in Berlin. Notable headphone launches included the AKG™ N60 NC, winner of 2015 EISA, RedDot, and IF Design awards and the AKG Y50 BT headphones, which won a 5-star rating from What Hi-Fi magazine.
Professional Solutions
| FY 2016 Key Figures – Professional Solutions | Three Months Ended September 30 | |||||||
|
Increase |
||||||||
| $ millions (except per share data) |
3M |
3M |
Including |
Excluding |
||||
| Net sales* | 247 | 254 | (3%) | 1% | ||||
| Gross profit | 102 | 103 | (1%) | 3% | ||||
| Percent of net sales | 41.4% | 40.7% | ||||||
| SG&A | 77 | 80 | (4%) | (1%) | ||||
| Operating income | 26 | 23 | 10% | 17% | ||||
| Percent of net sales | 10.4% | 9.1% | ||||||
| EBITDA1 | 34 | 32 | 6% | 12% | ||||
| Percent of net sales | 13.8% | 12.7% | ||||||
| Restructuring & non-recurring costs | 2 | 5 | ||||||
|
Non-GAAP – operational1 |
||||||||
| Gross profit | 103 | 103 | (1%) | 4% | ||||
| Percent of net sales | 41.6% | 40.7% | ||||||
| SG&A | 75 | 75 | (1%) | 3% | ||||
| Operating income | 28 | 28 | (1%) | 5% | ||||
| Percent of net sales | 11.3% | 11.1% | ||||||
| EBITDA | 36 | 37 | (4%) | 2% | ||||
| Percent of net sales | 14.5% | 14.6% | ||||||
|
1 A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. |
||||||||
| *Includes intercompany revenues of less than $1 million | ||||||||
Net sales in the first quarter of fiscal 2016 were $247 million, a decrease of three percent (an increase of one percent ex-FX) compared to the prior year.
On a non-GAAP basis in the first quarter of fiscal 2016, gross margin increased 90 basis points to 41.6 percent, driven by an improvement in product mix. SG&A expenses as a percentage of sales increased 70 basis points to 30.3 percent compared to the prior year.
Professional Solutions Highlights
During the first quarter, the Company’s entertainment and enterprise solutions were selected by leading system integrators and installers around the world. Notable projects included the Changi Airport in Singapore and a large enterprise control and automation project for Raytheon. HARMAN’s solutions also powered a wide range of high-profile special events, music festivals and televised award shows, including the iHeartRadio Music Festival in Las Vegas and the Rock in Rio in Brazil.
The division launched 7 major new products during the quarter, and many solutions were recognized with innovation awards from industry experts.
During the quarter, HARMAN started production of certain products at its new facility in Pecs, Hungary as part of the plan to improve its European manufacturing footprint.
Connected Services
| FY 2016 Key Figures – Connected Services | Three Months Ended September 30 | |||||||
|
Increase |
||||||||
| $ millions (except per share data) |
3M |
3M |
Including |
Excluding |
||||
| Net sales* | 174 | 68 | 157% | 208% | ||||
| Gross profit | 58 | 17 | 241% | 300% | ||||
| Percent of net sales | 33.1% | 25.0% | ||||||
| SG&A | 52 | 11 | 364% | 425% | ||||
| Operating income | 5 | 6 | (7%) | 18% | ||||
| Percent of net sales | 3.0% | 8.3% | ||||||
| EBITDA1 | 19 | 6 | 213% | 301% | ||||
| Percent of net sales | 11.0% | 9.0% | ||||||
| Restructuring & non-recurring costs | 0 | 0 | ||||||
| Acquisition-related items | 14 | 0 | ||||||
|
Non-GAAP – operational1 |
||||||||
| Gross profit | 58 | 17 | 241% | 300% | ||||
| Percent of net sales | 33.1% | 25.0% | ||||||
| SG&A | 38 | 11 | 235% | 280% | ||||
| Operating income | 20 | 6 | 251% | 348% | ||||
| Percent of net sales | 11.3% | 8.3% | ||||||
| EBITDA | 23 | 6 | 276% | 381% | ||||
| Percent of net sales | 13.2% | 9.0% | ||||||
|
1 A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. |
||||||||
| *Includes intercompany revenues of $6 million. | ||||||||
Net sales in the first quarter of fiscal 2016 were $174 million compared to $68 million in the prior year, driven primarily by the expansion of the Company’s services portfolio. On a non-GAAP basis, gross margin was 33.1 percent, and SG&A expenses as a percentage of sales were 21.8 percent.
Connected Services Highlights
During the quarter, HARMAN began providing product development services to new customers, including Mozilla, Pepsi and United Healthcare. Connected Services also secured follow-on business from BMW, Hyundai, Intel, Polycom and Toyota. In addition, HARMAN capitalized on its industry-leading OTA update technology, winning awards with Bosch, KDDI and Subaru.
At Cisco’s 24th Annual Supplier Appreciation Event, Cisco Systems named HARMAN one of its top three software development partners, recognizing HARMAN’s commitment to innovation, execution and customer service.
Recently, HfS Research, the leading independent research authority for IT and business services, recognized HARMAN as a global leader in Internet of Things (IoT) software solutions. HARMAN earned a spot in their “Winner’s Circle” with the highest overall score for delivering robust, end-to-end IoT solutions, as well as OTA updates and analytics capabilities.
Other (Corporate)
| FY 2016 Key Figures – Other | Three Months Ended September 30 | |||||||
|
Increase |
||||||||
| $ millions (except per share data) |
3M |
3M |
Including |
Excluding |
||||
| SG&A | 34 | 35 | (2%) | (1%) | ||||
| Restructuring & non-recurring costs | 0 | 0 | ||||||
| Acquisition-related items | 1 | 2 | ||||||
|
Non-GAAP – operational1 |
||||||||
| SG&A | 33 | 33 | 1% | 1% | ||||
| 1 A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. | ||||||||
Other (Corporate) SG&A expenses include compensation, benefit and occupancy costs for corporate employees, new technology innovation and expenses associated with the Company’s brand identity campaign. On a non-GAAP basis, SG&A was $33 million, in-line with the prior year.
|
HARMAN International Industries, Incorporated |
||||
| (In thousands, except earnings per share data; unaudited) |
Three Months Ended |
|||
|
2015 |
2014 |
|||
| Net sales | $1,630,888 | $1,428,922 | ||
| Cost of sales | 1,143,490 | 1,014,290 | ||
| Gross profit | 487,398 | 414,632 | ||
| Selling, general and administrative expenses | 355,931 | 298,849 | ||
| Operating income | 131,467 | 115,783 | ||
| Other expenses: | ||||
| Interest expense, net | 8,259 | 2,677 | ||
| Foreign exchange losses (gains), net | (1,845) | 60 | ||
| Miscellaneous, net | 3,987 | 2,340 | ||
| Income before income taxes | 121,066 | 110,706 | ||
| Income tax expense, net | 33,549 | 27,772 | ||
| Net income | 87,517 | 82,934 | ||
| Net income attributable to non-controlling interest | 418 | (39) | ||
| Net income attributable to HARMAN International Industries, Incorporated | $87,099 | $82,973 | ||
| Earnings per share: | ||||
| Basic | $1.21 | $1.20 | ||
| Diluted | $1.20 | $1.18 | ||
| Weighted average shares outstanding: | ||||
| Basic | 72,032 | 69,301 | ||
| Diluted | 72,556 | 70,194 | ||
|
HARMAN International Industries, Incorporated |
||||
| (In thousands; unaudited) | September 30 | June 30 | ||
|
2015 |
2015 |
|||
| ASSETS | ||||
| Current Assets | ||||
| Cash and cash equivalents | $402,161 | $649,513 | ||
| Receivables, net | 1,046,315 | 1,024,139 | ||
| Inventories | 846,302 | 693,574 | ||
| Other current assets | 575,376 | 581,544 | ||
| Total current assets | 2,870,154 | 2,948,770 | ||
| Property, plant and equipment, net | 547,136 | 552,421 | ||
| Goodwill | 1,348,761 | 1,287,180 | ||
| Deferred tax assets, long-term, net | 71,479 | 43,706 | ||
| Other assets | 973,551 | 1,097,675 | ||
| Total assets | $5,811,081 | $5,929,752 | ||
| LIABILITIES AND EQUITY | ||||
| Current liabilities | ||||
| Current portion of long-term debt | $4,474 | $4,550 | ||
| Short-term debt | 480 | 1,021 | ||
| Accounts payable | 870,423 | 918,910 | ||
| Accrued liabilities | 954,724 | 956,425 | ||
| Accrued warranties | 169,551 | 163,331 | ||
| Income taxes payable | 79,210 | 76,131 | ||
| Total current liabilities | 2,078,862 | 2,120,368 | ||
| Borrowings under revolving credit facility | 258,125 | 283,125 | ||
| Long-term debt | 797,642 | 797,542 | ||
| Pension liability | 187,140 | 186,662 | ||
| Other non-current liabilities | 113,807 | 149,229 | ||
| Total liabilities | 3,435,576 | 3,536,926 | ||
| Total HARMAN International Industries, Incorporated shareholders’ equity | 2,356,877 | 2,374,613 | ||
| Noncontrolling interest | 18,628 | 18,213 | ||
| Total equity | 2,375,505 | 2,392,826 | ||
| Total liabilities and equity | $5,811,081 | $5,929,752 | ||
|
HARMAN International Industries, Incorporated |
||||||
| (In thousands except earnings per share data; unaudited) |
Three Months Ended |
|||||
|
GAAP |
Adjustments |
Non-GAAP – |
||||
| Net sales | $1,630,888 | $0 | $1,630,888 | |||
| Cost of sales | 1,143,490 | (1,679)a | 1,141,811 | |||
| Gross profit | 487,398 | 1,679 | 489,077 | |||
| Selling, general and administrative expenses | 355,931 | (24,781)b | 331,150 | |||
| Operating income | 131,467 | 26,460 | 157,927 | |||
| Other expenses: | ||||||
| Interest expense, net | 8,259 | 0 | 8,259 | |||
| Foreign exchange losses (gains), net | (1,845) | 0 | (1,845) | |||
| Miscellaneous, net | 3,987 | (1,225) | 2,762 | |||
| Income before income taxes | 121,066 | 27,685 | 148,751 | |||
| Income tax expense, net | 33,549 | 7,759c | 41,308 | |||
| Net income | 87,517 | 19,926 | 107,443 | |||
| Net income attributable to non-controlling interest | 418 | 0 | 418 | |||
| Net income attributable to HARMAN International Industries, Incorporated | $87,099 | $19,926 | $107,025 | |||
| Earnings per share: | ||||||
| Basic | $1.21 | $0.28 | $1.49 | |||
| Diluted | $1.20 | $0.27 | $1.48 | |||
| Weighted average shares outstanding: | ||||||
| Basic | 72,032 | 72,032 | ||||
| Diluted | 72,556 | 72,556 | ||||
| a) | Restructuring expense in Cost of Sales was $1.7 million for projects to increase manufacturing productivity. | |
| b) | Restructuring expense in SG&A was a credit of $0.5 million primarily due to revised cost estimates related to projects to increase productivity in engineering, manufacturing and administrative functions; other non-recurring expense included in SG&A was $2.1 million. Acquisition-related expenses were $23.2 million, including $16.2 million of intangible amortization expenses. | |
| c) | The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country. | |
HARMAN has provided a reconciliation of non-GAAP measures in order to provide the users of these consolidated financial statements with a better understanding of its non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.
|
HARMAN International Industries, Incorporated |
||||||
| (In thousands except earnings per share data; unaudited) |
Three Months Ended |
|||||
|
GAAP |
Adjustments |
Non-GAAP – |
||||
| Net sales | $1,428,922 | $0 | $1,428,922 | |||
| Cost of sales | 1,014,290 | (2,923)a | 1,011,367 | |||
| Gross profit | 414,632 | 2,923 | 417,555 | |||
| Selling, general and administrative expenses | 298,849 | (8,885)b | 289,964 | |||
| Operating income | 115,783 | 11,808 | 127,591 | |||
| Other expenses: | ||||||
| Interest expense, net | 2,677 | 0 | 2,677 | |||
| Foreign exchange losses (gains), net | 60 | 0 | 60 | |||
| Miscellaneous, net | 2,340 | (0) | 2,340 | |||
| Income before income taxes | 110,706 | 11,808 | 122,514 | |||
| Income tax expense, net | 27,772 | 2,886c | 30,658 | |||
| Equity in net loss of unconsolidated subsidiaries | 0 | 0 | 0 | |||
| Net income | 82,934 | 8,922 | 91,856 | |||
| Net income attributable to non-controlling interest | (39) | 0 | (39) | |||
| Net income attributable to HARMAN International Industries, Incorporated | $82,973 | $8,922 | $91,895 | |||
| Earnings per share: | ||||||
| Basic | $1.20 | $0.13 | $1.33 | |||
| Diluted | $1.18 | $0.13 | $1.31 | |||
| Weighted average shares outstanding: | ||||||
| Basic | 69,301 | 69,301 | ||||
| Diluted | 70,194 | 70,194 | ||||
| a) | Restructuring expense in Cost of Sales was $2.9 million for projects to increase manufacturing productivity. | |
| b) | Restructuring expense in SG&A was $4.0 million primarily due to projects to increase productivity in engineering, manufacturing and administrative functions; other non-recurring expense included in SG&A was $4.9 million. | |
| c) | The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country. | |
HARMAN has provided a reconciliation of non-GAAP measures in order to provide the users of these consolidated financial statements with a better understanding of its non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.
|
HARMAN International Industries, Incorporated |
||||||
|
(In thousands; unaudited) |
Three Months Ended |
Increase / |
||||
|
2015 |
2014 |
|||||
| Net sales – nominal currency | $1,630,888 | $1,428,922 | 14% | |||
| Effects of foreign currency translation (1) |
(108,199) |
|||||
| Net sales – local currency | 1,630,888 | 1,320,723 | 23% | |||
| Gross profit – nominal currency | 487,398 | 414,632 | 18% | |||
| Effects of foreign currency translation (1) |
(25,273) |
|||||
| Gross profit – local currency | 487,398 | 389,359 | 25% | |||
| SG&A – nominal currency | 355,931 | 298,849 | 19% | |||
| Effects of foreign currency translation (1) | (18,989) | |||||
| SG&A – local currency | 355,931 | 279,860 | 27% | |||
| Operating income – nominal currency | 131,467 | 115,783 | 14% | |||
| Effects of foreign currency translation (1) |
(6,284) |
|||||
| Operating income – local currency | 131,467 | 109,499 | 20% | |||
| Net income attributable to HARMAN International Industries, Incorporated – nominal currency | 87,099 | 82,973 | 5% | |||
| Effects of foreign currency translation (1) |
(4,045) |
|||||
| Net income attributable to HARMAN International Industries, Incorporated – local currency | 87,099 | 78,928 | 10% | |||
| (1) Impact of restating prior year results at current year foreign exchange rates. | ||||||
HARMAN has provided a reconciliation of the non-GAAP measures in the table above to provide the users of these consolidated financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect its reported financial results, the Company shows the rates of change both including and excluding the effect of these changes in exchange rates. The Company encourages readers of its financial statements to evaluate its financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.
|
HARMAN International Industries, Incorporated |
||||||
|
EXCLUDING restructuring and non-recurring charges |
Three Months Ended |
Increase / |
||||
|
2015 |
2014 |
|||||
| Net sales – nominal currency | $1,630,888 | $1,428,922 | 14% | |||
| Effects of foreign currency translation (1) |
(108,199) |
|||||
| Net sales – local currency | 1,630,888 | 1,320,723 | 23% | |||
| Gross profit – nominal currency | 489,077 | 417,555 | 17% | |||
| Effects of foreign currency translation (1) |
(25,691) |
|||||
| Gross profit – local currency | 489,077 | 391,864 | 25% | |||
| SG&A – nominal currency | 331,150 | 289,964 | 14% | |||
| Effects of foreign currency translation (1) |
(18,482) |
|||||
| SG&A – local currency | 331,150 | 271,482 | 22% | |||
| Operating income – nominal currency | 157,927 | 127,591 | 24% | |||
| Effects of foreign currency translation (1) |
(7,209) |
|||||
| Operating income – local currency | 157,927 | 120,382 | 31% | |||
| Net income attributable to HARMAN International Industries, Incorporated – nominal currency | 107,025 | 91,895 | 16% | |||
| Effects of foreign currency translation (1) |
(4,969) |
|||||
| Net income attributable to HARMAN International Industries, Incorporated – local currency | 107,025 | 86,926 | 23% | |||
| (1) Impact of restating prior year results at current year foreign exchange rates. | ||||||
HARMAN has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the consolidated financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect its reported financial results, the Company shows the rates of change both including and excluding the effect of these changes in exchange rates. The Company encourages readers of its financial statements to evaluate its financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.
|
Harman International Industries, Incorporated |
||||||||||||
| (In thousands, except earnings per share data; unaudited) |
Three Months Ended |
Three Months Ended |
||||||||||
|
GAAP |
Adjustments |
Non-GAAP – |
GAAP |
Adjustments |
Non-GAAP – |
|||||||
| HARMAN | ||||||||||||
| Operating income | 131,467 | 26,460 | 157,927 | 115,783 | 11,808 | 127,591 | ||||||
| Depreciation & Amortization | 56,838 | (18,241) | 38,597 | 37,427 | (1,394) | 36,033 | ||||||
| EBITDA | 188,305 | 8,219 | 196,524 | 153,210 | 10,414 | 163,624 | ||||||
| CONNECTED CAR | ||||||||||||
| Operating income | 87,219 | 1,046 | 88,265 | 72,646 | 1,377 | 74,023 | ||||||
| Depreciation & Amortization | 18,402 | (1,836) | 16,566 | 16,959 | (1,371) | 15,588 | ||||||
| EBITDA | 105,621 | (790) | 104,831 | 89,605 | 6 | 89,611 | ||||||
| LIFESTYLE AUDIO | ||||||||||||
| Operating income | 47,694 | 7,550 | 55,244 | 49,073 | 3,518 | 52,591 | ||||||
| Depreciation & Amortization | 13,587 | (5,128) | 8,459 | 8,957 | 0 | 8,957 | ||||||
| EBITDA | 61,281 | 2,422 | 63,703 | 58,030 | 3,518 | 61,548 | ||||||
| PROFESSIONAL SOLUTIONS | ||||||||||||
| Operating income | 25,685 | 2,184 | 27,869 | 23,265 | 4,851 | 28,116 | ||||||
| Depreciation & Amortization | 8,504 | (638) | 7,866 | 8,941 | (23) | 8,918 | ||||||
| EBITDA | 34,189 | 1,546 | 35,735 | 32,206 | 4,828 | 37,034 | ||||||
| CONNECTED SERVICES | ||||||||||||
| Operating income | 5,191 | 14,474 | 19,665 | 5,599 | 0 | 5,599 | ||||||
| Depreciation & Amortization | 13,880 | (10,639) | 3,241 | 500 | 0 | 500 | ||||||
| EBITDA | 19,071 | 3,835 | 22,906 | 6,099 | 0 | 6,099 | ||||||
HARMAN has provided a reconciliation of non-GAAP measures in order to provide the users of these consolidated financial statements with a better understanding of its non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.
|
Harman International Industries, Incorporated |
||||||||||||
|
(In thousands; |
Connected |
Lifestyle |
Professional |
Connected |
Eliminations | HARMAN | ||||||
| Net Trade Sales | $755,483 | $461,752 | $246,333 | $167,281 | $0 | $1,630,888 | ||||||
| Intercompany Sales | 0 | 530 | 773 | 6,420 | (7,723) | 0 | ||||||
| Net Sales | 755,483 | 462,282 | 247,106 | 173,701 | (7,723) | 1,630,888 | ||||||
|
HARMAN International Industries, Incorporated |
||
| Total Company Liquidity |
September 30, |
|
| $ millions | ||
| Cash & cash equivalents | $402 | |
| Available credit under Revolving Credit Facility | 937 | |
| Total Liquidity | $1,339 | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20151029005394/en/
Harman International Industries, Incorporated
Darrin Shewchuk, +1 203-328-3834
Senior Director, Corporate Communications
darrin.shewchuk@harman.com
or
Yijing Brentano, +1 203-328-3500
Vice President, Investor Relations
yijing.brentano@harman.com
