Back to GetFilings.com
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended June 30, 1994
Commission file number 1-9764
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
(Exact name of Registrant as specified in its
charter)
Delaware 11-2534306
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1101 Pennsylvania Ave., N.W., Ste. 1010, Washington,
D.C. 20004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (202)
393-1101
Securities registered pursuant Name of each
Exchange on
to section 12(b) of the Act: which
registered:
Common Stock, par value $.01 per share New York Stock
Exchange, Inc.
(Title of class)
Securities registered pursuant to section 12(g) of the
Act: None
Indicate by check mark whether the registrant (1) has
filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the
registrant was required to file such reports), and (2) has been
subject to such
filing requirements for the past 90 days. X Yes No
The aggregate market value of the voting stock held by
nonaffiliates of the
Registrant as of August 31, 1994, was $374,289,168.
Indicate the number of shares outstanding of each of the
registrant's
classes of common stock, as of the latest practicable date:
15,079,067 shares
of Common Stock, par value $.01 per share, as of August 31, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Stockholders
for the fiscal
year ended June 30, 1994, are incorporated by reference in Part I,
Item 1, and
Part II, Items 5, 6, 7 and 8.
Portions of the Registrant's definitive Proxy Statement
relating to the
1994 Annual Meeting of Stockholders are incorporated by reference
in Part III,
Items 10 (as related to Directors), 11, 12, and 13.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item
405 of Regulation S-K (229.405 of this chapter) is not contained
herein, and will
not be contained, to the best of the registrant's knowledge, in
definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K
or any amendment to this Form 10-K. X
THIS PAGE LEFT BLANK INTENTIONALLY
TABLE OF CONTENTS
PART I
Page
Item 1. Business............................................
1
Item 2.
Properties..........................................18
Item 3. Legal
Proceedings...................................20
Item 4. Submission of Matters to a Vote of Security
Holders.20
Executive Officers of the
Registrant................20
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder
Matters........................22
Item 6. Selected Financial
Data.............................22
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of
Operations................22
Item 8. Consolidated Financial Statements and
Supplementary
Data.................................22
Item 9. Disagreements on Accounting and Financial
Disclosure.........................................22
PART III
Item 10. Directors and Executive Officers of the
Registrant..23
Item 11. Executive
Compensation..............................23
Item 12. Security Ownership of Certain Beneficial Owners and
Management.........................................23
Item 13. Certain Relationships and Related
Transactions......23
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form
8-K............................24
List of Financial Statements and
Financial Statement
Schedules......................27
Independent Auditors'
Report........................33
Index to
Exhibits...................................35
Page 1 of 145
THIS PAGE LEFT BLANK INTENTIONALLY
2
PART I
ITEM 1. BUSINESS
General Business
Harman International Industries, Incorporated ("Harman" or
the "Company"),
a Delaware corporation formed in 1980, is a leader in the design,
manufacture and
marketing of high-quality, high-fidelity audio products for
professional,
consumer (both home and automotive aftermarket), and automotive
original
equipment manufacturer ("OEM") markets in the United States and
overseas. The
Company's professional market includes a wide range of professional
uses, from
sound reinforcement, broadcast and recording and musical instrument
support to
commercial and public installations. The consumer market for audio
entertainment
systems consists of home loudspeakers and electronic components and
automotive
aftermarket loudspeakers and amplifiers. The Automotive OEM market
includes
components sold directly to automobile manufacturers (on either a
branded or
generic basis).
The Company's product offerings in the professional audio
market include:
JBL, Turbosound, Precision Devices, and Quested loudspeakers; and
JBL,
Soundcraft, Spirit, AKG, Studer, Studer Dyaxis, Allen & Heath
Brenell, DOD,
Digitech, BSS, Orban, dbx, Lexicon and UREI professional
electronics. The
Company's product offerings in the consumer audio market include:
JBL, Infinity
and Pyle loudspeakers; Harman Kardon electronic components;
AudioAccess in-home,
multi-source, multi-zone sound system controls; and
Fosgate-Audionics home
theater products. The Company's product offerings in the
automotive OEM market
are represented by premium loudspeaker systems designed and
manufactured for
factory installation by automobile manufacturers, including
Chrysler, Ford and
Mitsubishi, bearing the brand names Infinity, JBL and, beginning in
fiscal 1995,
Harman Kardon.
For more than 40 years, products bearing the Company's
brand names have
been designed to appeal to high-fidelity users, both professionals
and
enthusiasts, who desire premium quality and performance. The
respected,
established brand names and breadth of the Company's professional
product
offerings allow Harman to provide turnkey systems solutions as well
as unique
products for special market niches to professional customers. The
Company offers
an impressive array of world-class professional products which
enable performing
artists to produce high-quality, high-fidelity sound, both on stage
and in the
studio. The Company has identified three major areas to serve
within the
professional audio market: sound reinforcement, musical instrument
support and
broadcast and recording.
The growth of compact disc players, video cassette
recorders, and stereo
commercial television broadcasting has stimulated consumer demand
for high-
quality audio products and prompted the expansion of Harman's
consumer product
portfolio to include wireless loudspeakers, surround sound
processors and home
theater products. The Company has concentrated its efforts on the
higher-
quality, higher-priced segment of the consumer audio market.
Harman believes, based on its knowledge of the industry,
that it is among
the largest and most experienced domestically-based manufacturers
of high-quality
professional audio products, and that it offers a broader range of
these products
than any other domestic manufacturer. In addition, the Company and
its
predecessors have been leaders and innovators in loudspeaker
production and
technology for more than 40 years, and the Company believes its JBL
and Infinity
loudspeaker lines are among the world's premier loudspeaker brands.
The
Company's manufacturing, distribution and marketing capabilities
have been
expanded to support the growing markets it serves.
1
3
The Company's strategic plan for the manufacture and
marketing of high-
quality brand name products involves three principal interrelated
elements.
First, manufacturing on a highly integrated basis; second,
marketing
aggressively both domestically and internationally; and third,
achieving
competitive productivity through a balance between automation and
a highly
motivated, skilled work force.
Management believes that JBL, Infinity, Soundcraft,
Studer, AKG and the
other Company brand names are well-recognized worldwide for premium
quality and
performance. In order to better expand and capitalize upon this
reputation,
Harman has invested significant management and capital resources
over the years
in developing an international design, engineering, manufacturing
and marketing
capability, while emphasizing communication among these integrated
functions in
order to respond more effectively to customer needs and to assure
product quality
and manufacturing efficiency.
In collaboration with the Chrysler Corporation
("Chrysler"), Ford Motor
Company ("Ford") and Mitsubishi Motor Company ("Mitsubishi"), the
Company designs
and manufactures customized high-fidelity automotive audio systems
for factory
installation. Infinity sound systems are now available on most
Chrysler models,
including the Dodge Intrepid, Caravan, Stealth, Ram Van and the
Dakota and T-300
pickup trucks, the Eagle Vision, the Plymouth Voyager and the
Chrysler Concord,
New Yorker, Town & Country and LHS models. The Jeep Grand Cherokee
also offers
an Infinity premium audio system. "Ford/JBL" brand name systems
are installed
in Lincoln's Continental, Town Car and Mark VIII and Ford's
Windstar, Crown
Victoria, Taurus and Explorer. Infinity systems are also offered
on certain
Mitsubishi models, including the 3000GT, Eclipse, Diamante and
Galant. In fiscal
1995, Harman branded systems will be offered in the automobiles of
new customers
Saab, Jaguar and Range Rover. Also, in 1995 Harman will provide a
premium system
for the Toyota Avalon, and in 1996 the customer base will be
expanded to include
BMW. The Harman Kardon brand name will be offered for use in
branded audio
systems for automobiles in 1995.
HISTORICAL DEVELOPMENT
Since its formation in 1980, the Company has developed
internally and
through acquisitions the capacity to design, manufacture and market
its products
to compete worldwide in the most significant areas of the
high-quality, high-
fidelity audio markets. While the Company has existed in its
current form since
only 1980, its significant subsidiaries have been in business for
substantially
longer periods, some previously as part of the same enterprise and
most under
their current management.
In 1953, Dr. Sidney Harman, Chairman and Chief Executive
Officer of the
Company, co-founded Harman Kardon to design, manufacture and market
high-fidelity
consumer electronic audio components. Harman Kardon was the first
domestic
manufacturer to produce and market a high-fidelity receiver (a
combination of
tuner, preamplifier and power amplifier in one chassis). In 1962,
Harman Kardon
was acquired by a predecessor of the Company (the "Predecessor").
The
Predecessor expanded its participation in the high-fidelity field
in 1969 by
acquiring James B. Lansing Sound (JBL), a top U.S. manufacturer of
high-quality
loudspeakers. Founded in 1946, JBL was a driving force in the
introduction of
professional loudspeakers developed for the movie industry.
(Amplifiers of the
1940's had limited power, therefore, transducers had to be
efficient and loud for
the audience to hear the movie, thus the term loudspeaker.) JBL
also extended
its offerings to provide its technological legacy to consumers by
producing high-
quality loudspeakers for consumers who were accustomed to JBL's
professional
quality.
2
4
The Predecessor also formed international subsidiaries to
market and
distribute its audio products in Europe and Japan, where JBL and
Harman Kardon
were, and continue to be, top brand names.
In August 1977, the Predecessor was acquired by Beatrice
Foods Co. (now
Beatrice Companies, Inc. ("Beatrice"), when Dr. Harman became the
Under Secretary
of Commerce of the United States. In January 1980, at the
conclusion of his
service as Under Secretary of Commerce, Dr. Harman organized the
Company to re-
acquire from Beatrice the JBL loudspeaker business and the
international
distributing companies, which together represented approximately
60% of the
Predecessor's business. Harman Kardon and other parts of the
business had been
sold by Beatrice in the intervening years.
Since 1980, the Company has grown steadily by internal
expansion and a
series of strategic acquisitions. Harman's growth has been fueled
by a focus on
three areas of the audio industry: (1) professional audio,
providing a complete
range of audio products offered to the broadcast, recording, sound
reinforcement
and music instrument markets; (2) consumer audio, broadening its
range of product
offerings from the traditional base of loudspeakers and electronic
components to
include wireless loudspeakers, surround sound processors and home
theater
products and broadening its customer base to include large
retailers in the U.S.
such as Circuit City and Best Buy; and (3) automotive/OEM audio,
offering branded
audio systems for installation as original equipment in automobiles
and
broadening its base of customers to include Chrysler, Ford, Jeep
and Mitsubishi
and by adding Saab, Range Rover, Jaguar and Toyota for 1995 and BMW
for 1996.
The JBL professional loudspeaker business provided the
foundation for the
development of the Company's professional audio business, which has
been realized
through a series of strategic acquisitions. In 1983, the Company
acquired the
UREI professional amplifier business to expand its presence in the
professional
audio electronics arena. In April 1988, the Company acquired
Soundcraft, a U.K.
manufacturer of professional mixing boards, as a logical
progression of the
exclusive U.S. distribution of Soundcraft products by JBL
Professional. In March
1990, the Company acquired DOD to bring the Professional Group into
the musical
instrument/effects market. The digital electronics expertise of
DOD and
Soundcraft engineers have also contributed significantly to the
Company. In
September 1991, the Company acquired Allen & Heath Brennell,
Limited, and its
subsidiaries, a U.K. producer of professional mixing boards. In
April 1993,
Harman acquired Lexicon, a U.S. manufacturer of professional
digital audio signal
processing equipment and disk-based audio production systems,
further augmenting
the Company's digital audio product offerings.
Austrian microphone manufacturer AKG was acquired in
September 1993,
providing the Company the ability to offer complete system
solutions for the
sound reinforcement market. The AKG product line also includes
audio headphones,
audio signal processing devices, professional loudspeakers and
other professional
audio products. Effective January 1994 the Company acquired
Studer, a Swiss
manufacturer of professional recording and broadcast equipment,
expanding the
Company's presence in these key segments of the professional audio
market. As
a result of the acquisition and development of these professional
audio companies
and the renowned brand names which they offer, management believes
that Harman
is now the world leader in the professional audio market.
The Company's consumer business has been built around the
markets served
by JBL, Infinity and Harman Kardon. The Infinity consumer
loudspeaker business
was acquired in 1983, adding another true high-end speaker brand to
the Company's
product offerings. The Harman Kardon consumer electronics business
was acquired
from Shin Shirasuna in 1985, which had purchased Harman Kardon from
Beatrice.
The addition of the renowned Harman Kardon brand name served to
further
strengthen the Company's consumer product portfolio. Also in 1985,
the Company
acquired Pyle Industries to expand its presence in the automotive
aftermarket
loudspeaker business. The Company acquired the Epicure Products,
Inc. ("EPI")
3
5
loudspeaker business in October 1986. The Company expanded its
electronic audio
components business and entered the home theater market through its
acquisition
of Fosgate, Inc. ("Fosgate-Audionics" or "Fosgate") in January
1991. The
Company's consumer electronics presence was expanded further
through the fiscal
1994 acquisition of AudioAccess, a manufacturer of home audio/video
system
control devices.
In June 1981, the Company entered the automotive OEM
market for
loudspeakers through the acquisition of the Essex Loudspeaker
Division of United
Technologies, which was renamed Harman Motive, U.S. The Company
strengthened its
position in the European automotive OEM loudspeaker market through
the
acquisition of Harman Motive, Ltd. (formerly ELAC), a U.K.
automotive OEM
loudspeaker manufacturer, in December 1989. The Company has
derived value from
its strategic entry into the automotive OEM market by optimizing
engineering,
design and manufacturing processes and by leveraging the market
strength of its
brand names, such as Infinity and JBL.
The loudspeaker manufacturing capabilities of the Company
have been
strategically expanded to include European operations. In November
1987, the
Company acquired the assets of Audax, a French transducer
manufacturer, and in
April 1988, the Company completed its purchase of Lydig of
Scandinavia A/S
("Lydig"), a loudspeaker cabinet manufacturer. Lydig manufactures
speaker
cabinets for JBL and Infinity which are fitted with transducers
manufactured by
Audax and sold in European markets.
The Company's international distributing operations
include operating units
in Germany, France, Japan, the U.K. and Belgium.
In fiscal 1994, the Company established the Harman
Marketing Units
("HMU's") located in Hong Kong, Denmark, Japan, Singapore and the
U.S. to support
and protect the Harman brand names worldwide. These organizations
maintain close
contact with their markets, interpret user needs and facilitate
product
discussion between distributors and the Professional and Consumer
Group
companies.
BUSINESS STRATEGY
Harman is a leading manufacturer and marketer of
high-fidelity audio
products. The Company's goal is to capitalize on its technical
expertise and
reputation for superior sound and translate this expertise into
increased market
share in existing markets and into new product areas wherever an
in-depth
understanding of sound gives Harman a competitive edge. The key
elements of its
strategy are:
Superior Sound. Harman strives to provide its
customers
with products that deliver high-quality, high-fidelity sound.
The
Company and its predecessors have been leaders and innovators
in
loudspeaker production and technology for more than 40 years.
Brand Equity. The Company's brand names are well-
recognized worldwide for premium quality and performance.
Harman
believes that this strong brand name recognition will enable
it
to expand its product offerings and market share in the
professional, consumer and automotive OEM markets.
Market Expansion. The Company's growth strategy has
emphasized utilization of its strengths in delivering
professional quality sound in the consumer and automotive OEM
markets. The Company moved into the microphone and headphone
market with the acquisition of AKG and moved more broadly
into
the broadcast and recording arenas with the acquisition of
4
6
Studer. Harman has expanded its consumer product offerings
to
include home theater, surround sound and wireless speaker
technology. Harman has expanded its market for automotive
OEM
systems to Europe with the addition of Saab, Jaguar and Range
Rover as customers for 1995 and BMW for 1996. New customer
Toyota will also be added in 1995.
Systems Solutions. The Company has emphasized the
provision of professional systems solutions. The strategic
acquisitions of AKG and Studer now enable Harman to provide
complete systems solutions for sound reinforcement, broadcast
and
recording customers.
Manufacturing. Harman believes that the Company's
integrated manufacturing facilities are essential for the
manufacture of innovative, high quality products at
reasonable
costs. The Company integrates the disciplines of marketing,
design, engineering and manufacturing. By linking
engineering to
process development in the manufacturing facilities, the
Company
can develop manufacturing techniques that cannot be
duplicated by
most competitors.
OPPORTUNITIES
The Company's growth strategy is to continue to capitalize on
its
strong name brands and to provide internal support to each division
within
each group structure to maximize their resource utilization.
Potential
growth areas include:
Increased Presence in Professional Markets. The Company is
now
offering complete systems solutions utilizing a number of Harman
products to
provide custom solutions for the broadcast, recording, sound
reinforcement
and music instrument markets. In many cases the Company provides
one-stop
shopping to professional customers. The Company's products
including JBL,
Soundcraft, Lexicon, Allen & Heath, DOD, UREI, Studer, AKG, BSS,
Turbosound,
dbx, Orban, Digitech and Audio Logic are among the most
well-respected in the
world.
Operating Improvements at AKG and Studer. During fiscal
1994, the
Company acquired AKG and Studer, primarily because of their strong
brand
names and excellent reputations for quality. The Company is in the
process
of updating the manufacturing facilities and engineering
capabilities of AKG
and Studer. In addition, the product offerings are being updated
to include,
among other developments, wireless microphones at AKG and
additional digital
products at Studer.
Broadened Consumer Customer Base. The Company has broadened
its range
of products in the consumer loudspeaker area to accommodate both
specialty
audio retailers and large consumer electronics retailers such as
Circuit City
and Best Buy. In fiscal 1994, Infinity introduced two loudspeaker
lines
exclusively for sale to Circuit City. This program has been
enormously
successful.
Broadened Base of Automotive OEM Customers. The Company is
currently
selling branded premium audio systems for factory installation in
automobiles
under the brand names Infinity and JBL to Chrysler, Ford, Jeep and
Mitsubishi. New customers Saab, Jaguar, Toyota and Range Rover
will be added
in 1995 and BMW will be added in 1996. Significant is the addition
of
automobiles made in Europe as this expands the geographic base of
customers.
The Company will also begin offering systems under the Harman
Kardon brand
name in 1995, leveraging the market presence of another of the
Company's
brand names. 5
7
Worldwide Marketing Efforts. The Company has increased its
marketing
efforts to increase the public's awareness of the Company's brand
names and
to target "sell-through" rather than relying extensively on
retailers to
promote Harman products. In addition, the Company has increased
its efforts
in the training of retail sales people regarding Harman products.
The
Automotive OEM Group is also for the first time making the buying
public
aware of its ability to transform an automobile into a "concert
hall on
wheels" by promoting the Company's branded audio systems for
automobiles.
ORGANIZATION
The Company is organized in three core groups and three
functional
support groups. The core groups are Professional, Consumer and
Automotive
OEM. The functional support groups are Manufacturing, Marketing
and
Distributing. The Professional Group contributed approximately 39%
of fiscal
1994 total net sales, the Consumer Group accounted for
approximately 38% of
net sales, and the Automotive OEM Group generated approximately 23%
of net
sales.
Financial Information about Geographic Segments
Financial information about geographic segments required to
be included
hereunder is incorporated by reference to Note 10 of Notes to
Consolidated
Financial Statements contained in the Company's Annual Report to
Shareholders
for the fiscal year ended June 30, 1994.
Description of Business
The Company's business is conducted through its wholly owned
subsidiaries which include:
Name Principal products
AKG Acoustics GmbH Professional electronics
Allen & Heath Brenell Limited Professional electronics
Audax Industries, S.A. Consumer home, automotive and
professional loudspeakers;
automotive
OEM loudspeakers
DOD Electronics Corporation Professional electronics
Fosgate, Inc. Consumer home electronics
Harman Audio Outlet, Inc. Consumer home and automotive
high-
fidelity products
Harman Belgium NV Consumer home, automotive and
professional high-fidelity
products
Harman Deutschland GmbH Consumer home, automotive and
professional high-fidelity
products
Harman France, S.A. Consumer home, automotive and
professional high-fidelity
products
Harman International Industries, Consumer home, automotive and
Limited professional high-fidelity
products
6
8
Name Principal products
Harman International Japan Consumer home, automotive and
Co., Limited professional high-fidelity
products
Harman-Kardon, Incorporated Consumer home and automotive
electronics
Harman-Kardon Europa A/S Consumer home and automotive
electronics
Harman-Motive, Inc. (U.S.) Automotive OEM loudspeakers and
electronics
Harman-Motive, Ltd. (U.K.) Automotive OEM loudspeakers
Infinity Systems, Inc. Consumer home and automotive
loudspeakers and electronics
JBL Incorporated Consumer and professional
loudspeakers
and electronics
Lexicon, Incorporated Professional electronics
Lydig of Scandinavia A/S Components, cabinets and
loudspeaker
systems
Pyle Industries, Inc. Consumer automotive
loudspeakers and
electronics
Soundcraft Electronics, Limited Professional electronics
Studer Professional Audio AG Professional electronics
Markets for Products
Based on the Company's experience in, and knowledge of, the
industry,
the Company believes that the professional, consumer and automotive
OEM
markets, both domestic and international, have experienced
significant growth
in recent years. The growth of digital audio technology has
changed the way
music is recorded and reproduced and has led to the development of
a new
generation of professional and consumer audio products. The
Company is well-
positioned to meet the digital requirements of the professional
market with
the expertise of its professional companies, particularly
Soundcraft, Studer,
Lexicon and DOD.
Harman is a leader in the design and production of premium,
branded
high-fidelity systems for automobile manufacturers. Consumers are
placing
increasing emphasis on the quality of the sound system in the
automobile
purchase process. The Company's Infinity, JBL, and, starting in
1995, Harman
Kardon brand names have been successful in raising the standard for
excellence in car audio.
Products
The Company designs, engineers, manufactures and markets
worldwide a
broad range of high-quality, high-fidelity audio loudspeakers and
electronics
for the professional (broadcast and recording, sound reinforcement,
and
musical instrument support), consumer (both home and automotive
aftermarket),
and automotive OEM markets. The Company also distributes a small
amount of
7
9
complementary audio products manufactured by other companies. The
Professional Group accounted for approximately 39% of the Company's
fiscal
1994 sales. The Consumer Group contributed approximately 38% of
fiscal 1994
sales, of which 82% was attributable to home loudspeaker and
automotive
aftermarket systems and 18% was from electronic components. The
Automotive
OEM Group generated approximately 23% of fiscal 1994 sales.
Professional Products. The Company designs, manufactures and
markets
products in all significant segments of the professional market,
offering
complete systems solutions to professional installations and users
around the
world.
The Professional Group includes many of the most respected
names in the
industry including JBL, Soundcraft, Allen & Heath, DOD, Lexicon,
AKG, BSS,
dbx, Orban, Turbosound, Studer and UREI. Professional
installations of
Harman products include stadiums, opera houses, concert halls,
recording
studios, broadcast studios, theaters, cinemas and touring
performing artists.
Sound systems incorporating components manufactured by JBL,
UREI,
Lexicon, AKG, Studer and Soundcraft are in use around the world in
such
places as Wolf Trap Farm Park for the Performing Arts and the
Kennedy Center
in Washington, D.C., Disney World and Epcot Center in Florida, the
Great Hall
of the People in Beijing, China, Tanglewood Music Shed in
Massachusetts,
Frankfurt Opera House in Germany, the Royal Danish Theater and
Abbey Road
Studio in England. Performing artists such as Neil Diamond, Bruce
Springsteen, David Bowie, Madonna, Pink Floyd, Alabama, Michael
Jackson,
Elton John, Kenny Rogers, Billy Joel, U-2, The Rolling Stones and
The Who use
Harman professional equipment on tour.
The professional market has advanced rapidly and is heavily
involved in
digital technology. Harman's Professional Group is a leader in
this market.
The strength of the Professional Group is derived from its ability
to share
research and development, engineering talent and other substantial
digital
resources among its divisions. Soundcraft, Lexicon, Studer and DOD
each have
substantial digital resources and work together to achieve common
goals by
blending the individual strengths and qualities of the operating
units with
the combined resources of the group.
The Professional Group's loudspeaker products are well-known
for high
quality and superior sound. The JBL Professional portfolio of
products
includes studio monitors, loudspeaker systems, power amplifiers,
musical
instrument and sound reinforcement loudspeakers, bi-radial horns,
theater
systems and surround sound systems as well as industrial
loudspeakers. The
AKG acquisition has provided the Company with additional
professional
loudspeaker market strength through the addition of the Turbosound
Floodlight
and Flashlight loudspeaker lines and the Quested studio monitor
models.
The Company is a leading manufacturer and marketer of audio
electronics
equipment for professional use. Such products are marketed on a
worldwide
basis under various trade names, including Soundcraft, Allen &
Heath, DOD,
Digitech, Lexicon, AKG, BSS, dbx, Orban, Studer, Audio Logic, and
UREI, and
are often sold in conjunction with the Company's professional
loudspeakers.
The Soundcraft line of high-quality sound mixing consoles
extends from
automated multi-track consoles for master recording studios to
compact
professional mixers for personal recording and home studios.
Soundcraft
products span four main market areas: sound reinforcement,
recording studios,
broadcast studios and musical instrument dealers. Allen & Heath
manufactures
cost effective mixing consoles for use in broadcast studios and for
use on
stage in smaller venues.
8
10
The DOD product line is marketed under the DOD, Digitech and
Audio
Logic brand names, and is sold primarily to professional audio and
musical
instrument dealers. DOD products include signal processing
equipment,
equalizers, mixers and special effects devices. Performing artists
who have
used DOD products on tour include: Def Leppard, Damn Yankees, Skid
Row,
Frank Gambale, Steve Vai, George Lynch, Peter Gabriel, Marshall
Tucker and
Jennifer Batten (lead guitarist for Michael Jackson).
Lexicon is a leader in the design, manufacture and marketing
of high-
quality digital audio signal processing equipment and disk-based
audio
production systems for professional use in the audio, video,
musical
entertainment and broadcasting markets worldwide. Lexicon's OPUS
disk-
based audio production systems are used in film and video post
production
studios. OPUS provides recording, non destructive editing, mixing
and signal
processing all in the digital domain. Broadcasters also use
Lexicon products
to edit, shape and synchronize their programming. Additionally,
Lexicon
designs, manufactures and markets a series of high-end consumer
ambiance and
Home Theater Surround Sound processors.
AKG is one of the world's largest manufacturers of
high-quality
microphones. The AKG product line includes microphones, audio
headphones and
other professional audio products marketed under the AKG brand
name. AKG
also owns several companies that manufacture and market
professional audio
products, including: audio signal processing devices distributed
worldwide
under the brand names dbx and Orban; and amplifiers, loudspeakers
and other
professional audio products sold worldwide under the brand names
BSS,
Precision Devices, Quested and Turbosound.
Studer Professional Audio has brought the Professional Group
to a
strong position in the high-end broadcast arena. Studer is
recognized for
the high quality and reliability of its professional products,
which include
analog and digital tape recorders, mixing consoles, switching
systems,
digital audio workstations, professional compact disc players and
recorders
and turnkey broadcasting studio installations.
Consumer Products. The Company designs, manufactures and
markets
loudspeakers principally under the JBL and Infinity brand names for
the
consumer market. Since its formation in 1948, JBL has designed
loudspeakers
to appeal to audio enthusiasts who desire superior-quality sound
reproduction. JBL loudspeakers sold to the consumer market employ
techniques
originally developed by the Company for products used in recording
studios,
concert halls, theaters, airports and other acoustically demanding
environments. JBL's diverse product line gives customers a wide
range of
speaker choices: floorstanding, bookshelf, built-in, wireless,
transportable
and wall of ceiling mountable loudspeakers, in styles and finishes
ranging
from high gloss piano lacquer to genuine wood veneers. JBL's
recent
introduction of wireless technology in the SoundEffects speaker
system allows
easy home theater and multi-room installation.
From its beginning in 1968, Infinity has developed high
quality
loudspeakers with their own audio character, which is commonly
identified as
"linear," "symmetrical," or "neutral." These characteristics are
expressed
in sophisticated acoustic configurations utilizing injection-molded
graphite
speaker cone material, electro-magnetic induction tweeters and
mid-range
drivers. Epsilon, the latest addition to the Infinity Reference
Standard
line of high performance loudspeakers, features a proprietary
planar monopole
design which delivers wide, smooth power response with exceptional
spaciousness and "air" while eliminating the drawbacks of planar
dipole
speaker systems.
9
11
The more expensive JBL and Infinity loudspeakers are housed
in high-
gloss lacquer or wooden veneer cabinets which complement the
quality
components they enclose. The Company has made significant
investments in its
loudspeaker cabinet production facilities at Harman Speaker
Manufacturing in
Northridge, California and at Lydig in Denmark and believes that
they are
among the most advanced cabinet production facilities in the world.
Both JBL
and Infinity also offer premium automotive aftermarket loudspeaker
and
amplifier products.
The Company designs, manufactures and markets a broad range
of consumer
audio electronics products on a worldwide basis. The Company's
consumer
electronics products facilitate the marketing of complete systems
incorporating the Company's loudspeakers, such as surround sound
home theater
installations.
Founded in 1953, Harman Kardon has been a leading innovator
in the
development of high-quality audio components which improve the
listening
experience and reflect a commitment to value and ease-of-use. The
realization of these principles is reflected in Harman Kardon's
current
product offerings, including audio-video stereo receivers, bit
stream compact
disc changers, "smart" tape decks and high fidelity all-in-one
compact
systems.
Fosgate Audionics is a designer and manufacturer of high-end
surround
sound processors, amplifiers and loudspeakers for the growing U.S.
and
international home theater market. Fosgate Audionics provides
solutions for
all component and system needs for home theater and home audio.
Fosgate
offers home "THX" loudspeaker components and surround sound
processor/"THX"
controllers.
Pyle Industries manufactures and markets aftermarket
automotive
speakers, amplifiers and electronics.
In 1993, the Company acquired AudioAccess, which is a leader
in the
field of in-home, multi-source, multi-zone sound system controls.
AudioAccess adds to the Consumer Group's ability to provide
complete home
theater solutions. Also in 1993, the Company acquired a minority
interest in
Madrigal, with an option on the remaining shares. Madrigal is the
manufacturer of the legendary Mark Levinson amplifiers and Proceed
brand
high-fidelity product lines.
Automotive OEM. Harman International believes it is the
world's
largest manufacturer of premium branded, automotive OEM audio
systems. In
fiscal 1994, sales of automotive OEM products accounted for
approximately 23%
of the Company's consolidated net sales. In its sale of
loudspeakers and
other audio products to the automotive OEM market, the Company
takes
advantage of its expertise in the design and manufacture of
high-quality
loudspeakers, as well as the reputation for quality associated with
its JBL,
Infinity and Harman Kardon brand names. In particular, the
Company's
expertise in designing and manufacturing transducers utilizing
special
materials allows the Company to collaborate with automobile
manufacturers to
design lighter audio sound systems, thereby contributing to
increases in
automobile fuel efficiency.
The Company manufactures premium OEM sound systems for
automobiles,
including the Infinity audiophile systems sold to Chrysler and
Mitsubishi and
the JBL audiophile systems sold to Ford, as well as a limited
amount of
loudspeakers sold for installation as components of non-branded
standard
equipment sound systems. The Company's subsidiaries customize
these
automotive audio systems individually for each automobile model to
maximize
the acoustic performance for each model's interior.
10
12
Infinity has collaborated with Chrysler in developing
customized
automotive systems which are available as options under the
"Chrysler/Infinity" brand name for Chrysler's Concord, New Yorker,
Town &
Country and LHS models; Dodge's Intrepid and Caravan models;
Plymouth's
Voyager model; and Eagle's Vision model. Infinity also offers
customized
brand name audio systems which are available as options for
selected
Mitsubishi models, including the Mitsubishi 3000GT, Diamante,
Eclipse and
Galant along with the Dodge Stealth, which is manufactured by
Mitsubishi.
Chrysler/Infinity systems are also offered in the Jeep Grand
Cherokee and the
Dodge Ram Van and Dakota and T300 pickup trucks. The Company
expects that
the majority of new models currently planned by Chrysler will
include
"Chrysler/Infinity" systems as customer options.
JBL has created customized automotive audio systems utilizing
various
loudspeaker and amplifier configurations in collaboration with
Ford. These
systems are available as an option under the "Ford/JBL" brand name
in
Lincoln's Town Car, Continental and Mark VIII models; and Ford's
Taurus,
Windstar, Explorer and Crown Victoria models. The Company provides
the total
system, including all electronic components, other than the head
unit
(receiver/cassette deck/CD player) and subwoofer amplifiers, for
selected
models.
In fiscal 1995, Harman branded systems will be offered in the
automobiles of new customers Saab, Jaguar and Range Rover. Also,
in 1995
Harman will provide a premium system for the all-new Toyota Avalon,
and in
1996, the customer base will be expanded to include BMW. The
Harman Kardon
brand name will be offered for use in branded audio systems for
automobiles
in 1995.
Strict security has been maintained with respect to the
independent
engineering development of the branded audio systems for each
automotive
customer in order to promote technical competition and to protect
the
proprietary interests of the automobile manufacturers.
The Company's U.S. automotive OEM subsidiary (Harman Motive,
U.S.)
enjoys a Q-1 certified supplier rating from Ford and holds the Q-E
certification from Chrysler. A Q-1 certification is awarded to
suppliers
that meet or exceed the rigorous requirements of the Q-1 quality
evaluation
process set by Ford. The Q-E certification from Chrysler
recognizes superior
supplier performance in the area of quality. Harman Motive was
also awarded
the U.S. Senate-sponsored Productivity Award.
The Company's Harman Motive, Ltd. subsidiary in the United
Kingdom,
also a Q-1 supplier to Ford, is a specialized designer and
manufacturer of
loudspeakers and packaged assemblies for the automotive OEM
industry in
Europe. Each product is fully customized to meet the automobile
manufacturer's specific mechanical and performance criteria.
Harman Motive,
Ltd. currently produces a variety of loudspeaker systems which are
installed
in such makes as Ford, Rover and Jaguar. In addition, the
Company's Audax
transducer manufacturer, located in France, currently manufactures
and sells
loudspeakers directly to automobile manufacturers in France for
Peugeot,
Citroen and Renault models.
Harman's existing product lines continue to be augmented by
the
development of new products. During the past two years the
following
products were among the new products introduced:
1994: The Lexicon JamMan digital audio effects processor, the
Soundcraft Delta Theater mixing console, the Orban 8282
TV
Optimod digital television audio processor, the AKG
WMS50 and
WMS100 wireless microphones, the JBL C236A-S101 sound
power
controller, the Digitech Bass Whammy Pedal, the BSS
Varicurve
11
13
remote console series, the Studer Numisys II digital
audio
workstation, the JBL Control 8SR/pt mini sound
reinforcement
system, the Turbosound Floodlight TCS612 loudspeaker
system, the
Lexicon Vortex digital audio effects processor, the
Spirit Folio
S1, 4 and RacPac portable mixers, the DOD Vintage 2
guitar
processor, the JBL Control 1E Power Control 1 monitor,
the dbx
242 Project 1 parametric equalizer, the AKG C535WLTM900
hand-held
microphone, the Studer MultiDesk digital audio
workstation, the
JBL SC305 center channel loudspeaker, the Harman Kardon
FL8400
front-loading carousel CD changer, the Infinity Epsilon
planar
monopole loudspeaker, the Pyle Driver automotive
speakers, the
Fosgate-Audionics Model 3A surround sound processor
with
amplifier, the JBL SFX Series mini surround sound loudspeaker
systems, the Harman Kardon AVR15 audio/video receiver,
the JBL
SYN3 Synthesis Series home theater speaker system and
the
Infinity Reference Standard Car Audio Series automotive
speakers.
1993: The JBL HT/THX Loudspeaker System, the JBL G Series
loudspeakers,
the JBL PS Series Powered Subwoofers, the Soundcraft
Spirit Folio
Portable Mixer, the JBL Array Series loudspeakers, the
UREI
Platform Series electronics, the M2020 Lexicon effects
processor,
the Pyle Multi-Element Automotive Speakers, the
Soundcraft LM1
mixer, the Harman Video Series II/LD-1 Data Projector,
the
Concord IS5000 Surround Sound Processor, the Digitech
(DOD) TR3
Multi-Effects Pedal, the Digitech (DOD) Grunge
Distortion Pedal,
the Fosgate-Audionics Model Four surround controller,
the
Fosgate-Audionics Model MC-110 speaker, the JBL Base
Wave
Amplifier, the Harman Kardon AVR30 audio/video
receiver, the
Harman Kardon HD7725 CD player, the Infinity
Environmental
Reference Standard Series loudspeakers (ERS), the
Infinity KAPPA
MKII loudspeaker series and the JBL Control Monitor
Loudspeaker
Series.
Manufacturing
The Company believes that its manufacturing capabilities are
essential
to maintaining and improving the quality and performance of its
products.
The success of the Company's conversion of its primary
manufacturing
facilities to a continuous flow manufacturing process has reduced
product
cycle times, increased flexibility and improved efficiency. The
benefits of
these improvements are reflected in higher product quality and
lower purchase
and overhead costs.
The Company manufactures most of the products that it sells
other than
the Harman Kardon electronic components. The Company also produces
some
products for other loudspeaker companies on an OEM basis.
Notable among the Company's manufacturing capabilities with
respect to
loudspeakers are the production of its own high-gloss lacquer and
wooden
veneer loudspeaker enclosures, the milling of its own wire, the
winding of
its own voice coils and the use of numerically controlled lathes
and other
machine tools to produce its many precision components. The
Company's high
degree of manufacturing integration, it believes, permits it to
produce more
consistently uniform high performance products. Moreover, the
Company has
been able to apply technology and materials developed for one line
of
products to other of its product lines. The Company uses common
manufacturing facilities to achieve economies of scale, while
maintaining
competition among its subsidiaries in engineering, product
development and
marketing.
12
14
The Company's principal domestic manufacturing facility is
located in
Northridge, California where it manufactures JBL and Infinity
loudspeakers,
including cabinets, for professional, consumer and automotive
aftermarket
markets, amplifiers for the OEM and automotive aftermarket markets,
and UREI
electronics. The Company manufactures loudspeakers and assembles
sound
systems for the OEM automotive market in Martinsville, Indiana.
Its Pyle
subsidiary in Huntington, Indiana, manufactures loudspeakers for
automotive
aftermarket and OEM applications. DOD manufactures its products at
its
facility in Salt Lake City, Utah. Lexicon manufactures its
products
predominantly at its Waltham, Massachusetts facility.
In addition to the Company's U.S. manufacturing capacity, the
Company
has established a strong international manufacturing presence to
better
respond to customer demands in world markets. AKG manufactures
microphones
and headphones in Austria, with additional manufacturing operations
in India,
and Studer manufactures professional recording and broadcast
equipment in
Switzerland. Audax, whose products include high-quality,
high-performance
tweeters, manufactures transducers in France, and the Company's
Lydig
subsidiary manufactures cabinet enclosures and assembles complete
JBL and
Infinity loudspeakers in Denmark for sale in European markets.
Harman
Motive, Ltd. manufactures automotive OEM loudspeakers and
Soundcraft
manufactures mixing boards at their respective facilities in the
United
Kingdom. Also manufactured in the United Kingdom are Turbosound
loudspeakers
and BSS professional amplifiers. The Company's international
speaker and
professional electronics manufacturing facilities enable the
Company to
compete more effectively in Europe.
Marketing
The Company's products are sold domestically and
internationally in the
professional, consumer, and automotive OEM markets. The Company's
professional market includes a wide range of professional uses,
from sound
reinforcement, broadcast and recording and musical instrument
support to
commercial and public installations, which accounted for
approximately 39% of
the Company's consolidated net sales in fiscal 1994. The consumer
market for
audio products consists of home and automotive aftermarket
products, which
accounted for approximately 38% of fiscal 1994 consolidated net
sales. The
OEM market includes automobile manufacturers who purchase
components and
systems primarily on a branded basis. In fiscal 1994, sales of
automotive
OEM products accounted for approximately 23% of consolidated net
sales.
In fiscal 1994, the Company implemented marketing specialist
organizations located in Denmark, Hong Kong, Singapore, Japan and
the U.S.
(which serves the Latin American, African and Middle Eastern
markets) to
support and protect the Harman brand names worldwide. These
organizations,
called the Harman Marketing Units ("HMU's"), stay in intimate
contact with
their markets, interpret user needs and facilitate product
discussion between
distributors and the Professional and Consumer Group companies.
The HMU's
also sponsor advertising and promotional events to enhance public
awareness
of the Company's brands.
The Company's professional audio products are marketed
worldwide
through professional sound equipment dealers, including
engineered-sound
contractors which directly assist major users. The Company's sales
and
marketing group for its professional products is separate and
independent
from its consumer products sales and marketing group, although both
groups
are supported by the HMU's.
The Company primarily markets its consumer audio products
through audio
and audio-video specialty stores and certain audio-video chain
stores,
including Circuit City and Best Buy. The Company enjoys broad
distribution
13
15
of its products and particularly seeks dealers who emphasize
high-quality
audio systems and who are knowledgeable about the characteristics
of audio
products. The Company's sales and marketing activities include
dealer
education programs and comprehensive product literature to enable
salespeople
to understand and explain the price and performance features
offered by the
Company's products. The Company's dealers typically stock a number
of home
audio equipment lines including competing products (sometimes both
JBL and
Infinity loudspeakers) and may also carry automobile audio systems
and other
consumer-oriented electronics products.
The Company markets its automotive products in a variety of
ways. The
Company currently markets its automotive aftermarket products to
consumers
through its existing home audio dealer network and through
automotive audio
specialty dealers. At the OEM level, in addition to the brand name
systems
described previously, the Company sells non-branded systems
directly to
Chrysler, Ford, Rover and other automotive manufacturers (such as
Citroen,
Peugeot and Renault) for installation in vehicles during
production.
Distributing
The Company's International Distributing Group units in
Germany,
France, Great Britain, Japan and Belgium generally market products
made by
JBL, Soundcraft, Allen & Heath, DOD, UREI, AKG, Studer, Lexicon,
BSS, dbx,
Orban, Turbosound, Infinity, Harman Kardon, Pyle, AudioAccess and
Fosgate on
an exclusive basis in their respective countries. These Harman
products are
also distributed by other independent distributing firms in most
other major
world markets.
Harman Deutschland, the Company's largest European
distribution
subsidiary, completed an agreement to withdraw from the exclusive
distribution of Maxell audio and video tapes in Germany at the end
of fiscal
1993. Harman Deutschland continued to provide administrative
support on a
fee basis for Maxell in Germany through the end of fiscal 1994.
Excluding
the distribution of Maxell products, which accounted for
approximately $40.0
million of Harman Deutschland's sales in fiscal 1993, fiscal 1994
sales
approximated the prior year despite the difficult economic
conditions in
Germany. The termination of Harman Deutschland's distribution of
Maxell
products has not materially affected the Company's earnings.
Suppliers
Currently, products designed by Harman Kardon in the United
States are
manufactured predominantly by Technol Ace Corporation in Japan.
Technol Ace
has provided uninterrupted delivery to Harman Kardon for the past
eight
years. The Company believes it has had, and continues to have, an
excellent
working relationship with Technol Ace; however, the uninterrupted
availability of the products currently manufactured in Japan
depends upon the
continued cooperation of Technol Ace. The loss of this supplier
would have
a significant impact on the sales and earnings of Harman Kardon
until a new
supplier could be located. Harman Kardon has begun using multiple
vendors
and has thus limited its reliance on Technol Ace.
One supplier provides a significant number of components to
several
subsidiaries of the Company. The loss of this supplier would
create a
significant disruption in production for these subsidiaries until
alternate
sources for these components could be found and could have a
material impact
on the cost of these products.
Northridge Manufacturing relies on several suppliers for a
large
percentage of certain parts, such as speaker grilles, plastic
molded parts
14
16
and magnets. The loss of any one of these suppliers would have a
material
impact on the earnings of Harman Manufacturing until alternate
sources for
these components could be found.
Trademarks and Patents
The Company markets its products under numerous trademarks
and logos,
including JBL, Infinity, Harman Kardon, UREI, Pyle, Citation, JB
Lansing,
James B. Lansing Sound, Concord, Audax, Polydax, Lydig of
Scandinavia,
Soundcraft, Spirit, DOD, Audio Logic, DigiTech, Fosgate-Audionics,
Lexicon,
AKG, Studer, Studer Dyaxis, BSS, Orban, Precision Devices, dbx,
AudioAccess,
Turbosound, Quested, Auto Azimuth and Dynamic Midi which are
registered or
otherwise protected in substantially all major industrialized
countries. The
Company's registrations cover use of its trademarks and logos in
connection
with various applicable products, such as loudspeakers, speaker
systems,
speaker system components and other electrical and electronic
devices. As of
June 30, 1994, the Company held approximately 245 United States and
foreign
patents covering various products, product designs and circuits,
and had
approximately 136 patent applications pending around the world.
The Company
vigorously protects and enforces its trademark and patent rights.
Seasonality
Overall, the Company's consolidated net sales are not
materially
impacted by seasonality. However, the first fiscal quarter is
usually
weakest due to the July and August holidays in Europe and the
automotive OEM
model changeovers. Variations in seasonal demands among end-user
markets may
cause operating results to vary from quarter to quarter.
Customers
The loss of automotive OEM system sales to Chrysler and/or
Ford would
have a material adverse impact on the earnings of Harman Motive,
U.S., Harman
Motive, Ltd. and the Company as a whole. Sales to Chrysler for
fiscal year
1994 accounted for 13.7% of the Company's consolidated net sales.
The
Company's next two largest customers accounted for an aggregate of
12.2% of
its consolidated net sales for the year ended June 30, 1994.
Backlog Orders
Because the Company's practice is to maintain sufficient
inventories of
finished goods to fill orders promptly, the Company does not view
the level
of backlog to be an important index of future performance. The
Company's
backlog was approximately $27.3 million at June 30, 1994 and $26.3
million at
June 30, 1993.
Warranties
Harman generally warrants its home products to be free from
defects in
materials and workmanship for a period ranging from 90 days to five
years
from the date of purchase by the consumer, depending on the
product. The
warranty is a "limited" warranty insofar as it imposes certain
shipping costs
on the consumer, and excludes deficiencies in appearance except for
those
evident when the product is delivered. Harman dealers normally
perform
warranty service for loudspeakers in the field, using parts
supplied on an
exchange basis by the Company. The Company does not usually
reimburse
dealers for their labor in performing warranty service on its
loudspeaker
products.
15
17
Warranties in the international markets are generally similar
to those
in the domestic market, although claims arising under these
warranties are
the responsibility of the distributor, including the Company's
distributing
subsidiaries.
Competition
In general, the audio industry is fragmented and competitive
with many
manufacturers, large and small, domestic and international,
offering audio
products which vary widely in price and quality and are marketed
through a
variety of channels. Professional products are offered through
music
instrument and professional dealers, contractors, installers and on
a
contract bid basis. Consumer products are offered through various
channels
including audio specialty stores, discount stores, department
stores and mail
order firms. The Company concentrates its efforts on the
higher-quality,
higher-priced segments of the audio industry.
While the Company manufactures and markets many compatible
and
complementary products, other products that the Company
manufactures and
markets compete directly. For example, Soundcraft professional
mixing
consoles are compatible with and marketed by the same staff as JBL
professional loudspeakers. However, JBL Consumer and Infinity
loudspeakers
compete directly and are two of the top loudspeaker brands in the
world. The
Company's strategy uses its brand leadership to increase market
share.
The market for professional sound systems is highly
competitive. The
Company has historically held a leading market position in the
professional
loudspeaker market and has complemented its professional
loudspeaker line by
adding digital professional electronics products and recording and
broadcast
equipment. The Company competes using its ability to provide
complete
systems solutions to meet the complete audio requirements of its
professional
customers. Harman offers a product for virtually every
professional audio
application.
The Company competes in the sound reinforcement market with
many of its
brand names, including JBL, Turbosound, UREI, AKG, Soundcraft and
BSS. Its
principal competitors in the sound reinforcement area include
Electro Voice,
Inc. and Altec Lansing (subsidiaries of Mark IV Industries), TOA,
Tannoy,
Bose, Peavy, Tascam, Klark-Teknik and Sony. The Professional Group
competes
in the broadcast and recording areas with its Studer, AKG,
Soundcraft,
Lexicon and Orban brands. Principal competitors in broadcast and
recording
include: Neve, Sennheiser, Denon, SSL, Shure and Audio Technica.
In the
Music Instrument area the Company's DOD, Digitech, dbx, Lexicon and
Spirit
products meet competitors Yamaha, Peavy, Rane, Roland, Furman,
Alesis,
Eventide and Sony.
The Professional Group also competes in the industrial and
architectural sound market; competitors within this market include
Peavy, TOA
and Siemens.
The Company believes that it currently has a significant
share of the
consumer market for loudspeakers (home and aftermarket automotive),
primarily
as a result of the strength of its brand names. JBL and Infinity
are two of
the most recognized loudspeaker brands in the world. The Company
competes
based upon its ability to meet customer demands through new product
introduction, the breadth of its product lines, world-class
marketing and its
ability to take advantage of the economies of scale resulting from
the
Company's use of common manufacturing facilities.
The Company's principal competitors in the consumer
loudspeaker market
include Bose Corp., Boston Acoustics, Inc., Bowers & Wilkins, KEF,
Sony Corp.
16
18
and Polk Audio, Inc. Harman's principal competitors in the
consumer
automotive aftermarket area include Bose, Alpine Electronics, Inc.,
Kenwood
Corp., and Blaupunkt-Werke GmbH.
Competition in the consumer electronic components segment
remains
intense, with this market dominated by large Japanese competitors.
The short
life cycle of products and a need for continuous design and
development
efforts characterize this segment. The Company's competitive
strategy is to
compete in the upper segments of this market and to continue to
emphasize the
Company's ability to provide systems solutions to customers,
including a
combination of loudspeakers and electronics products, providing
integrated
surround sound and home theater systems. Principal electronics
competitors
include Denon, Onkyo, Nakamichi Corp., Pioneer and Kenwood.
In the automotive OEM market, the Company's principal
competitors
include Bose, International Jensen Inc., Oxford Electric, and
Foster Electric
Inc. The Company is the only supplier of branded loudspeaker
systems for
Ford, Chrysler, Jeep and Mitsubishi automobiles in the United
States, and
also supplies loudspeaker systems to Ford and Rover in the United
Kingdom.
The Company competes based upon the strength of its brand name
recognition
and the quality of its products together with its technical
expertise in
designing loudspeaker systems to fit the acoustic properties of
each
automobile model. Harman International is unique in its ability to
provide
multiple brands, each with its own unique characteristics and loyal
consumer
following.
Environmental Matters
The Company is subject to various federal, state, local and
international environmental laws and regulations, including those
governing
the use, discharge and disposal of hazardous materials. The
Company's
manufacturing facilities are believed to be in substantial
compliance with
current laws and regulations. The cost of compliance with current
laws and
regulations has not been, and is not expected to be, material. The
Company
has been named as a "potentially responsible party" with respect to
the
disposal of hazardous wastes at four hazardous waste sites. In
addition,
there are other sites to which the Company has sent hazardous
wastes which
the Company believes are currently under regulatory scrutiny. It
is possible
that additional environmental issues may arise in the future which
the
Company cannot now predict.
Although ultimate liability cannot be determined with respect
to the
sites mentioned above, and applicable law provides that a
potentially
responsible party at any site may be held jointly and severally
liable for
the total cost of remediation, the Company believes, based upon
internal
investigations and information made available to the Company with
regard to
its potential liability at these sites, that its proportionate
share of the
costs related to the investigation and remedial work at these sites
will not
exceed $100,000.
Research, Development and Engineering
The Company's expenditures for research, development and
engineering
were $22,324,000, $11,980,000, and $10,689,000 for the fiscal years
ending
June 30, 1994, 1993 and 1992, respectively. The increase in
expenditures in
fiscal 1994 includes development efforts at AKG and Studer,
acquired in
fiscal 1994, and a full year of expenditures of Lexicon, which was
acquired
in the fourth quarter of fiscal 1993.
17
19
Number of Employees
As of June 30, 1994, the Company had 6,849 full-time
employees,
including 4,043 domestic employees and 2,806 international
employees. The
increase in number of employees as of June 30, 1994 compared to the
prior
year primarily results from the AKG and Studer acquisitions.
Financial Information about Foreign & Domestic Operations & Export
Sales
Financial information about foreign and domestic operations
and export
sales to be filed hereunder is incorporated by reference to Note 10
of Notes
to Consolidated Financial Statements and Management's Discussion
and Analysis
of Financial Condition and Results of Operations (Effects of
Inflation and
Exchange Rates) on pages 33 and 23, respectively, in the Company's
Annual
Report to Shareholders for the fiscal year ended June 30, 1994.
ITEM 2. PROPERTIES
The Company's principal activities are conducted at the
facilities
described in the following table.
Square Owned or
Percentage
Location Footage Leased
Utilization
Northridge, California 616,792 Leased
100%
Vienna, Austria 284,867 Leased
100%
Ontario, California 212,600 Owned
100%
Martinsville, Indiana 181,856 Owned
100%
Huntington, Indiana 172,427 Owned
100%
Ringkobing, Denmark 134,366 Owned
100%
20,753 Leased
100%
Sandy, Utah 122,000 Leased
100%
Heilbronn, Germany 56,910 Owned
92%
63,183 Leased
60%
Potters Bar, UK 110,000 Leased
100%
Bridgend, UK 101,400 Leased
100%
Regensdorf, Switzerland 86,111 Leased
100%
San Leandro, California 78,125 Leased
60%
Chateau-du-Loir, France 66,712 Owned
100%
Chatsworth, California 59,000 Leased
60%
Chatsworth, California 55,000 Leased
100%
Chatou, France 54,972 Leased
88%
18
20
Of the above facilities, the Northridge, California facility
is used by
JBL Incorporated and Harman Motive; the Vienna, Austria facility is
used by
AKG Acoustics GmbH; the Ontario, California facility is used by JBL
Incorporated and Infinity Systems, Inc.; the Martinsville, Indiana
facility
is used by Harman Motive, Inc.; the Huntington, Indiana facility is
used by
Pyle Industries, Inc.; the Ringkobing, Denmark facility is used by
Lydig of
Scandinavia A/S; and the Sandy, Utah facility is used by DOD
Electronics
Corporation.
The Heilbronn, Germany facility is used by Harman Deutschland
GmbH; the
Potters Bar, U.K. facility is used by Soundcraft Electronics,
Limited; the
Bridgend, U.K. facility is used by Harman Motive, Ltd.; the
Regensdorf,
Switzerland facility is used by Studer Professional Audio AG; the
San
Leandro, California facility is used by Orban; the Chateau-du-Loir,
France
facility is used by Audax Industries, S.A.; the Chatsworth,
California
facilities are used by JBL International (59,000 square feet) and
Infinity
Systems, Inc. (55,000 square feet); and the Chatou, France facility
is used
by Studer Digitec SA.
The Company considers its properties to be suitable and
adequate for
its present needs.
19
21
ITEM 3. LEGAL PROCEEDINGS
There are various legal claims pending against the Company,
but in the
opinion of management, liabilities, if any, arising from such
claims will not
have a material effect upon the consolidated financial condition
and results
of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
Age at
Name August 1, 1994 Position
Sidney Harman 75 Chairman, Chief Executive
Officer and
Director of the Company
Bernard A. Girod 52 President, Chief Operating
Officer, Chief
Financial Officer,
Secretary and
Director of the Company
F. Michael Budd 47 President - Harman
Manufacturing Group
Philip J. Hart 49 President - Harman Professional
Group
Thomas Jacoby 40 President - Harman Consumer
Group
Gregory P. Stapleton 47 President - Automotive OEM
Group
Jerome H. Feingold 52 Vice President - Quality
Frank Meredith 37 Vice President and General
Counsel
William S. Palin 51 Vice President and Director
International
Audit
Sandra B. Robinson 35 Vice President - Financial
Operations
Floyd E. Toole 48 Vice President - Engineering
Officers are elected annually by the Board of Directors and
hold office
at the pleasure of the Board of Directors until the next annual
selection of
officers or until their successors are elected and qualified.
Sidney Harman, Ph.D., the Company's founder, has been
Chairman of the
Board and Chief Executive Officer and a director of the Company
since the
Company's founding in 1980. From 1977 to 1979, Dr. Harman was the
Under
Secretary of Commerce of the United States. From 1962 to 1977, Dr.
Harman
was an officer and director of the Predecessor of the Company.
Bernard A. Girod has been President of the Company since
March 1994,
Chief Operating Officer of the Company since March 1993, a Director
of the
Company since July 1993, Secretary of the Company since November
1992 and
20
22
Chief Financial Officer since September 1986. From September 1979
to
September 1986, Mr. Girod was the Vice President and General
Manager of
Permacel, a subsidiary of Avery International and Vice President of
Planning
and Business Development for Avery International. From 1977 to
1979, Mr.
Girod was the Chief Financial Officer of the Predecessor of the
Company.
F. Michael Budd has been the President of the Harman
Manufacturing
Group since June 1989. From October 1984 to June 1989, Mr. Budd
served as
President of the Automotive Components division of ITT Corporation.
Philip J. Hart has been President of the Harman Professional
Group
since November 1993. Prior to that time, Mr. Hart served as
President of
Soundcraft since Harman's 1988 acquisition. Prior to that time,
Mr. Hart was
General Manager of Soundcraft.
Thomas Jacoby has been President of the Harman Consumer Group
since
February 1993. Prior to that time, Mr. Jacoby served as President
of JBL
Consumer since August 1990. From July 1988 to August 1990, Mr.
Jacoby
served as Executive Vice President of Harman Kardon.
Gregory P. Stapleton has been President of the Automotive OEM
Group
since October 1987.
Jerome H. Feingold has been the Vice President-Quality of the
Company
since January 1992. Prior to that time, Mr. Feingold served as
President of
Harman Speaker Manufacturing since July 1985. Prior to 1985, Mr.
Feingold
held various management positions within the manufacturing division
of the
Company.
Frank Meredith has been General Counsel of the Company since
August
1994. Prior to that time, Mr. Meredith served as Vice
President-Tax/Legal
and Assistant Secretary of the Company since July 1992. Prior to
that time,
Mr. Meredith held other positions within the Company since May
1985.
William S. Palin has been Vice President and Director
International
Audit since March 1994. Prior to that time he was the director of
his own
accounting and consulting firm which handled numerous assignments
for the
Company over the years, including significant acquisition support.
Prior to
that time Mr. Palin was the Chief Financial Officer for Harman
Europe and
Managing Director of Harman Audio, both a part of the Predecessor
company.
Sandra B. Robinson has been Vice President-Financial
Operations since
November 1992. Prior to that time, Ms. Robinson was Director of
Corporate
Accounting and has been employed by the Company since December
1984.
Floyd E. Toole, Ph.D., joined the Company as Vice
President-Acoustic
Research in November 1991. Prior to joining the Company, Dr. Toole
spent 25
years, most recently as Senior Research Officer, with the National
Research
Council of Canada's Acoustics and Signal Processing Group. At the
National
Research Council, Dr. Toole worked to develop
psychoacoustic-optimized
adaptive digital techniques for improving the performance of
loudspeakers in
rooms.
21
23
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER
MATTERS
The information required by Part II, Item 5 is incorporated
by
reference to the Company's Annual Report to Shareholders for the
fiscal year
ended June 30, 1994 (Shareholder Information on page 36).
ITEM 6. SELECTED FINANCIAL DATA
The information required by Part II, Item 6 is incorporated
by
reference to the Company's Annual Report to Shareholders for the
fiscal year
ended June 30, 1994 (Financial Highlights on page 1).
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND
RESULTS OF OPERATIONS
The information required by Part II, Item 7 is incorporated
by
reference to the Company's Annual Report to Shareholders for the
fiscal year
ended June 30, 1994 (Management's Discussion and Analysis of
Financial
Condition and Results of Operations on pages 21 through 23).
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
The information required by Part II, Item 8 is incorporated
by
reference to the Company's Annual Report to Shareholders for the
fiscal year
ended June 30, 1994 (Consolidated Financial Statements on pages 24
through
35).
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
22
24
PART III
With the exception of information relating to the executive
officers of
the Company which is provided in Part I hereof, all information
required by
Part III (Items 10, 11, 12, and 13) of Form 10-K, including the
information
required by Item 405 of Regulation S-K, is incorporated by
reference to the
Company's definitive Proxy Statement relating to the 1994 Annual
Meeting of
Stockholders.
23
25
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
a) 1. Financial statements required to be filed
hereunder are
indexed on page 27 hereof.
2. Financial statement schedules required to be
filed
hereunder are indexed on page 27 hereof.
3. The exhibits required to be filed hereunder are
indexed on
pages 35 through 39 hereof.
b) Reports on Form 8-K
None.
24
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on
its behalf by the undersigned, thereunto duly authorized.
(Registrant): HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
By: (Signature and Title) /s/ Sidney Harman
Sidney Harman, Chairman of the Board
and
Chief Executive Officer
Date: September 19, 1994
Pursuant to the requirements of the Securities Exchange Act
of 1934, this
report has been signed below by the following persons on behalf of
the registrant
and in the capacities and on the dates indicated.
Signature Title
Date
/s/ Sidney Harman Chairman of the Board,
September 19, 1994
Sidney Harman Chief Executive Officer
and Director
/s/ Bernard A. Girod President, Chief Operating
September 19, 1994
Bernard A. Girod Officer, Chief Financial
Officer (Principal
Financial Accounting
Officer), Secretary and
Director
/s/ Shirley M. Hufstedler Director
September 19, 1994
Shirley M. Hufstedler
/s/ Edward Meyer Director
September 19, 1994
Edward Meyer
/s/ Alan Patricof Director
September 19, 1994
Alan Patricof
25
27
THIS PAGE LEFT BLANK INTENTIONALLY
26
28
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES
Index to Item 14(a)
Page
Reference
_______________________
Annual
Report to
Form 10-K
Shareholders
_______________________
Consolidated Financial Data (pages 24 through 35
of the 1994 Annual Report to Shareholders
herein incorporated by reference as Exhibit 13.1):
Consolidated Balance Sheets as of June 30, 1994
and
1993............................................................24
Consolidated Statements of Operations for the years
ended June 30, 1994, 1993 and
1992..................................25
Consolidated Statements of Cash Flows for the years
ended June 30, 1994, 1993 and
1992..................................26
Consolidated Statements of Shareholders' Equity for
the years ended June 30, 1994, 1993 and
1992........................27
Notes to Consolidated Financial
Statements............................28
Independent Auditors'
Report...........................33.............35
Schedules for the years ended June 30, 1994,
1993 and 1992:
V Property, Plant and Equipment....................28
VI Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment....29
VIII Valuation and Qualifying Accounts and Reserves...30
IX Short-Term Borrowings............................31
X Supplemental Income Statement Information........32
All other schedules have been omitted because they are not
applicable, not
required, or the information has been otherwise supplied in the
financial
statements or notes to the financial statements.
27
29
SCHEDULE V
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
Property, Plant and Equipment
Three Years Ended June 30, 1994
($000's omitted)
_________________________________________________________________
______________________
Column Column Column Column
Column Column
A B C D
E F
_________________________________________________________________
______________________
Other
Balance at
Changes Balance
Beginning Additions Retire-
Add(Deduct) at End
Classification of Period at Cost ments
Describe1 of Period
_________________________________________________________________
______________________
Year Ended June 30, 1992
Land $ 4,493 $ 2 $ --
$ -- $ 4,495
Buildings and Improvements 38,565 4,203 258
2,050 44,560
Machinery and Equipment 109,682 14,249 3,329
7,172 127,774
Furniture and Fixtures 11,072 2,549 214
2,411 15,818
-------- ------- -------
- - -------- --------
TOTAL $163,812 $21,003 $ 3,801
$11,633 $192,647
======== ======= =======
======== ========
Year Ended June 30, 1993
Land $ 4,495 $ -- $ 546
$ -- $ 3,949
Buildings and Improvements 44,560 2,183 2,875
(1,458) 42,410
Machinery and Equipment 127,774 22,082 6,418
767 144,205
Furniture and Fixtures 15,818 1,298 449
(3,185) 13,482
-------- ------- -------
- - -------- --------
TOTAL $192,647 $25,563 $10,288
$(3,876) $204,046
======== ======= =======
======== ========
Year Ended June 30, 1994
Land $ 3,949 $ -- $ 324
$ 515 $ 4,140
Buildings and Improvements 42,410 3,258 1,265
11,682 56,085
Machinery and Equipment 144,205 34,045 4,557
14,586 188,279
Furniture and Fixtures 13,482 3,417 890
4,882 20,891
-------- ------- -------
- - -------- --------
TOTAL $204,046 $40,720 $ 7,036
$31,665 $269,395
======== ======= =======
======== ========
1 Transfers from other assets and between fixed asset categories
and effect of foreign
currency translation in 1992. Purchase of Lexicon, transfers from
other assets and
between fixed asset categories and effect of foreign currency
translation in 1993.
Purchase of AKG, Studer and Beltronics, transfers from other assets
and between fixed
asset categories and effect of foreign currency translation in
1994.
28
30
SCHEDULE VI
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment
Three Years Ended June 30, 1994
($000's omitted)
_________________________________________________________________
______________________
Column Column Column Column
Column Column
A B C D
E F
_________________________________________________________________
______________________
Additions
Other
Balance at Charged to
Changes Balance
Beginning Costs and Retire-
Add(Deduct) at End
Classification of Period Expenses ments
Describe1 of Period
_________________________________________________________________
______________________
Year Ended June 30, 1992
Buildings and Improvements $ 8,164 $ 3,031 $ 481
$ (109) $ 10,605
Machinery and Equipment 46,023 16,870 1,840
6,707 67,760
Furniture and Fixtures 5,686 1,970 198
672 8,130
-------- ------- -------
- - -------- --------
TOTAL $ 59,873 $21,871 $ 2,519
$ 7,270 $ 86,495
======== ======= =======
======== ========
Year Ended June 30, 1993
Buildings and Improvements 10,605 3,255 837
(348) 12,675
Machinery and Equipment 67,760 17,878 5,629
(485) 79,524
Furniture and Fixtures 8,130 1,826 973
(194) 8,789
-------- ------- -------
- - -------- --------
TOTAL $ 86,495 $22,959 $ 7,439
$(1,027) $100,988
======== ======= =======
======== ========
Year Ended June 30, 1994
Buildings and Improvements 12,675 4,499 119
1,575 18,630
Machinery and Equipment 79,524 23,282 2,467
996 101,335
Furniture and Fixtures 8,789 3,429 732
(611) 10,875
-------- ------- -------
- - -------- --------
TOTAL $100,988 $31,210 $ 3,318
$ 1,960 $130,840
======== ======= =======
======== ========
1 Transfers between fixed asset categories and effect of foreign
currency translation in
1992, 1993 and 1994.
29
31
SCHEDULE VIII
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
Valuation and Qualifying Accounts and Reserves
Three Years Ended June 30, 1994
($000's omitted)
_________________________________________________________________
______________________
Column Column Column Column
Column Column
A B C D
E F
_________________________________________________________________
______________________
Charged
Balance at Charged to To Other
Balance
Beginning Costs and Accounts
Deductions at End
Classification of Period Expenses Describe
Describe of Period
_________________________________________________________________
______________________
Year Ended June 30, 1992
Allowance for doubtful
accounts $ 3,878 $ 2,373 $ 42 1
$ 2,629 2 $ 3,664
======= ======= =======
======= =======
Year Ended June 30, 1993
Allowance for doubtful
accounts $ 3,664 $ 2,216 $ 77 3
$ 2,522 2 $ 3,435
======= ======= =======
======= =======
Year Ended June 30, 1994
Allowance for doubtful
accounts $ 3,435 $ 2,757 $ 7,189 4
$ 3,140 2 $10,241
======= ======= =======
======= =======
1 Addition due to Allen & Heath Brennell acquisition.
2 Deductions for accounts receivable written off net of recoveries.
3 Addition due to Lexicon acquisition.
4 Addition due to AKG, Studer and Harman Belgium (Beltronics)
acquisitions.
30
32
SCHEDULE IX
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
Short-Term Borrowings
Three Years Ended June 30, 1994
($000's omitted)
_________________________________________________________________
______________________
Column Column Column Column
Column Column
A B C D E
F
_________________________________________________________________
______________________
Maximum
Average Weighted
Weighted Amount
Amount Average
Category of Balance Average Outstanding
Outstanding Interest
Aggregate at End Interest During the During
the Rate During
Short-Term Debt of Period Rate Period
Period The Period1
_________________________________________________________________
______________________
June 30, 1992
Notes payable-banks $ 63,463 8.7% $ 88,766 $
67,025 8.9%
June 30, 1993
Notes payable-banks $ 33,379 6.2% $ 75,333 $
42,574 8.6%
June 30, 1994
Notes payable-banks $ 63,140 6.3% $ 98,008 $
52,760 6.4%
1 Weighted average interest rate during the period is computed as
related interest expense
divided by the average outstanding balance during the year.
31
33
SCHEDULE X
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
Supplemental Income Statement Information
Three Years Ended June 30, 1994
($000's omitted)
_________________________________________________________________
______________________
Column A Column
B
_________________________________________________________________
______________________
Charged to Cost
and Expenses
For the Year
Ended June 30,
1992 1993
1994
_________________________________________________________________
______________________
1. Maintenance and repairs * *
*
2. Depreciation and amortization
of intangible assets * *
*
3. Taxes other than payroll and
income taxes * *
*
4. Royalties * *
*
5. Advertising costs $ 19,666 $
20,293 $ 18,933
* Does not exceed 1% of sales.
32
34
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Harman International Industries, Incorporated:
Under date of August 12, 1994, we reported on the consolidated
balance sheets of Harman
International Industries, Incorporated and subsidiaries as of June
30, 1994 and 1993, and
the related consolidated statements of operations, cash flows and
shareholders' equity for
each of the years in the three year period ended June 30, 1994, as
contained in the 1994
annual report to shareholders. These consolidated financial
statements and our report
thereon are incorporated by reference in the annual report on Form
10-K for the year ended
June 30, 1994. In connection with our audits of the aforementioned
consolidated financial
statements, we also have audited the related financial statement
schedules as listed in
the accompanying index. These financial statement schedules are
the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered
in relation to the
basic consolidated financial statements taken as a whole, present
fairly, in all material
respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
Los Angeles, California
August 12, 1994
33
35
THIS PAGE LEFT BLANK INTENTIONALLY
34
36
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
INDEX TO EXHIBITS
The following exhibits are filed as part of this report.
Where such filing is made
by incorporation by reference to a previously filed statement or
report, such statement
or report is identified in parenthesis.
There are omitted from the exhibits filed with this Annual
Report on Form 10-K
certain promissory notes and other instruments and agreements with
respect to long-term
debt of the Company, none of which authorizes securities in a total
amount that exceeds
10 percent of the total assets of the Company on a consolidated
basis. Pursuant to Item
61(d)(4)(iii) of Regulation S-K, the Company hereby agrees to file
with the Securities and
Exchange Commission copies of all such omitted promissory notes and
other instruments and
agreements as the Commission requests.
Exhibit
Page
No. Description
No.
3.1, 4.1 Restated Certificate of Incorporation, as amended,
filed
with the Delaware Secretary of State on October 7,
1986.
(Filed as Exhibits 3.1 and 4.1 to the Registration
State-
ment on Form S-1 (Reg. No. 33-8538) and hereby
incorporated
by
reference.)......................................................
...IBR
4.3, 10.17 Composite conformed copy of the Note Purchase
Agreements
dated June 30, 1987, relating to the sale of $25.0
million
principal amount of 10.08% Senior Notes due September
30,
1994, and $17.5 million principal amount of 10.40%
Senior
Notes due September 30, 1997, including as exhibits
thereto
the form of 10.08% Senior Notes due September 30, 1994,
and
10.40% Senior Notes due September 30, 1997. (Filed as
Exhibit 4 to the Quarterly Report on Form 10-Q for the
quarter ended December 31, 1988 (File No. 0-15147), and
hereby incorporated by
reference.).....................................IBR
4.4, 10.29 Composite conformed copy of the Note Purchase Agreement
dated December 1, 1988, relating to the sale of $45.0
million
principal amount of 11.2% Senior Subordinated Notes due
December 1, 1998, including as an exhibit thereto the
form
of 11.2% Senior Subordinated Notes due December 1,
1998.
(Filed as Exhibit 4 to the Quarterly Report on Form
10-Q
for the quarter ended December 31, 1988 (File No.
0-15147),
and hereby incorporated by
reference.).................................IBR
4.5 Amended By-Laws of Harman International Industries,
Incorporated. (Filed as Exhibit 4.5 to the Quarterly
Report
on Form 10-Q for the quarter ended March 31, 1992 (File
No.
0-15147) and hereby incorporated by
reference.)........................IBR
35
37
INDEX TO EXHIBITS (cont.)
Exhibit
Page
No. Description
No.
4.6 Indenture dated June 4, 1992, between Harman
International
Industries, Incorporated and Security Trust Company
N.A., as
Trustee, relating to $70,000,000 principal amount of
12.0% Senior
Subordinated Notes due 2002, including as an exhibit
thereto
the form of 12.0% Senior Subordinated Notes due 2002.
(Filed as
Exhibit 4.6 to the Annual Report on Form 10-K for the
year ended
June 30, 1992 (File No. 0-15147), and hereby
incorporated by
reference.)......................................................
......IBR
4.7 First Amendment to Note Agreement Dated June 30, 1987,
dated as of December 14, 1988, relating to the sale of
$25.0
million principal amount of 10.08% Series A Senior
Notes due
September 30, 1994, and $17.5 million principal amount
of 10.40%
Series B Senior Notes due September 30, 1997. (Filed
as Exhibit
4.7 to the Registration Statement on Form S-2 (Reg. No.
33-49692) and hereby incorporated by
reference.).......................IBR
10.1 Lease dated as of June 18, 1987 between Harman
International
Industries Business Campus Joint Venture and JBL Inc.,
as
amended. (Filed as Exhibit 10.1 to the Annual Report
on
Form 10-K for the fiscal year ended June 30, 1987 (File
No. 0-15147) and hereby incorporated by
reference.)....................IBR
10.2 Guaranty dated as of June 18, 1987 by Harman
International
Industries, Inc. of Lease dated as of June 18, 1987
between
Harman International Industries Business Campus Joint
Venture and JBL Inc., as amended. (Filed as Exhibit
10.2
to the Annual Report on Form 10-K for the fiscal year
ended June 30, 1987 (File No. 0-15147) and hereby
incorporated by
reference.)............................................IBR
10.3 Chatsworth Industrial Park Lease Agreement dated as of
July 31, 1984, between Almo Properties and Infinity
Systems,
Inc. (Filed as Exhibit 10.3 to the Registration
Statement
on Form S-1 (Reg. No. 33-8538) and hereby incorporated
by
reference.)......................................................
......IBR
10.9 Distributor Agreement dated April 27, 1981 between
Maxell
Europe GmbH and Harman Deutschland GmbH, as amended.
(Filed
as Exhibit 10.9 to the Registration Statement on Form
S-1
(Reg. No. 33-8538) and hereby incorporated by
reference.)..............IBR
10.10 Agreement dated as of June 20, 1985, among Harman
International
Industries, Inc., Harman-Motive, Inc., JBL Inc. and
Ford Motor
Co. (Filed as Exhibit 10.10 to the Registration
Statement on
Form S-1 (Reg. No. 33-8538) and hereby incorporated by
reference.)......................................................
......IBR
10.18 Harman International Industries, Inc. 1987 Executive
Incentive Plan (adopted December 8, 1987). (Filed as
Exhibit 10.18 to the Annual Report on Form 10-K for the
fiscal year ended June 30, 1988 (File No. 0-15147), and
hereby incorporated by
reference.).....................................IBR
36
38
INDEX TO EXHIBITS (cont.)
Exhibit
Page
No. Description
No.
10.19 Form of Incentive Stock Option Agreement under the 1987
Executive Incentive Plan. (Filed as Exhibit 10.19 to
the
Annual Report on Form 10-K for the fiscal year ended
June 30,
1988 (File No. 0-15147), and hereby incorporated by
reference.)........IBR
10.20 Form of Non-Qualified Stock Option Agreement under the
1987
Executive Incentive Plan. (Filed as Exhibit 10.20 to
the
Annual Report on Form 10-K for the fiscal year ended
June 30,
1988 (File No. 0-15147), and hereby incorporated by
reference.)........IBR
10.21 Form of Non-Qualified Stock Option Agreement with
non-officer
directors. (Filed as Exhibit 10.21 to the Annual
Report on
Form 10-K for the fiscal year ended June 30, 1988 (File
No. 0-15147), and hereby incorporated by
reference.)...................IBR
10.23 Lease Agreement dated April 28, 1988, among Alaskan
Permanent
Fund Corp. and the National Bank of Washington, as
trustee
of the National Bank of Washington Multi-Employer
Property
Trust and Harman Electronics, Inc. (Filed as Exhibit
10.23
to the Annual Report on Form 10-K for the fiscal year
ended
June 30, 1988 (File No. 0-15147), and hereby
incorporated
by
reference.)......................................................
...IBR
10.24 Promissory Note dated August 3, 1993, among Harman
International Industries, Inc., JBL Incorporated and
Banc
One Arizona Leasing Corporation. (Filed as Exhibit
10.24 to
the Annual Report on Form 10-K for the fiscal year
ended
June 30, 1993 (File No. 0-15147), and hereby
incorporated
by
reference.)......................................................
...IBR
10.26 Harman International Industries, Incorporated
Retirement
Savings Plan. (Filed on Form S-8 Registration
Statement on
June 16, 1989 (Reg. No. 33-28973), and hereby
incorporated by
reference.)......................................................
......IBR
10.27 Harman International Industries, Incorporated
Supplemental
Executive Retirement Plan. (Filed as Exhibit 10.27 to
the
Annual Report on Form 10-K for the fiscal year ended
June
30, 1989 (file No. 0-15147), and hereby incorporated by
reference.)......................................................
......IBR
10.28 Form of Benefit Agreement under the Supplemental
Executive Retirement Plan. (Filed as Exhibit A to the
Supplemental Executive Retirement Plan at Exhibit
10.27 and hereby incorporated by
reference.)...........................IBR
10.30 Form of Restricted Stock Agreement. (Filed as Exhibit
10.30
to the Annual Report on Form 10-K for the fiscal year
ended
June 30, 1989 (File No. 0-15147), and hereby
incorporated by
reference.)......................................................
......IBR
10.32 Note dated September 7, 1989, between Harco Properties,
Incorporated and New England Mutual Life Insurance
Company.
(Filed as Exhibit 10.32 to the Quarterly Report on Form
10-Q
for the quarter ended September 30, 1989 (File No.
0-15147),
and hereby incorporated by
reference.).................................IBR
37
39
INDEX TO EXHIBITS (cont.)
Exhibit
Page
No. Description
No.
10.38 Amendment to the Harman International Industries,
Incorporated
Supplemental Executive Retirement Plan. (Filed as
Exhibit 19.1
to the Quarterly Report on Form 10-Q for the quarter
ended
March 31, 1992 (File No. 0-15147), and hereby
incorporated by
reference.)......................................................
......IBR
10.39 Agreement dated July 1, 1992, between Harman
Deutschland GmbH
and Maxell Europe GmbH, related to the termination of
the
Distributor Agreement dated April 27, 1981. (Filed as
Exhibit
10.39 to the Annual Report on Form 10-K for the fiscal
year
ended June 30, 1992 (File No. 0-15147), and hereby
incorporated
by
reference.)......................................................
...IBR
10.41 Form of Incentive Stock Option Agreement under the 1992
Executive Incentive Plan. (Filed as Exhibit 10.41 to
the
Annual Report on Form 10-K for the fiscal year ended
June 30, 1993 (File No. 0-15147), and hereby
incorporated
by
reference.)......................................................
...IBR
10.42 Form of Non-qualified Stock Option Agreement under the
1992
Executive Incentive Plan. (Filed as Exhibit 10.42 to
the
Annual Report on Form 10-K for the fiscal year ended
June 30, 1993 (File No. 0-15147), and hereby
incorporated
by
reference.)......................................................
...IBR
10.43 Form of Restricted Stock Agreement under the 1992
Executive
Incentive Plan. (Filed as Exhibit 10.43 to the Annual
Report
on Form 10-K for the fiscal year ended June 30, 1993
(File
No. 0-15147), and hereby incorporated by
reference.)...................IBR
10.44 Form of Non-qualified Stock Option Agreement for
Non-officer
Directors under the 1992 Executive Incentive Plan.
(Filed as
Exhibit 10.44 to the Annual Report on Form 10-K for the
fiscal
year ended June 30, 1993 (File No. 0-15147), and hereby
incorporated by
reference.)............................................IBR
10.45 Harman International Industries, Inc. Executive
Deferred
Compensation Plan. (Filed as Exhibit 10.45 to the
Annual
Report on Form 10-K for the fiscal year ended June 30,
1993
(File No. 0-15147), and hereby incorporated by
reference.).............IBR
10.46 Harman International Industries, Inc. Executive
Deferred
Compensation Plan Split-Dollar Life Insurance
Agreement.
(Filed as Exhibit 10.46 to the Annual Report on Form
10-K
for the fiscal year ended June 30, 1993 (File No.
0-15147),
and hereby incorporated by
reference.).................................IBR
10.47 Escrow Agreement, dated as of December 30, 1993, by and
between the Company and PNC Bank, N.A. (Filed as
Exhibit
10.47 to the Quarterly Report on Form 10-Q for the
quarter
ended December 31, 1993 (File No. 0-15147) and hereby
incorporated by
reference.)............................................IBR
38
40
INDEX TO EXHIBITS (cont.)
Exhibit
Page
No. Description
No.
10.48 Share Purchase Agreement, dated as of July 19, 1994, by
and
between the Company and Girocredit for purchase of
remaining
24% of AKG Acoustics
GmbH...............................................43
10.49 Promissory Note dated September 30, 1993 between Harman
International Industries, Incorporated and PNC Bank,
N.A.
(Filed as Exhibit 19.5 to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993 (File No.
0-15147) and hereby incorporated by
reference.)........................IBR
10.50 Promissory Note dated September 28, 1993 between Harman
International Industries, Incorporated and Citicorp
USA,
Inc. (Filed as Exhibit 19.6 to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993
(File
No. 0-15147) and hereby incorporated by
reference.)....................IBR
10.51 Promissory Note dated May 17, 1994 among Harman
International Industries, Incorporated, certain of its
subsidiaries and Chemical
Bank..........................................57
10.52 Promissory Note dated May 5, 1994 among Harman
International Industries, Incorporated, certain of its
subsidiaries and NationsBank.
..........................................81
13.1 Harman International Industries, Incorporated Annual
Report
to Shareholders for the fiscal year ended June 30,
1994.................97
21.1 Subsidiaries of the
Company............................................139
23.1 Consent of Independent
Auditors........................................143
27.1 EDGAR Financial Data
Schedule..........................................147
39
41
THIS PAGE LEFT BLANK INTENTIONALLY
42