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8-K - FORM 8-K - HARMAN INTERNATIONAL INDUSTRIES INC /DE/ | d394436d8k.htm |
EX-99.2 - PRESS RELEASE - HARMAN INTERNATIONAL INDUSTRIES INC /DE/ | d394436dex992.htm |
Exhibit 99.1
Press Release | ||
Contact: Robert V. Lardon 203.328.3500 | ||
robert.lardon@harman.com |
HARMAN Q4 Operating Income up 174% to $71M; Full Year OI up 58% to $300 million and Sales Up 16%
| Q4 EPS on non GAAP basis up 100% to $0.67; Full Year non GAAP EPS up 41% to $2.93 |
| Eleventh consecutive quarter of year-over-year improvement in sales and earnings |
| General Motors awards $900 million infotainment business |
| BRIC Markets continue to lead sales growth; driven by 42% increase in China |
| Executed on share buy-back program and announced doubling of annual dividend |
STAMFORD, CT, August 10, 2012 Harman International Industries, Incorporated, the leading global audio and infotainment group (NYSE: HAR), today announced results for the fourth quarter and fiscal year ended June 30, 2012. In a separate release, the Company updated its fiscal 2013 guidance for foreign currency changes; on a constant currency basis, the Company confirmed its previous guidance.
Net sales for the fiscal year were $4.4 billion, an increase of 16 percent compared to the prior year. In local currency, net sales increased by 17 percent. On a GAAP basis, operating profit increased by 58 percent to $300 million compared to $190 million in the prior year. Excluding restructuring expenses, annual operating profit was $310 million, an increase of 47 percent compared to $211 million in the prior year. On a non-GAAP basis, earnings per diluted share were $2.93 for the year, an increase of 41 percent versus $2.08 reported in the prior year. On a GAAP basis, which includes the benefit from a tax asset valuation allowance release, earnings per diluted share were $4.57 for the year compared to $1.90 in the prior year.
Net sales for the fourth quarter were $1,091 million, an increase of 6 percent compared to the same period last year. In local currency, net sales increased by 14 percent. Fourth quarter operating income was $71 million, compared to $26 million in the same period last year. Excluding restructuring charges, operating profit in the fourth quarter grew by 101 percent to $70 million, compared to $35 million in the same period last year. On a non-GAAP basis, earnings per diluted share were $0.67 for the quarter compared to $0.34 in the same period last year. On a GAAP basis, earnings per diluted share were $0.69 for the quarter compared to $0.26 in the same period last year. The Company further noted $0.02 negative impact of currency on EPS which was offset by the positive benefit of share buyback activity during the quarter.
Harman Chairman, President and CEO Dinesh Paliwal said, We had a terrific year! Our full year and fourth quarter results reflect double digit top- and bottom-line growth which helped us deliver a 41% increase in earnings per share. Although the macroeconomic environment remains uncertain, we are cautiously optimistic and continue to focus on growth, cost management and productivity initiatives aimed at expanding our operating margins and we are making the critical investments necessary to sustain our profitable growth for the future.
Paliwal added, Our innovation emphasis drove an increase of 37 percent in our new patents and patents filings this past year. These ongoing investments in technology, our strong pipeline of new products, our luxury brands and the expansion of our channels globally position us for healthy secular growth. We are on the forefront of developing connected car technologies with a focus on active driver safety. We successfully collaborate and integrate technologies from Google, Apple, Microsoft and others. We concur with automakers that embedded infotainment system penetration will continue to grow rapidly and it will be complimented by smart mobile devices. Our recent record order wins for the embedded infotainment systems confirm our strategy and business model.
We continue to win new infotainment and car audio orders both in the US and abroad as 28 percent of our record high order backlog of $16 billion represents new business including new customers like GM, Tata, Geely and BAIC. With strong growth in BRIC markets led by China up 42%, our sales are well diversified globally, said Paliwal.
We are highly focused on shareholder value creation, through organic growth, strategic acquisitions and directly through our dividend and share buyback programs, noted Paliwal. We have worked hard to build a strong balance sheet that facilitates all of these strategies. In the last quarter, we took advantage of market opportunity to repurchase our stock and announced the doubling of our dividend.
1
Summary of Continuing Operations Gross Margin and SG&A
Gross margin on a GAAP basis increased 90 basis points to 27.1 percent in fiscal 2012. The increase in gross profit as a percentage of net sales was primarily due to better leverage of fixed costs on higher sales and productivity improvements in the cost base.
SG&A and Other expense as a percentage of sales on a non-GAAP basis in fiscal 2012 declined 60 basis points to 20.1 percent.
The Company generated $269 million in cash from operations in fiscal 2012.
FY 2012 Key Figures Total Company |
Three Months Ended June 30 | Twelve Months Ended June 30 | ||||||||||||||||||||||||||||||
Increase (Decrease) |
Increase| (Decrease) |
|||||||||||||||||||||||||||||||
$ millions (except per share data) |
3M FY12 |
3M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
12M FY12 |
12M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
||||||||||||||||||||||||
Net sales |
1,091 | 1,031 | 6 | % | 14 | % | 4,364 | 3,772 | 16 | % | 17 | % | ||||||||||||||||||||
Gross profit |
298 | 245 | 22 | % | 30 | % | 1,184 | 987 | 20 | % | 21 | % | ||||||||||||||||||||
Percent of net sales |
27.4 | % | 23.8 | % | 27.1 | % | 26.2 | % | ||||||||||||||||||||||||
SG&A & Other |
228 | 219 | 4 | % | 11 | % | 884 | 797 | 11 | % | 12 | % | ||||||||||||||||||||
Operating income |
71 | 26 | 174 | % | 204 | % | 300 | 190 | 58 | % | 61 | % | ||||||||||||||||||||
Percent of net sales |
6.5 | % | 2.5 | % | 6.9 | % | 5.0 | % | ||||||||||||||||||||||||
Net Income |
49 | 19 | 161 | % | 167 | % | 330 | 136 | 143 | % | 144 | % | ||||||||||||||||||||
Diluted earnings per share |
0.69 | 0.26 | 4.57 | 1.90 | ||||||||||||||||||||||||||||
Restructuring-related costs |
(1 | ) | 9 | 9 | 21 | |||||||||||||||||||||||||||
Non-GAAP |
||||||||||||||||||||||||||||||||
Gross profit(1) |
299 | 247 | 21 | % | 30 | % | 1,188 | 991 | 20 | % | 21 | % | ||||||||||||||||||||
Percent of net sales(1) |
27.4 | % | 23.9 | % | 27.2 | % | 26.3 | % | ||||||||||||||||||||||||
SG&A & Other(1) |
229 | 212 | 8 | % | 15 | % | 878 | 781 | 12 | % | 14 | % | ||||||||||||||||||||
Operating income(1) |
70 | 35 | 101 | % | 122 | % | 310 | 211 | 47 | % | 50 | % | ||||||||||||||||||||
Percent of net sales(1) |
6.4 | % | 3.4 | % | 7.1 | % | 5.6 | % | ||||||||||||||||||||||||
Net Income(1) |
48 | 24 | 100 | % | 110 | % | 211 | 149 | 42 | % | 43 | % | ||||||||||||||||||||
Diluted earnings per share(1) |
0.67 | 0.34 | 2.93 | 2.08 | ||||||||||||||||||||||||||||
Shares outstanding diluted (in millions) |
72 | 72 | 72 | 72 |
(1) | A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. |
2
Investor Call on August 10, 2012
11:00 a.m. EDT: HARMAN will conduct an investor and analyst call hosted by CEO Dinesh Paliwal, and CFO Herbert Parker. Those who wish to participate via audio in the earnings conference call scheduled at 11:00 a.m. EDT should dial 1.800-269-0310 (U.S.) or +1 (303) 223-2680 (International) ten minutes before the call and reference HARMAN Access Code 21599087. A replay of the call will also be available following its completion at approximately 1:00 p.m. EDT. The replay will be available through October 10, 2012 at 1:00 p.m. EDT. To listen to the replay, dial 1 (800) 633 8284 (U.S.) or +1 (402) 977 9140 (International), Access Code: 21599087.
NOTE: For reference during its analyst and investor conference call, the Company has posted a set of informational slides on its web site at www.harman.com and accompanying this press release on www.businesswire.com.
In addition, Harman invites you to visit the Investors section of its website at: www.harman.com where visitors can sign-up for email alerts and conveniently download copies of historical earnings releases and supporting slide presentations, among other documents.
General Information
HARMAN (www.harman.com) designs, manufactures and markets a wide range of audio and infotainment solutions for the automotive, consumer and professional markets supported by 15 leading brands, including AKG, Harman Kardon, Infinity, JBL, Lexicon and Mark Levinson. The company is admired by audiophiles across multiple generations and supports leading professional entertainers and the venues where they perform. More than 20 million automobiles on the road today are equipped with HARMAN audio and infotainment systems. HARMAN has a workforce of about 13,400 people across the Americas, Europe and Asia, and reported sales of $4.4 billion for the fiscal year ended June 30, 2012. The Companys shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.
A reconciliation of the non-GAAP measures included in this press release to the most comparable GAAP measures is provided in the tables contained at the end of this press release. HARMAN does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.
Forward-Looking Information
Except for historical information contained herein, the matters discussed in this release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. One should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, as well as our perception of historical trends, current market conditions, current economic data, expected future developments and other factors that we believe are appropriate under the circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to: (1) our ability to maintain profitability in our infotainment segment if there are delays in our product launches which may give rise to significant penalties and increased engineering expense; (2) the loss of one or more significant customers, or the loss of a significant platform with an automotive customer; (3) fluctuations in currency exchange rates, particularly with respect to the value of the U.S. Dollar and the Euro; (4) our ability to successfully implement our global footprint initiative, including achieving cost reductions and other benefits in connection with the restructuring of our manufacturing, engineering, procurement and administrative organizations; (5) fluctuations in the price and supply of raw materials including, without limitation, petroleum, copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components; (6) the inability of our suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; (7) our ability to attract and retain qualified senior management and to prepare and implement an appropriate succession plan for our critical organizational positions; (8) our failure to implement and maintain a comprehensive disaster recovery program; (9) our failure to comply with governmental rules and regulations, including the Foreign Corrupt Practices Act and U.S. export control laws, and the cost of compliance with such laws; (10) our ability to maintain a competitive technological advantage through innovation and leading product designs; (11) our failure to maintain the value of our brands and implementing a sufficient brand protection program; and (12) other risks detailed in Harman International Industries, Incorporated Annual Report on Form 10-K for the fiscal year ended June 30, 2012 and other filings made by the Company with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statement except as required by law. This earnings release also makes reference to the Companys awarded business, which represents the estimated future lifetime net sales for all customers. The Companys future awarded business does not represent firm customer orders. The Company calculates its awarded business using various assumptions including global vehicle production forecasts, customer take rates for the Companys products, revisions to product life cycle estimates and the impact of annual price reductions, among other factors. These assumptions are updated on an annual basis. The Company updates the estimates quarterly by adding the value of new awards received and subtracting sales recorded during the quarter.
HAR-E
3
APPENDIX
Infotainment Division
FY 2012 Key Figures Infotainment |
Three Months Ended June 30 | Twelve Months Ended June 30 | ||||||||||||||||||||||||||||||
Increase (Decrease) |
Increase (Decrease) |
|||||||||||||||||||||||||||||||
$ millions |
3M FY12 |
3M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
12M FY12 |
12M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
||||||||||||||||||||||||
Net sales |
588 | 612 | (4 | )% | 5 | % | 2,402 | 2,089 | 15 | % | 17 | % | ||||||||||||||||||||
Gross profit |
136 | 111 | 23 | % | 35 | % | 557 | 405 | 38 | % | 40 | % | ||||||||||||||||||||
Percent of net sales |
23.1 | % | 18.1 | % | 23.2 | % | 19.4 | % | ||||||||||||||||||||||||
SG&A & Other |
96 | 94 | 2 | % | 12 | % | 377 | 328 | 15 | % | 17 | % | ||||||||||||||||||||
Operating income |
40 | 17 | 140 | % | 176 | % | 181 | 77 | 133 | % | 144 | % | ||||||||||||||||||||
Percent of net sales |
6.8 | % | 2.7 | % | 7.5 | % | 3.7 | % | ||||||||||||||||||||||||
Restructuring-related costs |
(1 | ) | 2 | 1 | 10 | |||||||||||||||||||||||||||
Non-GAAP |
||||||||||||||||||||||||||||||||
Gross profit(1) |
137 | 112 | 22 | % | 34 | % | 561 | 410 | 37 | % | 40 | % | ||||||||||||||||||||
Percent of net sales(1) |
23.2 | % | 18.4 | % | 23.4 | % | 19.6 | % | ||||||||||||||||||||||||
SG&A & Other(1) |
98 | 94 | 4 | % | 14 | % | 380 | 323 | 18 | % | 19 | % | ||||||||||||||||||||
Operating income(1) |
39 | 18 | 112 | % | 142 | % | 182 | 88 | 107 | % | 116 | % | ||||||||||||||||||||
Percent of net sales(1) |
6.6 | % | 3.0 | % | 7.6 | % | 4.2 | % |
(1) | A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. |
Net sales in fiscal 2012 were $2.4 billion, an increase of 15 percent, or 17 percent in local currency. Higher sales were driven by robust demand in the luxury automotive segment and rapid adoption of the scalable platform in the mid segment car market. Continued growth in BRIC countries was led by 34 percent growth in China. Gross margin on a non-GAAP basis in fiscal 2012 increased 380 basis points to 23.4 percent.
As a percentage of sales on a non-GAAP basis, SG&A and Other increased 40 basis points to 15.8 percent. Excluding the one-time gain related to the monetization of intellectual property rights last year, the SG&A and Other expense was reduced by 40 basis points.
The infotainment division has gone through a major transformation from a loss position to an industry profit leader. Full year operating margin, on a non-GAAP basis, has increased to 7.6 percent from 4.2 percent last year.
Net sales in the fourth quarter were $588 million, a decrease of 4 percent, or an increase of 5 percent in local currency. Gross margin on a non-GAAP basis in the fourth quarter increased 480 basis points to 23.2 percent. The $11.7 million of non-recurring costs discussed in the fourth quarter of last year did not occur this quarter and as such, aided in the improvement. SG&A and Other expense on a non-GAAP basis in the fourth quarter increased 120 basis points to 16.6 percent.
Infotainment Division Highlights
In FY 2012, HARMAN continues to drive new business in embedded infotainment systems globally.
| General Motors chose Harman Infotainment system to replace a competitive system. This $900M infotainment award is HARMANs first with GM. |
| Won contracts with VW Group valued at $400M |
| $2B award from BMW to bring advanced connectivity to future generation infotainment systems. |
| Emerging market breakthrough: $500M infotainment awards in China with Geely, BAIC, Changan and in India with Tata Motors. |
Major launches this year included: BMW Connected Drive, Toyota Touch & Go, Toyota Entune, and Audi MMI 3G+. The Company launched a new scalable infotainment system in Ferraris F12 berlinetta featuring the latest in-dash and connected functionality.
To meet the growing demand for entry-level embedded infotainment systems, HARMAN launched a new scalable infotainment platform targeting entry- and mid-segment vehicles.
4
Lifestyle Division
FY 2012 Key Figures Lifestyle |
Three Months Ended June 30 | Twelve Months Ended June 30 | ||||||||||||||||||||||||||||||
Increase (Decrease) |
Increase (Decrease) |
|||||||||||||||||||||||||||||||
$ millions |
3M FY12 |
3M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
12M FY12 |
12M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
||||||||||||||||||||||||
Net sales |
330 | 252 | 31 | % | 39 | % | 1,331 | 1,087 | 22 | % | 24 | % | ||||||||||||||||||||
Gross profit |
100 | 66 | 51 | % | 59 | % | 383 | 338 | 13 | % | 14 | % | ||||||||||||||||||||
Percent of net sales |
30.3 | % | 26.3 | % | 28.8 | % | 31.1 | % | ||||||||||||||||||||||||
SG&A & Other |
60 | 63 | (5 | )% | 1 | % | 241 | 236 | 2 | % | 3 | % | ||||||||||||||||||||
Operating income |
40 | 3 | n.m. | n.m. | 142 | 102 | 39 | % | 39 | % | ||||||||||||||||||||||
Percent of net sales |
12.1 | % | 1.3 | % | 10.7 | % | 9.4 | % | ||||||||||||||||||||||||
Restructuring-related costs |
(1 | ) | 3 | 0 | 7 | |||||||||||||||||||||||||||
Non-GAAP |
||||||||||||||||||||||||||||||||
Gross profit(1) |
100 | 66 | 51 | % | 59 | % | 383 | 338 | 13 | % | 14 | % | ||||||||||||||||||||
Percent of net sales(1) |
30.3 | % | 26.3 | % | 28.8 | % | 31.1 | % | ||||||||||||||||||||||||
SG&A & Other(1) |
60 | 60 | 1 | % | 7 | % | 241 | 229 | 5 | % | 6 | % | ||||||||||||||||||||
Operating income(1) |
40 | 7 | n.m. | n.m. | 142 | 109 | 31 | % | 31 | % | ||||||||||||||||||||||
Percent of net sales(1) |
12.0 | % | 2.6 | % | 10.7 | % | 10.0 | % |
(1) | A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. n.m. = Not Meaningful |
Net sales in the fiscal 2012 were $1,331 million, an increase of 22 percent, or 24 percent in local currency. Higher sales were primarily driven by robust demand in the luxury automotive segment and continued growth in BRIC countries, led by 77 percent growth in China. Pass-through neodymium cost surcharges contributed 4 percent of the growth in revenue at zero margin. Gross margin on a non-GAAP basis decreased 230 basis points to 28.8 percent. The reduction was primarily due to neodymium cost increases and investments related to completion of new production capacity in China and Mexico. We expect favorable margin development due to reduced neodymium cost impact as well as productivity gains as these new facilities fully ramp up during the next fiscal year.
On a non-GAAP basis, SG&A and Other expense declined 300 basis points to 18.1 percent for the year.
Net sales in the fourth quarter were $330 million, an increase of 31 percent, or 39 percent in local currency. Gross margin on a non-GAAP basis in the fourth quarter increased 400 basis points to 30.3 percent. SG&A and Other expense on a non-GAAP basis in the fourth quarter declined 540 basis points to 18.3 percent.
Lifestyle Division Highlights
In Fiscal 2012, HARMAN continued to extend its leadership in automotive audio globally:
| Won cross car-line Harman Kardon audio business with BMW; |
| Extended the lifecycle for Harman Kardon audio business with Mercedes; |
| Won new branded audio business with Maserati; and |
| In emerging markets, the Company achieved strategic wins with Geely, BAIC, Great Wall, and Tata Motors. |
During the fourth quarter, the Company launched Harman Kardon headphones across Apple stores, and JBL headphones in Wal-Mart.
In 2012, the Company launched major global brand marketing campaigns with Paul McCartney, Maroon 5, Jennifer Lopez, AR Rahman, Liu Huan and Tim McGraw. As a result of our effective marketing initiatives, we are clearly seeing the increase in brand awareness, favorable consumer purchasing decisions and increase in automotive audio take rates.
5
Professional Division
FY 2012 Key Figures Professional |
Three Months Ended June 30 | Twelve Months Ended June 30 | ||||||||||||||||||||||||||||||
Increase (Decrease) |
Increase (Decrease) |
|||||||||||||||||||||||||||||||
$ millions |
3M FY12 |
3M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
12M FY12 |
12M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
||||||||||||||||||||||||
Net sales |
172 | 167 | 3 | % | 6 | % | 631 | 596 | 6 | % | 6 | % | ||||||||||||||||||||
Gross profit |
62 | 68 | (8 | )% | (5 | )% | 242 | 243 | 0 | % | 0 | % | ||||||||||||||||||||
Percent of net sales |
36.2 | % | 40.8 | % | 38.4 | % | 40.8 | % | ||||||||||||||||||||||||
SG&A & Other |
38 | 44 | (14 | )% | (10 | )% | 160 | 152 | 5 | % | 5 | % | ||||||||||||||||||||
Operating income |
25 | 24 | 1 | % | 4 | % | 83 | 91 | (9 | )% | (9 | )% | ||||||||||||||||||||
Percent of net sales |
14.3 | % | 14.5 | % | 13.1 | % | 15.2 | % | ||||||||||||||||||||||||
Restructuring-related costs |
1 | 4 | 9 | 3 | ||||||||||||||||||||||||||||
Non-GAAP |
||||||||||||||||||||||||||||||||
Gross profit(1) |
62 | 68 | (8 | )% | (5 | )% | 242 | 242 | 0 | % | 0 | % | ||||||||||||||||||||
Percent of net sales(1) |
36.3 | % | 40.7 | % | 38.4 | % | 40.7 | % | ||||||||||||||||||||||||
SG&A & Other(1) |
37 | 40 | (6 | )% | (3 | )% | 151 | 149 | 2 | % | 2 | % | ||||||||||||||||||||
Operating income(1) |
25 | 28 | (11 | )% | (8 | )% | 91 | 94 | (3 | )% | (2 | )% | ||||||||||||||||||||
Percent of net sales(1) |
14.7 | % | 17.0 | % | 14.5 | % | 15.8 | % |
(1) | A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. |
Professional Division net sales in fiscal 2012 were $631 million, an increase of 6 percent compared to the prior year. Gross margin on a non-GAAP basis in fiscal 2012 decreased 230 basis points to 38.4 percent. The primary reason for the gross margin decline was higher costs for neodymium magnets and investments related to completion of new production capacity in China. SG&A and Other expense on a non-GAAP basis decreased by 90 basis points to 24.0 percent. We expect favorable margin development due to reduced neodymium cost impact as well as revenue from high margin new products in the next fiscal year.
Net sales in the fourth quarter were $172 million, an increase of 3 percent, or 6 percent in local currency. Gross margin on a non-GAAP basis in the fourth quarter decreased 440 basis points to 36.3 percent. SG&A and Other expense on a non-GAAP basis decreased by 210 basis points to 21.6 percent.
Professional Division Highlights
In FY12, HARMAN delivered equipment for over 20 new stadium and large venue audio installations ranging from the Staples Center in Los Angeles to the Peoples Great Hall in Beijing.
HARMANs new IDX systems were sold and installed at eight international airports & train stations. The Companys products continue to take center stage at major special events such as the London Olympic Games, Super Bowl, the Grammy Awards, the UEFA Euro 2012 Soccer Championship Games and for concert tours including Lady Antebellum, Neil Diamond, Jimmy Buffet, Lenny Kravitz and more.
During the year, the Division advanced its leadership in digital amplification, signal processing, large array self-powered loudspeakers, and innovative apps-based guitar effects pedals.
6
Other (Corporate)
FY 2012 Key Figures Other |
Three Months Ended June 30 | Twelve Months Ended June 30 | ||||||||||||||||||||||||||||||
Increase (Decrease) |
Increase (Decrease) |
|||||||||||||||||||||||||||||||
$ millions |
3M FY12 |
3M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
12M FY12 |
12M FY11 |
Including Currency Changes |
Excluding Currency Changes(1) |
||||||||||||||||||||||||
SG&A & Other |
34 | 19 | 82 | % | 82 | % | 106 | 81 | 32 | % | 32 | % | ||||||||||||||||||||
Restructuring-related costs |
0 | 0 | (1 | ) | 0 | |||||||||||||||||||||||||||
Non-GAAP |
||||||||||||||||||||||||||||||||
SG&A & Other(1) |
34 | 19 | 82 | % | 82 | % | 106 | 80 | 32 | % | 32 | % |
(1) | A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. |
The Company continued the rollout of its global marketing campaigns. The Companys Corporate Technology Center is driving and enabling cutting-edge development in connectivity and networking, cloud computing, wireless technologies, digital signal processing, and energy-efficient solutions. The Company is building on its base of more than 4,400 patents and patents pending, including more than 700 patents issued or filed worldwide this fiscal year. The increase in fourth quarter SG&A expense compared to the prior year is primarily from investments in global brand marketing, IT-related systems for e-commerce and supply chain management, and new technology innovation projects within the Corporate Technology Center.
7
Harman International Industries, Incorporated
Consolidated Statements of Income
(In thousands, except earnings per share data; unaudited) |
Three Months Ended June 30, |
Twelve Months Ended June 30, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
Net sales |
$ | 1,090,771 | $ | 1,031,122 | $ | 4,364,078 | $ | 3,772,345 | ||||||||
Cost of sales |
792,436 | 785,908 | 3,179,932 | 2,784,995 | ||||||||||||
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Gross profit |
298,335 | 245,214 | 1,184,146 | 987,350 | ||||||||||||
Selling, general and administrative expenses |
227,519 | 219,701 | 884,200 | 813,809 | ||||||||||||
Loss on deconsolidation of variable interest entity |
0 | 0 | 0 | 0 | ||||||||||||
Sale of Intellectual Property |
1 | (326 | ) | (300 | ) | (16,510 | ) | |||||||||
Goodwill impairment |
0 | 0 | 0 | 0 | ||||||||||||
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Operating income |
70,815 | 25,839 | 300,246 | 190,051 | ||||||||||||
Other expenses: |
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Interest expense, net |
5,397 | 5,404 | 20,126 | 22,576 | ||||||||||||
Miscellaneous, net |
3,021 | 1,859 | 18,967 | 7,255 | ||||||||||||
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Income from operations before taxes |
62,397 | 18,576 | 261,153 | 160,220 | ||||||||||||
Income tax expense |
13,134 | (300 | ) | (68,388 | ) | 24,304 | ||||||||||
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Net income |
$ | 49,263 | $ | 18,876 | $ | 329,541 | $ | 135,916 | ||||||||
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Earnings per share: |
||||||||||||||||
Basic |
$ | 0.69 | $ | 0.27 | $ | 4.62 | $ | 1.91 | ||||||||
Diluted |
$ | 0.69 | $ | 0.26 | $ | 4.57 | $ | 1.90 | ||||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
71,054 | 71,222 | 71,297 | 70,992 | ||||||||||||
Diluted |
71,878 | 71,970 | 72,083 | 71,635 |
8
Harman International Industries, Incorporated
Consolidated Balance Sheets
(In thousands; unaudited) |
June 30, 2012 |
June 30, 2011 |
||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 617,356 | $ | 603,892 | ||||
Short-term investments |
203,014 | 317,322 | ||||||
Accounts receivable |
582,835 | 579,272 | ||||||
Inventories |
427,597 | 423,137 | ||||||
Other current assets |
285,443 | 184,532 | ||||||
|
|
|
|
|||||
Total current assets |
2,116,245 | 2,108,155 | ||||||
Property, plant and equipment |
430,234 | 470,300 | ||||||
Goodwill |
180,811 | 119,357 | ||||||
Deferred tax assets, long term |
308,768 | 229,941 | ||||||
Other assets |
133,406 | 130,742 | ||||||
Total assets |
$ | 3,169,464 | $ | 3,058,495 | ||||
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Current portion of long-term debt |
$ | 395,409 | $ | 386 | ||||
Short-term debt |
227 | 1,785 | ||||||
Accounts payable |
505,694 | 473,486 | ||||||
Accrued liabilities |
368,002 | 436,537 | ||||||
Accrued warranties |
97,289 | 122,396 | ||||||
Income taxes payable |
15,279 | 12,991 | ||||||
|
|
|
|
|||||
Total current liabilities |
1,381,900 | 1,047,581 | ||||||
Convertible senior notes |
0 | 378,401 | ||||||
Other non-current liabilities |
257,953 | 208,855 | ||||||
|
|
|
|
|||||
Total liabilities |
1,639,853 | 1,634,837 | ||||||
|
|
|
|
|||||
Total equity |
1,529,611 | 1,423,658 | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 3,169,464 | $ | 3,058,495 | ||||
|
|
|
|
9
Harman International Industries, Incorporated
Consolidated Statements of Cash Flows
(In thousands; unaudited) |
Year Ended June 30, | |||||||
2012 | 2011 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 329,541 | $ | 135,916 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
122,225 | 123,264 | ||||||
Deferred income tax benefit |
(99,306 | ) | (8,926 | ) | ||||
Loss on disposition of assets |
1,377 | 1,272 | ||||||
Share-based compensation |
17,370 | 17,973 | ||||||
Non-cash interest expense |
19,149 | 19,258 | ||||||
Changes in operating assets and liabilities, net of acquired businesses: |
||||||||
Decrease (increase) in: |
||||||||
Receivables, net |
(50,709 | ) | (4,222 | ) | ||||
Inventories |
(36,725 | ) | (25,534 | ) | ||||
Other current assets |
(84,866 | ) | 9,733 | |||||
Increase (decrease) in: |
||||||||
Accounts payable |
62,046 | 49,707 | ||||||
Accrued warranties |
(10,348 | ) | 23,067 | |||||
Accrued other liabilities |
2,914 | (12,535 | ) | |||||
Income taxes payable |
3,596 | 5,378 | ||||||
Other operating activities |
(7,757 | ) | (2,601 | ) | ||||
Net cash provided by operating activities |
268,507 | 331,750 | ||||||
Cash flows from investing activities: |
||||||||
Purchase of short-term investments |
(559,283 | ) | (599,495 | ) | ||||
Maturities of short-term investments |
673,591 | 282,173 | ||||||
Acquisitions, net of cash received |
(70,535 | ) | (14,800 | ) | ||||
Proceeds from asset dispositions |
2,865 | 3,005 | ||||||
Capital expenditures |
(112,536 | ) | (108,357 | ) | ||||
Other items, net |
1,247 | 2,974 | ||||||
Net cash used in investing activities |
(64,651 | ) | (434,500 | ) | ||||
Cash flows from financing activities: |
||||||||
Net decrease in short-term borrowings |
(1,308 | ) | (12,461 | ) | ||||
Cash dividends paid to shareholders |
(21,161 | ) | (3,525 | ) | ||||
Repurchase of common stock |
(123,946 | ) | 0 | |||||
Share-based payment arrangements |
11,342 | 9,544 | ||||||
Debt issuance costs for revolving credit facility |
(0 | ) | (7,002 | ) | ||||
Other items, net |
(12,573 | ) | 5,066 | |||||
Net cash used in financing activities |
(147,646 | ) | (8,378 | ) | ||||
Effect of exchange rate changes on cash |
(42,746 | ) | 69,450 | |||||
Net increase (decrease) in cash and cash equivalents |
13,464 | (41,678 | ) | |||||
Cash and cash equivalents at beginning of period |
603,892 | 645,570 | ||||||
Cash and cash equivalents at end of period |
$ | 617,356 | $ | 603,892 | ||||
|
|
|
|
10
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
(In thousands, except earnings per share data; unaudited) |
Three Months Ended June 30, 2012 |
|||||||||||
GAAP | Adjustments | Non-GAAP | ||||||||||
Net sales |
$ | 1,090,771 | $ | 0 | $ | 1,090,771 | ||||||
Cost of sales |
792,436 | (820 | )a | 791,616 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
298,335 | 820 | 299,155 | |||||||||
Selling, general and administrative expenses |
227,519 | 1,842 | b | 229,361 | ||||||||
Loss on deconsolidation of variable interest entity |
0 | 0 | 0 | |||||||||
Sale of Intellectual Property |
1 | 0 | 1 | |||||||||
Goodwill impairment |
0 | 0 | 0 | |||||||||
|
|
|
|
|
|
|||||||
Operating income |
70,815 | (1,022 | ) | 69,793 | ||||||||
Other expenses: |
||||||||||||
Interest expense, net |
5,397 | 0 | 5,397 | |||||||||
Miscellaneous, net |
3,021 | 249 | 3,270 | |||||||||
|
|
|
|
|
|
|||||||
Income from operations before taxes |
62,397 | (1,271 | ) | 61,126 | ||||||||
Income tax expense |
13,134 | (196 | )c | 12,938 | ||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 49,263 | $ | (1,075 | ) | $ | 48,188 | |||||
|
|
|
|
|
|
|||||||
Earnings per share: |
||||||||||||
Basic |
$ | 0.69 | $ | (0.01 | ) | $ | 0.68 | |||||
Diluted |
$ | 0.69 | $ | (0.02 | ) | $ | 0.67 | |||||
Weighted average shares outstanding: |
||||||||||||
Basic |
71,054 | 71,054 | ||||||||||
Diluted |
71,878 | 71,878 |
(a) | Restructuring expense in Cost of Sales was $0.8 million due to projects to increase efficiency in manufacturing. |
(b) | Restructuring credit in SG&A was $1.8 million due to reverse of accrual formed in prior period. |
(c) | The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country. |
Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
11
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
(In thousands, except earnings per share data; unaudited) |
Twelve Months Ended June 30, 2012 |
|||||||||||
GAAP | Adjustments | Non-GAAP | ||||||||||
Net sales |
$ | 4,364,078 | $ | 0 | $ | 4,364,078 | ||||||
Cost of sales |
3,179,932 | (3,411 | )a | 3,176,521 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
1,184,146 | 3,411 | 1,187,557 | |||||||||
Selling, general and administrative expenses |
884,200 | (5,987 | )b | 878,213 | ||||||||
Loss on deconsolidation of variable interest entity |
0 | 0 | 0 | |||||||||
Sale of Intellectual Property |
(300 | ) | 0 | (300 | ) | |||||||
Goodwill impairment |
0 | 0 | 0 | |||||||||
|
|
|
|
|
|
|||||||
Operating income |
300,246 | 9,398 | 309,644 | |||||||||
Other expenses: |
||||||||||||
Interest expense, net |
20,126 | 0 | 20,126 | |||||||||
Miscellaneous, net |
18,967 | 249 | 19,216 | |||||||||
|
|
|||||||||||
Income from operations before taxes |
261,153 | 9,149 | 270,302 | |||||||||
Income tax expense |
(68,388 | ) | 127,450 | c | 59,062 | |||||||
|
|
|||||||||||
Net income |
$ | 329,541 | $ | (118,301 | ) | $ | 211,240 | |||||
|
|
|
|
|
|
|||||||
Earnings per share: |
||||||||||||
Basic |
$ | 4.62 | $ | (1.66 | ) | $ | 2.96 | |||||
Diluted |
$ | 4.57 | $ | (1.64 | ) | $ | 2.93 | |||||
Weighted average shares outstanding: |
||||||||||||
Basic |
71,297 | 71,297 | ||||||||||
Diluted |
72,083 | 72,083 |
(a) | Restructuring expense in Cost of Sales was $3.4 million due to projects to increase efficiency in manufacturing. |
(b) | Restructuring expense in SG&A was $6.0 million due to projects to increase efficiency in engineering and administrative functions. |
(c) | The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country. |
Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
12
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
(In thousands, except earnings per share data; unaudited) |
Three Months Ended June 30, 2011 |
|||||||||||
GAAP | Adjustments | Non-GAAP | ||||||||||
Net sales |
$ | 1,031,122 | $ | 0 | $ | 1,031,122 | ||||||
Cost of sales |
785,908 | (1,736 | )a | 784,172 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
245,214 | 1,736 | 246,950 | |||||||||
Selling, general and administrative expenses |
219,701 | (7,195 | )b | 212,506 | ||||||||
Loss on deconsolidation of variable interest entity |
0 | 0 | 0 | |||||||||
Sale of Intellectual Property |
(326 | ) | 0 | (326 | ) | |||||||
Goodwill impairment |
0 | 0 | 0 | |||||||||
|
|
|
|
|
|
|||||||
Operating income |
25,839 | 8,931 | 34,770 | |||||||||
Other expenses: |
||||||||||||
Interest expense, net |
5,404 | 0 | 5,404 | |||||||||
Miscellaneous, net |
1,859 | 0 | 1,859 | |||||||||
|
|
|
|
|
|
|||||||
Income from operations before taxes |
18,576 | 8,931 | 27,507 | |||||||||
Income tax expense |
(300 | ) | 3,674 | c | 3,374 | |||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 18,876 | $ | 5,257 | $ | 24,133 | ||||||
|
|
|
|
|
|
|||||||
Earnings per share: |
||||||||||||
Basic |
$ | 0.27 | $ | 0.07 | $ | 0.34 | ||||||
Diluted |
$ | 0.26 | $ | 0.07 | $ | 0.34 | ||||||
Weighted average shares outstanding: |
||||||||||||
Basic |
71,222 | 71,222 | ||||||||||
Diluted |
71,970 | 71,970 |
(a) | Restructuring expense in Cost of Sales was $1.7 million due to projects to increase efficiency in manufacturing. |
(b) | Restructuring expense in SG&A was $7.2 million due to projects to increase efficiency in engineering and administrative functions. |
(c) | The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country. |
Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
13
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
(In thousands, except earnings per share data; unaudited) |
Twelve Months Ended June 30, 2011 |
|||||||||||
GAAP | Adjustments | Non-GAAP | ||||||||||
Net sales |
$ | 3,772,345 | $ | 0 | $ | 3,772,345 | ||||||
Cost of sales |
2,784,995 | (4,108 | )a | 2,780,887 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
987,350 | 4,108 | 991,458 | |||||||||
Selling, general and administrative expenses |
813,809 | (16,540 | )b | 797,269 | ||||||||
Loss on deconsolidation of variable interest entity |
0 | 0 | 0 | |||||||||
Sale of Intellectual Property |
(16,510 | ) | 0 | (16,510 | ) | |||||||
Goodwill impairment |
0 | 0 | 0 | |||||||||
|
|
|
|
|
|
|||||||
Operating income |
190,051 | 20,648 | 210,699 | |||||||||
Other expenses: |
||||||||||||
Interest expense, net |
22,576 | 0 | 22,576 | |||||||||
Miscellaneous, net |
7,255 | 0 | 7,255 | |||||||||
|
|
|||||||||||
Income from operations before taxes |
160,220 | 20,648 | 180,868 | |||||||||
Income tax expense |
24,304 | 7,506 | c | 31,810 | ||||||||
|
|
|||||||||||
Net income |
$ | 135,916 | $ | 13,142 | $ | 149,058 | ||||||
|
|
|
|
|
|
|||||||
Earnings per share: |
||||||||||||
Basic |
$ | 1.91 | $ | 0.19 | $ | 2.10 | ||||||
Diluted |
$ | 1.90 | $ | 0.18 | $ | 2.08 | ||||||
Weighted average shares outstanding: |
||||||||||||
Basic |
70,992 | 70,992 | ||||||||||
Diluted |
71,635 | 71,635 |
(a) | Restructuring expense in Cost of Sales was $4.1 million due to projects to increase efficiency in manufacturing. |
(b) | Restructuring expense in SG&A was $16.5 million due to projects to increase efficiency in engineering and administrative functions. |
(c) | The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country. |
Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
14
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
Foreign Currency Translation Impact
(In thousands; unaudited) |
Three Months Ended June 30, |
Increase (Decrease) |
||||||||||
2012 | 2011 | |||||||||||
Net sales nominal currency |
$ | 1,090,771 | $ | 1,031,122 | 6 | % | ||||||
Effect of foreign currency translation(1) |
(71,881 | ) | ||||||||||
|
|
|||||||||||
Net sales local currency |
1,090,771 | 959,241 | 14 | % | ||||||||
Gross profit nominal currency |
298,335 | 245,214 | 22 | % | ||||||||
Effect of foreign currency translation(1) |
(15,969 | ) | ||||||||||
|
|
|||||||||||
Gross profit local currency |
298,335 | 229,245 | 30 | % | ||||||||
SG&A & Other nominal currency |
227,520 | 219,375 | 4 | % | ||||||||
Effect of foreign currency translation(1) |
(13,399 | ) | ||||||||||
|
|
|||||||||||
SG&A & Other local currency |
227,520 | 205,976 | 11 | % | ||||||||
Operating income nominal currency |
70,815 | 25,839 | 174 | % | ||||||||
Effect of foreign currency translation(1) |
(2,570 | ) | ||||||||||
|
|
|||||||||||
Operating income local currency |
70,815 | 23,269 | 204 | % | ||||||||
Net income nominal currency |
49,263 | 18,876 | 161 | % | ||||||||
Effect of foreign currency translation(1) |
(430 | ) | ||||||||||
Net income local currency |
49,263 | 18,446 | 167 | % |
(1) | Impact of restating prior year results at current year foreign exchange rates. |
Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Companys performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
15
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
Foreign Currency Translation Impact
EXCLUDING restructuring and goodwill charges (In thousands; unaudited) |
Three Months Ended June 30, |
Increase (Decrease) |
||||||||||
2012 | 2011 | |||||||||||
Net sales nominal currency |
$ | 1,090,771 | $ | 1,031,122 | 6 | % | ||||||
Effect of foreign currency translation(1) |
(71,881 | ) | ||||||||||
|
|
|||||||||||
Net sales local currency |
1,090,771 | 959,241 | 14 | % | ||||||||
Gross profit nominal currency |
299,155 | 246,950 | 21 | % | ||||||||
Effect of foreign currency translation(1) |
(15,969 | ) | ||||||||||
|
|
|||||||||||
Gross profit local currency |
299,155 | 230,981 | 30 | % | ||||||||
SG&A & Other nominal currency |
229,361 | 212,180 | 8 | % | ||||||||
Effect of foreign currency translation(1) |
(12,694 | ) | ||||||||||
|
|
|||||||||||
SG&A & Other local currency |
229,361 | 199,486 | 15 | % | ||||||||
Operating income nominal currency |
69,793 | 34,770 | 101 | % | ||||||||
Effect of foreign currency translation(1) |
(3,276 | ) | ||||||||||
|
|
|||||||||||
Operating income local currency |
69,793 | 31,494 | 122 | % | ||||||||
Net income nominal currency |
48,188 | 24,133 | 100 | % | ||||||||
Effect of foreign currency translation(1) |
(1,136 | ) | ||||||||||
Net income local currency |
48,188 | 22,997 | 110 | % |
(1) | Impact of restating prior year results at current year foreign exchange rates. |
Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Companys performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
16
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
Foreign Currency Translation Impact
(In thousands; unaudited) |
Twelve Months Ended June 30, |
Increase (Decrease) |
||||||||||
2012 | 2011 | |||||||||||
Net sales nominal currency |
$ | 4,364,078 | $ | 3,772,345 | 16 | % | ||||||
Effect of foreign currency translation(1) |
(54,448 | ) | ||||||||||
|
|
|||||||||||
Net sales local currency |
4,364,078 | 3,717,897 | 17 | % | ||||||||
Gross profit nominal currency |
1,184,146 | 987,350 | 20 | % | ||||||||
Effect of foreign currency translation(1) |
(11,375 | ) | ||||||||||
|
|
|||||||||||
Gross profit local currency |
1,184,146 | 975,975 | 21 | % | ||||||||
SG&A & Other nominal currency |
883,900 | 797,299 | 11 | % | ||||||||
Effect of foreign currency translation(1) |
(8,129 | ) | ||||||||||
|
|
|||||||||||
SG&A & Other local currency |
883,900 | 789,170 | 12 | % | ||||||||
Operating income nominal currency |
300,246 | 190,051 | 58 | % | ||||||||
Effect of foreign currency translation(1) |
(3,246 | ) | ||||||||||
|
|
|||||||||||
Operating income local currency |
300,246 | 186,805 | 61 | % | ||||||||
Net income nominal currency |
329,541 | 135,916 | 143 | % | ||||||||
Effect of foreign currency translation(1) |
(714 | ) | ||||||||||
Net income local currency |
329,541 | 135,202 | 144 | % |
(1) | Impact of restating prior year results at current year foreign exchange rates. |
Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Companys performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
17
Harman International Industries, Incorporated
Reconciliation of GAAP to Non-GAAP Results
Foreign Currency Translation Impact
EXCLUDING restructuring and goodwill charges (In thousands; unaudited) |
Twelve Months Ended June 30, |
Increase (Decrease) |
||||||||||
2012 | 2011 | |||||||||||
Net sales nominal currency |
$ | 4,364,078 | $ | 3,772,345 | 16 | % | ||||||
Effect of foreign currency translation(1) |
(54,448 | ) | ||||||||||
|
|
|||||||||||
Net sales local currency |
4,364,078 | 3,717,897 | 17 | % | ||||||||
Gross profit nominal currency |
1,187,557 | 991,458 | 20 | % | ||||||||
Effect of foreign currency translation(1) |
(11,494 | ) | ||||||||||
|
|
|||||||||||
Gross profit local currency |
1,187,557 | 979,964 | 21 | % | ||||||||
SG&A & Other nominal currency |
877,913 | 780,759 | 12 | % | ||||||||
Effect of foreign currency translation(1) |
(7,175 | ) | ||||||||||
|
|
|||||||||||
SG&A & Other local currency |
877,913 | 773,584 | 14 | % | ||||||||
Operating income nominal currency |
309,644 | 210,699 | 47 | % | ||||||||
Effect of foreign currency translation(1) |
(4,319 | ) | ||||||||||
|
|
|||||||||||
Operating income local currency |
309,644 | 206,380 | 50 | % | ||||||||
Net income nominal currency |
211,240 | 149,058 | 42 | % | ||||||||
Effect of foreign currency translation(1) |
(1,788 | ) | ||||||||||
Net income local currency |
211,240 | 147,270 | 43 | % |
(1) | Impact of restating prior year results at current year foreign exchange rates. |
Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Companys performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.
18
Harman International Industries, Incorporated
Total Liquidity Reconciliation
Total Company Liquidity |
As of June 30, 2012 |
|||
$ millions |
||||
Cash & cash equivalents |
$ | 617 | ||
Short-term investments |
203 | |||
Available credit under Revolving Credit Facility |
541 | |||
Total liquidity |
$ | 1,361 |
19