Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - HARMAN INTERNATIONAL INDUSTRIES INC /DE/ | d856866d8k.htm |
| EX-99.2 - EX-99.2 - HARMAN INTERNATIONAL INDUSTRIES INC /DE/ | d856866dex992.htm |
| EX-99.1 - EX-99.1 - HARMAN INTERNATIONAL INDUSTRIES INC /DE/ | d856866dex991.htm |
 SYMPHONY TELECA &
RED BEND
ACQUISITIONS
DINESH PALIWAL
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
JANUARY 22, 2015
SANDRA ROWLAND
CHIEF FINANCIAL OFFICER
Exhibit 99.3 |
 HARMAN International. Confidential. Copyright 2015
FORWARD LOOKING
Except for historical information contained herein, the matters discussed in this earnings release are
forward-looking statements within the meaning of Section 21E of the Securities Exchange
Act, as amended. One should not place undue reliance on these statements. The Company
bases these statements on particular assumptions that it has made in light of its industry experience,
as well as its perception of historical trends, current market conditions, current economic
data, expected future developments and other factors that the Company believes are appropriate
under the circumstances. These statements involve risks, uncertainties and assumptions that
could cause actual results to differ materially from those suggested in the forward-looking
statements, including but not limited to: (1) the Company’s ability to maintain profitability in its infotainment
division if there are delays in its 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) the Company’s ability
to successfully implement its global footprint initiative, including achieving cost reductions
and other benefits in connection with the restructuring of its 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 the
Company’s suppliers to deliver products at the scheduled rate and disruptions arising in
connection therewith; (7) the Company’s ability to maintain a competitive technological
advantage through innovation and leading product designs; (8) the Company’s failure to maintain the value of
its brands and implementing a sufficient brand protection program; and (9) other risks detailed in
the Harman International Industries, Incorporated Annual
Report on Form 10-K for the fiscal year ended June 30, 2014 and other filings made by the Company with the Securities and Exchange
Commission. The Company undertakes no obligation to publicly update or revise any forward-looking
statement except as required by law. This earnings release also makes reference to the Company’s awarded business, which represents
the estimated future lifetime net sales for all customers. The Company's future awarded
business does not represent firm customer orders. The Company reports its awarded business
primarily based on written award letters. To validate these awards, the Company uses various
assumptions including global vehicle production forecasts, customer take rates for the
Company’s products, revisions to product life cycle estimates and the impact of annual price reductions and
exchange rates, among other factors. These assumptions are updated and reported externally on an
annual basis. The Company updates the estimated awarded business quarterly by adding the value
of new awards received and subtracting sales recorded during the quarter. These quarterly
updates do not include any assumptions for increased take rates, revisions to product life cycle, or any other factors.
INFORMATION |
 HARMAN International. Confidential. Copyright 2015
TWO TRANSFORMATIVE
TRANSACTIONS
3 |
 HARMAN International. Confidential. Copyright 2015
OVERVIEW
SYMPHONY TELECA (STC)
4
•
Outsourced Product Development and Software Services company
•
Focused at the intersection of cloud, mobility, and analytics
•
Headquartered in Silicon Valley
•
~8,000 employees, primarily software engineers and designers
|
 HARMAN International. Confidential. Copyright 2015
DIVERSE
CUSTOMER BASE
5
•
Impressive roster of over 300 technology leaders |
 HARMAN International. Confidential. Copyright 2015
GLOBAL SOFTWARE
SERVICES MARKET
COST FOCUSED
REVENUE FOCUSED
SYMPHONY
TELECA
IT
Outsourcing
Business Process
Outsourcing
OPD, Software
Engineering and
Services
STRATEGIC VALUE |
 HARMAN International. Confidential. Copyright 2015
OVERVIEW
ADDRESSABLE MARKET
•
Fast-growing, high margin addressable
market estimated at $40 billion in 2017
•
Aligned with most high opportunity
verticals: IoT, Telecom, Consumer
Electronics, ISV, Healthcare, Auto
•
Well-positioned within the mobile and
automotive value chain
Source: Ernst & Young
Addressable Market Growth Forecast (aligned to STC Business Units)
20
24
28
34
40
0
5
10
15
20
25
30
35
40
45
2013
2014
2015
2016
2017 |
 HARMAN International. Confidential. Copyright 2015
STRATEGIC
RATIONALE
CLOUD
MOBILITY
ANALYTICS
•
Platform for integrated services serving converged markets
•
S/W engineering & integration services for connected experiences
•
Accelerated innovation for market expansion
•
Deep technical partnerships
•
Diversified revenue mix and enhanced growth profile
HARMAN International. Confidential. Copyright 2015
|
 HARMAN International. Confidential. Copyright 2015
TWO TRANSFORMATIVE
TRANSACTIONS
9 |
 HARMAN International. Confidential. Copyright 2015
OVERVIEW
RED BEND SOFTWARE
•
~230 employees
•
Israel, France, US, UK, Japan, China,
Korea, Germany
•
Impressive customer roster
•
Smart-connectivity technology for:
•
Internet of Things (IoT)
•
Cutting-edge OTA updating and
virtualization technology for cyber
security
10
AUTOMOTIVE OEMS
FROM EUROPE AND
NORTH AMERICA |
 HARMAN International. Confidential. Copyright 2015
NEXT GENERATION
INFOTAINMENT
11
ADVANCED SAFETY
UPGRADEABILITY
CYBER SECURITY
HARMAN |
 HARMAN International. Confidential. Copyright 2015
STRATEGIC
RATIONALE
12
TODAY
TOMORROW
Handsets, Mobile
Infotainment, ECUs in Automobile
“RED BEND BY HARMAN”
: THE DE FACTO OTA INDUSTRY STANDARD |
 HARMAN International. Confidential. Copyright 2015
TWO TRANSFORMATIVE
TRANSACTIONS
13 |
 HARMAN International. Confidential. Copyright 2015
FINANCIAL TERMS
SYMPHONY TELECA
14
•
100% of equity at closing on a cash-free, debt free basis in two steps:
•
Earn-Out Opportunity based on Calendar Year 2015 Revenue
ESTIMATES IN
MILLIONS OF DOLLARS
CASH*
STOCK*
TOTAL
CONSIDERATION
PAYMENT 1
(AT CLOSING)
$382
$166
$548
PAYMENT 2
(Q3 FY 2017)
$232
0
$232
$614
$166
$780
*Shares subject to 1 year lock-up; 1.6 million shares. Subject to customary
closing adjustments |
 HARMAN International. Confidential. Copyright 2015
FINANCIAL TERMS
RED BEND SOFTWARE
15
•
$170M at Closing
•
42%
cash
-
$71M*
•
58%
stock
-
$99M*
(6-month
lockup)
•
950,000 shares*
•
$30M Performance Based Earn-Out Opportunity
•
Payable in January 2017
*Subject to customary closing adjustments |
 |