HARMAN INTERNATIONAL INDUSTRIES INC /DE/ - FORM 8-K - EX-99.1

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8-K - FORM 8-K - HARMAN INTERNATIONAL INDUSTRIES INC /DE/	d74398d8k.htm

Exhibit 99.1


Darrin Shewchuk		Yijing Brentano
Director, Corporate Communications		Vice President, Investor Relations
Tel: +1 203-328-3834		Tel: +1 203-328-3500
darrin.shewchuk@harman.com		yijing.brentano@harman.com

AUGUST 4, 2015 – FOR IMMEDIATE RELEASE

HARMAN REPORTS FOURTH QUARTER AND FULL YEAR FISCAL 2015 RESULTS

•

Q4 Net Sales up 16% to $1.7 Billion; FY Net Sales up 15% to $6.2 Billion

•

Q4 Operational EPS up 10% to $1.37; FY Operational EPS up 29% to Record $5.71

•

Completed Acquisition of Bang & Olufsen Automotive Audio Business

•

Secured $400 Million and €350 Million in Long-Term Debt Financing

STAMFORD, CT – Harman International Industries, Incorporated (NYSE: HAR), the premier connected technologies company for automotive, consumer and enterprise markets, today announced results for the fourth quarter and full year ended June 30, 2015.

Net sales for the fourth quarter were $1.68 billion, an increase of 16 percent compared to the prior year or 28 percent excluding the impact of foreign currency translation (ex-FX). Excluding the impact of foreign currency translation and acquisitions, net sales increased 16 percent compared to the prior year. Infotainment net sales increased seven percent (21 percent ex-FX), due to platform expansions, higher take rates, and stronger automotive production. Lifestyle Audio net sales increased 13 percent (21 percent ex-FX), due to stronger home and multimedia and car audio sales. Net sales in Professional Solutions increased 15 percent (20 percent ex-FX), primarily driven by the acquisition of AMX, which expanded the Company’s product portfolio into enterprise automation and video switching.

Excluding restructuring, non-recurring charges and acquisition-related items, fourth quarter operating income increased 24 percent to $150 million compared to $121 million in the prior year, and earnings per diluted share increased 10 percent to $1.37 compared to $1.25 in the prior year. On a GAAP basis, fourth quarter operating income increased 99 percent to $114 million compared to $57 million in the prior year, EBITDA increased 82 percent to $168 million compared to $92 million in the prior year, and earnings per diluted share increased 63 percent to $1.01 compared to $0.62 in the prior year. The Company recorded $36 million of restructuring, non-recurring charges and acquisition-related items, compared to $64 million in the prior year.

Net sales for the full year were $6.16 billion, an increase of 15 percent (22 percent ex-FX) compared to the prior year, as Infotainment, Lifestyle and Professional all reported strong increases in net sales. Excluding the impact of foreign currency translation and acquisitions, net sales increased 15 percent compared to the prior year. Excluding restructuring, non-recurring charges and acquisition-related items, fiscal year 2015 operating income increased 29 percent to $554 million compared to $430 million in the prior year. On the same non-GAAP basis, earnings per diluted share increased 29 percent to $5.71 from $4.41 in the prior year. On a GAAP basis, fiscal year 2015 operating income increased 42 percent to $470 million from $330 million in prior year, EBITDA increased 38 percent to $639 million compared to $462 million in the prior year, and earnings per diluted share increased 44 percent to $4.84 compared to $3.36 in the prior year.

Dinesh C. Paliwal, the Company’s Chairman, President and CEO, said “In fiscal 2015, we delivered record revenue, EBITDA and earnings per share. Over the last two years, HARMAN has achieved outstanding growth, adding nearly $2 billion of revenue and increasing non-GAAP earnings per share by 86 percent.”

Paliwal continued, “With the introduction of industry first innovations in audio, system solutions, and embedded infotainment, particularly in the areas of cybersecurity and driver safety, we continue to deliver superior offerings for our customers. HARMAN is well positioned to capitalize on the increasing demand for the connected car, connected enterprise and connected lifestyle. In 2015, we further diversified our portfolio through strategic acquisitions, thereby strengthening our software capabilities and scaling connected services to fully address the opportunities presented at the intersection of cloud, mobility and analytics.”

The Company will hold an Investor Day in New York City on Thursday, August 6, 2015 and will provide financial guidance for fiscal 2016.


FY 2015 Key Figures – Total Company	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY15			3M FY14			Including Currency Changes			Excluding Currency Changes¹			12M FY15			12M FY14			Including Currency Changes			Excluding Currency Changes¹
Net sales		1,679			1,444			16	%		28	%		6,155			5,348			15	%		22	%
Gross profit		491			391			26	%		36	%		1,817			1,457			25	%		31	%
Percent of net sales		29.3	%		27.1	%								29.5	%		27.2	%
SG&A		378			334			13	%		25	%		1,348			1,127			20	%		26	%
Operating income		114			57			99	%		93	%		470			330			42	%		46	%
Percent of net sales		6.8	%		4.0	%								7.6	%		6.2	%
EBITDA		168			92			82	%		85	%		639			462			38	%		43	%
Percent of net sales		10.0	%		6.4	%								10.4	%		8.6	%
Net Income attributable to HARMAN International Industries, Incorporated		73			43			69	%		80	%		343			235			46	%		53	%
Diluted earnings per share		1.01			0.62			63	%		73	%		4.84			3.36			44	%		51	%
Restructuring & non-recurring charges		13			64									49			100
Acquisition-related items		23			0									35			0
Non-GAAP - operational¹
Gross profit		493			394			25	%		35	%		1,811			1,466			24	%		30	%
Percent of net sales		29.4	%		27.3	%								29.4	%		27.4	%
SG&A		343			274			25	%		37	%		1,257			1,036			21	%		28	%
Operating income		150			121			24	%		32	%		554			430			29	%		35	%
Percent of net sales		8.9	%		8.3	%								9.0	%		8.0	%
EBITDA		187			154			22	%		29	%		699			555			26	%		32	%
Percent of net sales		11.2	%		10.7	%								11.4	%		10.4	%
Net Income attributable to HARMAN International Industries, Incorporated		100			87			14	%		31	%		405			308			31	%		40	%
Diluted earnings per share		1.37			1.25			10	%		26	%		5.71			4.41			29	%		39	%
Shares outstanding – diluted (in millions)		73			70									71			70

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Summary of Operations – Gross Margin and SG&A (Non-GAAP)

Gross margin for the fourth quarter of fiscal year 2015 increased 210 basis points to 29.4 percent. The improvement was primarily due to the impact of higher sales volume leveraging a more efficient fixed production cost base and the expansion of the Company’s product portfolio into enterprise automation and video switching.

In the fourth quarter of fiscal year 2015, SG&A expense as a percentage of net sales increased 150 basis points to 20.4 percent, primarily due to the expansion of the Company’s product portfolio into enterprise automation and video switching and investments in marketing and research and development.

Investor Call Today August 4, 2015

At 11:00 a.m. EDT today, HARMAN’s management will host an analyst and investor conference call to discuss the fourth quarter and full year results. Those who want to participate via audio in the earnings conference call should dial 1 (800) 735 5968 (U.S.) or +1 (212) 231 2902 (International) ten minutes before the call and reference HARMAN, Access Code: 21771673.

In addition, HARMAN invites you to visit the Investors section of its website at: www.harman.com where visitors can sign-up for email alerts and conveniently download copies of historical earnings releases and supporting slide presentations, among other documents. The fiscal fourth quarter earnings release and supporting materials were posted on the site at approximately 8:00 a.m. EDT today.

A replay of the call will also be available following its completion at approximately 1:00 p.m. EDT. The replay will be available through Wednesday, November 4, 2015 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: 21771673. If you need technical assistance, call the toll-free Global Crossing Customer Care Line at 1 (800) 473 0602 (U.S.) or +1 (303) 446 4604 (International).

General Information

HARMAN (harman.com) designs and engineers connected products and solutions for automakers, consumers, and enterprises worldwide, including connected car systems, audio and visual products, enterprise automation solutions; and connected services. With leading brands including AKG®, Harman Kardon®, Infinity®, JBL®, Lexicon®, Mark Levinson® and Revel®, HARMAN is admired by audiophiles, musicians and the entertainment venues where they perform around the world. More than 25 million automobiles on the road today are equipped with HARMAN audio and connected car systems. The Company’s software services power billions of mobile devices and systems that are connected, integrated and secure across all platforms, from work and home to car and mobile. HARMAN has a workforce of approximately 27,000 people across the Americas, Europe, and Asia and reported sales of $6.2 billion during the 12 months ended June 30, 2015. The Company’s shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.

A reconciliation of the non-GAAP measures included in this press release to the most comparable GAAP measures is provided in the tables contained at the end of this press release. HARMAN does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Forward-Looking Information

Except for historical information contained herein, the matters discussed in this earnings presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One should not place undue reliance on these statements. The Company bases these statements on particular assumptions that it has made in light of its industry experience, as well as its perception of historical trends, current market conditions, current economic data, expected future developments and other factors that the Company believes are appropriate under the circumstances. These statements involve risks, uncertainties and assumptions that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to: (1) the Company’s ability to maintain profitability if there are delays in its product launches or increased pricing pressure from its customers; (2) the loss of one or more significant customers, the loss of a significant platform with an automotive customer, or the in-sourcing of certain services by the Company’s automotive customers; (3) fluctuations in currency exchange rates, particularly with respect to the value of the U.S. Dollar and the Euro; (4) fluctuations in the price and supply of raw materials including, without limitation, petroleum, copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components; (5) the inability of the Company’s suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; (6) the Company’s ability to maintain a competitive technological advantage through innovation and leading product designs; (7) the Company’s ability to integrate successfully its recently completed and future acquisitions; (8) the Company’s ability to attract and retain qualified senior management and to prepare and implement an appropriate succession plan for its critical organizational positions; (9) the Company’s failure to maintain the value of its brands and implementing a sufficient brand protection program; and (10) other risks detailed in the Harman International Industries, Incorporated Annual Report on Form 10-K for the fiscal year ended June 30, 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.

APPENDIX

Infotainment Division


FY 2015 Key Figures – Infotainment	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY15			3M FY14			Including Currency Changes			Excluding Currency Changes¹			12M FY15			12M FY14			Including Currency Changes			Excluding Currency Changes¹
Net sales		823			773			7	%		21	%		3,125			2,839			10	%		19	%
Gross profit		201			171			18	%		31	%		754			635			19	%		26	%
Percent of net sales		24.4	%		22.1	%								24.1	%		22.4	%
SG&A		108			131			(17	%)		(4	%)		411			440			(6	%)		2	%
Operating income		93			40			133	%		125	%		342			195			75	%		78	%
Percent of net sales		11.3	%		5.2	%								11.0	%		6.9	%
EBITDA		111			57			95	%		97	%		412			261			58	%		63	%
Percent of net sales		13.5	%		7.4	%								13.2	%		9.2	%
Restructuring & non-recurring charges		0			31									5			55
Acquisition-related items		1			0									1			0
Non-GAAP - operational¹
Gross profit		202			172			17	%		31	%		759			641			18	%		26	%
Percent of net sales		24.6	%		22.3	%								24.3	%		22.6	%
SG&A		108			101			7	%		23	%		410			391			5	%		13	%
Operating income		94			71			32	%		40	%		349			250			39	%		45	%
Percent of net sales		11.4	%		9.2	%								11.2	%		8.8	%
EBITDA		110			87			26	%		35	%		412			310			33	%		39	%
Percent of net sales		13.3	%		11.2	%								13.2	%		10.9	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the fourth quarter of fiscal 2015 were $823 million, an increase of seven percent (21 percent ex-FX) compared to the prior year. The increase in net sales was due to the expansion of recently launched platforms, higher take rates and stronger automotive production.

On a non-GAAP basis in the fourth quarter of fiscal 2015, gross margin increased 230 basis points to 24.6 percent compared to the prior year primarily due to the impact of improved leverage on fixed production costs and benefits from footprint migration restructuring initiatives. SG&A spending as a percent of sales was consistent with the prior year at 13.1 percent.

Infotainment Division Highlights

During the quarter, HARMAN secured new business with Deere & Company to design a new infotainment system for their John Deere farm equipment. The John Deere award is HARMAN’s second win in the commercial infotainment market, following a previously announced award with MAN Scania. The Company also earned a follow-on award from Chinese automaker Guangzhou Automotive Group, a joint-venture partner of FIAT Chrysler Automobiles.

Expanding HARMAN’s footprint in the Japanese market, the Company launched a new infotainment platform for Suzuki Motor Corporation. First debuting on Suzuki’s Spacia and Lapin vehicles, the program will expand across car lines. HARMAN infotainment systems continued to be deployed across car lines in new vehicles worldwide, including the BMW 1-, 2-, 3-, and 7-series, Jaguar XE and XF, the new Mercedes Benz GLC and the Geely Borui.

On July 21, 2015, the Company named Phillip Eyler as President, Infotainment. Mr. Eyler’s tenure at HARMAN has spanned nearly two decades through leadership roles of increasing responsibility in Infotainment and Audio systems engineering, project management, quality and manufacturing. Most recently, he served as Senior Vice President and General Manager Global Automotive Audio, and spearheaded industry-first software platforms such as HALOsonic, Clari-Fi™ and Individual Sound Zones.

Lifestyle Division


FY 2015 Key Figures – Lifestyle	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY15			3M FY14			Including Currency Changes			Excluding Currency Changes¹			12M FY15			12M FY14			Including Currency Changes			Excluding Currency Changes¹
Net sales		479			424			13	%		21	%		1,887			1,656			14	%		20	%
Gross profit		149			124			20	%		27	%		605			498			21	%		26	%
Percent of net sales		31.2	%		29.3	%								32.0	%		30.1	%
SG&A		102			97			5	%		15	%		405			328			24	%		30	%
Operating income		47			27			77	%		65	%		199			171			17	%		19	%
Percent of net sales		9.9	%		6.3	%								10.6	%		10.3	%
EBITDA		59			36			63	%		57	%		241			205			18	%		20	%
Percent of net sales		12.3	%		8.6	%								12.8	%		12.4	%
Restructuring & non-recurring charges		3			20									26			27
Acquisition-related items		2			0									2			0
Non-GAAP - operational¹
Gross profit		148			126			18	%		24	%		595			500			19	%		24	%
Percent of net sales		31.0	%		29.7	%								31.5	%		30.2	%
SG&A		96			79			21	%		31	%		368			302			22	%		27	%
Operating income		52			47			12	%		14	%		227			198			15	%		18	%
Percent of net sales		10.9	%		11.0	%								12.0	%		11.9	%
EBITDA		62			56			10	%		13	%		265			232			14	%		18	%
Percent of net sales		12.9	%		13.2	%								14.1	%		14.0	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the fourth quarter of fiscal 2015 were $479 million, an increase of 13 percent (21 percent ex-FX) compared to the prior year due to higher home and multimedia and car audio sales.

On a non-GAAP basis in the fourth quarter of fiscal 2015, gross margin improved by 130 basis points to 31 percent compared to the prior year primarily due to improved operating leverage as a result of higher sales volume. SG&A expenses as a percentage of sales increased by 140 basis points to 20.1 percent, primarily due to increased investments in marketing and research and development.

Lifestyle Division Highlights

During the quarter HARMAN secured new car audio awards from BMW, Daimler, Hyundai, and Lexus, among others. The Company’s car audio solutions continued to expand across car lines globally. New vehicles launched in the quarter include the Maserati Ghibli and Quattroporte (Harman/Kardon), which also feature HARMAN’s Clari-Fi sound restoration technology. Other launches in the quarter included the BMW 7 Series (Bowers & Wilkins), the Lincoln Continental (Revel), and the Hyundai Santa Fe (Infinity), which also includes HARMAN’s QuantumLogic™ Surround technology that extracts signals from the original recording and redistributes them into an authentic, multidimensional soundstage for playback that is clear, refined and detailed.

On June 1, HARMAN completed the acquisition of the Bang & Olufsen automotive audio business. During the quarter, Audi launched the A4 featuring a Bang & Olufsen branded audio system.

At its flagship store in New York, HARMAN commercially launched the AKG N90Q, the world’s first headphones with personalized sound. Designed in partnership with Quincy Jones, these ultra-luxury headphones feature TRUNOTE™, a revolutionary software solution that automatically calibrate to the listener’s ears. The headphones have received industry accolades, including the Best of CES. The Company’s home and multimedia products also received four European EISA Best Product awards for JBL, Mark Levinson and AKG products.

Professional Division


FY 2015 Key Figures – Professional	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY15			3M FY14			Including Currency Changes			Excluding Currency Changes¹			12M FY15			12M FY14			Including Currency Changes			Excluding Currency Changes¹
Net sales		285			248			15	%		20	%		1,049			853			23	%		26	%
Gross profit		113			96			18	%		24	%		428			323			33	%		37	%
Percent of net sales		39.6	%		38.6	%								40.8	%		37.9	%
SG&A		86			58			47	%		56	%		326			209			56	%		62	%
Operating income		27			37			(28	%)		(25	%)		102			114			(11	%)		(8	%)
Percent of net sales		9.4	%		15.1	%								9.7	%		13.4	%
EBITDA		36			43			(16	%)		(12	%)		136			135			1	%		4	%
Percent of net sales		12.8	%		17.4	%								13.0	%		15.8	%
Restructuring & non-recurring charges		11			3									19			6
Non-GAAP - operational¹
Gross profit		114			96			19	%		26	%		426			324			32	%		36	%
Percent of net sales		40.1	%		38.7	%								40.7	%		38.0	%
SG&A		77			55			39	%		47	%		306			203			50	%		56	%
Operating income		38			41			(8	%)		(3	%)		121			121			(0	%)		3	%
Percent of net sales		13.2	%		16.4	%								11.5	%		14.1	%
EBITDA		46			46			(2	%)		3	%		153			141			8	%		11	%
Percent of net sales		16.0	%		18.7	%								14.6	%		16.6	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the fourth quarter of fiscal 2015 were $285 million, an increase of 15 percent (20 percent ex-FX) compared to the prior year. The increase in net sales is primarily due to the acquisition of AMX, which expanded the Company’s product portfolio into enterprise automation and video switching.

On a non-GAAP basis in the fourth quarter of fiscal 2015, gross margin increased 140 basis points to 40.1 percent and SG&A expense as a percentage of sales increased to 27 percent compared to 22.3 percent in the prior year. Both of these increases are primarily due to the expansion of the Company’s product portfolio into enterprise automation and video switching.

Professional Division Highlights

During the fourth quarter, the Company’s audio, video, lighting and enterprise automation solutions were selected by leading system integrators and installers around the world. Notable projects included the SuperVia Urban Trains system in Brazil, the Daytona International Speedway in Florida and NATO Headquarters in Brussels. HARMAN’s products also powered a wide range of high-profile special events, music festivals and televised award shows including North America’s largest dance music festival.

The division launched 20 major new products during the quarter and many were recognized with innovation awards from industry experts.

Services Division


FY 2015 Key Figures – Services	Three Months Ended June 30						Twelve Months Ended June 30
					Increase (Decrease)						Increase (Decrease)
$ millions (except per share data)	3M FY15			3M FY14	Including Currency Changes	Excluding Currency Changes¹	12M FY15			12M FY14	Including Currency Changes	Excluding Currency Changes¹
Net sales		89						89
Gross profit		27						27
Percent of net sales		30.5	%					30.5	%
SG&A		26						26
Operating income		1						1
Percent of net sales		1.1	%					1.1	%
EBITDA		13						13
Percent of net sales		14.1	%					14.1	%
Restructuring & non-recurring charges		0						0
Acquisition-related items		12						12
Non-GAAP - operational¹
Gross profit		27						27
Percent of net sales		30.5	%					30.5	%
SG&A		14						14
Operating income		13						13
Percent of net sales		14.9	%					14.9	%
EBITDA		15						15
Percent of net sales		17.0	%					17.0	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

The Services Division includes the results of Symphony Teleca Corporation, acquired on April 8, 2015. Net sales in fourth quarter of fiscal 2015 were $89 million. On a non-GAAP basis in the fourth quarter of fiscal 2015, gross margin was 30.5 percent, and SG&A expenses as a percentage of sales were 15.6 percent.

Services Division Highlights

HARMAN is now providing product development services at the intersection of cloud, mobility, and analytics to new customers, including Morgan Stanley, Mazda, GoDaddy.com, Kronos and Lava Mobiles. The Company secured follow-on business from Merrill Lynch, Microsoft and BlackBerry.

HARMAN also achieved Automotive SPICE^® Organizational Process Capability Level 3 Certification. With this designation, HARMAN is now one of the few organizations in the world to be recognized for its software development capabilities and practices in automotive electronics and embedded systems.

Microsoft named HARMAN the 2015 IoT Partner of the Year for accelerating innovation across connected car, connected home and connected enterprise. HARMAN also announced a collaboration with data platform provider Hortonworks to deliver connected car prognostics solutions to automotive manufacturers. The joint collaboration will help transform the automotive enterprise by enabling the connected car ecosystem with real-time IoT data, insights and prognostics solutions.

Other (Corporate)


FY 2015 Key Figures – Other	Three Months Ended June 30										Twelve Months Ended June 30
					Increase (Decrease)										Increase (Decrease)
$ millions (except per share data)	3M FY15		3M FY14		Including Currency Changes			Excluding Currency Changes¹			12M FY15		12M FY14		Including Currency Changes			Excluding Currency Changes¹
SG&A		56		47		18	%		19	%		178		151		19	%		19	%
Restructuring & non-recurring charges		0		9								0		12
Acquisition-related items		8		0								19		0
Non-GAAP - operational¹
SG&A		48		38		26	%		27	%		159		139		14	%		15	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Other (Corporate) SG&A expense includes compensation, benefit and occupancy costs for corporate employees, new technology innovation, and expenses associated with the Company’s brand identity campaign. It also includes the results and operations of Redbend. Other SG&A increased $10 million to $48 million compared to the prior year, primarily due to increased research and development activities in the areas of over-the-air (OTA) updates and cybersecurity, as a result of the acquisition of Redbend and higher investments in brand marketing.

Corporate Highlights

In the quarter, HARMAN’s Redbend remote OTA software management solution was selected by KDDI in Japan for IoT devices and by Samsung for Tizen operating system-based 4G LTE smartphones. In May, HARMAN received a top award at the Barcelona International Motor Show for its Redbend secure OTA automotive software management platform.

HARMAN International Industries, Incorporated

Consolidated Statements of Income


	Three Months Ended June 30,					Twelve Months Ended June 30,
(In thousands, except earnings per share data; unaudited)	2015		2014			2015			2014
Net sales	$	1,678,633	$	1,444,419		$	6,155,297		$	5,348,483
Cost of sales		1,187,457		1,053,624			4,338,193			3,891,816
Gross profit		491,176		390,795			1,817,104			1,456,667
Selling, general and administrative expenses		377,629		333,739			1,347,510			1,126,940
Operating income		113,547		57,056			469,594			329,727
Other expenses:
Interest expense, net		6,068		2,090			13,929			8,026
Foreign exchange (gains) losses, net		3,643		1,190			(723	)		5,935
Miscellaneous, net		3,175		2,568			10,107			8,371
Income before income taxes		100,661		51,208			446,281			307,395
Income tax expense, net		27,019		8,095			103,269			72,610
Equity in net loss of unconsolidated subsidiaries		0		0			23			206
Net income		73,642		43,113			342,989			234,579
Net income (loss) attributable to non-controlling interest		465		(113	)		309			(113	)

Net income attributable to HARMAN International Industries, Incorporated	$	73,177	$	43,226		$	342,680		$	234,692

Earnings per share:
Basic	$	1.02	$	0.63		$	4.89		$	3.40
Diluted	$	1.01	$	0.62		$	4.84		$	3.36
Weighted average shares outstanding:
Basic		71,923		69,088			70,147			69,073
Diluted		72,694		70,058			70,870			69,889

HARMAN International Industries, Incorporated

Consolidated Balance Sheets


(In thousands; unaudited)	June 30, 2015		June 30, 2014
ASSETS
Current Assets
Cash and cash equivalents	$	649,513	$	581,312
Receivables, net		1,024,139		894,579
Inventories		693,574		662,128
Other current Assets		581,544		320,852
Total current assets		2,948,770		2,458,871
Property, plant and equipment, net		552,421		509,856
Intangible assets, net		669,667		182,030
Goodwill		1,287,180		540,952
Deferred tax assets, long-term, net		43,706		170,558
Other assets		428,008		263,323

Total assets	$	5,929,752	$	4,125,590

LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt	$	4,550	$	35,625
Short-term debt		1,021		3,736
Accounts payable		918,910		697,553
Accrued liabilities		956,425		566,722
Accrued warranties		163,331		155,472
Income taxes payable		76,131		26,544
Total current liabilities		2,120,368		1,485,652
Borrowings under revolving credit facility		283,125		300,000
Long-term debt		797,542		219,407
Pension liability		186,662		186,352
Other non-current liabilities		149,229		141,158
Total liabilities		3,536,926		2,332,569
Total HARMAN International Industries, Incorporated shareholders’ equity		2,374,613		1,792,578
Noncontrolling interest		18,213		443
Total equity		2,392,826		1,793,021

Total liabilities and equity	$	5,929,752	$	4,125,590

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


	Three Months Ended June 30, 2015
(In thousands except earnings per share data; unaudited)	GAAP		Adjustments			Non-GAAP - Operational
Net sales	$	1,678,633	$	0		$	1,678,633
Cost of sales		1,187,457		(1,589	)^a		1,185,868
Gross profit		491,176		1,589			492,765
Selling, general and administrative expenses		377,629		(34,715	)^b		342,914
Operating income		113,547		36,304			149,851
Other expenses:
Interest expense, net		6,068		0			6,068
Foreign exchange losses (gains), net		3,643		0			3,643
Miscellaneous, net		3,175		(1,224	)		1,951
Income before income taxes		100,661		37,528			138,189
Income tax expense, net		27,019		10,812	^d		37,831
Net income (loss)		73,642		26,716			100,358
Net income attributable to non-controlling interest		465		0			465

Net income attributable to HARMAN International Industries, Incorporated	$	73,177	$	26,716		$	99,893

Earnings per share:
Basic	$	1.02	$	0.37		$	1.39
Diluted	$	1.01	$	0.37		$	1.37
Weighted average shares outstanding:
Basic		71,923					71,923
Diluted		72,694					72,694

a)	Restructuring expense in Cost of Sales was $1.6 million for projects to increase manufacturing productivity.

Restructuring expense in SG&A was $3.7 million primarily due to projects to increase productivity in engineering, manufacturing and administrative functions; other non-recurring expense included in SG&A was $7.9 million. Acquisition-related expenses were $23.1 million primarily due to intangible amortization expenses.

c)	The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country.

HARMAN has provided a reconciliation of non-GAAP measures in order to provide the users of these consolidated financial statements with a better understanding of its non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


	Twelve Months Ended June 30, 2015
(In thousands except earnings per share data; unaudited)	GAAP			Adjustments			Non-GAAP - Operational
Net sales	$	6,155,297		$	0		$	6,155,297
Cost of sales		4,338,193			6,426	^a		4,344,619
Gross profit		1,817,104			(6,426	)		1,810,678
Selling, general and administrative expenses		1,347,510			(90,682	)^b		1,256,828
Operating Profit		469,594			84,256			553,850
Other expenses:
Interest expense, net		13,929			0			13,929
Foreign exchange losses (gains), net		(723	)		(0	)		(723	)
Miscellaneous, net		10,107			(1,224	)		8,883
Income before income taxes		446,281			85,480			531,761
Income tax expense, net		103,269			23,611	^d		126,880
Equity in net loss of unconsolidated subsidiaries		23			0			23
Net income (loss)		342,989			61,869			404,858
Net income attributable to non-controlling interest		309			0			309

Net income attributable to HARMAN International Industries, Incorporated	$	342,680		$	61,869		$	404,549

Earnings per share:
Basic	$	4.89		$	0.88		$	5.77
Diluted	$	4.84		$	0.87		$	5.71
Weighted average shares outstanding:
Basic		70,147						70,147
Diluted		70,870						70,870

a)	Restructuring expense in Cost of Sales was $9.4 million for projects to increase manufacturing productivity, offset by a $17.3 million accrual reversal for a US Customs / NAFTA related exposure.

Restructuring expense in SG&A was $42.6 million primarily due to projects to increase productivity in engineering and administrative functions. Other non-recurring expense includes in SG&A was $13.4 million. Acquisition-related expenses were $34.7 million including $15.2 million of intangible amortization expenses.

c)	The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the statutory tax rate within that specific country.

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


	Three Months Ended June 30, 2014
(In thousands, except earnings per share data; unaudited)	GAAP			Adjustments			Non-GAAP
Net sales	$	1,444,419		$	0		$	1,444,419
Cost of sales		1,053,624			(3,295	)^a		1,050,329
Gross profit		390,795			3,295			394,090
Selling, general and administrative expenses		333,739			(60,225	)^b		273,514
Operating income		57,056			63,520			120,576
Other expenses:
Interest expense, net		2,090			0			2,090
Foreign exchange losses, net		1,190			0			1,190
Miscellaneous, net		2,568			46			2,614
Income before income taxes		51,208			63,474			114,682
Income tax expense, net		8,095			19,242	^c		27,337
Equity in net loss of unconsolidated subsidiaries		0			0			0
Net income (loss)		43,113			44,232			87,345
Net income attributable to non-controlling interest		(113	)		0			(113	)

Net income attributable to HARMAN International Industries, Incorporated	$	43,226		$	44,232		$	87,458

Earnings per share:
Basic	$	0.63		$	0.64		$	1.26
Diluted	$	0.62		$	0.63		$	1.25
Weighted average shares outstanding:
Basic		69,088						69,088
Diluted		70,058						70,058

a)	Restructuring expense in Cost of Sales was $1.7 million for projects to increase manufacturing productivity; other non-recurring expense included in Cost of Sales was $1.6 million.

b)	Restructuring expense in SG&A was $48.9 million primarily due to projects to increase productivity in engineering, manufacturing and administrative functions; other non-recurring expense included in SG&A was $11.4 million.

c)	The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country.

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


	Twelve Months Ended June 30, 2014
(In thousands, except earnings per share data; unaudited)	GAAP			Adjustments			Non-GAAP
Net sales	$	5,348,483		$	0		$	5,348,483
Cost of sales		3,891,816			(8,838	)^a		3,882,978
Gross profit		1,456,667			8,838			1,465,505
Selling, general and administrative expenses		1,126,940			(91,215	)^b		1,035,725
Operating income		329,727			100,053			429,780
Other expenses:
Interest expense, net		8,026			0			8,026
Foreign exchange losses, net		5,935			0			5,935
Miscellaneous, net		8,371			46			8,417
Income before income taxes		307,395			100,007			407,402
Income tax expense, net		72,610			26,491	^c		99,101
Equity in net loss of unconsolidated subsidiaries		206			0			206
Net income (loss)		234,579			73,516			308,095
Net income attributable to non-controlling interest		(113	)		0			(113	)

Net income attributable to HARMAN International Industries, Incorporated	$	234,692		$	73,516		$	308,208

Earnings per share:
Basic	$	3.40		$	1.06		$	4.46
Diluted	$	3.36		$	1.05		$	4.41
Weighted average shares outstanding:
Basic		69,073						69,073
Diluted		69,889						69,889

a)	Restructuring expense in Cost of Sales was $7.8 million due to projects to increase productivity in manufacturing; other non-recurring expense included in Cost of Sales was $1.0 million.

b)	Restructuring expense in SG&A was $76.4 million primarily due to projects to increase productivity in engineering, manufacturing and administrative functions; other non-recurring expense in SG&A was $14.8 million.

c)	The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact


	Three Months Ended June 30,					Increase / (Decrease)
(In thousands; unaudited)	2015		2014			Increase / (Decrease)
Net sales - nominal currency	$	1,678,633	$	1,444,419			16	%
Effects of foreign currency translation⁽¹⁾				(129,410	)

Net sales - local currency		1,678,633		1,315,009			28	%

Gross profit - nominal currency		491,176		390,795			26	%
Effects of foreign currency translation⁽¹⁾				(29,026	)

Gross profit - local currency		491,176		361,769			36	%

SG&A - nominal currency		377,629		333,739			13	%
Effects of foreign currency translation⁽¹⁾				(30,725	)

SG&A - local currency		377,629		303,014			25	%

Operating income - nominal currency		113,547		57,056			99	%
Effects of foreign currency translation⁽¹⁾				1,699

Operating income - local currency		113,547		58,755			93	%

Net income attributable to HARMAN International Industries, Incorporated - nominal currency		73,177		43,226			69	%
Effects of foreign currency translation⁽¹⁾				(2,467	)

Net income attributable to HARMAN International Industries, Incorporated - local currency		73,177		40,759			80	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

HARMAN has provided a reconciliation of the non-GAAP measures in the table above to provide the users of these consolidated financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect its reported financial results, the Company shows the rates of change both including and excluding the effect of these changes in exchange rates. The Company encourages readers of its financial statements to evaluate its financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of Non-GAAP Results

Foreign Currency Translation Impact


	Three Months Ended June 30,					Increase / (Decrease)
EXCLUDING restructuring and non-recurring charges (In thousands; unaudited)	2015		2014			Increase / (Decrease)
Net sales - nominal currency	$	1,678,633	$	1,444,419			16	%
Effects of foreign currency translation⁽¹⁾				(129,410	)

Net sales - local currency		1,678,633		1,315,009			28	%

Gross profit - nominal currency		492,764		394,090			25	%
Effects of foreign currency translation⁽¹⁾				(29,295	)

Gross profit - local currency		492,764		364,795			35	%

SG&A - nominal currency		342,914		273,514			25	%
Effects of foreign currency translation⁽¹⁾				(22,577	)

SG&A - local currency		342,914		250,937			37	%

Operating income - nominal currency		149,851		120,576			24	%
Effects of foreign currency translation⁽¹⁾				(6,718	)

Operating income - local currency		149,851		113,858			32	%

Net income attributable to HARMAN International Industries, Incorporated - nominal currency		99,893		87,458			14	%
Effects of foreign currency translation⁽¹⁾				(10,989	)

Net income attributable to HARMAN International Industries, Incorporated - local currency		99,893		76,469			31	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

HARMAN has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the consolidated financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect its reported financial results, the Company shows the rates of change both including and excluding the effect of these changes in exchange rates. The Company encourages readers of its financial statements to evaluate its financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact


	Twelve Months Ended June 30,					Increase / (Decrease)
(In thousands; unaudited)	2015		2014			Increase / (Decrease)
Net sales - nominal currency	$	6,155,297	$	5,348,483			15	%
Effects of foreign currency translation⁽¹⁾				(308,657	)

Net sales - local currency		6,155,297		5,039,826			22	%

Gross profit - nominal currency		1,817,104		1,456,667			25	%
Effects of foreign currency translation⁽¹⁾				(67,895	)

Gross profit - local currency		1,817,104		1,388,772			31	%

SG&A - nominal currency		1,347,510		1,126,940			20	%
Effects of foreign currency translation⁽¹⁾				(59,382	)

SG&A - local currency		1,347,510		1,067,558			26	%

Operating income - nominal currency		469,594		329,727			42	%
Effects of foreign currency translation⁽¹⁾				(8,513	)

Operating income - local currency		469,594		321,214			46	%

Net income attributable to HARMAN International Industries, Incorporated - nominal currency		342,680		234,692			46	%
Effects of foreign currency translation⁽¹⁾				(10,344	)

Net income attributable to HARMAN International Industries, Incorporated - local currency		342,680		224,348			53	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of Non-GAAP Results

Foreign Currency Translation Impact


	Twelve Months Ended June 30,					Increase / (Decrease)
EXCLUDING restructuring and non-recurring charges (In thousands; unaudited)	2015		2014			Increase / (Decrease)
Net sales - nominal currency	$	6,155,297	$	5,348,483			15	%
Effects of foreign currency translation⁽¹⁾				(308,657	)

Net sales - local currency		6,155,297		5,039,826			22	%

Gross profit - nominal currency		1,810,678		1,465,505			24	%
Effects of foreign currency translation⁽¹⁾				(68,663	)

Gross profit - local currency		1,810,678		1,396,842			30	%

SG&A - nominal currency		1,256,828		1,035,725			21	%
Effects of foreign currency translation⁽¹⁾				(50,285	)

SG&A - local currency		1,256,828		985,440			28	%

Operating income - nominal currency		553,850		429,780			29	%
Effects of foreign currency translation⁽¹⁾				(18,378	)

Operating income - local currency		553,850		411,402			35	%

Net income attributable to HARMAN International Industries, Incorporated - nominal currency		404,549		308,208			31	%
Effects of foreign currency translation⁽¹⁾				(20,201	)

Net income attributable to HARMAN International Industries, Incorporated - local currency		404,549		288,007			40	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results


	Three Months Ended June 30, 2015							Three Months Ended June 30, 2014
(In thousands, except earnings per share data; unaudited)	GAAP		Adjustments			Non-GAAP - Operational		GAAP		Adjustments			Non-GAAP - Operational
HARMAN:
Operating income		113,547		36,304			149,851		57,056		63,520			120,576
Depreciation & Amortization		54,421		(16,844	)		37,577		35,026		(1,418	)		33,608
EBITDA		167,968		19,460			187,428		92,082		62,102			154,184
INFOTAINMENT
Operating income		92,988		1,043			94,031		39,972		31,239			71,211
Depreciation & Amortization		18,133		(2,428	)		15,705		17,062		(1,398	)		15,664
EBITDA		111,121		(1,385	)		109,736		57,034		29,841			86,875
LIFESTYLE
Operating income		47,494		4,586			52,080		26,793		19,812			46,605
Depreciation & Amortization		11,528		(1,778	)		9,750		9,490		0			9,490
EBITDA		59,022		2,808			61,830		36,283		19,812			56,095
PROFESSIONAL
Operating income		26,874		10,635			37,509		37,360		3,278			40,638
Depreciation & Amortization		9,462		(1,436	)		8,026		5,845		(20	)		5,825
EBITDA		36,336		9,199			45,535		43,205		3,258			46,463
SERVICES
Operating income		1,009		12,198			13,207
Depreciation & Amortization		11,508		(9,596	)		1,912
EBITDA		12,517		2,602			15,119

Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results


	Twelve Months Ended June 30, 2015							Twelve Months Ended June 30, 2014
(In thousands, except earnings per share data; unaudited)	GAAP		Adjustments			Non-GAAP - Operational		GAAP		Adjustments			Non-GAAP - Operational
HARMAN:
Operating income		469,594		84,256			553,850		329,727		100,053			429,780
Depreciation & Amortization		169,231		(24,181	)		145,050		132,328		(6,959	)		125,369
EBITDA		638,825		60,075			698,900		462,055		93,094			555,149
INFOTAINMENT
Operating income		342,350		6,290			348,640		195,403		54,717			250,120
Depreciation & Amortization		69,934		(6,256	)		63,678		65,912		(6,219	)		59,693
EBITDA		412,284		34			412,318		261,315		48,498			309,813
LIFESTYLE
Operating income		199,149		27,886			227,035		170,517		27,323			197,840
Depreciation & Amortization		42,269		(4,158	)		38,111		34,581		(622	)		33,959
EBITDA		241,418		23,728			265,146		205,098		26,701			231,799
PROFESSIONAL
Operating income		102,002		18,544			120,546		114,057		6,499			120,556
Depreciation & Amortization		34,112		(1,601	)		32,511		20,866		(119	)		20,747
EBITDA		136,114		16,943			153,057		134,923		6,380			141,303
SERVICES
Operating income		1,009		12,198			13,207
Depreciation & Amortization		11,508		(9,596	)		1,912
EBITDA		12,517		2,602			15,119

HARMAN International Industries, Incorporated

Total Liquidity Reconciliation


Total Company Liquidity	June 30, 2015
$ millions	June 30, 2015
Cash & cash equivalents	$	650
Available credit under Revolving Credit Facility		912

Total Liquidity	$	1,562

HARMAN INTERNATIONAL INDUSTRIES INC /DE/ - FORM 8-K - EX-99.1 - August 4, 2015

Attached files

HARMAN INTERNATIONAL INDUSTRIES INC /DE/ Reports