· Eighth consecutive quarter of year-over-year improvement in sales and earnings
· BRIC countries sales increase 91%; global market share gains continue
· Infotainment and audio backlog remains at record high $14.5B; scalable systems rise to 40% of Infotainment
Stamford, CT, October 21, 2011 – Harman International Industries, Incorporated, the leading global audio and infotainment group (NYSE: HAR), today announced results for the first quarter ended September 30, 2011.
Net sales for the first quarter were $1,051 million, an increase of 26 percent compared to the same period last year. Excluding foreign currency translation, net sales increased by 19 percent. First quarter operating income was $74 million, compared to $43 million in the same period last year. Excluding restructuring charges, operating profit in the first quarter grew by 91 percent to $76 million, compared to $40 million in the same period last year. On the same non-GAAP basis, earnings per diluted share were $0.69 for the quarter compared to $0.35 in the same period last year. On a GAAP basis, earnings per diluted share were $0.67 for the quarter compared to $0.39 in the same period last year.
During this quarter, all three of the Company’s divisions reported higher sales. Operating profit improvement was driven by the Infotainment Division through a lower cost base and higher sales partially driven by pent up demand resulting from the tsunami earthquake and temporarily substituting for a competitor. Profitability gains in Infotainment more than offset the impact of the increased cost of rare-earth neodymium magnets in the Company’s audio business. The Company’s aggressive actions to mitigate neodymium costs through procurement and sales price increases contained the net cost impact in the quarter to $9 million.
At September 30, 2011, the Company’s cash and short term investments balance was $690 million, compared to $921 million as of June 30, 2011. This change was the result of increased net operating working capital to support higher sales, the MWM acquisition, and foreign currency translation.
Dinesh C. Paliwal, the Company’s Chairman, President and CEO, said, “We are now in a new growth phase at HARMAN with strong footholds in each of the BRIC countries – further diversifying and expanding our growth prospects. Our operational realignment will better enable us to focus and make measurable improvement on the profitability of our infotainment business and we are aggressively working on increasing our backlog of scalable systems. We are excited to have launched a global marketing campaign featuring some of the world’s most prominent music artists to support penetration of our family of brands across our business lines. Our focus on operational excellence and ability to pass on cost increases has allowed us to reduce the impact of neodymium. We continue to invest in innovation and capacity expansion to take advantage of global opportunities and weather economic headwinds. We are very pleased with the progress of our Company’s transformation which has resulted in eight consecutive quarters of improvements to both our top and bottom line.”
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