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HARMAN Reports Fourth Quarter Sales Up 29% and Improves Operating Income by $109 Million 

05-August-2010 
 

·   New orders raise backlog from $8.8 to $12.2 billion as more customers adopt next-generation technology

·   Cash rises by $221 million during the quarter to $646 million, provides flexibility for strategic initiatives

·   $350 million in permanent cost savings drives competitive advantage and margin improvement

Stamford, CT, August 5, 2010 – 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, 2010.  Net sales for the year were $3.4 billion, an increase of 18 percent compared to the prior year. Excluding foreign currency translation, net sales increased by 17 percent.  On a GAAP basis, operating profit from continuing operations was $86 million compared to an operating loss of ($504) million in fiscal 2009.  Excluding non-recurring items, annual operating profit from continuing operations was $116 million, compared to a non-GAAP operating loss of ($86) million in the prior year. On the same non-GAAP basis, earnings per diluted share from continuing operations were $0.85 for the year compared to a loss per diluted share of ($1.23) in the prior year.  On a GAAP basis, earnings per diluted share from continuing operations were $0.50 for the year compared to a loss per diluted share of ($7.19) in the prior year.  The Company divested its QNX business in June which is excluded from these results. The QNX operating profit for the eleven months was $10 million, or $0.13 earnings per diluted share.

Net sales for the quarter were $851 million, an increase of 29 percent compared to the same period last year.  Excluding foreign currency translation, net sales increased by 35 percent.  Fourth quarter operating income was $26 million, an improvement of $109 million versus a prior year loss. Excluding non-recurring items, operating profit from continuing operations in the fourth quarter was $30 million, compared to a non-GAAP operating loss of ($35) million in the same period last year.  On the same non-GAAP basis, earnings per diluted share from continuing operations were $0.30 for the quarter compared to a loss per diluted share of ($0.43) in the same period last year.  On a GAAP basis, earnings from continuing operations per diluted share were $0.26 for the quarter compared to loss per diluted share of ($1.01) in the same period last year. The Company divested its QNX business in June which is excluded from these results. The QNX operating profit for the two months was $1 million, or $0.02 earnings per diluted share.

At June 30, 2010, the Company’s cash and short term investments balance was $646 million, compared to $424 million as of March 31, 2010.  The increase in cash was primarily the result of positive cash from operating activities and the proceeds from the sale of QNX.

Dinesh C. Paliwal, the Company’s Chairman, President and CEO, said, “Our progress during the quarter has been extremely encouraging, with all key performance indicators improving.  The next generation technology developed at Harman is capturing market share and delivering increased value to our customers.  Additionally, we are driving value by optimizing our business portfolio and global footprint, transforming our cost structure, and accelerating our growth into emerging markets.” 

“We were pleased to see an unexpected increase in demand this quarter,” added Paliwal.  “As a result, we decided to incur additional procurement and logistics costs to secure sufficient allocation of electronics components. At the same time, our increased confidence in our ability to capture market share has prompted us to accelerate investments in sales, marketing, and business development. We believe these efforts, combined with prudent capital deployment, will continue our sales and profit improvements and deliver superior shareholder value.”

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