Harman International Industries, Inc. Reports Third Quarter Earnings
WASHINGTON--April 25, 2001--Harman International today announced results for the third quarter and the nine months ended March 31, 2001.Net sales for the quarter were $435.7 million, a 3 percent increase compared to last year's net sales of $423.9 million. Exclusive of currency effects, net sales rose 7 percent. The company reported pretax income of $10.4 million before a pretax charge of $36.3 million for non-recurring items.
Net income for the quarter before the charge was $7.4 million, equal to $0.22 per share. After the charge, the loss was $0.57 per share.
For the nine months ended March 31, 2001, net sales were $1.269 billion versus $1.232 billion in the same period last year. Excluding the effects of currency translation, the Company's net sales increased 10 percent over this period. Earnings per share before the non-recurring charge were $1.15 for the nine-month period. After the charge, earnings per share were $0.38.
The restructuring charge totaled $36.3 million. This included non-cash charges of $18.5 million and cash charges of $17.8 million.
The significant items included in the charge are $6.4 million to terminate distributors in the U.K., Germany and Finland; $6.5 million to cover severance of 250 people, representing annual compensation of $10 million; $7.3 million of fixed and impaired asset write-offs, reflecting the elimination of inefficient and obsolete production lines; $5.9 million for factory closures in Argentina and U.K.; and $8.6 million for inventory write-downs at Studer and Consumer International.
Below are the Company's summarized results before the non-recurring charge (in millions, except per share amounts):
Three Months Ended Nine Months Ended
March 31, March 31,
2001 2000 2001 2000
---- ---- ---- ----
Net Sales $ 435.7 $ 423.9 $ 1,268.8 $ 1,231.5
Operating income 17.9 36.8 73.7 86.7
Income before taxes 10.4 31.4 54.7 70.6
Net income 7.4 22.3 38.8 49.5
Diluted EPS $ 0.22 $ 0.63 $ 1.15 $ 1.40
Note: Excludes the impact of $36.3 million ($25.8 million after
tax) of restructuring, impairment, and other non-recurring charges.
The Consumer Systems Group reported net sales of $937.0 million
for the nine months ended March 31, 2001, a 2 percent increase over
the same prior year period and 9 percent higher after adjusting for
currency translation.
In Europe, higher sales of radio and navigation units to Mercedes
Benz contributed to the growth. In North America and Asia, audio
system sales to Toyota and Lexus increased, offsetting lower sales to
Chrysler. Home audio sales were down slightly versus the prior year
period. Sales to PC manufacturers decreased as the PC industry
experienced substantial sales declines.
For the nine months ended March 31, 2001, Professional Group sales
increased 5 percent to $331.8 million, or 11 percent higher excluding
the effects of currency translation. Crown International contributed
to the sales increase. AKG also contributed to the group's steady
performance as its OEM programs, especially OnStar, continue to grow.
Dr. Sidney Harman, Executive Chairman, and Bernard Girod,
Vice-Chairman-CEO, stated:
"The Company has taken the necessary steps to ensure future,
sustained growth. The restructuring charge enables us to complete the
overhaul of the consumer distribution system, write down assets
impaired during this period of economic uncertainty, and reduce excess
manufacturing capacity. We anticipate fourth quarter results within
current expectations."
Harman International Industries, Incorporated (www.harman.com) is
a leading manufacturer of high-quality, high-fidelity audio products
for the consumer and professional markets. The Company's stock is
traded on the New York Stock Exchange under the symbol: HAR.
At 4:30 p.m. EDT today, Wednesday, April 25, 2001, Harman's
management will host an analyst and investor conference call to
discuss the third quarter results and comment on the outlook for
future periods. Those who wish to participate in the call should dial
888/273-9887 (US) or 612/332-0634 (International), and reference
Harman International.
A replay of the call will also be available following the
completion of the call at approximately 8:00 p.m. EDT. The replay will
be available through May 2nd. To listen to the replay, dial
800/475-6701 (US) or 320/365-3844 (International), Access Code: No.
582326.
Note: Except for historical information contained herein, the
matters discussed are forward-looking statements which 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 the effect of economic conditions, product demand,
currency exchange rates, labor disputes, availability of key
components, competitive products and other risks detailed in the
Company's Securities and Exchange Commission filings.
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
THIRD QUARTER RESULTS - FISCAL 2001
FOR THE THREE AND NINE MONTHS ENDED March 31, 2001 and 2000
(000s omitted except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2001 2000 2001 2000
-------- -------- ---------- ----------
Gross sales $459,252 $442,794 $1,354,998 $1,294,642
Sales returns
and discounts 23,594 18,863 69,581 63,112
Inventory repurchase 0 0 16,607 0
--------- -------- ---------- ----------
Net sales 435,658 423,931 1,268,810 1,231,530
Cost of sales 339,316 299,752 941,165 884,617
--------- -------- ---------- ----------
Gross profit 96,342 124,179 327,645 346,913
Selling, general and
administrative expenses 114,823 87,335 290,300 260,198
--------- -------- ---------- ----------
Operating income (18,481) 36,844 37,345 86,715
Other expense:
Interest expense 7,249 4,917 18,594 14,624
Miscellaneous, net 174 489 425 1,464
--------- -------- ---------- ----------
Income before
income taxes (25,904) 31,438 18,326 70,627
Income tax expense (7,512) 9,121 5,319 21,109
---------- -------- ---------- ----------
Net income $ (18,392) $ 22,317 13,007 $ 49,518
========== ======== ========== ==========
Basic EPS $ (0.57) $ 0.65 $ 0.40 $ 1.43
Diluted EPS $ (0.57) $ 0.63 $ 0.38 $ 1.40
Shares outstanding
- basic 31,998 34,332 32,383 34,550
Shares outstanding
- diluted 31,998 35,464 33,842 35,272
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
CONSOLIDATED BALANCE SHEETS
(000s omitted)
March 31, March 31,
2001 2000
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 6,299 $ 6,306
Accounts receivable 310,556 317,777
Inventories 349,856 303,604
Other current assets 60,063 47,644
--------- ---------
Total current assets 726,774 675,331
--------- ---------
Property, plant and equipment 250,588 244,502
Excess of cost over fair
value of assets acquired 151,147 162,937
Other assets 40,730 40,751
---------- ---------
Total assets $ 1,169,239 $ 1,123,521
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 10,577 $ 9,652
Current portion of
long-term debt 2,415 9,455
Accounts payable and accrued
liabilities 299,504 294,492
--------- ---------
Total current liabilities 312,496 313,599
--------- ---------
Long-term debt 412,682 306,272
Other non-current liabilities 33,397 29,409
Minority interest 982 829
Total shareholders' equity 409,682 473,412
--------- ---------
Total liabilities and
shareholders' equity $ 1,169,239 $ 1,123,521
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