Harman International Reports Third Quarter Earnings
WASHINGTON--April 24, 2002--Harman International Industries, Incorporated today announced results for the third quarter and nine months ended March 31, 2002.Net sales for the quarter were $458.3 million, a 5 percent increase over net sales of $435.7 million in the same period last year. Exclusive of currency effects, net sales rose 8 percent. Net income for the quarter was $14.6 million compared to a net loss of $18.4 million in the third quarter of last year.
For the quarter, earnings per diluted share were $0.43, compared to a loss of $0.57 per share in the prior period. Excluding special charges of $36.3 million in the prior year third quarter, net income was $7.4 million, or $0.22 per diluted share.
For the nine months ended March 31, 2002, net sales were $1.325 billion versus $1.269 billion in the prior year period. Excluding currency effects, the Company's net sales increased 5 percent over the prior period. Net income totaled $37.3 million and earnings per diluted share were $1.11 before an $8.3 million pre-tax legal charge incurred in the second quarter.
After the charge, net income for the nine months was $31.4 million, or $0.93 per diluted share.
The Consumer Systems Group reported net sales of $354.6 million for the three months ended March 31, 2002, an increase of 9 percent over the prior year period, or 12 percent excluding currency effects. Sales to the automakers increased 16 percent as vehicle sales were generally strong in North America and Europe. Sales to Toyota, especially in support of the Camry, were well above the prior year.
Sales to Chrysler improved in the third quarter compared to last year. Harman/Becker reported increased sales in Europe due to robust shipments of infotainment systems to BMW in support of the new 7 Series. Sales of aftermarket navigation systems and increased purchases by Mercedes-Benz also improved sales in Europe. Multimedia sales were higher to Apple and the PC audio aftermarket.
Sales of consumer home audio products in the U.S. and Europe were slightly lower than the previous nine-month period due to continued softness in the consumer home market.
Professional Group sales for the three months ended March 31, 2002 were $103.8 million, a 3 percent decrease compared to the same prior year period after adjusting for the sale of a business unit. Profits, however, were substantially higher for both domestic and international operations. In particular, JBL Professional and Crown sales, spurred by new products, increased during the period.
The international professional business units reported lower sales versus last year as they exited unprofitable product lines.
Dr. Sidney Harman, Executive Chairman, and Bernard Girod, Vice Chairman and Chief Executive Officer, commented:
"The Company produced good results for the third quarter and first nine months of fiscal 2002. Our automotive business continues to add new customers and new customer platforms. On March 7, 2002, we announced a new $200 million award to provide Mercedes-Benz with infotainment/telematic systems for the S Class. That major award was in addition to significant OEM contracts announced over the past several months. Multimedia performed well during the quarter and continues to outperform a soft PC market. Sales of our consumer home audio and professional products remain affected by the slow economic recovery.
The Company acquired the TEMIC Speech Recognition and Processing business from DaimlerChrysler in April. This acquisition will expand Harman's infotainment systems' capability to include fully-integrated voice-activated solutions.
We look forward to completing an excellent year and we eagerly anticipate the challenges and opportunities of fiscal 2003."
At 4:30 p.m. EDT today, Harman International will host an analyst and investor conference call to discuss the results for its third quarter and nine months ended March 31, 2002, and to comment on management's outlook for future periods. To participate in the conference call, please call (US) (800) 230-1096 or for international calls dial (612) 332-0107 prior to 4:30 p.m. EDT.
Please let the operator know that you would like to join the Harman International call.
A replay of the conference call will be available at approximately 8:00 p.m. EDT on April 24, 2002. The replay will be available through May 1, 2002. To access the replay, please call (US) (800) 475-6701 or for international calls (320) 365-3844. The access code number is 636085.
Harman International Industries, Incorporated (www.harman.com) is a leading manufacturer of high-quality, high fidelity audio products and electronic systems for the consumer and professional markets. The Company's stock is traded on the New York Stock Exchange under the symbol: HAR.
Note: Except for historical information contained herein, the matters discussed are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, as well as our perception of historical trends, current market conditions, expected future developments and other factors that we believe are appropriate under the circumstances. These statements 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 changes in consumer confidence and spending, automobile industry sales and production rates, model-year changeovers in the automotive industry, our ability to satisfy contract performance criteria, availability of key components to the products we manufacture, competitive products, currency exchange rates, the outcome of pending or future litigation and other claims, labor disputes at our facilities or those of our customers, general economic conditions such as the length of the current economic recovery and other risks detailed in the Company's filings with the Securities and Exchange Commission.
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
THIRD QUARTER RESULTS - FISCAL 2002
FOR THE THREE AND NINE MONTHS ENDED March 31, 2002 and 2001
(000s omitted except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
---- ---- ---- ----
Net sales $ 458,310 435,658 1,324,751 1,268,810
Cost of sales 334,828 339,316 970,110 941,165
--------- --------- --------- ---------
Gross profit 123,482 96,342 354,641 327,645
Selling, general and
administrative
expenses 96,373 114,823 291,647 290,300
--------- --------- --------- ---------
Operating income 27,109 (18,481) 62,994 37,345
Other expense:
Interest expense 6,073 7,249 17,673 18,594
Miscellaneous, net 405 174 1,082 425
--------- --------- --------- ---------
Income before
income taxes 20,631 (25,904) 44,239 18,326
Income tax expense 5,983 (7,512) 12,830 5,319
--------- --------- --------- ---------
Net income $ 14,648 (18,392) 31,409 13,007
========= ========= ========= =========
Basic EPS $ 0.45 (0.57) 0.98 0.40
Diluted EPS $ 0.43 (0.57) 0.93 0.38
Shares outstanding -
basic 32,333 31,998 32,174 32,383
Shares outstanding -
diluted 33,939 31,998 33,728 33,842
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
CONSOLIDATED BALANCE SHEETS
(000s omitted)
March 31, March 31,
2002 2001
---- ----
ASSETS
Current assets
Cash and cash equivalents $ 84,430 6,299
Accounts receivable 317,253 310,556
Inventories 326,907 349,856
Other current assets 72,529 60,063
---------- ----------
Total current assets 801,119 726,774
---------- ----------
Property, plant and
equipment 283,545 250,588
Excess of cost over fair
value of assets acquired 155,462 151,147
Other assets 60,529 40,730
---------- ----------
Total assets $1,300,655 1,169,239
========== ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 7,199 10,577
Current portion of
long-term debt 4,216 2,415
Accounts payable and
accrued liabilities 316,630 299,504
---------- ----------
Total current liabilities 328,045 312,496
---------- ----------
Long-term debt 459,398 412,682
Other non-current
liabilities 46,781 33,397
Minority interest 6,130 982
Total shareholders' equity 460,301 409,682
---------- ----------
Total liabilities and
shareholders' equity $1,300,655 1,169,239
========== ==========