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In a release dated October 29, the company stated:
- Net sales for the quarter were $757 million, a decrease of 13 percent compared to the same period last fiscal year. Excluding foreign currency translation, net sales declined by 10 percent. Sequentially, sales increased 13 percent compared to the previous quarter. Excluding non-recurring items, the first quarter generated a non-GAAP operating profit of $5 million, compared to a non-GAAP operating loss of ($34) million for the previous quarter. On the same non-GAAP basis, loss per diluted share was ($0.05) for the quarter compared to earnings of $0.47 for the same period last fiscal year. On a GAAP basis, loss per diluted share was ($0.14) for the quarter compared to earnings per share of $0.36 during the same period last fiscal year.
"It is clear that Harman's aggressive initiatives to optimize costs, improve productivity and drive innovation are bearing fruit," said Dinesh C. Paliwal, the company's Chairman, President and CEO. "Our key markets are stabilizing, we are gaining market share, and we posted double-digit sequential sales growth for the quarter - aided in part by various stimulus programs. Our operating income, excluding non-recurring items, has turned positive. Harman is recognized as a strong global company with a fast-growing footprint in the emerging markets, and major customers including BMW, Daimler and Toyota have chosen us for repeat business due to our track record of successful execution and technology leadership. These achievements have contributed to an estimated $10 billion in total awarded business which we will deliver over several years. Despite the continued global economic challenges, I am pleased with the major progress we have made in lowering our cost base while investing heavily in innovation. The $400 million cost savings and operational excellence initiatives that we launched in June 2008 are ahead of target in delivering sustainable benefits."
- Net sales in the first quarter were $757 million, a decrease of 13 percent or 10 percent when adjusted for constant currency compared to the prior year. Net sales declined in all three divisions primarily due to the global economic downturn. Sequentially, sales were up 13 percent compared to the previous quarter.
- Gross margin on a non-GAAP basis in the first quarter decreased 2.1 percentage points to 26.4 percent compared to the same period last year. The gross margin decline was primarily due to a decrease in factory utilization associated with lower sales and the ramp up of new infotainment product launches in the Automotive Division. Restructuring costs included in costs of sales were $1 million which consisted primarily of accelerated depreciation related to the closure of manufacturing facilities.
- SG&A expense on a non-GAAP basis in the first quarter was $195 million compared to $205 million in the same period last year. Restructuring costs excluded from non-GAAP SG&A were $3 million which were primarily related to the company's STEP Change program. Foreign currency translation contributed $6 million to the decrease in SG&A expense.
- Operating income on a non-GAAP basis in the first quarter was $5 million compared to operating income of $43 million in the same period last year. On a GAAP basis, operating loss was ($1 million) compared to operating income of $32 million during the same period of the prior year.
Harman International designs, manufactures and markets a wide range of audio and infotainment products for the automotive, consumer and professional markets.
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