Harman International Industries, Inc. (HAR), a leading global manufacturer of audio and infotainment products, has reported dismal fourth quarter and fiscal 2009 results, with a decrease in year-over-year sales and net income.
Harman has reported net sales of $668 million during the fourth quarter compared to $1.1 billion in the year-earlier quarter – a decline of 37%. Excluding the effect of foreign currency, net sales decreased 32% year-over-year. Harman reported a loss of $1.05 per share during the quarter, much lower than the Zacks Consensus Estimate of -60 cents and a net income of 54 cents in the year-ago quarter.
For the fiscal year 2009, net sales decreased 30% year-over-year to $2.9 billion. Excluding the foreign currency translation, net sales declined 26%. The company reported a loss of $7.19 per share, drastically lower than the Zacks Consensus Estimate of ($1.11) and a net income of $1.73 in the previous year.
Despite the disappointing results, Harman was upbeat about key operational initiatives it undertook in June 2008, which resulted in significant cost savings ahead of its target. At quarter end, the company had achieved $190 million in sustainable savings, which was much higher than its expectation of $144 million.
During the quarter, Harman issued 10.7 million common shares, raising gross proceeds of $200 million. About $38 million of the proceeds was used to repay its outstanding debt. At quarter end, the company had cash and cash equivalents of $590.6 million compared to $223.1 million in the year-earlier quarter, primarily due to increased borrowings from the revolving credit facility and net proceeds from the equity issuance.
Harman was also able to deliver a record number of major automotive projects in spite of challenging market conditions. In order to strengthen its global brand penetration and augment its top-line growth, Harman has further decided to sponsor a new television and online music series in collaboration with the National Geographic channels. Harman expects to capitalize on such opportunities to gain further market share and rejuvenate its top-line growth.
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