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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest
event reported): JULY 28, 1999
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HARRIS CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 1-3863 34-0276860
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
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1025 West NASA Blvd., Melbourne, FL 32919
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 727-9100
No Change
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(Former name or former address, if changed since last report.)
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Items 1-4. Not Applicable.
Item 5. Other Events.
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On July 28, 1999, Harris Corporation ("Harris" or the
"Company") reported its sales and earnings for fiscal 1999. Additionally, the
Company expects to complete the sale of its semiconductor business and the
spin-off of Lanier during the first quarter of fiscal year 2000. Following such
actions, the Company will explore potential acquisitions and repurchases of
significant amounts of its stock.
A copy of the press release is filed herewith as Exhibit 99
and is incorporated herein by reference.
Item 6. Not Applicable.
Item 7. Financial Statements And Exhibits.
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(a) Financial Statements.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
The following document is filed as an Exhibit to this
Report:
99. Press Release, dated July 28, 1999,
reporting the Company's sales and earnings
for fiscal 1999.
Items 8-9. Not Applicable.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
HARRIS CORPORATION
By: /s/ Bryan R. Roub
-------------------------------------
Name: Bryan R. Roub
Title: Senior Vice President &
Chief Financial Officer
Date: July 28, 1999
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EXHIBIT INDEX
Exhibit No.
Under Reg.
S-K, Item 601 Description
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99. Press Release, dated July 28, 1999,
reporting Harris Corporation's sales and
earnings for fiscal 1999.
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NEWS RELEASE
[HARRIS LOGO]
EXHIBIT 99
HARRIS CORPORATION REPORTS LOWER SALES AND EARNINGS
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FOR FISCAL 1999
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MELBOURNE, Florida, July 28, 1999 - Harris Corporation reported lower
earnings for the fourth quarter and the overall fiscal year ended July 2, 1999.
The company reported the results of its commercial and government communications
businesses on a basis consistent with the previously announced repositioning
plans. These announced actions, currently in process, include selling its
semiconductor business and focusing the company's resources on the worldwide
market for voice, data and video communications. In a separate initiative, the
company also announced its intention to spin-off its Lanier office equipment
business as an independent publicly traded company.
Results for the fourth quarter prior to special charges, and including
operating income from discontinued operations, were consistent with
expectations. Discussions in the rest of this release refer to results which
exclude the results of Lanier and Semiconductor which are classified as
discontinued operations. Discontinued operations results for the fourth quarter
include a charge related to disposition of these businesses.
Fourth Quarter Results
- ----------------------
Sales in the company's commercial communications business grew 10
percent from $253 million in 4Q98 to $278 million in 4Q99, reflecting strong
demand for the company's digital high-definition broadcast products and radio
products. Sales in the company's government communications business declined to
$190 million, from $223 million last year.
Income from continuing operations was $3.1 million, or 4 cents per
share, which includes special charges and other items, compared to $6.0 million,
or 8 cents per share in 4Q98.
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Annual Results
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Sales for fiscal 1999 from the company's continuing operations were
$1.7 billion, versus $1.9 billion during the same period last year. Income from
continuing operations was $49.9 million, or 63 cents per share, compared with
$66.4 million or 83 cents per share the previous year.
OUTLOOK
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Commenting on the outlook for the company, Phillip W. Farmer, chairman
and chief executive, said, "Earlier this month, Harris initiated a major
reorganization effort that is changing the company from four independent
business areas into a centralized organization focused on communications
equipment. The reorganization eliminates the company's sector structure and
reduces the amount of support staff required. It is expected to save the company
$30-$40 million annually when fully implemented.
"The reaction to our internal reorganization and our repositioning
effort from our customers, shareholders and employees has been very positive. We
are now taking the many actions necessary to complete the repositioning efforts
and to achieve the growth planned for the new Harris communications company.
"Fiscal 2000 first half financial results for continuing operations are
expected to be below last year's first half, but will improve thereafter as the
benefits of the repositioning efforts are realized, including productivity
improvements from information systems investments and other projects designed to
better serve our markets and customers.
"We believe that repositioning the company to focus on the
communications market continues to provide the strongest opportunity for growth
for our shareholders, customers, and employees," he added.
The spin-off of Lanier and the sale of the semiconductor division are
expected to be complete during the first fiscal quarter of 2000. Financial
information about Lanier, including audited financial statements, is available
in Lanier's Form 10 amendment filed with the SEC today.
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This press release contains forward-looking statements that reflect management's
current expectations, assumptions and estimates of future performance and
economic conditions. Such statements are made in reliance upon the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The company cautions investors that any
forward-looking statements are subject to risks and uncertainties that may cause
actual results and future trends to differ materially from those matters
expressed in or implied by such forward-looking statements. The company's
consolidated results and the forward-looking statements could be affected by
many factors, including general economic conditions in the markets in which the
company operates; economic developments that have a particularly adverse effect
on one or more the of the markets served by the company; the ability to execute
management's repositioning as a pure communications company (including
management's plan to modify its internal structure and divest non-core
businesses); the ability to realize cost savings from the company's internal
reorganization; stability of key markets for communications products,
particularly Asia and Brazil; fluctuation in foreign currency exchange rates and
the effectiveness of the company's currency hedging program; reductions in the
U.S. and worldwide defense and space budgets; effect of continuing consolidation
in the U.S. defense industry on the company's direct and indirect business with
the U.S. government; the company's ability to receive contract awards; continued
development and market acceptance of new products, especially digital television
broadcast products; continued success of the company's patent licensing
programs; the ability of Harris, its customers, and suppliers to become Year
2000 compliant; and the successful resolution of patent infringement and other
general litigation. Other factors that may impact the company's results and
forward-looking statements may be disclosed in the company's filings with the
SEC. Harris disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Attachments
# # #
Media inquiries: Jim Burke at 407-727-9126 or [email protected]
Investor relations inquiries: Pamela Padgett at 407-727-9383
Additional information on Harris is also available on our Internet site:
www.harris.com
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HARRIS CORPORATION
FY'99 YEAR-END AND FOURTH QUARTER SUMMARY
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CONDENSED CONSOLIDATED STATEMENT OF INCOME
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(In millions except per share amounts) Fiscal Year Ended Fourth Quarter Ended
July 2 July 3 July 2 July 3
1999 1998 1999 1998
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REVENUE
Revenue from product sales, rentals, and services $ 1,743.5 $ 1,924.8 $ 468.0 $ 475.6
COSTS AND EXPENSES
Cost of product sales, rentals, and services 1,278.3 1,443.5 351.5 372.2
Engineering, selling and administrative expenses 384.3 420.7 111.7 100.3
Restructuring expenses 5.1 16.1 5.1 16.1
Special charge for litigation costs 20.6 - - -
Interest 9.8 12.5 2.1 2.5
Other-net (32.6) (71.7) (7.2) (24.8)
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1,665.5 1,821.1 463.2 466.3
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Income from continuing operations before income taxes 78.0 103.7 4.8 9.3
Income taxes 28.1 37.3 1.7 3.3
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Income from continuing operations before extraordinary
item 49.9 66.4 3.1 6.0
Discontinued operations net of income taxes 12.4 66.6 (63.4) (29.2)
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Income (loss) before extraordinary item 62.3 133.0 (60.3) (23.2)
Extraordinary loss from early retirement of debt net of
income taxes (9.2) - (9.2) -
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Net income (loss) $ 53.1 $ 133.0 $ (69.5) $ (23.2)
========= ========= ========= =========
NET INCOME (LOSS) PER COMMON SHARE Basic:
Continuing operations before extraordinary item $ 0.63 $ 0.84 $ 0.04 $ 0.08
Discontinued operations 0.16 0.84 (0.80) -
Extraordinary loss (0.12) - (0.12) (0.37)
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$ 0.67 $ 1.68 $ (0.88) $ (0.29)
========= ========= ========= =========
Diluted:
Continuing operations $ 0.63 $ 0.83 $ 0.04 $ 0.08
Discontinued operations 0.16 0.83 (0.80) -
Extraordinary loss (0.12) - (0.12) (0.37)
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$ 0.67 $ 1.66 $ (0.88) $ (0.29)
========= ========= ========= =========
Cash dividends paid per common share
0.96 0.88 0.24 0.22
Average diluted shares outstanding
79.7 80.0 79.4 80.0
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CONDENSED CONSOLIDATED BALANCE SHEET
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(In millions)
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<CAPTION>
July 2 July 3
1999 1998
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<S> <C> <C>
ASSETS
Cash, cash equivalents, and marketable securities $ 101.2 $ 131.5
Receivables 411.7 347.0
Unbilled costs and accrued earnings 184.4 247.0
Inventories 205.7 216.4
Deferred income taxes 128.4 111.3
Plant and equipment 291.6 314.8
Intangibles resulting from acquisitions 72.8 69.8
Net assets of discontinued operations 1,376.0 1,534.5
Other assets 269.6 258.1
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$3,041.4 $3,230.4
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LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term debt $ 324.2 $ 180.0
Payables and accrued expenses 454.2 366.4
Advance payments and unearned income 84.9 102.9
Income taxes 26.8 81.1
Non-current deferred income taxes 47.3 101.6
Long-term debt 514.5 761.0
Shareholders' equity 1,589.5 1,637.4
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$3,041.4 $3,230.4
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HARRIS CORPORATION
FY'99 YEAR END SUMMARY
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<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
July 2, July 3,
1999 1998
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OPERATING ACTIVITIES
Net income $ 49.9 $ 66.4
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 63.5 61.9
Non-current deferred income tax (0.1) 28.5
Extraordinary loss (9.2) -
Income from discontinued operations-net of items
not effecting cash 184.7 246.4
(Increase) decrease in:
Accounts and notes receivable (55.1) (12.6)
Unbilled costs and inventories 87.0 59.9
Increase (decrease) in:
Accounts payables and accrued expenses 88.2 29.7
Advance payments and unearned income (17.9) (43.2)
Income taxes (73.2) (0.7)
Other 15.4 (38.3)
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Net cash provided by operating activities 333.2 398.0
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INVESTING ACTIVITIES
Cash paid for acquired businesses (35.7) -
Additions of plant and equipment (60.4) (88.7)
Net assets of discontinued operations (26.2) (323.3)
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Net cash used in investing activities (122.3) (412.0)
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FINANCING ACTIVITIES
Proceeds from borrowings 9,301.4 5,391.1
Payment of borrowings (9,457.9) (5,332.7)
Proceeds from sale of Common Stock 4.5 12.1
Purchase of Treasury Stock (15.6) -
Cash dividends (76.5) (70.1)
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Net cash (used) and provided by financing activities (244.1) 0.4
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Effect of exchange rate changes on cash and
cash equivalents 2.9 0.4
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Net decrease in cash and cash equivalents (30.3) (13.2)
Cash and cash equivalents at beginning of year 131.5 144.7
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Cash and cash equivalents at end of year $ 101.2 $ 131.5
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HARRIS CORPORATION
FY'99 YEAR END & FOURTH QUARTER SUMMARY
BUSINESS SEGMENT INFORMATION
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(In millions)
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<CAPTION>
Fiscal Year Ended Fourth Quarter Ended
July 2 July 3 July 2 July 3
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
NET SALES
Government $ 813.2 $ 951.1 $ 190.1 $ 222.7
Commercial 930.3 973.7 277.9 252.9
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Total $1,743.5 $1,924.8 $ 468.0 $ 475.6
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OPERATING PROFIT*
Government $ 52.1 $ 43.9 $ (3.6) $ (11.3)
Commercial 34.1 60.0 15.5 4.7
Headquarters (31.0) (59.4) (12.2) (6.4)
Other 32.6 71.7 7.2 24.8
Interest Expense (9.8) (12.5) (2.1) (2.5)
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Total $ 78.0 $ 103.7 $ 4.8 $ 9.3
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* Results include a fourth quarter $5.1 million
restructuring charge in 1999 and a $16.1 million
restructuring charge in 1998. The 1999 restructuring
charge is included in Headquarters expense. In 1998, a
$7.8 million restructuring charge is included in the
Government segment and a $8.3 million restructuring
charge is included in the Commercial segment.
Commercial segment results also include a $20.6 million
special charge for litigation costs in 1999.
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HARRIS CORPORATION
FY'99 BUSINESS SEGMENT INFORMATION BY QUARTER
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(In millions)
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<CAPTION>
Quarters Ended
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October 2 January 1 April 2 July 2 Total
1998 1999 1999 1999 Year
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<S> <C> <C> <C> <C> <C>
Net Sales
Government $ 211.2 $ 189.3 $ 222.6 $ 190.1 $ 813.2
Commercial 201.4 228.2 222.8 277.9 930.3
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Total $ 412.6 $ 417.5 $ 445.4 $ 468.0 $1,743.5
======== ======== ======== ======== ========
Operating Profit
Government $ 14.2 $ 19.8 $ 21.7 $ (3.6) $ 52.1
Commercial (8.6) 14.1 13.1 15.5 34.1
Headquarters (2.7) (12.0) (4.1) (12.2) (31.0)
Other 11.2 5.1 9.1 7.2 32.6
Interest Expense (2.8) 0.2 (5.1) (2.1) (9.8)
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Total $ 11.3 $ 27.2 $ 34.7 $ 4.8 $ 78.0
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