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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 26, 1999
Harman International Industries, Incorporated
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-9764 11-2534306
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(Commission File Number) (IRS Employer Identification No.)
1101 Pennsylvania Avenue, N.W., Ste. 1010, Washington, D.C. 20004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (202) 393-1101
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On January 26, 1999, Harman International Industries, Incorporated
("Harman") issued a press release announcing earnings for the three and
six months ending December 31, 1998, including a restructuring charge,
other information concerning these periods, and a future outlook. The press
release is filed as part of this Current Report on Form 8-K.
Item 7c. Exhibits
Exhibit Description
20.1 Press release announcing second quarter and
first half results, including special charges,
and other information concerning these periods
and future periods.
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, competitive products and other risks detailed in the Company's
other Securities and Exchange Commission filings.
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Signatures
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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.
HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
By: /s/ Frank Meredith
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Frank Meredith
Vice President of Finance and
Administration and Chief
Financial Officer
Date: January 26, 1999
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EXHIBIT INDEX
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Exhibit No. Description Page
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20.1 Press Release 5-8
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EXHIBIT 20.1
January 26, 1999 FOR IMMEDIATE RELEASE
HARMAN INTERNATIONAL INDUSTRIES, INC.
ANNOUNCES SECOND QUARTER AND FIRST HALF RESULTS,
INCLUDING A RESTRUCTURING CHARGE.
THE COMPANY FORECASTS EARNINGS FOR THE NEXT 18 MONTHS
Washington, DC -- Harman International Industries, Inc. (HAR:NYSE)
today announced its financial results for the second quarter and first six
months of its fiscal 1999 year. For the second quarter, sales were
$387.5 million, approximately 4% below last year's sales of $403.0
million. The Company reported a pretax loss of $44.3 million for the
quarter after a pretax charge of $66.4 million for plant closures ($17.0
million), impaired assets ($20.0 million), inventory write-down ($24.3
million) and other items ($5.1 million). Net income for the quarter
before the charge was $15.3 million, equal to $0.86 per share. The loss
for the quarter after the charge was $1.73 per share.
Cash expense associated with the charge is estimated at $15 million and
non-cash charges total approximately $51 million. The restructuring
plan is expected to result in annual pretax savings of approximately $24
million.
For the first half, sales were $703.4 million, approximately 4% below
last year's sales of $732.2 million. The company reported a pretax loss
of $32.0 million after the pretax charge of $66.4 million identified
above. Net income for the half before the charge was $23.8 million,
equal to $1.32 basic and $1.30 diluted, per share. After the charge, the
Company reports a net loss per share for the six months of $1.22.
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Harman International Industries, Inc.
January 26, 1999
Page -2-
The Consumer Group reported lower sales driven by the declines in
Asia and a generally soft consumer electronics market worldwide.
Consumer sales were also affected by the restructuring program now in
progress. The operating profit at the Consumer Group was virtually
breakeven before the charge.
The Professional Group reported modestly lower sales, due primarily to
a decline in sales to Asia and to the timing of certain contracts. OEM
sales increased over the prior year, primarily due to strong sales to
Chrysler including systems for the new Jeep Cherokee, Dodge Durango
and the Chrysler LHS and 300M.
Commenting on the results, Dr. Sidney Harman, Chairman, stated:
"During the past year, we began formulating a thorough
restructuring program designed to improve the profitability of
the Consumer Group and other operations which did not meet
our financial expectations. We determined that when a
complete and fully tested operational program was in place, the
financial restructuring would follow. The operational plan was
completed and the financial restructuring charge was taken in the
second quarter of fiscal 1999."
Bernard Girod, Chief Executive Officer, said:
"We are confident that the Company will return to strong
earnings performance once the restructuring program has been
fully implemented. A substantial part of the work will be
completed by the end of our third fiscal quarter. We expect
strong earnings performance beginning with the fourth fiscal
quarter of this year. Because of the complexity of this material
and the potential for confusion, we have elected to provide a
specific earnings forecast for the next 18 months.
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Harman International Industries, Inc.
January 26, 1999
Page -3-
Although the Company does not usually forecast, nor will it in
the future, the extraordinary circumstances surrounding the
restructuring program prompt us to do so now."
"In the third fiscal quarter ending March 31, 1999, we expect to
report earnings of $0.70 a share. In the fourth quarter, earnings
will reach $1.15 per share. In fiscal 2000, the Company expects
to earn $4.00 per share. Thereafter, we expect to report earnings
increases of 15% to 20% annually. We are confident that the
many and substantial opportunities we have been nurturing in
the past few years in the automotive OEM field will come to
fruition, that our Professional Group will perform effectively,
and that the Consumer Group will have been successfully
restructured and will contribute positively to earnings."
Harman International Industries, Incorporated (www.harman.com) is a
leader in the design, manufacture and marketing of high-quality, high-
fidelity audio products targeted primarily at the OEM, 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 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, competitive products and other risks detailed in the
Company's Securities and Exchange Commission filings.
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HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
FISCAL 1999 RESULTS
FOR THE THREE AND SIX MONTHS ENDED December 31, 1998
(000s omitted except per share amounts)
Three Months Ended Six Months Ended
December 31, December 31,
1998 1998
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Net sales $ 387,518 $ 703,414
Cost of sales 303,071 535,232
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Gross profit 84,447 168,182
S,G &A 84,750 150,156
Plant closures, severance 17,010 17,010
Asset impairment 20,054 20,054
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Operating income (37,367) (19,038)
Other expense (income):
Interest expense 6,054 11,987
Miscellaneous, net 872 962
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Income before income taxes (44,293) (31,987)
Income tax benefit (13,731) (9,916)
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Net income $ (30,562) $ (22,071)
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Basic EPS $ (1.73) $ (1.22)
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Diluted EPS $ (1.73) $ (1.22)
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Shares - basic 17,701 18,076
Shares - diluted 17,701 18,076
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