·      Q2 Net Sales up 12% to $1.8 Billion; Up 19% Excluding Foreign Exchange

·      Q2 Operational EBITDA up 14% to $225 Million; Up 20% Excluding Foreign Exchange

·      Q2 Operational EPS up 3% to $1.84; Up 9% Excluding Foreign Exchange

·      Secured $2 Billion of New Automotive Awards Year-to-Date

·      Expands IoT Solutions through New Partnerships with Google, Microsoft and Under Armour

·      TowerSec Acquisition Strengthens Automotive Cyber Security Leadership


STAMFORD, CT – Harman International Industries, Incorporated (NYSE: HAR), the premier connected technologies company for automotive, consumer and enterprise markets, today announced results for the second quarter ended December 31, 2015.

Net sales for the second quarter were $1.8 billion, an increase of 12 percent compared to the prior year or 19 percent excluding the impact of foreign currency translation (ex-FX). Excluding the impact of acquisitions and foreign currency translation, net sales increased 12 percent compared to the prior year. Connected Car net sales increased two percent (nine percent ex-FX) due to higher take rates, stronger automotive production, and platform expansions. Lifestyle Audio net sales increased 20 percent (26 percent ex-FX) due to new product introductions and expanded global distribution channels in consumer audio, the acquisition of Bang & Olufsen Automotive and higher car audio take rates. Net sales in Professional Solutions decreased seven percent (four percent ex-FX) mainly due to weakness in emerging markets. Connected Services net sales were $170 million compared to $74 million in the prior year, primarily due to the expansion of the Company’s services portfolio as a result of the acquisition of Symphony Teleca (STC). 

Excluding restructuring, non-recurring charges and acquisition-related items, second quarter operating income increased 15 percent to $186 million compared to $162 million in the prior year, and EBITDA increased 14 percent to $225 million compared to $198 million in the prior year. Earnings per diluted share were $1.84 compared to $1.79 in the prior year.

On a GAAP basis, second quarter operating income increased seven percent to $159 million compared to $149 million in the prior year and EBITDA increased 17 percent to $217 million compared to $186 million in the prior year. Earnings per diluted share decreased six percent to $1.55 compared to $1.65 in the prior year, due to higher acquisition-related items, including interest expense and share count. The Company recorded $26 million of restructuring, non-recurring charges and acquisition-related items compared to $14 million in the prior year. The increase was primarily due to non-cash amortization of acquired intangible assets.

“I am pleased to announce our 11th consecutive quarter of top and bottom line growth. Our strong first half results were in-line with our expectations. While we are closely monitoring macroeconomic developments, at this time, we are on track to deliver on our full year plan,” said Dinesh C. Paliwal, the Company’s Chairman, President and CEO. “HARMAN continues to innovate and bring industry-first solutions to market. We are also partnering with key technology leaders such as Google, Microsoft and Under Armour to capitalize on the opportunities presented by IoT for automotive, enterprise and consumer electronics. In addition, our acquisition of TowerSec will strengthen our cybersecurity leadership position for automotive.”

Press Release table Q2 2016



Summary of Operations – Gross Margin and SG&A (Non-GAAP)

Gross margin for the second quarter of fiscal year 2016 increased 60 basis points to 30.8 percent. The improvement was primarily due to the impact of higher sales volume leveraging a more efficient fixed production cost base, as well as the expansion of the Company’s services portfolio.

In the second quarter of fiscal year 2016, SG&A expense as a percentage of net sales increased 30 basis points to 20.3 percent compared to 20.0 percent in the prior year due to investments in research and development.

Investor Call Today January 28, 2016

At 11:00 a.m. EDT today, HARMAN’s management will host an analyst and investor conference call to discuss the second quarter results. Those who wish to participate via audio in the earnings conference call should dial 1 (800) 908-9207 (U.S.) or +1 (212) 231-2932 (International) ten minutes before the call and reference HARMAN, Access Code: 21801416.

In addition, HARMAN invites you to visit the Investors section of its website at: www.harman.com where visitors can sign-up for email alerts and conveniently download copies of historical earnings releases and supporting slide presentations, among other documents. The fiscal second quarter earnings release and supporting materials were posted on the site at approximately 8:00 a.m. EDT today.

A replay of the call will also be available following its completion at approximately 1:00 p.m. EDT. The replay will be available through Friday, April 29, 2016 at 1:00 p.m. EDT. To listen to the replay, dial 1 (800) 633-8284 (U.S.) or +1 (402) 977-9140 (International), Access Code: 21801416. If you need technical assistance, call the toll-free Global Crossing Customer Care Line at 1 (800) 473-0602 (U.S.) or +1 (303) 446-4604 (International).


General Information

HARMAN (harman.com) designs and engineers connected products and solutions for automakers, consumers, and enterprises worldwide, including connected car systems, audio and visual products, enterprise automation solutions; and connected services.  With leading brands including AKG®, Harman Kardon®, Infinity®, JBL®, Lexicon®, Mark Levinson® and Revel®, HARMAN is admired by audiophiles, musicians and the entertainment venues where they perform around the world. More than 25 million automobiles on the road today are equipped with HARMAN audio and connected car systems. The Company’s software services power billions of mobile devices and systems that are connected, integrated and secure across all platforms, from work and home to car and mobile. HARMAN has a workforce of approximately 28,000 people across the Americas, Europe, and Asia and reported sales of $6.5 billion during the 12 months ended December 31, 2015. The Company’s shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.

A reconciliation of the non-GAAP measures included in this press release to the most comparable GAAP measures is provided in the tables contained at the end of this press release. HARMAN does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.


Forward-Looking Information

Except for historical information contained herein, the matters discussed in this earnings presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  One should not place undue reliance on these statements.  The Company bases these statements on particular assumptions that it has made in light of its industry experience, as well as its perception of historical trends, current market conditions, current economic data, expected future developments and other factors that the Company believes are appropriate under the circumstances.  These statements involve risks, uncertainties and assumptions that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to: (1) the Company’s ability to maintain profitability if there are delays in its product launches or increased pricing pressure from its customers; (2) the loss of one or more significant customers, the loss of a significant platform with an automotive customer or the in-sourcing of certain services by the Company’s automotive customers; (3) fluctuations in currency exchange rates, particularly with respect to the value of the U.S. Dollar and the Euro; (4) fluctuations in the price and supply of raw materials including, without limitation, petroleum, copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components; (5) the inability of the Company’s suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; (6) the Company’s ability to maintain a competitive technological advantage through innovation and leading product designs; (7) the Company’s ability to integrate successfully its recently completed and future acquisitions; (8) the Company’s ability to attract and retain qualified senior management and to prepare and implement an appropriate succession plan for its critical organizational positions; (9) the Company’s failure to maintain the value of its brands and implementing a sufficient brand protection program; and (10) other risks detailed in the Harman International Industries, Incorporated Annual Report on Form 10-K for the fiscal year ended June 30, 2015 and other filings made by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement except as required by law.

This earnings release also makes reference to the Company’s awarded business or “backlog”, which represents the estimated future lifetime net sales for all customers. The Company's future awarded business does not represent firm customer orders.  The Company reports its awarded business primarily based on written award letters. To validate these awards, the Company uses various assumptions including global vehicle production forecasts, customer take rates for the Company’s products, revisions to product life cycle estimates and the impact of annual price reductions and exchange rates, among other factors.  These assumptions are updated and reported externally on an annual basis.

*For Full Release and Supporting Slide Deck, select the download option above.