Harman Reports Lower Sales, Losses In FY, Q4

By Steve Smith -- TWICE, 8/19/2009

Normal 0 false false false MicrosoftInternetExplorer4

Stamford, Conn. - Harman International reported lower sales and net losses in its fiscal year and fourth quarter, ended June 30.

Net sales for the year were $2.9 billion, a decrease of 30 percent compared with the prior year. Net loss for the year was $422.6 million, compared with a net profit of $107.8 million in the prior year.

Net sales for the fourth quarter were $668 million, a 37 percent decrease compared with $1.1 billion for the same period last year. The net loss for the quarter was $62.4 million, compared with a net profit of $31.7 million in the prior year's final quarter.

Consumer net sales in fiscal 2009 were $356.5 million, a decrease of 31 percent - or 28 percent when adjusted for constant currency compared to the prior year.

The operating loss for the year was $50 million, compared with the prior year's loss of $4 million.

Net sales in the fourth quarter were $70 million, a decrease of 37 percent - or 33 percent when adjusted for constant currency compared to the prior year. Lower sales were attributable to the severe economic downturn in the Americas and Europe as well as elimination of the personal navigation device business in the consumer division.

The operating loss during the quarter was $8 million slightly higher than the $6 million loss of the prior year.

In its statement, the company said that during the fiscal fourth quarter, the Harman consumer division made "significant strides in strengthening its brand marketing and channels to market." Harman's JBL brand expanded its retail presence with its co-branded Roxy headphone line in the Target store chain.

Marketing initiatives during the quarter focused on continued expansion of the AKG consumer product line in the U.S., including a retail agreement with Airport Wireless stores. AKG also launched a redesigned Web site, a dedicated shopping portal on Amazon.com, and a social media campaign on networking sites including Facebook and YouTube. Harman's successful partnership with Apple continued to expand with new co-marketing campaigns for iPhone models and Harman headphones in Asia, and AKG headphones featured on Apple's European e-commerce site.

"Despite the continued global economic challenges, I am impressed by the major progress we are seeing in our key operational initiatives," said Dinesh C. Paliwal, Harman's chairman, president and CEO. "The cost savings and operational excellence initiatives that we launched in June 2008 are ahead of target in delivering sustainable benefits. We have successfully delivered without exception on a record number of major automotive projects, despite significant market challenges. Building upon this successful track record, we are now in advanced discussions with key automakers to finalize several significant awards in the near future."