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Harman Reorganizes, Post FY, Q4 Results

8/10/2011 10:24:46 AM Eastern

Stamford,
Conn. - Harman has reorganized its automotive and consumer divisions to create
two new divisions, lifestyle and infotainment, and released its fourth quarter
and fiscal year financial results.

Harman
decided to reorganize its automotive and consumer divisions into lifestyle and infotainment
divisions because, according to Dinesh Paliwal, chairman, president and CEO, "Consumers
want simplicity, seamless portability and sound integration that fits their
lifestyle. There is a clear convergence happening among consumer devices in the
home, office, car and everywhere in between. Consumers no longer view these
locations and personal mobile devices as separate domains, but as one,
continuous ecosystem where the delivery of information and entertainment should
flow seamlessly between them, anytime, anywhere, anyplace."

He
added, "Harman is in a unique position to tie these technologies together and
deliver products that provide the seamless digital ecosystem consumers are
demanding."

Paliwal
noted that in recent years, "We have eliminated over $400 million of
unnecessary costs, optimized our global footprint, and positioned our business
for growth. It is now time to align our company to best address a future that
will be driven by advanced technologies in content creation, aggregation,
distribution, and seamless delivery and connectivity among multiple devices."

Harman
believes that it will create additional growth by combining the infrastructure
and capabilities of its luxury home audio business with its market-leading position
in branded car audio systems, which are featured in the premium vehicle
segments of: BMW, Chrysler, Ferrari, Fiat, GM, Harley-Davidson, Hyundai,
Jaguar, Land Rover, Lexus, Mercedes Benz, Rolls Royce, Subaru and Toyota.

To
increase automotive audio take rates and lifestyle product sales, the company
will launch a new, integrated marketing campaign intended to create synergy
between its automotive and consumer products and brands, featuring global
celebrity artists using Harman products. More details on the campaign and the
artists involved will be presented at the IFA show in Berlin, Germany, in early
September.

Harman's
new infotainment division encompasses technology solutions for navigation,
hands-free telephony, Internet and wireless connectivity, and a myriad of
in-vehicle safety systems including camera, infrared and laser technologies.

This
stand-alone division, with revenues of approximately $2.1 billion, the company
said, will benefit from a focused management structure that will further improve
operating profitability.

On
the financial side net sales
for the fiscal year were $3.8 billion, an increase of 12 percent compared to
the prior year. Net income for the year was $135.9 million, down from the prior
year's $164.1 million.

Net sales for the
fiscal fourth quarter, ended June 30, was $1.03 billion, up from $850.7 million
in the prior year. Net income for the quarter from continuing operations was
$18.9 million compared with $18.4 million in the prior year.

In the consumer division
net sales in fiscal 2011 were $420 million, an increase of 13 percent. Operating
income was $7 million, a $4 million increase over the prior year. Net sales in
the fourth quarter were $100 million, an increase of 24 percent. Operating loss
in the fourth quarter was $5 million compared with an operating loss of $7
million in the prior year.

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