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Harman Reports Lower Q1 Sales

Stamford, Conn. – Harman International reported lower
net sales and a net loss of $9 million in its fiscal first quarter ended Sept.

Harman reported sales of $757 million during the quarter, down 13
percent including currency charges an 10 percent excluding them. The prior
year’s sales were $869 million in the opening quarter. However compared with
the fiscal fourth quarter of last year sales are up 13 percent.

The quarterly net loss of $9 million is in comparison to a $21
million profit in the first fiscal quarter of last year.

Dinesh C. Paliwal, chairman, president and CEO said in a prepared
statement, “Our key markets are stabilizing, we are gaining market share, and
we posted double-digit sequential sales growth for the quarter – aided in part
by various stimulus programs. Despite the continued global economic challenges,
I am pleased with the major progress we have made in lowering our cost base
while investing heavily in innovation. The $400 million cost savings and
operational excellence initiatives that we launched in June 2008 are ahead of
target in delivering sustainable benefits.”

Consumer net sales for the quarter ended were $84 million, a
decrease of 17 percent or 16 percent when adjusted for constant currency
compared to the prior year. Sequentially, sales were up 20 percent compared to
the previous quarter.  There was an
operating loss in the quarter of $1 million compared with an operating profit
of $1 million in the prior year.

Harman’s consumer division launched a new dealer-focused strategy
at IFA Berlin 2009, and received more than $30 million in orders at this event,
the company reported. “Our improved focus on new product introductions and
targeted marketing is paying off with new wins for the Consumer Division that
will improve both its performance and overall brand penetration across our
businesses,” said Paliwal.