10-K/APeriod: FY2001

L3HARRIS TECHNOLOGIES, INC. /DE/ Annual Report (Amendment), Year Ended Jun 29, 2001

Filed June 4, 2002For Securities:LHX

Summary

This 10-K/A filing from L3HARRIS TECHNOLOGIES, INC. /DE/ (formerly Harris Corporation) for the fiscal year ended June 29, 2001, details the company's strategic repositioning and performance across its five core segments: Government Communications, RF Communications, Microwave Communications, Network Support, and Broadcast Communications. The company experienced revenue growth to $1.96 billion, driven by increases in Government, RF, Microwave, and Broadcast segments, while the Network Support segment saw a decline. However, net income from continuing operations decreased to $21.4 million from $25.0 million in the prior year, partly due to a significant $73.5 million write-off of purchased in-process research and development related to the WavTrace acquisition. Key strategic moves during the fiscal year included acquisitions aimed at strengthening market positions, such as WavTrace for broadband wireless access and Exigent International for government IT services. The company also divested non-core assets, including its interest in GE-Harris Railway Electronics. Despite a challenging economic environment, Harris highlighted its leadership in several key areas and its efforts to balance its portfolio between commercial and government markets.

Key Highlights

  • 1Total revenue increased by 8.2% to $1.96 billion for fiscal year 2001, compared to $1.81 billion in fiscal year 2000.
  • 2Net income from continuing operations decreased to $21.4 million ($0.32 per diluted share) in fiscal year 2001, down from $25.0 million ($0.34 per diluted share) in fiscal year 2000.
  • 3The company made several strategic acquisitions in fiscal year 2001, including WavTrace, Inc. (broadband wireless access) and Exigent International, Inc. (government IT services).
  • 4A significant charge of $73.5 million for purchased in-process research and development was recorded in fiscal year 2001 related to the WavTrace acquisition.
  • 5The Government Communications segment saw revenue grow by 4.0% and income before taxes increase by 22.0%, supported by strong performance on defense contracts.
  • 6The Network Support segment experienced a significant revenue decline of 42.3% in fiscal year 2001, impacted by a slowdown in the DSL services market and the wind-down of exited product lines.
  • 7Harris' U.S. government business remained a substantial portion of total sales, accounting for 41.8% in fiscal year 2001.

Frequently Asked Questions

Revenue growth in fiscal year 2001 was primarily driven by the Government Communications segment (4.0% increase), RF Communications (1.2% increase), Microwave Communications (39.0% increase), and Broadcast Communications (30.7% increase). These increases were partially offset by a significant decline in the Network Support segment (-42.3%).

The acquisition of WavTrace, Inc. in August 2000 contributed to the growth in the Microwave Communications segment. However, it also resulted in a significant one-time charge of $73.5 million for purchased in-process research and development in fiscal year 2001, negatively impacting the segment's profitability and the company's overall net income for the year.

The company continued its repositioning strategy, which included acquisitions of WavTrace and Exigent to strengthen its communications and government services capabilities. These moves, alongside previous divestitures and exits from non-core product lines (like telephone switching and alarm management), aimed to focus the business on key growth areas. While these actions contributed to revenue growth in certain segments, the company faced challenges, such as the decline in the Network Support segment and integration costs, impacting overall profitability.

The U.S. government remains a significant customer, representing 41.8% of total sales from continuing operations in fiscal year 2001. While this provides a stable revenue stream, it also means the company's performance is subject to government appropriations, policy changes, and contract terms, which can include termination for convenience or default.