What were the primary drivers of Harris Corporation's revenue growth in fiscal year 2004?

The primary drivers of Harris Corporation's revenue growth in fiscal year 2004 were strong demand from the U.S. Government, particularly in defense and intelligence sectors, and increased international sales of tactical radio systems. The Government Communications Systems and RF Communications segments saw significant increases due to these factors.

How did Harris Corporation manage its expenses, and what was the impact on profitability?

Harris Corporation focused on cost management, leading to a decrease in Engineering, Selling, and Administrative expenses as a percentage of revenue from 20.1% to 16.7%. This improved efficiency, combined with strong revenue growth, significantly boosted profitability, with net income from continuing operations increasing by 78.8%.

What is the significance of the acquisition of The Orkand Corporation?

The acquisition of The Orkand Corporation for $66 million in cash shortly after fiscal year-end is significant as it bolsters Harris Corporation's capabilities in technical services and information technology for U.S. Government agencies. This acquisition is expected to be accretive to earnings and adds scale to its mission-critical services business.

How does the company manage risks related to U.S. Government contracts?

Harris Corporation acknowledges the significant reliance on U.S. Government contracts, which are subject to Congressional appropriations, potential termination, and extensive regulation. The company mitigates these risks through diversification of its customer base and programs, and by adhering to stringent compliance with procurement regulations. However, the report notes that disruptions or shifts in U.S. Government funding could still adversely impact the business.

LHX 10-K FY2004 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed September 1, 2004. Cited figures are marked; the original filing is the authoritative source.

L3Harris Technologies, Inc. (formerly Harris Corporation) reported a strong fiscal year ended July 2, 2004, with revenues increasing by 22.2% to $2.52 billion^a.

This growth was primarily driven by robust performance in its Government Communications Systems and RF Communications segments, which benefited from increased defense spending and ongoing global security initiatives. Net income from continuing operations saw a significant surge of 78.8%, reaching $125.7 million^b, or $1.88 per diluted share, up from $70.3 million, or $1.06 per diluted share, in the prior year. The company also demonstrated improved operational efficiency, with Engineering, Selling, and Administrative expenses decreasing as a percentage of revenue.

L3Harris continues to invest in product development and strategic acquisitions, as evidenced by the acquisition of The Orkand Corporation, enhancing its service capabilities in the government sector. The company also returned capital to shareholders through dividends and share repurchases, signaling confidence in its future performance.

02—Key points

Key Highlights

Revenue increased by 22.2% to $2.52 billion, driven by strong performance in Government Communications Systems and RF Communications.
Net income from continuing operations grew by 78.8% to $125.7 million ($1.88 per diluted share), showcasing improved profitability.
Engineering, Selling, and Administrative expenses as a percentage of revenue decreased from 20.1% to 16.7%, indicating enhanced operational efficiency.
The company acquired The Orkand Corporation for $66 million, strengthening its technical services and IT capabilities for government agencies.
Strong demand for tactical radios and government communication systems fueled growth in the RF Communications and Government Communications Systems segments.
The company continued its commitment to shareholder returns with an increase in its quarterly dividend and ongoing share repurchases.
The sale of the Tools and Test Systems (TTS) product line resulted in an $18.9 million pre-tax gain, reported as a discontinued operation.

03—Questions

Frequently Asked Questions

What were the primary drivers of Harris Corporation's revenue growth in fiscal year 2004?
The primary drivers of Harris Corporation's revenue growth in fiscal year 2004 were strong demand from the U.S. Government, particularly in defense and intelligence sectors, and increased international sales of tactical radio systems. The Government Communications Systems and RF Communications segments saw significant increases due to these factors.
How did Harris Corporation manage its expenses, and what was the impact on profitability?
Harris Corporation focused on cost management, leading to a decrease in Engineering, Selling, and Administrative expenses as a percentage of revenue from 20.1% to 16.7%. This improved efficiency, combined with strong revenue growth, significantly boosted profitability, with net income from continuing operations increasing by 78.8%.
What is the significance of the acquisition of The Orkand Corporation?
The acquisition of The Orkand Corporation for $66 million in cash shortly after fiscal year-end is significant as it bolsters Harris Corporation's capabilities in technical services and information technology for U.S. Government agencies. This acquisition is expected to be accretive to earnings and adds scale to its mission-critical services business.
How does the company manage risks related to U.S. Government contracts?
Harris Corporation acknowledges the significant reliance on U.S. Government contracts, which are subject to Congressional appropriations, potential termination, and extensive regulation. The company mitigates these risks through diversification of its customer base and programs, and by adhering to stringent compliance with procurement regulations. However, the report notes that disruptions or shifts in U.S. Government funding could still adversely impact the business.

04—Continue

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