10-KPeriod: FY2005

L3HARRIS TECHNOLOGIES, INC. /DE/ Annual Report, Year Ended Jul 1, 2005

Filed September 2, 2005For Securities:LHX

Summary

L3Harris Technologies, Inc. (LHX), formerly Harris Corporation, reported a strong fiscal year 2005, with revenue increasing by 19.1% to $3.0 billion and net income from continuing operations growing by 60.9% to $202.2 million. This performance was driven by significant growth in its Government Communications Systems and RF Communications segments, supported by increased U.S. defense spending and modernization efforts. The company also saw improved profitability in its Microwave and Broadcast Communications segments, bolstered by strategic acquisitions of Orkand Corporation and Encoda Systems Holdings, Inc., respectively. Looking ahead, L3Harris announced a definitive agreement to acquire Leitch Technology Corporation for approximately $450 million, further strengthening its Broadcast Communications segment. The company's strategy focuses on continuing profitable revenue growth, leveraging corporate initiatives, making strategic acquisitions, managing costs, and maintaining an efficient capital structure. L3Harris also demonstrated a commitment to shareholder returns, increasing its annual dividend and continuing its share repurchase program.

Key Highlights

  • 1Revenue increased by 19.1% to $3.0 billion in fiscal year 2005.
  • 2Net income from continuing operations grew by 60.9% to $202.2 million.
  • 3Government Communications Systems and RF Communications segments showed significant growth, driven by U.S. government defense spending and modernization.
  • 4Acquisition of Orkand Corporation and Encoda Systems Holdings, Inc. contributed to revenue growth and improved segment profitability.
  • 5Announced definitive agreement to acquire Leitch Technology Corporation for approximately $450 million.
  • 6Increased annual dividend rate and continued share repurchases.
  • 7Strong operating income growth across all four business segments.

Frequently Asked Questions

Revenue growth was primarily driven by increased demand in the Government Communications Systems and RF Communications segments, fueled by U.S. government defense spending and modernization initiatives. The acquisitions of Orkand Corporation and Encoda Systems Holdings, Inc. also contributed significantly to the revenue increase.

The acquisition of Orkand Corporation bolstered the Government Communications Systems segment, while the acquisition of Encoda Systems Holdings, Inc. significantly expanded the Broadcast Communications segment's software offerings and revenue. Both acquisitions contributed positively to revenue growth and improved segment operating income.

The company's strategy centers on continuing profitable revenue growth across all segments, leveraging key corporate initiatives, pursuing strategic acquisitions to enhance product and service offerings, maintaining a focus on cost management, and optimizing its capital structure.

L3Harris increased its annual common stock dividend rate and continued its share repurchase program during fiscal year 2005, reflecting a commitment to returning value to its shareholders.

Key risks include significant dependence on U.S. government revenue, potential impacts from changes in government funding or policy, reliance on fixed-price contracts that carry cost overrun risk, exposure to international operations and currency fluctuations, the need for successful new product development and market acceptance, and the potential impacts of geo-political events.