01—Abstract
Summary
Summary of the 10-K filed August 26, 2008. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (formerly Harris Corporation) reported a solid fiscal year ended June 27, 2008, with total revenue reaching $5.31 billiona, a 25.2% increase year-over-year.
This growth was driven by strong performance across all four segments, particularly in Defense Communications and Electronics and Government Communications Systems, bolstered by acquisitions and organic demand. Despite revenue growth, net income saw a slight decrease to $444.2 millionb from $480.4 million in the prior year, primarily due to a significant gain from a business combination in the prior year, partially offset by increased operating expenses and integration costs. The company continues to invest heavily in research and development to maintain its technological edge and expects continued revenue growth in fiscal year 2009.
02—Key points
Key Highlights
- Total revenue increased by 25.2% to $5.31 billion, driven by strong performance in all four business segments.
- Net income decreased by 7.5% to $444.2 million, mainly due to a large gain from a business combination in the prior fiscal year.
- The Defense Communications and Electronics segment saw revenue grow by 18.9% and operating income by 23.1%, driven by demand for tactical radios like the Falcon III.
- Government Communications Systems revenue grew by 32.2%, supported by the acquisition of Multimax and strong performance in civil and intelligence programs.
- Harris Stratex Networks segment revenue increased by 41.4%, though it reported an operating loss of $28.5 million due to integration costs and accounting adjustments.
- The company repurchased approximately $225 million of its common stock during fiscal year 2008 and announced an increase in its quarterly dividend.
- Research and development expenditures increased to $1.007 billion, reflecting continued investment in new technologies.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, L3HARRIS Technologies, Inc. kept $0.10.
- Revenue$4.60B100.0%
- Cost of revenue−$3.15B68.4%
- Gross profit$1.45B31.6%
- Operating costs−$997.0M21.7%
- Operating income$453.5M9.9%
- Interest, other & tax−$9.3M0.2%
- Net income$444.2M9.7%
Where FY2008 revenue went
$4.60B- Cost of revenue: $3.15B, 68% of revenue
- Operating costs: $997.0M, 22% of revenue
- Net income: $444.2M, 9.7% of revenue
Kept 9.7% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2008filed August 26, 2008Financial Statements
| Revenue | $4.60B |
| Cost of Revenue | $3.15B |
| Gross Profit | $1.45B |
| Operating Expenses | $746.50M |
| Operating Income | $453.50M |
| Interest Expense | $53.10M |
| Net Income | $444.20M |
| EPS (Basic) | $3.29 |
| EPS (Diluted) | $3.24 |
| Shares Outstanding (Diluted) | 136.20M |
05—Questions
Frequently Asked Questions
What were the key drivers of revenue growth in fiscal year 2008?
Revenue growth was primarily driven by strong demand across all segments, particularly in Defense Communications and Electronics due to modernization programs for tactical radios, and in Government Communications Systems, boosted by the acquisition of Multimax and increased demand in civil and intelligence programs. International markets also contributed significantly to the growth across various segments.
Why did net income decrease despite revenue growth?
The decrease in net income was mainly due to a significant one-time gain of $143.1 million after-tax recorded in fiscal year 2007 related to the combination with Stratex Networks. Operating expenses also increased in fiscal 2008 due to integration costs associated with acquisitions and higher R&D spending.
What is the company's strategy for future growth?
L3Harris Technologies' strategy focuses on continuing profitable revenue growth in all segments by introducing new technology-based products, expanding into new markets, improving operating efficiencies and cost reductions, making strategic acquisitions, and maintaining an efficient capital structure. Significant investment in R&D for products like the Falcon III radio is a key part of this strategy.
What is the company's exposure to government contracts?
The company is highly dependent on U.S. Government contracts, which accounted for approximately 68% of total revenue in fiscal 2008. While this provides a stable revenue base, it also exposes the company to risks related to government funding, program cancellations, and regulatory changes.
06—Continue