01—Abstract
Summary
Summary of the 10-K filed August 26, 2013. Cited figures are marked; the original filing is the authoritative source.
This 10-K filing for fiscal year 2013 from Harris Corporation (now L3Harris Technologies, Inc.) outlines a year marked by a slight revenue decrease, primarily driven by lower performance in the RF Communications and Integrated Network Solutions segments, while the Government Communications Systems segment remained relatively stable.
The company continued its strategic focus on sustaining core markets, accelerating growth in key areas like public safety and healthcare IT, driving operational excellence through its Harris Business Excellence (HBX) platform, and optimizing capital deployment. Financially, Harris reported a decrease in income from continuing operations and diluted earnings per share compared to the prior year. The company also announced a significant subsequent event: a new $1 billiona share repurchase program and an increase in its quarterly cash dividend, demonstrating a commitment to returning value to shareholders.
Despite challenges such as U.S. government budget uncertainties and global economic weakness, Harris maintained a strong financial position, supported by robust operating cash flow and an available revolving credit facility. The company's outlook indicates continued investment in research and development to drive innovation and maintain a competitive edge in its diverse markets.
02—Key points
Key Highlights
- Harris Corporation's fiscal year 2013 saw a 6.2% decrease in total revenue to $5.11 billion, primarily due to lower sales in RF Communications and Integrated Network Solutions segments.
- Income from continuing operations decreased by 16.9% to $461.9 million, and diluted earnings per share from continuing operations declined by 13.3% to $4.16.
- The company reported net cash provided by operating activities of $833.0 million, indicating strong operational cash generation.
- Harris announced a new $1 billion share repurchase program and increased its quarterly cash dividend from $0.37 to $0.42 per share, signaling confidence and commitment to shareholder returns.
- The majority of revenue (67% in fiscal 2013) was derived from U.S. Government customers, making the company susceptible to government budget fluctuations and policy changes.
- The company continued to invest significantly in research and development, with total R&D expenditures of $979 million in fiscal 2013.
- Harris operated across three main segments: RF Communications, Integrated Network Solutions, and Government Communications Systems, serving both government and commercial markets.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, L3HARRIS Technologies, Inc. kept $0.02.
- Revenue$5.11B100.0%
- Cost of revenue−$3.38B66.2%
- Gross profit$1.73B33.8%
- Operating costs−$1.26B24.7%
- Operating income$466.0M9.1%
- Interest, other & tax−$353.0M6.9%
- Net income$113.0M2.2%
Where FY2013 revenue went
$5.11B- Cost of revenue: $3.38B, 66% of revenue
- Operating costs: $1.26B, 25% of revenue
- Net income: $113.0M, 2.2% of revenue
- Interest, other & tax: $353.0M, 6.9% of revenue
Kept 2.2% as net incomeNet income $113.0M · 2.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed August 26, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $5.11B$5.45B | −6.2% |
| Cost of Revenue | $3.38B$3.57B | −5.2% |
| Gross Profit | $1.73B$1.88B | −8.2% |
| Operating Expenses | $914.00M$940.90M | −2.9% |
| Operating Income | $466.00M$558.70M | −16.6% |
| Interest Expense | $109.00M$113.20M | −3.7% |
| Net Income | $113.00M$30.60M | +269.3% |
| EPS (Basic) | $1.01$0.26 | +288.5% |
| EPS (Diluted) | $1.01$0.26 | +288.5% |
| Shares Outstanding (Basic) | 106.30M112.10M | −5.2% |
| Shares Outstanding (Diluted) | 111.20M114.80M | −3.1% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Harris Corporation's revenue changes in fiscal year 2013?
Harris Corporation experienced a slight overall revenue decrease in fiscal year 2013. This was primarily driven by lower revenues in the RF Communications segment due to decreased tactical communications sales, and in the Integrated Network Solutions segment, mainly from a reduction in IT Services revenue.
How did Harris Corporation's profitability fare in fiscal year 2013?
In fiscal year 2013, Harris Corporation's profitability saw a decline compared to the previous year. Income from continuing operations decreased by 16.9% to $461.9 million, and diluted earnings per share from continuing operations fell by 13.3% to $4.16. This was attributed to lower revenues, a less favorable product mix in some segments, and increased R&D spending.
What is Harris Corporation's strategy for returning capital to shareholders?
Harris Corporation demonstrated a commitment to shareholder returns by announcing a new $1 billion share repurchase program and increasing its quarterly cash dividend rate. This reflects the company's focus on optimizing capital deployment and enhancing shareholder value through share buybacks and dividends.
How dependent is Harris Corporation on U.S. Government contracts?
Harris Corporation is significantly dependent on U.S. Government contracts. In fiscal year 2013, approximately 67% of its total revenue was derived from sales to U.S. Government customers, including the Department of Defense and intelligence and civilian agencies. This reliance makes the company's performance susceptible to U.S. government budget priorities, appropriations, and policy changes.
06—Continue