Summary
Harris Corporation's 2015 10-K filing reveals a pivotal year marked by the transformative acquisition of Exelis Inc., significantly expanding the company's scale and technological capabilities in the aerospace and defense sectors. This strategic move, completed in May 2015, was financed through a substantial mix of debt and equity, impacting the company's financial structure. While overall revenue saw a modest increase driven by the Exelis integration, income from continuing operations experienced a notable decline, primarily due to significant acquisition-related charges, including financing, integration, and restructuring costs. The company's core segments, RF Communications and Government Communications Systems, showed resilience, with RF Communications benefiting from international tactical communications demand and Government Communications Systems seeing growth driven by key programs like FGCM and NextGen initiatives. However, the Integrated Network Solutions segment faced challenges with a decrease in revenue and operating income, partly due to the divestiture of its commercial healthcare business. Looking ahead, Harris is focused on integrating Exelis, realizing synergy savings, and navigating a constrained U.S. government budget environment while continuing to invest in innovation and technology leadership.
Financial Highlights
53 data points| Revenue | $3.88B |
| Cost of Revenue | $2.37B |
| Gross Profit | $1.51B |
| Operating Expenses | $883.00M |
| Operating Income | $334.00M |
| Interest Expense | $130.00M |
| Net Income | $334.00M |
| EPS (Basic) | $3.15 |
| EPS (Diluted) | $3.11 |
| Shares Outstanding (Basic) | 105.70M |
| Shares Outstanding (Diluted) | 106.80M |
Key Highlights
- 1Completed the significant acquisition of Exelis Inc. for approximately $4.7 billion in May 2015, creating a larger, more diversified aerospace and defense company.
- 2Revenue increased by 1.4% to $5.1 billion, primarily driven by the inclusion of Exelis's results for the final month of the fiscal year.
- 3Income from continuing operations decreased by 38.1% to $334 million, largely impacted by $217 million in after-tax charges related to the Exelis acquisition (financing, integration, restructuring costs).
- 4The RF Communications segment revenue decreased slightly by 2.9% to $1.775 billion, with tactical communications revenue up 1% offset by a 12% decline in public safety communications.
- 5The Government Communications Systems segment saw a 3.0% revenue increase to $1.855 billion, supported by strong performance in key programs.
- 6The Integrated Network Solutions segment experienced a significant revenue decline of 14.4% to $1.253 billion, partly due to the divestiture of its commercial healthcare solutions business.
- 7Ended the fiscal year with a substantial funded backlog of $12.2 billion, indicating strong future revenue potential.