Summary
Harris Corporation, a leading technology innovator, presented its 2016 10-K filing, detailing a robust business structure focused on addressing critical mission challenges for government and commercial customers across over 100 countries. The company operates through four key segments: Communication Systems, Space and Intelligence Systems, Electronic Systems, and Critical Networks. A significant event highlighted was the acquisition of Exelis Inc. in May 2015, which aimed to create greater scale and complementary technologies, with legacy Harris shareholders retaining 84% ownership of the combined entity. The report also detailed divestitures, including the composite aerostructures business and commercial healthcare solutions operation, aligning the company's portfolio with its strategic growth areas. Financially, the company reported revenue of $7.5 billion for fiscal year 2016, a substantial increase driven by the Exelis acquisition. While income from continuing operations saw a modest increase, profitability as a percentage of revenue was impacted by a $367 million non-cash impairment charge related to Harris CapRock Communications and integration costs from the Exelis acquisition. Despite these impacts, Harris maintained a strong operational focus, investing in R&D and optimizing its business portfolio, while also managing its debt and returning capital to shareholders through dividends.
Financial Highlights
53 data points| Revenue | $5.99B |
| Cost of Revenue | $3.83B |
| Gross Profit | $2.16B |
| Operating Expenses | $1.10B |
| Operating Income | $1.05B |
| Interest Expense | $183.00M |
| Net Income | $324.00M |
| EPS (Basic) | $2.61 |
| EPS (Diluted) | $2.59 |
| Shares Outstanding (Basic) | 123.80M |
| Shares Outstanding (Diluted) | 125.00M |
Key Highlights
- 1Harris Corporation completed the transformative acquisition of Exelis Inc. in May 2015, significantly expanding its scale and capabilities across its four business segments: Communication Systems, Space and Intelligence Systems, Electronic Systems, and Critical Networks.
- 2Revenue for fiscal year 2016 reached $7.5 billion, primarily driven by the full-year inclusion of Exelis' operations following the acquisition.
- 3The company reported income from continuing operations of $345 million, with a notable 3% increase over fiscal year 2015, although income from continuing operations as a percentage of revenue decreased to 5% due to integration costs and asset impairments.
- 4A significant non-cash impairment charge of $367 million was recorded in the Critical Networks segment related to Harris CapRock Communications, attributed to the downturn in the energy market.
- 5The company continued its commitment to shareholder returns by increasing its quarterly cash dividend rate for the fifteenth consecutive year.
- 6Harris Corporation's business remains heavily reliant on U.S. Government contracts, representing 76% of revenue in fiscal year 2016, underscoring the importance of government spending priorities and stability.
- 7The company actively manages its financial risk, utilizing hedging strategies for foreign currency exchange rates and managing its debt levels, which stood at $4.5 billion in long-term debt at fiscal year-end 2016.