01—Abstract
Summary
Summary of the 10-Q filed May 1, 2013. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (LHX) reported its financial results for the third quarter of fiscal year 2013, ending March 29, 2013.
Total revenue declined by 12.1% year-over-year to $1,203.7 milliona, primarily due to lower sales in the RF Communications and Government Communications Systems segments. Despite the revenue dip, income from continuing operations attributable to common shareholders remained strong at $125.1 million, though it was down 19.4% from the prior year's $155.3 million. Diluted earnings per share from continuing operations were $1.12, compared to $1.38 in the same period last year.
The company completed the sale of its Broadcast Communications business in February 2013, which contributed to a significant decrease in 'discontinued operations' losses. The balance sheet shows a healthy cash position of $459.0 millionb, and the company continues its share repurchase program while also increasing its quarterly dividend.
02—Key points
Key Highlights
- Total revenue decreased 12.1% year-over-year to $1,203.7 million for the third quarter.
- Income from continuing operations attributable to common shareholders was $125.1 million, a decrease of 19.4% compared to the prior year.
- Diluted earnings per share from continuing operations were $1.12, down from $1.38 in the prior year's quarter.
- The company completed the sale of its Broadcast Communications business on February 4, 2013.
- Net cash provided by operating activities increased 6.2% to $513.2 million for the first three quarters of fiscal 2013.
- Cash and cash equivalents stood at $459.0 million as of March 29, 2013, an increase from the previous year-end.
- The company announced a planned restructuring and other actions, including workforce reductions and debt prepayment, expected to incur charges of $65 million to $115 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2014, L3HARRIS Technologies, Inc. kept $0.08.
- Revenue$1.20B100.0%
- Cost of revenue−$803.5M66.8%
- Gross profit$400.2M33.2%
- Operating costs−$4.4M0.4%
- Operating income$395.8M32.9%
- Interest, other & tax−$301.0M25.0%
- Net income$94.8M7.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2014filed May 1, 2013Financial Statements
Q1 FY2014 against Q1 FY2013
| Line item | Q1 FY2014Q1 FY2013 | Change |
|---|---|---|
| Revenue | $1.20B$1.37B | −12.1% |
| Cost of Revenue | $803.50M$879.80M | −8.7% |
| Gross Profit | $400.20M$489.00M | −18.2% |
| Operating Expenses | $202.50M$242.00M | −16.3% |
| Operating Income | $395.80M$422.00M | −6.2% |
| Interest Expense | $27.60M$28.70M | −3.8% |
| Net Income | $94.80M-$353.20M | +126.8% |
| EPS (Basic) | $0.85$-3.15 | +127.0% |
| EPS (Diluted) | $0.85$-3.13 | +127.2% |
| Shares Outstanding (Basic) | 110.60M112.30M | −1.5% |
| Shares Outstanding (Diluted) | 111.20M112.90M | −1.5% |
05—Questions
Frequently Asked Questions
What was the primary driver for the decrease in revenue?
The primary driver for the decrease in revenue was lower sales in the RF Communications segment, particularly in Tactical Communications, and a decline in revenue from U.S. Department of Defense customers in the Government Communications Systems segment. The Integrated Network Solutions segment also saw a decline, mainly in IT Services.
How did the sale of the Broadcast Communications business impact the financial results?
The sale of the Broadcast Communications business on February 4, 2013, significantly reduced the reported losses from discontinued operations. The company recorded a loss on the sale of $23.6 million in the third quarter of fiscal 2013.
What is the company's liquidity position?
L3Harris maintained a strong liquidity position, with cash and cash equivalents of $459.0 million as of March 29, 2013. The company also has a $1 billion revolving credit facility, with approximately $600 million available at the end of the quarter, and expects sufficient resources to meet its obligations for the next 12 months and beyond.
What are the anticipated charges related to the announced restructuring?
The company announced plans for company-wide restructuring and other actions, including workforce reductions and facility consolidation, expected to incur estimated pre-tax charges of $65 million to $115 million. These charges are anticipated to be recognized primarily in the fourth quarter of fiscal 2013.
06—Continue