10-QPeriod: Q1 FY2014

L3HARRIS TECHNOLOGIES, INC. /DE/ Quarterly Report for Q1 Ended Mar 29, 2013

Filed May 1, 2013For Securities:LHX

Summary

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 million, 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 million, and the company continues its share repurchase program while also increasing its quarterly dividend.

Financial Highlights

52 data points
Beta

Revenue

$1.20B

33.2% Gross Margin

Net Income

$94.80M

7.9% Net Margin

EPS (Diluted)

$0.85

Total Assets

$5.08B

Cash & Equivalents

$459.00M

Free Cash Flow

$388.30M

Financial Statements
Beta
Revenue$1.20B
Cost of Revenue$803.50M
Gross Profit$400.20M
Operating Expenses$202.50M
Operating Income$395.80M
Interest Expense$27.60M
Net Income$94.80M
EPS (Basic)$0.85
EPS (Diluted)$0.85
Shares Outstanding (Basic)110.60M
Shares Outstanding (Diluted)111.20M

Key Highlights

  • 1Total revenue decreased 12.1% year-over-year to $1,203.7 million for the third quarter.
  • 2Income from continuing operations attributable to common shareholders was $125.1 million, a decrease of 19.4% compared to the prior year.
  • 3Diluted earnings per share from continuing operations were $1.12, down from $1.38 in the prior year's quarter.
  • 4The company completed the sale of its Broadcast Communications business on February 4, 2013.
  • 5Net cash provided by operating activities increased 6.2% to $513.2 million for the first three quarters of fiscal 2013.
  • 6Cash and cash equivalents stood at $459.0 million as of March 29, 2013, an increase from the previous year-end.
  • 7The company announced a planned restructuring and other actions, including workforce reductions and debt prepayment, expected to incur charges of $65 million to $115 million.

Frequently Asked Questions

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.

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.

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.

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.