Summary
This 8-K filing from Harris Corporation reports a significant impairment charge related to its investment in Terion, Inc. The company will record a $19.8 million charge ($12.9 million after-tax, or $0.09 per diluted share) due to the diminished value of its 19.6% stake in Terion. This impairment is a direct result of Terion losing its largest customer, which represented a substantial portion of its installed base. While the impairment itself does not involve future cash expenditures, it highlights a material negative development for Harris's non-operating income and signals potential challenges for its minority investment. Investors should note that this charge will be reflected in the first quarter of fiscal year 2007.
Key Highlights
- 1Harris Corporation will record a $19.8 million impairment charge on its investment in Terion, Inc.
- 2The impairment charge translates to $12.9 million after-tax, impacting earnings by $0.09 per diluted share.
- 3The impairment is driven by Terion losing its largest customer, impacting approximately 60,000 units of its installed base.
- 4Harris holds a 19.6% ownership interest in Terion, with a current carrying value of $23.0 million prior to the impairment.
- 5The impairment charge will be recognized in the first quarter of fiscal year 2007 as 'Non-operating income (loss)'.
- 6These impairment charges are not expected to result in any future cash expenditures for Harris.
- 7Terion is exploring strategic alternatives for its business, which may affect the future value of Harris's investment.