HSTX Financial Tables for Q1 FY09.
Table 1
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2009 First Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended
September 26, September 28,
2008 2007
(Restated)
(In millions, except per
share amounts)
Revenue from product sales and services $195.8 $172.3
Cost of product sales and services (135.8) (123.5)
Amortization of purchased technology (1.8) (1.8)
Gross margin 58.2 47.0
Research and development expenses (10.2) (12.4)
Selling and administrative expenses (36.5) (28.8)
Amortization of intangible assets (1.4) (1.8)
Restructuring charges (3.3) (4.0)
Operating income 6.8 --
Interest income 0.4 0.7
Interest expense (0.7) (0.7)
Income before income taxes 6.5 --
Provision for income taxes (0.9) (0.2)
Net income (loss) $5.6 $(0.2)
Net income (loss) per common share
of Class A and Class B common stock
(Notes 1 and 2):
Basic $0.10 $(0.00)
Diluted $0.09 $(0.00)
Basic weighted average shares outstanding 58.4 58.5
Diluted weighted average shares outstanding 58.5 58.4
(1) The net income (loss) per common share amounts are the same for
Class A and Class B because the holders of each class are legally
entitled to equal per share distributions whether through
dividends or in liquidation.
(2) For the quarter ended September 26, 2008, the calculation of
diluted earnings per share includes a potential deduction to net
income of $0.2 million for the assumed after-tax effect of the
change in fair value of warrants using the "treasury stock"
method.
Table 2
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2009 First Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 26, June 27,
2008 2008(1)
(In millions)
Assets
Cash and cash equivalents $94.4 $95.0
Short-term investments 2.5 3.1
Receivables 195.1 199.7
Inventories and unbilled costs 144.2 130.6
Current deferred taxes 12.0 12.6
Other current assets 19.8 19.1
Property, plant and equipment 74.6 75.6
Goodwill 282.9 284.2
Identifiable intangible assets 126.7 130.1
Non-current deferred taxes 15.6 13.7
Other assets 13.6 13.6
$981.4 $977.3
Liabilities and Shareholders' Equity
Short-term debt $10.0 $--
Current portion of long-term debt -- 5.0
Accounts payable 76.6 81.1
Accrued expenses and other current liabilities 106.2 96.8
Due to Harris Corporation 13.6 19.4
Long-term debt -- 3.8
Restructuring and other long-term liabilities 6.2 7.4
Warrants outstanding 0.3 0.6
Redeemable preference shares 8.3 8.3
Non-current deferred taxes and
reserve for uncertain tax positions 8.2 6.7
Shareholders' equity 752.0 748.2
$981.4 $977.3
(1) Derived from audited financial statements.
Table 3
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2009 First Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Quarter Ended
September 26, September 28,
2008 2007
(Restated)
(In millions)
Operating Activities
Net income (loss) $5.6 $(0.2)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Amortization of identifiable intangible assets 3.4 3.6
Depreciation and amortization of property,
plant and equipment and capitalized software 5.6 5.3
Non-cash share-based compensation expense 1.0 2.0
Decrease in fair value of warrants (0.3) (0.5)
Deferred income tax (benefit) expense (0.7) 0.2
Changes in operating assets and liabilities:
Receivables 5.5 (13.2)
Unbilled costs and inventories (13.6) (9.0)
Accounts payable and accrued expenses 4.3 8.6
Advance payments and unearned income 1.0 --
Due to Harris Corporation (5.8) 3.0
Restructuring liabilities and other (2.1) 2.3
Net cash provided by operating activities 3.9 2.1
Investing Activities
Purchases of short-term investments and
available for sale securities (1.2) (4.0)
Sales and maturities of short-term investments
and available for sale securities 1.8 9.3
Additions of property, plant and equipment (4.4) (2.1)
Additions of capitalized software (1.0) (4.2)
Net cash used in investing activities (4.8) (1.0)
Financing Activities
Increase (decrease) in short-term debt 10.0 (1.2)
Payments on long-term debt (8.8) (2.8)
Payments on long-term capital lease obligation
to Harris Corporation -- (2.0)
Proceeds from exercise of former Stratex stock
options -- 0.9
Net cash provided by (used in) financing activities 1.2 (5.1)
Effect of exchange rate changes on
cash and cash equivalents (0.9) (1.0)
Net decrease in cash and cash equivalents (0.6) (5.0)
Cash and cash equivalents, beginning of year 95.0 69.2
Cash and cash equivalents, end of quarter $94.4 $64.2
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2009 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE
To supplement our consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (GAAP), we provide additional measures of revenue, gross margin, operating income (loss), non-operating income (loss), cost of product sales and services, research and development expenses, selling and administrative expenses, income (loss) before income taxes, income taxes, net income (loss), and net income (loss) per basic and diluted share adjusted to exclude certain costs, expenses, gains and losses, including such amounts related to our merger with Stratex. Management of Harris Stratex Networks, Inc. (the "Company" or "Harris Stratex") believes that these non-GAAP financial measures provide information that is useful to investors in understanding period-over- period operating results separate and apart from items that may, or could, have a disproportionate positive or negative impact on results in any particular period. Management also believes these non-GAAP measures enhance the ability of an investor to analyze trends in Harris Stratex business and better understand our performance. In addition, the Company may utilize non- GAAP financial measures as a guide in its budgeting and long-term planning process and to measure operating performance for some management compensation purposes. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. A reconciliation of these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP follows.
Table 4
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2009 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended
September 26, 2008
As Non-GAAP % of
Reported Adjustments Non-GAAP Revenue
(In millions, except per share amounts)
Revenue from product sales
and services $195.8 $-- $195.8
Cost of product sales
and services (A) (135.8) 0.4 (135.4)
Amortization of purchased
technology (B) (1.8) 1.8 --
Gross margin. 58.2 2.2 60.4 30.8%
Research and development
expenses © (10.2) 0.2 (10.0) 5.1%
Selling and administrative
expenses (D) (36.5) 1.1 (35.4) 18.1%
Amortization of intangible
assets (E) (1.4) 1.4 --
Restructuring charges (F) (3.3) 3.3 --
Operating income 6.8 8.2 15.0 7.7%
Interest income 0.4 -- 0.4
Interest expense (0.7) -- (0.7)
Income before income taxes 6.5 8.2 14.7 tax rate
Provision for income taxes (G) (0.9) (2.6) (3.5) 24%
Net income (loss) $5.6 $5.6 $11.2
Net income (loss) per common
share of Class A and Class B
common stock (Notes 1 and 2):
Basic $0.10 $0.19
Diluted $0.09 $0.19
Basic weighted average
shares outstanding 58.5 58.5
Diluted weighted average
shares outstanding 58.5 58.5
Table 4
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2009 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended
September 28, 2007
As Non-GAAP Non-GAAP % of
Restated Adjustments (Restated) Revenue
(In millions, except per share amounts)
Revenue from product sales
and services $172.3 $-- $172.3
Cost of product sales
and services (A) (123.5) 1.0 (122.5)
Amortization of purchased
technology (B) (1.8) 1.8 --
Gross margin. 47.0 2.8 49.8 28.9%
Research and development
expenses © (12.4) 0.5 (11.9) 6.9%
Selling and administrative
expenses (D) (28.8) 5.2 (23.6) 13.7%
Amortization of intangible
assets (E) (1.8) 1.8 --
Restructuring charges (F) (4.0) 4.0 --
Operating income -- 14.3 14.3 8.3%
Interest income 0.7 -- 0.7
Interest expense (0.7) -- (0.7)
Income before income taxes -- 14.3 14.3 tax rate
Provision for income taxes (G) (0.2) (3.5) (3.7) 26%
Net income (loss) $(0.2) $10.8 $10.6
Net income (loss) per common
share of Class A and Class B
common stock (Notes 1 and 2):
Basic $(0.00) $0.18
Diluted $(0.00) $0.18
Basic weighted average
shares outstanding 58.4 58.4
Diluted weighted average
shares outstanding 58.4 58.4
(1) The net income (loss) per common share amounts are the same for Class
A and Class B because the holders of each class are legally entitled
to equal per share distributions whether through dividends or in
liquidation.
(2) For the quarter ended September 26, 2008, the calculation of diluted
earnings per share includes a potential deduction to net income of
$0.2 million for the assumed after-tax effect of the change in fair
value of warrants using the "treasury stock" method.
Notes to table 4:
Note A - Cost of sales and services - Includes adjustment to cost of product sales and services for the first quarter of fiscal 2009 to remove purchase accounting adjustments for the amortization of the step-up in the value of fixed assets ($0.2 million) and adjustment to remove FAS 123R expense ($0.2 million).
For the first quarter of fiscal 2008, includes adjustment to cost of product sales and services to remove purchase accounting adjustments for the amortization of the step-up in the value of fixed assets ($0.2 million), adjustment to remove integration costs ($0.6 million) and adjustment to remove FAS 123R expense ($0.2 million).
Note B - Amortization of purchased technology - Adjustment for the first quarters of fiscal 2009 and 2008 to remove amortization of purchased intangibles incurred in connection with the merger.
Note C - Research and development expenses - Adjustment for the first quarter of fiscal 2009 to remove FAS 123R expense of $0.2 million.
For the first quarter of fiscal 2008, adjustment to remove FAS 123R expense of $0.5 million.
Note D - Selling and administrative expenses - Includes adjustment for the first quarter of fiscal 2009 to remove purchase accounting adjustments related to the amortization of the step-up in the value of fixed assets ($0.4 million) and FAS 123R expense ($0.7 million).
For the first quarter of fiscal 2008, includes adjustment to remove purchase accounting adjustments related to the amortization of the step-up in the value of fixed assets ($0.5 million), integration costs and lease impairment costs ($3.0 million) and FAS 123R expense ($1.7 million).
Note E - Amortization of intangible assets - Adjustment for the first quarters of fiscal 2009 and 2008 to remove amortization of purchased intangibles incurred in connection with the merger.
Note F - Restructuring charges - Adjustment to remove charges for restructuring incurred during the first quarters of fiscal 2009 and 2008.
Note G - Provision for income taxes - Adjustment to reflect a pro forma 24 percent tax rate for the first quarter of fiscal 2009 and a pro forma 26 percent tax rate for the first quarter of fiscal 2008.
Table 5
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2009 First Quarter Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Quarter Ended Quarter Ended
September 26, 2008 September 28, 2007
(In millions)
As Non-GAAP As Non-GAAP
Reported Adjustments Non-GAAP Reported Adjustments Non-GAAP
North America $61.5 $ -- $61.5 $56.6 $ -- $56.6
International:
Africa 65.6 -- 65.6 52.4 -- 52.4
Europe, Middle
East, and Russia 36.9 -- 36.9 32.7 -- 32.7
Latin America
and AsiaPac 28.4 -- 28.4 24.1 -- 24.1
Total
International 130.9 -- 130.9 109.2 -- 109.2
Network
Operations 3.4 -- 3.4 6.5 -- 6.5
$195.8 $ -- $195.8 $172.3 $ -- $172.3
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