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To: The Ox who wrote (119)	1/23/2008 1:45:31 PM
From: Rob Preuss	Read Replies (1) \| Respond to of 312

I too am tempted. HSTX quarterly results are due in just 1 week and should be good. Fed will meet 2 days before that and may take additional action. HSTX is down today below the extraordinary lows we saw yesterday. Broader market is being driven by emotion (fear/panic) and emotions can change anytime.

To: The Ox who wrote (119)	1/30/2008 4:08:26 PM
From: Rob Preuss	Respond to of 312

Harris Stratex Networks Reports Q2 Fiscal 2008 Financial Results Wednesday January 30, 4:05 pm ET RESEARCH TRIANGLE PARK, N.C., Jan. 30 /PRNewswire-FirstCall/ -- Harris Stratex Networks, Inc. (Nasdaq: HSTX), the leading independent supplier of turnkey wireless transmission solutions, today reported financial results for the second quarter of fiscal 2008, which ended December 28, 2007. Revenue for the second quarter of fiscal 2008 was $181.1 million. GAAP net loss was $1.0 million or $0.02 per share, which includes $17.6 million in pre- tax charges associated with the merger transaction, integration, asset impairment and stock compensation expense. Non-GAAP Financial Results On a non-GAAP basis, the second quarter revenue of $181.1 million was an increase of 5 percent compared with $171.9 million in the prior year quarter. Non-GAAP gross margin was 31.1 percent in the second quarter of fiscal 2008, operating income was $16.8 million, and net income was $12.1 million or $0.21 per share. A reconciliation of GAAP to non-GAAP financial measures is provided on Table 4 along with the accompanying notes. North America microwave had record second quarter revenue of $63.8 million, realizing 13 percent growth compared to the prior quarter and an increase over the year ago quarter. Network Operations also had a strong revenue quarter at $6.5 million, comparable to the prior quarter and 30 percent higher than the year ago quarter. "I am very pleased with the continued momentum in our North America Microwave and Network Operations segments," said Guy Campbell, president and chief executive officer of Harris Stratex Networks. "Mobile network footprint expansion, increased bandwidth demand, and microwave relocation are expected to continue to fuel growth for North America. Our Network Operations segment continues to benefit from increased demand for our service assurance solution with Next Generation Network (NGN) customers. Gross margins in these two segments are on plan and overall these businesses are delivering to our expected results." International revenue of $110.8 million was comparable to the prior quarter and increased 7 percent compared with the year-ago period. Combined revenues for Latin America and Asia Pacific were $37.8 million, an increase of 54 percent compared to the prior year, as the company's focus on capturing new customers in these regions gained traction. Africa revenue at $41.0 million increased 4 percent compared to the year-ago quarter. Revenue in Europe, Middle East and Russia was $32.0 million, a decrease of 20 percent compared with the year ago period, as a result of operator consolidations and slower implementation of 3G networks. "We are pleased with the year over year revenue growth in International. However, gross margins in this segment did not meet our expectations," said Campbell. "Geographic revenue mix, particularly the shift in contribution from Europe, Middle East and Russia, to Latin America and Asia Pacific, impacted margin performance. Additionally, we experienced increased freight costs which could not be passed on to customers, and services margins for engineering and installation projects were also lower than expected. We are taking immediate steps to reduce costs and improve operational performance in the second half of the fiscal year." Total operating expenses declined from $40.0 million, or 23 percent of revenue, in Q2 of fiscal 2007 to $39.5 million, or 22 percent of revenue, in Q2 of fiscal 2008. However, on a sequential basis, Q2 fiscal 2008 operating expenses increased by $900,000. "Although expense synergies are being realized according to our plan, we have seen an increase in G&A related primarily to ensuring SOX readiness for the new company that was not previously anticipated at the levels we have experienced," said Campbell. "We are addressing the spending in G&A to return to planned levels in the second half of the year." Outlook and Guidance The company increased its revenue guidance for fiscal 2008 to a new range of $700 million to $720 million. Non-GAAP earnings guidance was reduced to a new range of $0.85 to $0.95 per share. "Demand remains strong," said Campbell, "and we expect to continue to expand our customer base. We expect that the TRuepoint® 6000 series product introductions, value engineering, and additional cost-saving initiatives within operations will drive continued improvement in our earnings going forward. We have realized the expected cost savings from our merger in the first half of the year, and we are on track to achieve our $35 million goal for the full year. However, we now believe that the customer, product and geographic mix that we experienced in the first half of the year will continue into the second half of this year." Conference Call Harris Stratex Networks will host a conference call today to discuss the company's financial results at 5:30 p.m. Eastern Time. Those wishing to join the call should dial 303-262-2075 (no pass code required) at approximately 5:20 p.m. A replay of the call will be available starting one hour after the call's completion until February 8. To access the replay, dial 303-590-3000 (pass code: 11106010 #). A live and archived webcast of the conference call will also be available via the company's Web site at www.HarrisStratex.com/investors/conference-call . Non-GAAP Measures and Comparative Financial Information Harris Stratex Networks, Inc. and the Microwave Communications Division of Harris Corporation report information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The GAAP information presented in this press release consists of the results of operations, cash flows and financial position of Harris Stratex Networks, Inc. for the quarter and two quarters ended December 28, 2007 and December 29, 2006. On January 26, 2007, the Microwave Communications Division of Harris Corporation and Stratex Networks, Inc. merged into Harris Stratex Networks, Inc. and became one reporting entity. Accordingly, management of Harris Stratex Networks will monitor revenues, cost of product sales and services, research and development expenses, selling and administrative expenses, operating income or loss, tax expense or benefit, net income or loss, and net income or loss per share for the new combined entity for planning and forecasting results in future periods, and may use these measures for some management compensation purposes. As such, historical non-GAAP combined information has been included in this press release for comparative purposes. These measures exclude certain costs and expenses as discussed herein. As a result, management is presenting these non-GAAP measures in addition to results reported in accordance with GAAP to better communicate underlying operational and financial performance in each period. Management believes these non-GAAP 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 given period. Management also believes that these non-GAAP measures enhance the ability of an investor to analyze trends in Harris Stratex Networks' business and to better understand our performance. Harris Stratex Networks management does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Harris Stratex Networks presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate the Company's financial performance. Reconciliations of these non- GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP are included in the tables below. About Harris Stratex Networks Harris Stratex Networks, Inc. (Nasdaq: HSTX - News) is the world's leading independent supplier of turnkey wireless transmission solutions. The company offers reliable, flexible and scalable wireless network solutions, backed by comprehensive professional services and support. Harris Stratex Networks serves all global markets, including mobile network operators, public safety agencies, private network operators, utility and transportation companies, government agencies and broadcasters. Customers in more than 135 countries depend on Harris Stratex Networks to build, expand and upgrade their voice, data and video solutions. Harris Stratex Networks is recognized around the world for innovative, best-in-class wireless networking solutions and services. For more information, visit www.HarrisStratex.com.

To: The Ox who wrote (119)	1/30/2008 4:18:51 PM
From: Rob Preuss	Respond to of 312

Financial Tables Attached. Table 1 HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second Quarter Summary CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) Quarters Ended Two Quarters Ended December 28, December 29, December 28, December 29, 2007 2006 2007 2006 (In millions, except net loss per share) Revenue from product sales and services $181.1 $101.2 $353.4 $194.8 Cost of product sales and services (130.1) (66.4) (251.5) (129.2) Amortization of purchased technology (1.7) - (3.5) - Gross margin 49.3 34.8 98.4 65.6 Research and development expenses (10.9) (8.3) (23.3) (15.7) Selling and administrative expenses (32.9) (18.5) (64.8) (35.0) Amortization of intangible assets (1.9) - (3.7) - Restructuring charges (4.4) - (8.4) - Corporate allocations expense - (1.8) - (3.4) Operating (loss) income (0.8) 6.2 (1.8) 11.5 Interest income 0.4 0.2 1.1 0.3 Interest expense (0.8) (0.3) (1.5) (0.5) (Loss) income before income taxes (1.2) 6.1 (2.2) 11.3 Income tax benefit (expense) 0.2 (0.3) 0.4 (0.7) Net (loss) income $(1.0) $5.8 $(1.8) $10.6 Net loss per common share: Basic and diluted $(0.02) * $(0.03) * Basic and diluted weighted average shares outstanding 58.4 * 58.4 * * Prior to January 26, 2007, the Company was a division of Harris Corporation and there were no shares outstanding for purposes of income or loss calculations. Table 2 HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second Quarter Summary CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) December 28, June 29, 2007 2007 (1) (In millions) Assets Cash and cash equivalents $73.0 $69.2 Short-term investments 10.0 20.4 Receivables 207.6 185.3 Inventories and unbilled costs 168.4 172.6 Current deferred taxes 7.1 4.1 Other current assets 22.0 21.7 Property, plant and equipment 78.2 80.0 Goodwill 314.6 323.6 Identifiable intangible assets 137.2 144.5 Other assets 17.5 16.7 $1,035.6 $1,038.1 Liabilities and Shareholders' Equity Short-term debt $0.0 $1.2 Current portion of long-term debt 7.6 10.7 Accounts payable 96.5 84.7 Accrued expenses and other current liabilities 92.9 96.1 Due to Harris Corporation 20.5 23.1 Long-term debt 6.3 8.8 Restructuring and other long-term liabilities 8.3 11.8 Redeemable preference shares 8.3 8.3 Warrants outstanding 3.1 3.9 Non-current deferred taxes 23.6 31.5 Shareholders' equity 768.5 758.0 $1,035.6 $1,038.1 (1) Derived from audited financial statements. Table 3 HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second Quarter Summary CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Two Quarters Ended December 28, December 29, 2007 2006 (In millions) Operating Activities Net (loss) income $(1.8) $10.6 Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Amortization of identifiable intangible assets acquired in the Stratex acquisition 7.2 - Depreciation and amortization of property, plant and equipment and capitalized software 9.4 6.2 Non-cash stock-based compensation expense 3.6 - Non-cash charges for restructuring and inventory write-downs 7.8 - Decrease in fair value of warrants (0.8) - Deferred income tax (benefit) expense (3.5) - Changes in operating assets and liabilities, net of effects from acquisition: Receivables (20.9) 15.4 Unbilled costs and inventories 0.6 (23.7) Accounts payable and accrued expenses 7.1 (4.5) Advance payments and unearned income 5.5 6.4 Due to Harris Corporation 0.5 (12.3) Other (2.6) (3.8) Net cash provided by (used in) operating activities 12.1 (5.7) Investing Activities Purchases of short-term investments and available for sale securities (4.4) - Sales of short-term investments and available for sale securities 14.8 - Additions of property, plant and equipment (3.6) (1.9) Additions of capitalized software (6.5) (3.1) Net cash provided by (used in) investing activities 0.3 (5.0) Financing Activities Decrease in short-term debt (1.2) (0.1) Payments on long-term debt (5.6) - Payments on long-term capital lease obligation to Harris Corporation (2.0) - Proceeds from exercise of former Stratex stock options 0.9 - Net cash and other transfers from Harris Corporation prior to the Stratex acquisition - 8.5 Net cash (used in) provided by financing activities (7.9) 8.4 Effect of exchange rate changes on cash and cash equivalents (0.7) 0.7 Net (decrease) increase in cash and cash equivalents 3.8 (1.6) Cash and cash equivalents, beginning of year 69.2 13.8 Cash and cash equivalents, end of quarter $73.0 $12.2 HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second 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 2008 Second Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Condensed Consolidated Statements of Operations (Unaudited) Quarter Ended December 28, 2007 December 29, 2006 MCD and Non- Stratex Non- GAAP Combined GAAP As Adjust- Non- as Adjust- Non- Reported ments GAAP Reported ments GAAP (In millions, except per share amounts) Revenue from product sales and services $181.1 $ - $181.1 $171.9 $ - $171.9 Cost of product sales and services (A) (130.1) 5.3 (124.8) (113.9) 0.2 (113.7) Amortization of purchased technology (B) (1.7) 1.7 - - - - Gross margin 49.3 7.0 56.3 58.0 0.2 58.2 Research and development expenses © (10.9) 0.2 (10.7) (12.3) 0.6 (11.7) Selling and administrative expenses (D) (32.9) 4.1 (28.8) (33.5) 5.2 (28.3) Amortization of intangible assets (E) (1.9) 1.9 - - - - Restructuring charges (F) (4.4) 4.4 - - - - Corporate allocations expense(G) - - - (1.8) 1.8 - Operating (loss) income (0.8) 17.6 16.8 10.4 7.8 18.2 Interest income 0.4 - 0.4 1.2 - 1.2 Interest expense (0.8) - (0.8) (1.4) - (1.4) (Loss) income before income taxes (1.2) 17.6 16.4 10.2 7.8 18.0 Income tax benefit (expense) (H) 0.2 (4.5) (4.3) (0.6) (4.8) (5.4) Net (loss) income $(1.0) $13.1 $12.1 $9.6 $3.0 $12.6 Net (loss) income per common share: Basic and diluted $(0.02) $0.21 * * Basic and diluted weighted average shares outstanding: Basic and diluted 58.4 58.4 * * * Prior to January 26, 2007, the Company was not a public reporting entity and there were no shares outstanding for purposes of earnings (loss) per share calculations. Table 4 (Continued) HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Condensed Consolidated Statements of Operations (Unaudited) Two Quarters Ended December 28, 2007 December 29, 2006 MCD and Non- Stratex Non- GAAP Combined GAAP As Adjust- Non- as Adjust- Non- Reported ments GAAP Reported ments GAAP (In millions, except per share amounts) Revenue from product sales and services $353.4 $ - $353.4 $332.8 $ - $332.8 Cost of product sales and services (A) (251.5) 6.3 (245.2) (223.2) 0.4 (222.8) Amortization of purchased technology (B) (3.5) 3.5 - - - - Gross margin 98.4 9.8 108.2 109.6 0.4 110.0 Research and development expenses © (23.3) 0.7 (22.6) (23.3) 1.3 (22.0) Selling and administrative expenses (D) (64.8) 9.3 (55.5) (65.3) 8.8 (56.5) Amortization of intangible assets (E) (3.7) 3.7 - - - - Restructuring charges (F) (8.4) 8.4 - - - - Corporate allocations expense(G) - - - (3.4) 3.4 - Operating (loss) income (1.8) 31.9 30.1 17.6 13.9 31.5 Interest income 1.1 - 1.1 2.0 - 2.0 Interest expense (1.5) - (1.5) (2.6) - (2.6) (Loss) income before income taxes (2.2) 31.9 29.7 17.0 13.9 30.9 Income tax benefit (expense) (H) 0.4 (8.1) (7.7) (1.0) (8.3) (9.3) Net (loss) income $(1.8) $23.8 $22.0 $16.0 $5.6 $21.6 Net (loss) income per common share: Basic and diluted $(0.03) $0.38 * * Basic and diluted weighted average shares outstanding: Basic and diluted 58.4 58.4 * * * Prior to January 26, 2007, the Company was not a public reporting entity and there were no shares outstanding for purposes of earnings (loss) per share calculations. Notes to tables 4 and 6: Note A - Cost of sales and services - Includes adjustments to cost of product sales and services for the second quarter and first two quarters of fiscal 2008 to remove purchase accounting adjustments for the amortization of the step-up in the value of fixed assets ($0.2 million and $0.4 million), adjustments to remove merger integration costs ($0.9 million and $1.5 million) and adjustments to remove FAS 123R expense ($0.5 million and $0.7 million). Also includes adjustments to remove $3.7 million in write-downs of inventory related to restructuring actions for the second quarter of fiscal 2008. For the second quarter and first two quarters of fiscal 2007, adjustments to Stratex Networks, Inc. cost of product sales and services to remove FAS 123R expense ($0.2 million and $0.4 million). Note B - Amortization of purchased technology - Adjustments for the second quarter and first two quarters of fiscal 2008 to remove amortization of purchased intangibles incurred in connection with the merger. Note C - Research and development expenses - Adjustments for the second quarter and first two quarters of fiscal 2008 to remove FAS 123R expense ($0.2 million and $0.7 million). Adjustments for the second quarter and the first two quarters of fiscal 2007 to remove FAS 123R expense recorded by Stratex ($0.6 million and $1.3 million). Note D - Selling and administrative expenses - Includes adjustments for the second quarter and first two quarters of fiscal 2008 to remove purchase accounting adjustments related to the amortization of the step-up in the value of fixed assets ($0.5 million and $1.0 million), merger integration costs ($2.3 million and $4.5 million), lease impairment costs ($0.1 million and $0.9 million) and FAS 123R expense ($1.2 million and $2.9 million). For the second quarter and first two quarters of fiscal 2007, includes adjustments to the Microwave Communications Division of Harris Corporation's selling and administrative expenses to remove FAS 123R expense ($0.3 million and $0.7 million), adjustments to the Stratex selling and administrative expenses to remove FAS 123R expense ($1.5 million and $3.2 million) and to remove $1.5 million of merger integration costs incurred by Stratex associated with the merger ($1.7 million and $3.2 million). Also includes adjustment to remove $1.7 million of merger integration costs incurred by the Microwave Communications Division of Harris during the second quarter of fiscal 2007. Note E - Amortization of intangible assets - Adjustment for the second quarter and first two quarters of fiscal 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 second quarter and first two quarters of fiscal 2008. Note G - Corporate allocation expenses - Adjustment for the second quarter and first two quarters of fiscal 2007 to remove corporate allocation expenses from Harris Corporation, which did not continue after the merger with Stratex. Note H - Income tax benefit (expense) - Adjustment to reflect a pro forma 26 percent tax rate for the second quarter and first two quarters of fiscal 2008, and a pro forma 30 percent tax rate for the second quarter and first two quarters of fiscal 2007. Table 5 HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second Quarter Summary GAAP REVENUE BY SEGMENT INFORMATION (Unaudited) Quarter Ended Two Quarters Ended December 28, December 29, December 28, December 29, 2007 2006 2007 2006 (In millions) North America microwave $63.8 $58.7 $120.4 $108.6 International microwave 110.8 37.5 220.0 76.7 Network operations 6.5 5.0 13.0 9.5 $181.1 $101.2 $353.4 $194.8 Table 6 HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second Quarter Summary SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA (Unaudited) Quarter Ended Quarter Ended December 28, 2007 December 29, 2006 (In millions) As Non- Reported GAAP MCD Combined Adjust- Non- As Stratex Non- ments GAAP Reported Actual GAAP North America $63.8 $ - $63.8 $58.7 $4.2 $62.9 International: Africa 41.0 - 41.0 25.5 13.9 39.4 Europe, Middle East, and Russia 32.0 - 32.0 3.5 36.5 40.0 Latin America and AsiaPac 37.8 - 37.8 8.5 16.1 24.6 Total International 110.8 - 110.8 37.5 66.5 104.0 Network Operations 6.5 - 6.5 5.0 - 5.0 $181.1 $ - $181.1 $101.2 $70.7 $171.9 Table 6 (Continued) HARRIS STRATEX NETWORKS, INC. Fiscal Year 2008 Second Quarter Summary SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA (Unaudited) Two Quarters Ended Two Quarters Ended December 28, 2007 December 29, 2006 (In millions) As Non- Reported GAAP MCD Combined Adjust- Non- As Stratex Non- ments GAAP Reported Actual GAAP North America $120.4 $ - $120.4 $108.6 $6.8 $115.4 International: Africa 93.4 - 93.4 50.2 41.7 91.9 Europe, Middle East, and Russia 64.7 - 64.7 12.2 56.4 68.6 Latin America and AsiaPac 61.9 - 61.9 14.3 33.1 47.4 Total International 220.0 - 220.0 76.7 131.2 207.9 Network Operations 13.0 - 13.0 9.5 - 9.5 $353.4 $ - $353.4 $194.8 $138.0 $332.8