Financial Tables with Restated Results
Table 1
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Fourth Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended Fiscal Year Ended
June 27, June 29, June 27, June 29,
2008 2007 2008 2007
(Restated) (Restated)
(In millions, except per share amounts)
Revenue from product sales
and services $186.8 $174.1 $718.4 $507.9
Cost of product sales and
services (141.1) (124.3) (521.1) (358.2)
Amortization of purchased
technology (1.8) (1.8) (7.1) (3.0)
Gross margin 43.9 48.0 190.2 146.7
Research and development
expenses (11.3) (12.5) (46.1) (39.4)
Selling and administrative
expenses (45.3) (37.0) (141.4) (98.9)
Acquired in-process research
and development - - - (15.3)
Amortization of intangible
assets (1.5) (4.5) (7.1) (7.5)
Restructuring charges (0.9) (7.3) (9.3) (9.3)
Corporate allocations expense - - - (3.7)
Operating loss (15.1) (13.3) (13.7) (27.4)
Interest income 1.0 0.6 2.4 1.8
Interest expense (0.4) (0.7) (2.6) (2.3)
Loss before income taxes (14.5) (13.4) (13.9) (27.9)
Income tax benefit 0.8 6.2 2.0 6.1
Net loss $(13.7) $(7.2) $(11.9) $(21.8)
Net loss per common share of
Class A and Class B common
stock (Notes 1 and 2):
Basic $(0.23) $(0.12) $(0.20) $(0.88)
Diluted $(0.23) $(0.12) $(0.20) $(0.88)
Basic weighted average shares
outstanding 58.5 58.2 58.4 24.7
Diluted weighted average shares
outstanding 58.5 58.2 58.4 24.7
(1) The net 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) 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. Basic and diluted weighted average shares
outstanding are calculated based on the daily outstanding shares,
reflecting the fact that no shares were outstanding prior to January
26, 2007.
Table 2
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Fourth Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 27, 2008 June 29, 2007
(Restated)
(In millions)
Assets
Cash and cash equivalents $95.0 $69.2
Short-term investments 3.1 20.4
Receivables 199.7 183.1
Inventories and unbilled costs 130.6 161.1
Current deferred taxes 12.6 4.1
Other current assets 19.1 21.7
Property, plant and equipment 75.6 80.0
Goodwill 284.2 324.7
Identifiable intangible assets 130.1 144.5
Other assets 27.3 16.7
$977.3 $1,025.5
Liabilities and Shareholders' Equity
Short-term debt $ - $1.2
Current portion of long-term debt 5.0 10.7
Accounts payable 81.1 84.7
Accrued expenses and other current
liabilities 96.8 97.2
Due to Harris Corporation 19.4 23.1
Long-term debt 3.8 8.8
Restructuring and other long-term
liabilities 10.4 11.8
Redeemable preference shares 8.3 8.3
Warrants outstanding 0.6 3.9
Non-current deferred taxes 3.7 29.4
Shareholders' equity 748.2 746.4
$977.3 $1,025.5
Table 3
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Fourth Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Quarter Ended
June 27, June 29,
2008 2007
(Restated)
(In millions)
Operating Activities
Net loss $(13.7) $(7.2)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Amortization of identifiable intangible
assets acquired in the Stratex acquisition 3.0 6.4
Other noncash charges related to the Stratex
Acquisition - 2.5
Depreciation and amortization of property, plant
and equipment and capitalized software 4.6 2.3
Non-cash stock-based compensation expense 1.1 2.9
Non-cash charges for inventory
write-downs 11.0 -
Decrease in fair value of warrants (0.1) (0.6)
Deferred income tax benefit (5.0) (13.1)
Changes in operating assets and liabilities, net
of effects from acquisition:
Receivables (2.8) (26.5)
Unbilled costs and inventories 2.8 (4.0)
Accounts payable and accrued expenses 2.7 11.9
Advance payments and unearned income 3.4 8.0
Due to Harris Corporation (4.2) 8.3
Changes in other assets and liabilities 1.8 7.5
Net cash provided by (used in) operating
activities 4.6 (1.6)
Investing Activities
Purchases of short-term investments and
available for sale securities (0.9) -
Sales of short-term investments and
available for sale securities 1.3 20.5
Additions of property, plant and
equipment (2.9) (3.9)
Additions of capitalized software (2.4) (0.1)
Net cash provided by investing activities (4.9) 16.5
Financing Activities
Increase in short-term debt - 1.0
Payments on long-term debt (2.3) (2.6)
Proceeds from exercise of former Stratex
stock options - 1.7
Payments on long-term capital lease
obligation to Harris Corporation (0.5) -
Excess tax benefits from share-based
compensation 0.7 -
Net cash (used in) provided by financing
activities (2.1) 0.1
Effect of exchange rate changes on cash
and cash equivalents 0.4 (0.2)
Net (decrease) increase in cash and cash
equivalents (2.0) 14.8
Cash and cash equivalents, beginning of
quarter 97.0 54.4
Cash and cash equivalents, end of quarter $95.0 $69.2
Table 3 (Continued)
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Fourth Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Fiscal Year Ended
June 27, June 29,
2008 2007
(Restated)
(In millions)
Operating Activities
Net loss $(11.9) $(21.8)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Amortization of identifiable intangible
assets acquired in the Stratex
acquisition and other 13.9 25.8
Other noncash charges related to the
Stratex acquisition - 7.9
Depreciation and amortization of property,
plant and equipment and capitalized
software 19.8 14.5
Noncash share-based compensation expense 6.4 3.9
Noncash charges for restructuring and
inventory write-downs 14.7 -
Decrease in fair value of warrant
liability (3.3) (0.6)
Deferred income tax benefit (7.5) (13.0)
Changes in operating assets and liabilities,
net of effects from acquisition:
Receivables (13.7) (23.8)
Unbilled costs and inventories 15.9 (33.1)
Accounts payable and accrued expenses 1.3 10.1
Advance payments and unearned income 7.8 12.8
Due to Harris Corporation 0.4 4.6
Decrease in restructuring liabilities and
other (3.8) (0.4)
Net cash provided by (used in) operating
activities 40.0 (13.1)
Investing Activities
Cash acquired from the Stratex
acquisition, net of acquisition costs of
$12.7 million - 20.4
Purchases of short-term investments and
available for sale securities (9.2) (30.7)
Sales and maturities of short-term
investments and available for sale
securities 26.6 35.8
Additions of property, plant and equipment (9.2) (8.3)
Additions of capitalized software (10.3) (2.9)
Net cash (used in) provided by investing
activities (2.1) 14.3
Financing Activities
Decrease (increase) in short-term debt (1.2) 1.0
Payments on long-term debt (10.7) (5.2)
Payments on long-term capital lease
obligation to Harris Corporation (3.7) -
Proceeds from exercise of former Stratex
stock options 1.5 3.1
Excess tax benefits from share-based
compensation 0.7 -
Proceeds from issuance of redeemable preference
shares - 8.3
Proceeds from issuance of Class B common
stock to Harris Corporation - 26.9
Registration costs for Class A common
stock issued in Stratex acquisition - (1.1)
Proceeds from exercise of former Stratex
warrants - 0.2
Net cash and other transfers from Harris
Corporation prior to the Stratex acquisition - 24.1
Net cash (used in) provided by financing
activities (13.4) 57.3
Effect of exchange rate changes on cash
and cash equivalents 1.3 (3.1)
Net increase in cash and cash equivalents 25.8 55.4
Cash and cash equivalents, beginning of
year 69.2 13.8
Cash and cash equivalents, end of year $95.0 $69.2
Table 4
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Fourth Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended
June 27, 2008
Non-GAAP
As Reported Adjustments Non-GAAP % of Sales
(In millions, except per share amounts)
Revenue from product
sales and services $186.8 $ - 186.8
Cost of product sales
and services (A) (141.1) 11.4 (129.7)
Amortization of purchased
technology (B) (1.8) 1.8 -
Gross margin 43.9 13.2 57.1 30.6%
Research and development
expenses © (11.3) 0.3 (11.0) 5.8%
Selling and
administrative
expenses (D) (45.3) 5.5 (39.8) 21.3%
Amortization of
intangible assets (E) (1.5) 1.1 (0.4) 0.2%
Restructuring charges
(F) (0.9) 0.9 -
Operating (loss) income (15.1) 21.0 5.9 3.2%
Interest income 1.0 - 1.0
Interest expense (0.4) - (0.4)
(Loss) income before
income taxes (14.5) 21.0 6.5 tax rate
Income tax benefit
(expense) (G) 0.8 (2.5) (1.7) 26%
Net (loss) income ($13.7) $18.5 $4.8
Net (loss) income
per common share:
Basic and diluted ($0.23) $0.08
Basic and diluted weighted
average shares outstanding:
Basic and diluted 58.5 58.5
Quarter Ended
June 29, 2007
Non-GAAP Non-GAAP
As Restated Adjustments (Restated) % of Sales
(In millions, except per share amounts)
Revenue from product
sales and services $174.1 $ - $174.1
Cost of product sales
and services (A) (124.3) 2.9 (121.4)
Amortization of purchased
technology (B) (1.8) 1.8 -
Gross margin 48.0 4.7 52.7 30.3%
Research and development
expenses © (12.5) 0.4 (12.1) 7.0%
Selling and administrative
expenses (D) (37.0) 7.0 (30.0) 17.2%
Amortization of
intangible assets (E) (4.5) 4.5 -
Restructuring
charges (F) (7.3) 7.3 -
Operating (loss) income (13.3) 23.9 10.6 6.1%
Interest income 0.6 - 0.6
Interest expense (0.7) - (0.7)
(Loss) income before
income taxes (13.4) 23.9 10.5 tax rate
Income tax benefit
(expense) (G) 6.2 (8.9) (2.7) 26%
Net (loss) income ($7.2) $15.0 $7.8
Net (loss) income per
common share:
Basic and diluted ($0.12) $0.13
Basic and diluted weighted
average shares outstanding:
Basic and diluted 58.2 58.2
*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 Table 4:
Note A - Cost of sales and services - Includes adjustments to cost of product
sales and services for the fourth quarter of fiscal 2008 to remove purchase
accounting adjustments for the amortization of the step-up in the value of fixed
assets of $0.2 million and adjustments to remove FAS 123R expense of $0.2
million. Also includes adjustment to remove impairment of inventory of $11.0
million
For the fourth quarter of fiscal 2007 includes adjustments to cost of product
sales and services to remove merger related charges including amortization of
the step-up in inventory and fixed assets of $2.7 million and adjustments for
the quarter to remove FAS 123R expense of $0.2 million.
Note B - Amortization of purchased technology - Adjustments for the fourth
quarter of fiscal 2008 and fiscal 2007 to remove amortization of purchased
intangibles incurred in connection with the merger.
Note C - Research and development expenses - Adjustments to remove FAS
123R expense of $0.3 million for the fourth quarter of fiscal 2008 and $0.4
million for the fourth quarter of fiscal 2007.
Note D - Selling and administrative expenses - Includes adjustments for the
fourth quarter of fiscal 2008 to remove purchase accounting adjustments
related to the amortization of the step-up in the value of fixed assets of $0.4
million, merger integration costs of $4.2 million and FAS 123R expense of $0.9
million.
For the fourth quarter of fiscal 2007, includes adjustments to remove purchase
accounting adjustments related to the amortization of the step-up in the value
of fixed assets of $0.4 million, merger integration costs of $4.7 million and FAS
123R expense of $1.9 million.
Note E - Amortization of intangible assets - Adjustment for the fourth quarter
of fiscal 2008 and fiscal 2007 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 fourth quarter of fiscal 2008 and the fourth
quarter of fiscal 2007.
Note G - Income tax benefit (expense) - Adjustment to reflect a pro forma 26
percent tax rate for the fourth quarter of fiscal 2008 and the fourth quarter of
fiscal 2007.
Table 5
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Year End Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Year Ended
June 27, 2008
Non-GAAP
As Reported Adjustments Non-GAAP % of Sales
(In millions, except per share amounts)
Revenue from product
sales and services
(A) $718.4 $ - $718.4
Cost of product sales
and services (B) (521.1) 18.2 (502.9)
Amortization of
purchased technology
© (7.1) 7.1 -
Gross margin 190.2 25.3 215.5 30.0%
Research and development
expenses (D) (46.1) 1.4 (44.7) 6.2%
Selling and
administrative
expenses (E) (141.4) 17.6 (123.8) 17.2%
Acquired research and
development (F) - - -
Amortization of
intangible assets (G) (7.1) 6.7 (0.4) 0.1%
Restructuring charges
(H) (9.3) 9.3 -
Corporate allocations
expense (I) - - -
Operating (loss) income (13.7) 60.3 46.6 6.5%
Interest income (J) 2.4 - 2.4
Interest expense (J) (2.6) - (2.6)
Other expense, net (J) - - -
(Loss) income before
income taxes (13.9) 60.3 46.4 tax rate
Income tax benefit
(expense) (K) 2.0 (14.0) (12.0) 26%
Net (loss) income ($11.9) $46.3 $34.4
Net (loss) income per common
share:
Basic and diluted ($0.2) $0.59
Basic and diluted weighted
average shares outstanding:
Basic and diluted 58.4 58.4
Year Ended
June 29, 2007
Non-GAAP Non-GAAP
As Restated Adjustments (Restated) % of Sales
(In millions, except per share amounts)
Revenue from product
sales and services (A) $507.9 $145.8 $653.7
Cost of product sales
and services (B) (358.2) (91.2) (449.4)
Amortization of
purchased technology
© (3.0) 3.0 -
Gross margin 146.7 57.6 204.3 31.3%
Research and development
expenses (D) (39.4) 2.0 (37.4) 5.7%
Selling and
administrative
expenses (E) (98.9) (22.0) (120.9) 18.5%
Acquired research and
development (F) (15.3) 15.3 -
Amortization of
intangible assets (G) (7.5) 7.5 -
Restructuring charges (H) (9.3) 8.6 (0.7) 0.1%
Corporate allocations
expense (I) (3.7) 3.4 (0.3)
Operating (loss) income (27.4) 72.4 45.0 6.9%
Interest income (J) 1.8 1.8 3.6
Interest expense (J) (2.3) (1.4) (3.7)
Other expense, net (J) - (0.9) (0.9)
(Loss) income before
income taxes (27.9) 71.9 44.0 tax rate
Income tax benefit
(expense) (K) 6.1 (18.7) (12.6) 29%
Net (loss) income ($21.8) $53.2 $31.4
Net (loss) income per common
share:
Basic and diluted ($0.88) $0.54
Basic and diluted weighted
average shares outstanding:
Basic and diluted 24.7 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 Table 5:
Note A - Revenue - Adjustment to revenue for fiscal 2007 of $145.8 million to
add Stratex Networks, Inc. revenue for the 7 months ended January 26, 2007,
prior to the merger.
Note B - Cost of sales and services - Includes adjustments to cost of product
sales and services for fiscal 2008 to remove purchase accounting adjustments
for the amortization of the step-up in the value of fixed assets of $0.8 million,
adjustments to remove merger integration costs of $1.5 million, and
adjustments to remove FAS 123R expense of $1.2 million. Also includes
adjustments to remove inventory impairment related to product transitioning of
$11.0 million and write down of inventory related to restructuring actions of
$3.7 million.
For fiscal 2007, includes adjustment of $100.3 million to add Stratex Networks,
Inc. cost of product sales and services for the 7 months ended January 26,
2007, prior to the merger. Also includes adjustments to remove merger related
charges including amortization of the step-up in inventory and fixed assets of
$8.3 million, write off of deferred costs of $0.1 million, and FAS 123 R expense
of $0.7 million.
Note C - Amortization of purchased technology - Adjustments for fiscal 2008
and fiscal 2007 to remove amortization of purchased intangibles incurred in
connection with the merger.
Note D - Research and development expenses - Adjustments to fiscal 2008 to
remove $1.4 million of FAS 123R expense.
For fiscal 2007, includes adjustment to remove FAS 123R expense of $2.0
million.
Note E - Selling and administrative expenses - Includes adjustments for fiscal
2008 to remove purchase accounting adjustments related to the amortization of
the step-up in the value of fixed assets of $1.9 million, merger integration costs
of $10.4 million, FAS 123R expense of $5.2 million and $0.1 million lease
impairment costs.
For fiscal 2007, includes adjustment of $41.5 million to add Stratex Networks
Selling and administrative expenses for the 7 months ended January 26, 2007,
prior to the merger. Also include adjustments to remove merger related charges
including amortization of the step-up of fixed assets of $0.8 million, merger
integration costs of $11.8 million, and FAS 123R expense of $6.9 million.
Note F - Acquired in-process research and development - Adjustment for fiscal
2007 to remove write off of in-process research and development incurred in
connection with the merger.
Note G - Amortization of intangible assets - Adjustment for fiscal 2008 and
fiscal 2007 to remove amortization of purchased intangibles incurred in
connection with the merger.
Note H - Restructuring charges - Adjustment to remove charges for
restructuring incurred during fiscal 2008 and fiscal 2007.
Note I - Corporate allocation expenses - Adjustment for fiscal 2007 to remove
corporate allocation expenses from Harris Corporation, which did not continue
after the merger with Stratex.
Note J - Interest income and expense and other expense - Adjustment for fiscal
2007 to add Stratex Networks interest income, interest expense and other
expense for the 7 months ended January 26, 2007, prior to the merger.
Note K - Income tax benefit (expense) - Adjustment to reflect a pro forma
26 percent tax rate for fiscal 2008, and a pro forma 29 percent tax rate for
fiscal 2007.
Table 6
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Fourth Quarter Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Quarter Ended
June 27, 2008 June 29, 2007
(In millions)
Non-GAAP Non-GAAP
As Adjust- As Adjust-
Reported ments Non-GAAP Reported ments Non-GAAP
North America $55.1 $- $55.1 $58.8 $- $58.8
International:
Africa 47.8 - 47.8 41.3 - 41.3
Europe, Middle
East, and
Russia 55.7 - 55.7 44.2 - 44.2
Latin America
and AsiaPac 21.1 - 21.1 25.1 - 25.1
Total
international 124.6 - 124.6 110.6 - 110.6
Network Operations 7.1 - 7.1 4.7 - 4.7
$186.8 $- $186.8 $174.1 $- $174.1
Table 7
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Quarter Ended
June 27, 2008 June 29, 2007
(In millions)
Non-GAAP Non-GAAP
As Adjust- As Adjust-
Reported ments Non-GAAP Reported ments Non-GAAP
North America $232.4 $- $232.4 $216.3 $ 7.0 $223.3
International:
Africa 197.1 - 197.1 126.7 44.1 170.8
Europe, Middle
East, and
Russia 159.6 - 159.6 87.1 59.2 146.3
Latin America
and AsiaPac 105.0 - 105.0 58.4 35.5 93.9
Total international 461.7 - 461.7 272.2 138.8 411.0
Network Operations 24.3 - 24.3 19.4 - 19.4
$718.4 $- $718.4 $507.9 $145.8 $653.7
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 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 1
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended
September 28, 2007
As Restated Non-GAAP Non-GAAP % of
Adjustments Restated Sales
(In millions, except per share amounts)
Revenue from
product sales and
services (A) $172.3 $ - $172.3
Cost of product sales
and services (B) (123.5) 1.0 (122.5)
Amortization of purchased
technology © (1.8) 1.8 -
Gross margin 47.0 2.8 49.8 28.9%
Research and development
expenses (D) (12.4) 0.5 (11.9) 6.9%
Selling and administrative
expenses (E) (28.8) 5.2 (23.6) 13.7%
Amortization of intangible
assets (F) (1.8) 1.8 -
Restructuring charges (G) (4.0) 4.0 -
Corporate allocations
expense (H) - - -
Operating (loss) income - 14.3 14.3 8.3%
Interest income (I) 0.7 - 0.7
Interest expense (I) (0.7) - (0.7)
Other expense (I) - - -
Income before income taxes - 14.3 14.3 tax rate
Income tax expense (J) (0.2) (3.5) (3.7) 26%
Net (loss) income $(0.2) $10.8 $10.6
Net (loss) income per
common share:
Basic and diluted $(0.00) $0.18
Basic and diluted weighted
average shares outstanding:
Basic and diluted 58.4 58.4
Quarter Ended
September 29, 2006
As Restated Non-GAAP Non-GAAP % of
Adjustments Restated Sales
(In millions, except per share amounts)
Revenue from
product sales and
services (A) $93.6 $67.3 $160.9
Cost of product sales
and services (B) (62.1) (46.3) (108.4)
Amortization of purchased
technology © - - -
Gross margin 31.5 21.0 52.5 32.7%
Research and development
expenses (D) (7.5) (3.6) (11.1) 6.9%
Selling and administrative
expenses (E) (16.4) (11.0) (27.4) 17.1%
Amortization of
intangible assets (F) - - -
Restructuring charges (G) - - -
Corporate allocations
expense (H) 1.6 1.6 -
Operating (loss) income 6.0 8.0 14.0 8.7%
Interest income (I) 0.1 0.7 0.8
Interest expense (I) (0.2) (0.6) (0.8)
Other expense (I) - (0.4) (0.4)
Income before income taxes 5.9 7.7 13.6 tax rate
Income tax expense (J) (0.4) (3.7) (4.1) 30%
Net (loss) income $5.5 $4.0 $9.5
Net (loss) income per
common share:
Basic and diluted * *
Basic and diluted weighted
average shares outstanding:
Basic and diluted * *
* 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 Table 1:
Note A - Revenue - Includes adjustment for the first quarter of fiscal 2007 to
add $67.3 million of Stratex Networks, Inc. revenue for the quarter.
Note B - Cost of sales and services - Includes adjustment to cost of product
sales and services for the first quarter of fiscal 2008 to remove purchase
accounting adjustments for the amortization of the step-up in the value of fixed
assets of $0.2 million, adjustment to remove $0.6 million of integration costs
and adjustment to remove FAS 123R expense of $0.2 million.
For the first quarter of fiscal 2007, includes adjustment to add $46.5 million of
Stratex Networks, Inc cost of product sales and service for the quarter. Also
includes adjustment to remove $0.2 million of FAS 123R expense.
Note C - Amortization of purchased technology - Adjustment for the first
quarter of fiscal 2008 to remove amortization of purchased intangibles incurred
in connection with the merger.
Note D - Research and development expenses - Adjustment for the first quarter
of fiscal 2008 to remove FAS 123R expense of $0.5 million.
For the first quarter of fiscal 2007, includes adjustment to add $4.3 million of
Stratex Networks, Inc. research and development expense for the quarter. Also
includes adjustment to remove FAS 123R expense of $0.7 million.
Note E - Selling and administrative expenses - Includes adjustment for the first
quarter of fiscal 2008 to remove purchase accounting adjustments related to the
amortization of the step-up in the value of fixed assets of $0.5 million, $3.0
million of integration costs and lease impairment costs and FAS 123R expense
of $1.7 million.
For the first quarter of fiscal 2007, includes adjustment to add $14.6 million of
Stratex Networks, Inc selling and administrative expenses for the quarter. Also
includes adjustments to remove $2.1 million of FAS 123R expense and $1.5
million of integration costs associated with the merger.
Note F - Amortization of intangible assets - Adjustment for the first quarter of
fiscal 2008 to remove amortization of purchased intangibles incurred in
connection with the merger.
Note G - Restructuring charges - Adjustment to remove charges for
restructuring incurred during the first quarter of fiscal 2008.
Note H - Corporate allocation expenses - Adjustment for the first quarter of
fiscal 2007 to remove corporate allocation expenses from Harris Corporation,
which did not continue after the merger with Stratex.
Note I - Interest income, Interest expense and Other expense - Adjustments to
add Stratex Networks, Inc interest income, interest expense, and other expense
for the quarter.
Note J - Income tax benefit (expense) - Adjustment to reflect a pro forma 26
percent tax rate for the first quarter of fiscal 2008 and a pro forma 30 percent
tax rate for the first quarter of fiscal 2007.
Table 2
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 First Quarter Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Quarter Ended
September 28, 2007 September 29, 2006
(In millions)
Combined
Non-GAAP Non- MCD Stratex Non-
As Reported Adjustments GAAP Actual Actual GAAP
North America $56.6 $- $56.6 $49.9 2.7 52.6
International:
Africa 52.4 - 52.4 24.7 27.8 52.5
Europe, Middle
East, and
Russia 32.7 - 32.7 8.7 20.0 28.7
Latin America and
AsiaPac 24.1 - 24.1 5.9 16.8 22.7
Total
international 109.2 - 109.2 39.3 64.6 103.9
Network Operations 6.5 - 6.5 4.4 - 4.4
$172.3 $- $172.3 $93.6 $67.3 $160.9
Table 3
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 First Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of September 28, As of June 29,
2007 2007(1)
(Restated) (Restated)
(In millions)
Assets
Cash and cash equivalents $64.2 $69.2
Short-term investments 15.1 20.4
Receivables 197.0 183.1
Inventories and unbilled costs 170.1 161.1
Current deferred taxes 5.0 4.1
Other current assets 20.7 21.7
Property, plant and equipment 79.2 80.0
Goodwill 315.1 324.7
Identifiable intangible assets 141.0 144.5
Non-current deferred taxes 0.6 0.5
Other assets 16.2 16.2
$1,024.2 $1,025.5
Liabilities and Shareholders' Equity
Short-term debt $ - $1.2
Current portion of long-term debt 9.2 10.7
Accounts payable 92.1 84.7
Accrued expenses and other
current liabilities 77.2 78.0
Advance payments and unearned income 22.3 22.3
Due to Harris Corporation 20.2 17.2
Long-term debt 7.5 8.8
Restructuring and other
long-term liabilities 11.3 14.6
Redeemable preference shares 8.3 8.3
Warrants outstanding 3.4 3.9
Non-current deferred taxes 20.2 29.4
Shareholders' equity 752.5 746.4
$1,024.2 $1,025.5
(1) Derived from audited financial statements.
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 1
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
As Restated Non-GAAP Non-GAAP % of
Adjustments Restated Sales
(In millions, except per share amounts)
Revenue from
product sales and
services (A) 181.1 - 181.1
Cost of product
sales and
services (B) (130.4) 5.3 (125.1)
Amortization of
purchased
technology © (1.7) 1.7 -
Gross margin 49.0 7.0 56.0 30.9%
Research and
development
expenses (D) (10.9) 0.2 (10.7) 5.9%
Selling and
administrative
expenses (E) (36.2) 4.1 (32.1) 17.7%
Amortization of
intangible assets (F) (1.9) 1.9 -
Restructuring
charges (G) (4.4) 4.4 -
Corporate
allocations
expense (H) - - -
Operating (loss)
income (4.4) 17.6 13.2 7.3%
Interest income (I) 0.4 - 0.4
Interest expense (I) (0.8) - (0.8)
Other expense (I) - - -
(Loss) income before
income taxes (4.8) 17.6 12.8 tax rate
Income tax benefit
(expense) (J) 1.6 (4.9) (3.3) 26%
Net (loss) income $(3.2) $12.7 $9.5
Net (loss) income per
common share:
Basic and diluted $(0.05) $0.16
Basic and diluted
weighted average
shares outstanding:
Basic and diluted 58.4 58.4
Quarter Ended
December 29, 2006
December 28, 2007
As Restated Non-GAAP Non-GAAP % of
Adjustments Restated Sales
(In millions, except per share amounts)
Revenue from
product sales and
services (A) $101.2 $70.7 $171.9
Cost of product
sales and
services (B) (67.7) (47.3) (115.0)
Amortization of
purchased
technology © - - -
Gross margin 33.5 23.4 56.9 33.1%
Research and
development
expenses (D) (8.3) (3.4) (11.7) 6.8%
Selling and
administrative
expenses (E) (17.8) (10.5) (28.3) 16.5%
Amortization of
intangible
assets (F) - - -
Restructuring
charges (G) (0.7) 0.7 -
Corporate
allocations
expense (H) (1.8) 1.8 -
Operating (loss)
income 4.9 12.0 16.9 9.3%
Interest income (I) 0.2 1.0 1.2
Interest expense (I) (0.3) (0.6) (0.9)
Other expense (I) - (0.5) (0.5)
(Loss) income
before income taxes 4.8 11.9 16.7 tax rate
Income tax benefit
(expense) (J) (0.3) (4.7) (5.0) 30%
Net (loss) income $4.5 $7.2 $11.7
Net (loss) income
per common share:
Basic and diluted * *
Basic and diluted
weighted average
shares outstanding:
Basic and diluted * *
*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 Table 1:
Note A - Revenue - Includes adjustment for the second quarter of fiscal 2007 to
add $70.7 million of Stratex Networks, Inc. revenue for the quarter.
Note B - Cost of sales and services - Includes adjustments to cost of product
sales and services for the second quarter of fiscal 2008 to remove purchase
accounting adjustments for the amortization of the step-up in the value of fixed
assets of $0.2 million, adjustments to remove $0.9 million of merger integration
costs and adjustments to remove $0.5 million of FAS 123R expense. 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 of fiscal 2007, includes adjustment to add $47.5 million
of Stratex Networks, Inc cost of product sales and service for the quarter. Also
includes adjustment to remove $0.2 million FAS 123R expense.
Note C - Amortization of purchased technology - Adjustments for the second
quarter of fiscal 2008 to remove amortization of purchased intangibles incurred
in connection with the merger.
Note D - Research and development expenses - Adjustments for the second
quarter of fiscal 2008 to remove $0.2 million FAS 123R expense.
For the second quarter of fiscal 2007, includes adjustment to add $4.0 million
of Stratex Networks, Inc. research and development expense for the quarter.
Also includes adjustment to remove FAS 123R expense of $0.6 million.
Note E - Selling and administrative expenses - Includes adjustments for the
second quarter of fiscal 2008 to remove purchase accounting adjustments
related to the amortization of the step-up in the value of fixed assets of $0.5
million, $2.3 million of merger integration costs, $0.1 million lease impairment
costs and FAS 123R expense of $1.2 million.
For the second quarter of fiscal 2007, includes adjustment to add $15.0 million
of Stratex Networks, Inc selling and administrative expenses for the quarter.
Also includes adjustments to remove $1.8 million of FAS 123R expense and
$2.7 million of integration costs associated with the merger.
Note F - Amortization of intangible assets - Adjustment for the second quarter
of fiscal 2008 to remove amortization of purchased intangibles incurred in
connection with the merger.
Note G - Restructuring charges - Adjustment to remove charges for
restructuring incurred during the second quarter of fiscal 2008.
Note H - Corporate allocation expenses - Adjustment for the second quarter of
fiscal 2007 to remove corporate allocation expenses from Harris Corporation,
which did not continue after the merger with Stratex.
Note I - Interest income, Interest expense and Other expense - Adjustments for
the second quarter of fiscal 2007 to add Stratex Networks, Inc interest income,
interest expense, and other expense for the quarter.
Note J - Income tax benefit (expense) - Adjustment to reflect a pro forma 26
percent tax rate for the second quarter of fiscal 2008, and a pro forma 30
percent tax rate for the second quarter of fiscal 2007.
Table 2
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Second Quarter Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Quarter Ended
December 28, 2007
(In millions)
As Non-GAAP
Reported Adjustments Non-GAAP
North America $63.8 $- $63.8
International:
Africa 41.0 - 41.0
Europe, Middle
East, and Russia 32.0 - 32.0
Latin America and
AsiaPac 37.8 - 37.8
Total international 110.8 - 110.8
Network Operations 6.5 - 6.5
$181.1 $- $181.1
Quarter Ended
December 29, 2006
(In millions)
Stratex Non-GAAP Combined
MCD Actual Actual Adjustments Non-GAAP
North America $58.7 $ 4.2 $- $62.9
International:
Africa 25.5 13.9 - 39.4
Europe, Middle East, and Russia 3.5 36.5 - 40.0
Latin America and AsiaPac 8.5 16.1 - 24.6
Total international 37.5 66.5 - 104.0
Network Operations 5.0 - - 5.0
$101.2 $70.7 $- $171.9
Table 3
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Second Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of December 28, As of June 29,
2007 2007 (1)
(Restated) (Restated)
(In millions)
Assets
Cash and cash equivalents $73.0 $69.2
Short-term investments 10.0 20.4
Receivables 205.2 183.1
Inventories and unbilled
costs 154.5 161.1
Current deferred taxes 7.1 4.1
Other current assets 22.0 21.7
Property, plant and
equipment 78.2 80.0
Goodwill 315.7 324.7
Identifiable intangible
assets 137.2 144.5
Non-current deferred taxes 0.1 0.5
Other assets 17.4 16.2
$1,020.4 $1,025.5
Liabilities and Shareholders' Equity
Short-term debt $- $1.2
Current portion of long-term debt 7.6 10.7
Accounts payable 96.5 84.7
Accrued expenses and other
current liabilities 68.6 78.0
Advance payments and unearned income 27.9 22.3
Due to Harris Corporation 16.2 17.2
Long-term debt 6.3 8.8
Restructuring and other long-term
liabilities 10.1 14.6
Redeemable preference shares 8.3 8.3
Warrants outstanding 3.1 3.9
Non-current deferred taxes 20.5 29.4
Shareholders' equity 755.3 746.4
$1,020.4 $1,025.5
(1) Derived from audited financial statements.
ADD: /FIRST AND FINAL ADD -- CLTH125 -- Harris Stratex Networks Earnings/
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Third Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE
To supplement our condensed 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 1
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Third Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended
March 28, 2008
As Restated Non-GAAP Non-GAAP % of
Adjustments Restated Sales
(In millions, except per share amounts)
Revenue from product sales
and services (A) $178.2 $ - $178.2
Cost of product sales
and services (B) (126.1) 0.5 (125.6)
Amortization of
purchased technology © (1.8) 1.8 -
Gross margin 50.3 2.3 52.6 29.6%
Research and development
expenses (D) (11.5) 0.4 (11.1) 6.3%
Selling and administrative
expenses (E) (31.1) 2.7 (28.4) 16.0%
Acquired in-process
research and development (F) - - -
Amortization of intangible
assets (G) (1.9) 1.9 -
Restructuring charges (H) - - -
Corporate allocations expense - - -
Operating (loss) income 5.8 7.3 13.1 7.4%
Interest income (I) 0.3 - 0.3
Interest expense (I) (0.7) - (0.7)
Income (loss) before
income taxes 5.4 7.3 12.7 tax rate
Income tax (expense)
benefit (J) (0.2) (3.1) (3.3) 26%
Net income (loss) $5.2 $4.2 $9.4
Net income (loss) per
common share of Class A
and Class B common stock (1):
Basic $0.09 $0.16
Diluted $0.05 (2) $.16 (2)
Basic weighted average
shares outstanding: 58.4 58.4
Diluted average shares
outstanding 58.7 58.7
Quarter Ended
March 30, 2007
As Restated Non-GAAP Non-GAAP % of
Adjustments Restated Sales
(In millions, except per share amounts)
Revenue from product
sales and services (A) $139.0 $7.8 $146.8
Cost of product sales
and services (B) (104.1) (0.5) (104.6)
Amortization of purchased
technology © (1.2) 1.2 -
Gross margin 33.7 8.5 42.2 28.8%
Research and development
expenses (D) (11.1) 0.3 (10.8) 7.4%
Selling and administrative
expenses (E) (27.7) (0.1) (27.8) 19.0%
Acquired in-process research
and development (F) (15.3) 15.3 -
Amortization of intangible
assets (G) (3.0) 3.0 -
Restructuring charges (H) (1.3) 1.3 -
Corporate allocations expense (0.3) - (0.3)
Operating (loss) income (25.0) 28.3 3.3 2.3%
Interest income (I) 0.9 0.1 1.0
Interest expense (I) (1.1) (0.2) (1.3)
Income (loss) before
income taxes (25.2) 28.2 3.0 tax rate
Income tax (expense)
benefit (J) 0.6 (1.4) (0.8) 27%
Net income (loss) $(24.6) $26.8 $2.2
Net income (loss) per
common share of Class A
and Class B common stock (1):
Basic $(0.61) (3)
Diluted (0.61) (3)
Basic weighted average
shares outstanding: 40.3 (3)
Diluted average shares
outstanding 40.3 (3)
*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.
(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 March 28, 2008, the "As Reported" calculations of
diluted earnings per share include a potential deduction to net income of $2.1
million for the assumed after-tax effect of the change in fair value of warrants
using the "treasury stock" method. The "Non-GAAP" calculations exclude t he
effects of this potential deduction.
(3) 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. Basic and diluted weighted average shares outstanding are
calculated based on the daily outstanding shares, reflecting the fact that no
shares were outstanding prior to January 26, 2007. Non-GAAP earnings per
share for the quarter ended March 30, 2007 is not reported because it is not
meaningful due to the merger date occurring during the quarter.
Notes to Table 1:
Note A - Revenue - Includes adjustment for the third quarter of fiscal 2007 to
add $7.8 million of Stratex Networks, Inc. revenue for the month of January
prior to the merger.
Note B - Cost of sales and services - Includes adjustments to cost of product
sales and services for the third quarter of fiscal 2008 to remove purchase
accounting adjustments for the amortization of the step-up in the value of fixed
assets of $0.2 million and adjustments to remove FAS 123R expense of $0.3
million.
For the third quarter of fiscal 2007, includes adjustment to $6.3 million for
Stratex Networks cost of product sales and services for the month of January.
Also includes adjustments to remove merger related charges including
amortization of the step-up in inventory of $5.4 million and fixed assets of $0.2
million and adjustments to remove the write off of deferred revenue of $0.1
million and FAS 123R expense of $0.1 million.
Note C - Amortization of purchased technology - Adjustments for the third
quarter of fiscal 2008 and fiscal 2007 to remove amortization of purchased
intangibles incurred in connection with the merger.
Note D - Research and development expenses - Adjustments for the third
quarter of fiscal 2008 to remove FAS 123R expense of $0.4 million.
The third quarter of fiscal 2007, includes adjustment to remove FAS 123R
expense of $0.3 million.
Note E - Selling and administrative expenses - Includes adjustments for the
third quarter of fiscal 2008 to remove purchase accounting adjustments related
to the amortization of the step-up in the value of fixed assets of $0.5 million,
merger integration costs of $0.9 million and FAS 123R expense of $1.3 million.
For the third quarter of fiscal 2007, includes adjustment to add $3.6 million of
Stratex Networks, Inc selling and administrative expenses for the month of
January prior to the merger. Also includes adjustments to remove $1.3 million
of FAS 123R expense and $2.2 million of integration costs associated with the
merger.
Note F - Adjustment for the third quarter of fiscal 2007 to remove write off of
in-process research and development incurred in connection with the merger.
Note G - Amortization of intangible assets - Adjustment for the third quarter of
fiscal 2008 and fiscal 2007 to remove amortization of purchased intangibles
incurred in connection with the merger.
Note H - Restructuring charges - Adjustment for the third quarter of fiscal 2007
to remove restructuring charges incurred subsequent to the merger.
Note I - Interest income and Interest expense - Adjustments to add Stratex
Networks, Inc interest income and interest expense for the month of January
prior the merger.
Note J - Income tax benefit (expense) - Adjustment to reflect a pro forma 26
percent tax rate for the third quarter of fiscal 2008 and 27 percent tax rate for
the third quarter of fiscal 2007.
Table 2
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Third Quarter Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Quarter Ended
March 28, 2008 March 30, 2007 (1)
(In millions)
Non-GAAP Non-GAAP
As Adjust- As Adjust
Reported ments Non-GAAP Reported ments Non-GAAP
North America $56.9 $- $56.9 $48.9 $0.2 $49.1
International:
Africa 55.9 - 55.9 35.2 2.4 7.6
Europe, Middle East,
and Russia 39.2 - 39.2 30.8 2.7 3.5
Latin America and
AsiaPac 22.0 - 22.0 18.9 2.5 1.4
Total international 117.1 - 117.1 84.9 7.6 92.5
Network Operations 4.2 - 4.2 5.2 - 5.2
$178.2 - $178.2 $139.0 $7.8 $146.8
(1) During the third quarter of fiscal 2007, MCD and Stratex were merged;
therefore, the combined format that has historically been presented in
this table is no longer necessary for this quarter and going forward.
Table 3
HARRIS STRATEX NETWORKS, INC.
Fiscal Year 2008 Third Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of March 28, As of June 29,
2008 2007(1)
(Restated) (Restated)
(In millions)
Assets
Cash and cash equivalents $97.0 $69.2
Short-term investments 3.4 20.4
Receivables 195.9 183.1
Inventories and unbilled costs 144.4 161.1
Current deferred taxes 6.5 4.1
Other current assets 17.5 21.7
Property, plant and equipment 74.4 80.0
Goodwill 316.5 324.7
Identifiable intangible assets 133.2 144.5
Non-current deferred taxes - 0.5
Other assets 16.0 16.2
$1,004.8 $1,025.5
Liabilities and
Shareholders' Equity
Short-term debt $- $1.2
Current portion of long-term debt 6.0 10.7
Accounts payable 81.8 84.7
Accrued expenses and other
current liabilities 70.3 78.0
Advance payments and
unearned income 26.7 22.3
Due to Harris Corporation 20.5 17.2
Long-term debt 5.0 8.8
Restructuring and other
long-term liabilities 7.8 14.6
Redeemable preference shares 8.3 8.3
Warrants outstanding 0.6 3.9
Non-current deferred taxes 16.8 29.4
Shareholders' equity 761.0 746.4
$1,004.8 $1,025.5
(1) Derived from audited financial statements.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Quarters Ended
March 28, 2008
As As
Previously Adjustments Restated
Reported
(In millions, except per share amounts)
Net revenues from product sales and
services $531.6 $- $531.6
Cost of product sales and services:
Cost of external product sales (306.3) (4.7) (311.0)
Cost of product sales with Harris
Corporation (4.2) - (4.2)
Total cost of product sales (310.5) (4.7) (315.2)
Cost of services (59.8) (0.4) (60.2)
Cost of sales billed from Harris
Corporation (4.6) - (4.6)
Amortization of purchased technology (5.3) - (5.3)
Total cost of product sales and
services (380.2) (5.1) (385.3)
Gross margin 151.4 (5.1) 146.3
Research and development expenses (34.8) - (34.8)
Selling and administrative expenses (90.0) (0.9) (90.9)
Selling and administrative expenses
with Harris Corporation (5.2) - (5.2)
Total research, development, selling
and administrative expenses (130.0) (0.9) (130.9)
Acquired in-process research and
development - - -
Amortization of identifiable
intangible assets (5.6) - (5.6)
Restructuring charges (8.4) - (8.4)
Corporate allocations expense from
Harris Corporation - - -
Operating income 7.4 (6.0) 1.4
Interest income 1.4 - 1.4
Interest expense (2.2) - (2.2)
Income before provision for income
taxes 6.6 (6.0) 0.6
Provision for income taxes (1.1) 2.3 1.2
Net income $5.5 $(3.7) $1.8
Net income per common share of
Class A and Class B common stock:
Basic $0.09 $0.03
Diluted $0.05 $(0.02)
Basic weighted average shares
outstanding 58.4 58.4
Diluted weighted average shares
outstanding 58.9 58.9
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended June 29, 2007
As As
Previously Adjustments Restated
Reported
(In millions, except per share amounts)
amounts)
Net revenues from product sales and
services $507.9 $- $507.9
Cost of product sales and services:
Cost of external product sales (281.2) (5.1) (286.3)
Cost of product sales with Harris
Corporation (1.3) - (1.3)
Total cost of product sales (282.5) (5.1) (287.6)
Cost of services (64.3) (0.9) (65.2)
Cost of sales billed from Harris
Corporation (5.4) - (5.4)
Amortization of purchased technology (3.0) - (3.0)
Total cost of product sales and
services (355.2) (6.0) (361.2)
Gross margin 152.7 (6.0) 146.7
Research and development expenses (39.4) - (39.4)
Selling and administrative expenses (92.1) - (92.1)
Selling and administrative expenses
with Harris Corporation (6.8) - (6.8)
Total research, development, selling
and administrative expenses (138.3) - (138.3)
Acquired in-process research and
development (15.3) - (15.3)
Amortization of identifiable
intangible assets (7.5) - (7.5)
Restructuring charges (9.3) - (9.3)
Corporate allocations expense from
Harris Corporation (3.7) - (3.7)
Operating loss (21.4) (6.0) (27.4)
Interest income 1.8 - 1.8
Interest expense (2.3) - (2.3)
Loss before provision for income
taxes (21.9) (6.0) (27.9)
Benefit for income taxes 4.0 2.1 6.1
Net loss $(17.9) $(3.9) $(21.8)
Basic and diluted net loss per common
share $(0.72) $(0.16) $(0.88)
Basic and diluted weighted average
shares outstanding 24.7 24.7
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended June 30, 2006
As As
Previously Adjustments Restated
Reported
(In millions, except per share amounts)
Net revenues from product sales and
services $357.5 $- $357.5
Cost of product sales and services:
Cost of external product sales (222.7) (2.4) (225.1)
Cost of product sales with Harris
Corporation (7.4) - (7.4)
Total cost of product sales (230.1) (2.4) (232.5)
Cost of services (37.1) (0.3) (37.4)
Cost of sales billed from Harris
Corporation (5.3) - (5.3)
Amortization of purchased technology - - -
Total cost of product sales and
services (272.5) (2.7) (275.2)
Gross margin 85.0 (2.7) 82.3
Research and development expenses (28.8) - (28.8)
Selling and administrative expenses (62.9) (0.1) (63.0)
Selling and administrative expenses
with Harris Corporation (5.6) - (5.6)
Total research, development, selling
and administrative expenses (97.3) (0.1) (97.4)
Acquired in-process research and
development - - -
Amortization of identifiable
intangible assets - - -
Restructuring charges (3.8) - (3.8)
Corporate allocations expense from
Harris Corporation (12.4) - (12.4)
Operating loss (28.5) (2.8) (31.3)
Interest income 0.5 - 0.5
Interest expense (1.0) - (1.0)
Loss before provision for income
taxes (29.0) (2.8) (31.8)
Provision for income taxes (6.8) - (6.8)
Net loss $(35.8) $(2.8) $(38.6)
Basic and diluted net loss per N/A N/A
common share
Basic and diluted weighted average
shares outstanding N/A N/A
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended July 1, 2005
As As
Previously Adjustments Restated
Reported
(In millions, except per share amounts)
Net revenues from product sales and
services $310.4 $- $310.4
Cost of product sales and services:
Cost of external product sales (181.5) (1.7) (183.2)
Cost of product sales with Harris
Corporation (3.7) - (3.7)
Total cost of product sales (185.2) (1.7) (186.9)
Cost of services (31.3) (1.0) (32.3)
Cost of sales billed from Harris
Corporation (4.3) - (4.3)
Amortization of purchased technology - - -
Total cost of product sales and
services (220.8) (2.7) (223.5)
Gross margin 89.6 (2.7) 86.9
Research and development expenses (28.0) - (28.0)
Selling and administrative expenses (52.8) (0.3) (53.1)
Selling and administrative expenses
with Harris Corporation (6.0) - (6.0)
Total research, development, selling
and administrative expenses (86.8) (0.3) (87.1)
Acquired in-process research and
development - - -
Amortization of identifiable
intangible assets - - -
Restructuring charges - - -
Corporate allocations expense from
Harris Corporation (6.2) - (6.2)
Operating loss (3.4) (3.0) (6.4)
Interest income 0.9 - 0.9
Interest expense (1.0) - (1.0)
Loss before provision for income
taxes (3.5) (3.0) (6.5)
Provision for income taxes (0.3) - (0.3)
Net loss $(3.8) $(3.0) $(6.8)
Basic and diluted net loss per
common share N/A N/A
Basic and diluted weighted average
shares outstanding N/A N/A
CONDENSED CONSOLIDATED BALANCE SHEET
As of March 28, 2008
As
Previously Adjustment As
Reported Restated
ASSETS
Current Assets
Cash and cash equivalents $97.0 $- $97.0
Short-term investments and available
for sale securities 3.4 - 3.4
Receivables 199.0 (3.1) 195.9
Unbilled costs 35.7 - 35.7
Inventories 125.3 (16.6) 108.7
Deferred income taxes 6.5 - 6.5
Other current assets 17.5 - 17.5
Total current assets 484.4 (19.7) 464.7
Long-Term Assets
Property, plant and equipment 74.4 - 74.4
Goodwill 315.4 1.1 316.5
Identifiable intangible assets 133.2 - 133.2
Other long-term assets 16.0 - 16.0
539.0 1.1 540.1
Total assets $1,023.4 $(18.6) $1,004.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $- $- $-
Current portion of long-term debt 6.0 - 6.0
Accounts payable 81.8 - 81.8
Compensation and benefits 12.5 - 12.5
Other accrued items 44.8 1.1 45.9
Advance payments and unearned income 26.7 - 26.7
Income taxes payable 3.6 - 3.6
Restructuring liabilities 6.7 - 6.7
Current portion of long-term capital lease
obligation to Harris Corporation 1.6 - 1.6
Due to Harris Corporation 20.5 - 20.5
Total current liabilities 204.2 1.1 205.3
Long-term liabilities 42.9 (4.4) 38.5
Total liabilities 247.1 (3.3) 243.8
Total shareholders' equity 776.3 (15.3) 761.0
Total liabilities and shareholders' equity $1,023.4 $(18.6) $1,004.8
CONDENSED CONSOLIDATED BALANCE SHEET
As of June 29, 2007
As
Previously Adjustment As
Reported Restated
ASSETS
Current Assets
Cash and cash equivalents $69.2 $- $69.2
Short-term investments and available for
sale securities 20.4 - 20.4
Receivables 185.3 (2.2) 183.1
Unbilled costs 36.9 - 36.9
Inventories 135.7 (11.5) 124.2
Deferred income taxes 4.1 - 4.1
Other current assets 21.7 - 21.7
Total current assets 473.3 (13.7) 459.6
Long-Term Assets
Property, plant and equipment 80.0 - 80.0
Goodwill 323.6 1.1 324.7
Identifiable intangible assets 144.5 - 144.5
Other long-term assets 16.7 - 16.7
564.8 1.1 565.9
Total assets $1,038.1 $(12.6) $1,025.5
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $1.2 $- $1.2
Current portion of long-term debt 10.7 - 10.7
Accounts payable 84.7 - 84.7
Compensation and benefits 11.5 - 11.5
Other accrued items 44.7 1.1 45.8
Advance payments and unearned income 22.3 - 22.3
Income taxes payable 6.8 - 6.8
Restructuring liabilities 10.8 - 10.8
Current portion of long-term capital lease
obligation to Harris Corporation 3.1 - 3.1
Due to Harris Corporation 17.2 - 17.2
Total current liabilities 213.0 1.1 214.1
Long-term liabilities 67.1 (2.1) 65.0
Total liabilities 280.1 (1.0) 279.1
Total shareholders' equity 758.0 (11.6) 746.4
Total liabilities and shareholders' equity $1,038.1 $(12.6) $1,025.5
CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 2006
As
Previously Adjustment As
Reported Restated
(In millions)
ASSETS
Current Assets
Cash and cash equivalents $13.8 $- $13.8
Short-term investments and available for
sale securities - - -
Receivables 123.9 (2.2) 121.7
Unbilled costs 25.5 - 25.5
Inventories 71.9 (5.5) 66.4
Deferred income taxes - - -
Other current assets 6.7 - 6.7
Total current assets 241.8 (7.7) 234.1
Long-Term Assets
Property, plant and equipment 52.2 - 52.2
Goodwill 28.3 - 28.3
Identifiable intangible assets 6.4 - 6.4
Other long-term assets 23.9 - 23.9
110.8 - 110.8
Total assets $352.6 $(7.7) $344.9
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $0.2 $- $0.2
Current portion of long-term debt - - -
Accounts payable 42.1 - 42.1
Compensation and benefits 17.4 - 17.4
Other accrued items 16.9 - 16.9
Advance payments and unearned income 9.2 - 9.2
Income taxes payable - - -
Restructuring liabilities 2.2 - 2.2
Current portion of long-term capital lease
obligation to Harris Corporation - - -
Due to Harris Corporation - - -
- - -
Total current liabilities 88.0 - 88.0
Long-term liabilities 12.6 - 12.6
Total liabilities 100.6 - 100.6
Total shareholders' equity 252.0 (7.7) 244.3
Total liabilities and shareholders' equity $352.6 $(7.7) $344.9
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is furnished herewith:
99.1 Press Release, issued by Harris Stratex Networks, Inc. on September
18, 2008 (furnished pursuant to Item 2.02).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HARRIS STRATEX NETWORKS, INC.
By:
Name: Sarah A. Dudash
Title: Vice President and Chief Financial Officer
Date: September 18, 2008
EXHIBIT INDEX
Exhibit
No.
Under
Regulation S-K,
Item 601 Description
99.1 Press Release, issued by Harris Stratex Networks, Inc. on
September 18, 2008 (furnished pursuant to Item 2.02).
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