Harris Corporation Strategically Realigns Business Segments
The three Harris segments
· RF Communications – no change; includes the Tactical Communications and Public Safety and Professional Communications businesses. Provides tactical and land mobile radios, systems and networking applications for global defense, security, public safety and public service, transportation, and utility markets.
· Government Communications Systems – includes the Civil Programs, Defense Programs and National Intelligence Programs businesses. Provides communications and information technology and systems integration for mission-critical government applications.
· Integrated Network Solutions – includes the Harris IT Services, Harris CapRock Communications, Healthcare Solutions, and Cyber Integrated Solutions businesses (all of which were previously part of the Government Communications Systems segment), and the Broadcast Communications business. Provides IT services, managed services, cyber integration, interoperability, imaging, and digital media management solutions to support government, energy, healthcare, broadcast, and enterprise networks.
“Harris has established a strong reputation and track record for delivering innovative solutions across an increasingly broad spectrum of markets. This strategic business realignment will enable each of our segments to more effectively combine technologies, products and services from throughout the company into integrated solutions tailored for the specific markets that they serve,” said Howard L. Lance, chairman, president and chief executive officer.
“This approach represents a tremendous opportunity for our current and prospective customers, as we introduce more integrated end-to-end solutions for existing and new markets. This realignment positions the company to further expand into adjacent markets and global regions that are growing faster and have higher margins than some of our traditional government markets,” he added.
Integrated Network Solutions
Integrated Network Solutions represents a new segment that combines the resources and capabilities of existing and recently acquired operations into a powerful organization targeting the fast-growing global market for highly reliable and secure communications and IT networks.
The new segment will leverage the company’s strong and expanding technology and service capabilities – along with its growing global presence – to provide integrated solutions to meet individual customer and market needs. Harris is unique in its ability to integrate advanced technology and services to capture, aggregate, distribute, and analyze any type of communications or information – including voice, video, data, and imaging.
Integrated Network Solutions builds on Harris’ legacy of creating and operating some of the world’s most trusted networks for customers in established markets including defense, intelligence, air traffic control, public safety, and broadcast. The company is extending this reach into new markets, including healthcare, energy, cloud computing, sports, entertainment, and retail venues. Harris customers operate under very demanding requirements where high reliability and secure communications is critical.
“Commercial businesses and government customers around the globe are increasingly seeking total solutions – combining innovative technology with managed services,” said Dan Pearson, executive vice president and chief operating officer, and acting group president for the new segment. “With a flexible technology and managed services approach, Integrated Network Solutions is uniquely positioned to create tailored end-to-end solutions for customers seeking a trusted communications and IT partner.”
The company will report its financial results under the new segment structure effective with its third quarter of fiscal 2011, which ends April 1, 2011.
The company has reiterated its previous guidance for non-GAAP net income for fiscal 2011 in the range of $4.80 to $4.90 per diluted share ($4.73 to $4.83 per diluted share on a GAAP basis). Fiscal 2011 non-GAAP earnings guidance excludes acquisition-related costs. Fiscal 2011 revenue is still expected to be at the high end of the $5.9 to $6.0 billion range, which represents a year-over-year increase of about 15 percent compared with the prior year. A reconciliation of GAAP to non-GAAP financial measures is provided in Tables 1 and 2 along with accompanying notes.
There have been no changes to previous guidance other than giving effect to the segment realignment. In the RF Communications segment, fiscal 2011 revenue is still expected to be in the range of 9 to 10 percent higher, compared with the prior year, and operating margin is still expected to be in the range of 34 to 35 percent. In the realigned Government Communications Systems segment, fiscal 2011 revenue is expected to be in the range of 3 to 5 percent higher, compared with the prior year, and operating margin is expected to be in the range of 12.5 to 13.0 percent. In the new Integrated Network Solutions segment, fiscal 2011 revenue is expected to be in the range of 33 to 35 percent higher, compared with the prior year, which represents organic revenue growth in the range of 7 to 9 percent. Non-GAAP operating margin in the segment is expected to be in the range of 5 to 6 percent.
About Harris Corporation
Harris is an international communications and information technology company serving government and commercial markets in more than 150 countries. Headquartered in Melbourne, Florida, the company has approximately $5 billion of annual revenue and more than 16,000 employees — including nearly 7,000 engineers and scientists. Harris is dedicated to developing best-in-class assured communications® products, systems, and services.Harris Corporation