x
|
Quarterly
report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
|
Harman
International Industries,
Incorporated
|
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
|
11-2534306
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S.
EmployerIdentification No.)
|
|
|
|
1101
Pennsylvania Avenue, NW,
|
|
|
Suite
1010
|
|
|
Washington,
DC
|
|
20004
|
(Address
of principal executive offices)
|
|
(Zip
code)
|
|
||
(202)
393-1101
|
||
(Registrant's
telephone number, including area
code)
|
Large
accelerated filer x
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
|
|
|
Page
|
Part
I
|
|
FINANCIAL
INFORMATION
|
Number
|
|
|
|
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|
|
|
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|||
|
|
|
|
|
|
5
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6
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|
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7
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|
8
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|
18
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||
|
|
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20
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||
|
|
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|
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28
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||
|
|
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29
|
||
|
|
|
|
Part
II
|
|
OTHER
INFORMATION
|
|
|
|
|
|
|
30
|
||
|
|
|
|
|
31
|
||
|
|
|
|
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|
32
|
•
|
the
occurrence of any event, change or other circumstance that
could give rise to the termination of the merger agreement providing
for
the acquisition of our Company by affiliates of KKR and
GSCP;
|
•
|
the
inability to complete the proposed acquisition due to the
failure to obtain stockholder approval or the failure to satisfy
other
conditions to the consummation of the
acquisition;
|
•
|
the
failure of the proposed acquisition of our Company by
affiliates of KKR and GSCP to close for any other
reason;
|
•
|
risks
that the proposed acquisition disrupts current plans and
operations, as well as relationships with key customers and suppliers,
and
the potential difficulties in employee retention as a result of the
proposed acquisition;
|
•
|
the
impact of the substantial indebtedness incurred to finance
the proposed acquisition of our Company;
|
•
|
the
amount of costs, fees, expenses and charges related to the
proposed acquisition of our Company and the actual terms of certain
financings that will be obtained for the acquisition of our
Company;
|
•
|
automobile
industry sales and production rates and the
willingness of automobile purchasers to pay for the option of a premium
audio system and/or a multi-functional infotainment
system;
|
•
|
changes
in consumer confidence and
spending;
|
•
|
fluctuations
in currency exchange rates and other risks
inherent in international trade and business
transactions;
|
•
|
our
ability to satisfy contract performance criteria, including
technical specifications and due dates;
|
•
|
our
ability to design and manufacture our products profitably
under our long-term contractual
commitments;
|
•
|
the
loss of one or more significant customers, including our
automotive manufacturer customers;
|
•
|
competition
in the automotive, consumer or professional markets
in which we operate;
|
•
|
model-year
changeovers in the automotive
industry;
|
•
|
changes
in general economic conditions and specific market
conditions;
|
•
|
our
ability to enforce or defend our ownership and use of
intellectual property;
|
•
|
our
ability to effectively integrate acquisitions made by our
Company;
|
•
|
strikes,
work stoppages and labor negotiations at our
facilities or at a facility of one of our significant customers;
or work
stoppages at a common carrier or a major shipping
location;
|
•
|
the
outcome of pending or future litigation and administrative
claims, including patent and environmental matters;
and
|
•
|
world
political stability.
|
Part
I.
|
FINANCIAL
INFORMATION
|
Item
1.
|
|
|
March
31,
|
|
June
30,
|
|
||
|
|
2007
|
|
2006
|
|
||
|
|
(Unaudited)
|
|
|
|
||
Assets
|
|
|
|
|
|
||
Current
assets
|
|
|
|
|
|
||
Cash
and cash equivalents
|
|
$
|
96,961
|
|
|
291,758
|
|
Receivables
(less allowance for doubtful accounts of $9,147 at
March 31, 2007 and $8,738 at June 30, 2006)
|
|
|
529,719
|
|
|
444,474
|
|
Inventories
|
|
|
480,179
|
|
|
344,957
|
|
Other
current assets
|
|
|
170,114
|
|
|
168,168
|
|
Total
current assets
|
|
|
1,276,973
|
|
|
1,249,357
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
529,456
|
|
|
521,935
|
|
Goodwill
|
|
|
400,123
|
|
|
381,219
|
|
Other
assets
|
|
|
192,482
|
|
|
202,150
|
|
Total
assets
|
|
$
|
2,399,034
|
|
|
2,354,661
|
|
Liabilities
and Shareholders’ Equity
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
3,084
|
|
|
1,751
|
|
Current
portion of long-term debt
|
|
|
17,020
|
|
|
16,337
|
|
Accounts
payable
|
|
|
270,421
|
|
|
320,327
|
|
Accrued
liabilities
|
|
|
396,673
|
|
|
414,093
|
|
Income
taxes payable
|
|
|
125,843
|
|
|
116,493
|
|
Total
current liabilities
|
|
|
813,041
|
|
|
869,001
|
|
|
|
|
|
|
|
|
|
Borrowings
under revolving credit facility
|
|
|
136,702
|
|
|
159,900
|
|
Senior
notes
|
|
|
2,751
|
|
|
19,566
|
|
Minority
interest
|
|
|
1,439
|
|
|
2,716
|
|
Other
non-current liabilities
|
|
|
81,216
|
|
|
75,314
|
|
Shareholders’
equity
|
|
|
|
|
|
||
Preferred
stock, $.01 par value. Authorized 5,000,000 shares;
none issued and outstanding
|
|
|
---
|
|
|
---
|
|
Common
stock, $.01 par value. Authorized 200,000,000 shares;
issued and outstanding 83,345,859 at March 31, 2007
and
82,754,909 at June 30, 2006
|
|
|
833
|
|
|
827
|
|
Additional
paid-in capital
|
|
|
578,241
|
|
|
544,871
|
|
Accumulated
other comprehensive income (loss):
|
|
|
|
|
|
|
|
Unrealized
loss on hedging derivatives
|
|
|
(1,896
|
)
|
|
(3,267
|
)
|
Minimum
pension liability adjustment
|
|
|
(11,811
|
)
|
|
(11,789
|
)
|
Cumulative
foreign currency translation adjustment
|
|
|
87,464
|
|
|
64,280
|
|
Retained
earnings
|
|
|
1,350,662
|
|
|
1,144,070
|
|
Less
common stock held in treasury (18,198,082 shares at March
31, 2007 and 16,690,182 at June 30, 2006)
|
|
|
(639,608
|
)
|
|
(510,828
|
)
|
Total
shareholders’ equity
|
|
|
1,363,885
|
|
|
1,228,164
|
|
Total
liabilities and shareholders’ equity
|
|
$
|
2,399,034
|
|
|
2,354,661
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
||||||||
|
|
March
31,
|
|
March
31,
|
|
||||||||
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
$
|
882,771
|
|
|
801,487
|
|
|
2,640,031
|
|
|
2,388,780
|
|
Cost
of sales
|
|
|
577,396
|
|
|
519,870
|
|
|
1,727,729
|
|
|
1,535,099
|
|
Gross
profit
|
|
|
305,375
|
|
|
281,617
|
|
|
912,302
|
|
|
853,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
|
|
203,052
|
|
|
182,827
|
|
|
607,341
|
|
|
560,838
|
|
Operating
income
|
|
|
102,323
|
|
|
98,790
|
|
|
304,961
|
|
|
292,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
|
340
|
|
|
2,492
|
|
|
977
|
|
|
10,889
|
|
Miscellaneous,
net
|
|
|
543
|
|
|
857
|
|
|
1,888
|
|
|
2,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes and minority interest
|
|
|
101,440
|
|
|
95,441
|
|
|
302,096
|
|
|
279,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense, net
|
|
|
30,895
|
|
|
31,775
|
|
|
94,369
|
|
|
89,516
|
|
Minority
interest
|
|
|
(498
|
)
|
|
(360
|
)
|
|
(1,313
|
)
|
|
(717
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
71,043
|
|
|
64,026
|
|
|
209,040
|
|
|
190,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
|
$
|
1.09
|
|
|
0.96
|
|
|
3.20
|
|
|
2.88
|
|
Diluted
earnings per share
|
|
$
|
1.07
|
|
|
0.94
|
|
|
3.14
|
|
|
2.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares - basic
|
|
|
65,239
|
|
|
66,428
|
|
|
65,348
|
|
|
66,103
|
|
Weighted
average shares - diluted
|
|
|
66,327
|
|
|
68,109
|
|
|
66,501
|
|
|
68,164
|
|
|
|
Nine
months ended
|
|
||||
|
|
March
31,
|
|
||||
|
|
2007
|
|
2006
|
|
||
|
|
|
|
|
|
||
Cash
flows from operating activities:
|
|
|
|
|
|
||
Net
income
|
|
$
|
209,040
|
|
|
190,528
|
|
Adjustments
to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
93,395
|
|
|
92,126
|
|
Loss
on disposition of assets
|
|
|
1,691
|
|
|
51
|
|
Stock
option expense
|
|
|
11,844
|
|
|
11,725
|
|
Excess
tax benefits from share-based payment
arrangements
|
|
|
(7,763
|
)
|
|
(42,952
|
)
|
Changes
in working capital, net of acquisition/disposition
effects:
|
|
|
|
|
|
|
|
Decrease
(increase) in:
|
|
|
|
|
|
|
|
Receivables
|
|
|
(68,120
|
)
|
|
(5,571
|
)
|
Inventories
|
|
|
(123,436
|
)
|
|
(25,144
|
)
|
Other
current assets
|
|
|
(8,481
|
)
|
|
(13,744
|
)
|
Increase
(decrease) in:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
(57,142
|
)
|
|
(31,151
|
)
|
Accrued
liabilities
|
|
|
(26,996
|
)
|
|
42,245
|
|
Income
taxes payable
|
|
|
3,051
|
|
|
17,420
|
|
Other
operating activities
|
|
|
12,248
|
|
|
5,777
|
|
Net
cash provided by operating activities
|
|
$
|
39,331
|
|
|
241,310
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
Payment
for purchase of companies, net of cash
acquired
|
|
$
|
(6,660
|
)
|
|
(11,811
|
)
|
Proceeds
from asset dispositions
|
|
|
1,340
|
|
|
1,024
|
|
Capital
expenditures
|
|
|
(84,364
|
)
|
|
(74,972
|
)
|
Other
items, net
|
|
|
(983
|
)
|
|
(1,603
|
)
|
Net
cash used in investing activities
|
|
$
|
(90,667
|
)
|
|
(87,362
|
)
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
Net
increase (decrease) in short-term borrowings
|
|
$
|
1,347
|
|
|
(833
|
)
|
Net
repayments under revolving credit facility
|
|
|
(25,660
|
)
|
|
---
|
|
Repayment
of long-term debt
|
|
|
(13,168
|
)
|
|
---
|
|
Other
increase (decrease) in long-term debt
|
|
|
(4,770
|
)
|
|
1,637
|
|
Repurchase
of common stock
|
|
|
(128,780
|
)
|
|
(118,972
|
)
|
Dividends
paid to shareholders
|
|
|
(2,448
|
)
|
|
(2,485
|
)
|
Exercise
of stock options
|
|
|
21,532
|
|
|
26,031
|
|
Excess
tax benefits from share-based payment
arrangements
|
|
|
7,763
|
|
|
42,952
|
|
Other
|
|
|
---
|
|
|
108
|
|
Net
cash used in financing activities
|
|
$
|
(144,184
|
)
|
|
(51,562
|
)
|
Effect
of exchange rate changes on cash
|
|
|
723
|
|
|
3,499
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
$
|
(194,797
|
)
|
|
105,885
|
|
Cash
and cash equivalents at beginning of period
|
|
|
291,758
|
|
|
291,214
|
|
Cash
and cash equivalents at end of period
|
|
$
|
96,961
|
|
|
397,099
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
2,649
|
|
|
14,249
|
|
Income
taxes paid
|
|
$
|
91,058
|
|
|
81,779
|
|
Supplemental
schedule of non-cash investing
activities:
|
|
|
|
|
|
|
|
Fair
value of assets acquired
|
|
$
|
---
|
|
|
12,102
|
|
Cash
paid for the assets
|
|
|
---
|
|
|
6,503
|
|
Liabilities
assumed
|
|
$
|
---
|
|
|
5,599
|
|
|
|
March
31,
|
|
June
30,
|
|
||
($000s
omitted)
|
|
2007
|
|
2006
|
|
||
Finished
goods
|
|
$
|
267,473
|
|
|
147,663
|
|
Work
in process
|
|
|
55,488
|
|
|
45,954
|
|
Raw
materials
|
|
|
157,218
|
|
|
151,340
|
|
Total
|
|
$
|
480,179
|
|
|
344,957
|
|
|
|
Nine
months ended
|
|
||||
|
|
March
31,
|
|
||||
($000s
omitted)
|
|
2007
|
|
2006
|
|
||
|
|
|
|
|
|
||
Beginning
balance (June 30)
|
|
$
|
60,768
|
|
|
48,582
|
|
Warranty
provisions
|
|
|
44,148
|
|
|
37,476
|
|
Warranty
payments (cash or in-kind)
|
|
|
(45,467)
|
|
(25,952)
|
||
Ending
balance
|
|
$
|
59,449
|
|
|
60,106
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
||||||||
|
|
March
31,
|
|
March
31,
|
|
||||||||
($000s
omitted)
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net
income
|
|
$
|
71,043
|
|
|
64,026
|
|
|
209,040
|
|
|
190,528
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation
|
|
|
4,569
|
|
|
17,904
|
|
23,184
|
|
|
2,865
|
||
Unrealized
gains (losses) on hedging
|
|
|
15
|
|
(3,453)
|
|
1,371
|
|
|
(3,846)
|
|||
Minimum
pension liability adjustment
|
|
|
(6)
|
|
(54)
|
|
|
(22)
|
|
(4)
|
|||
Total
other comprehensive income
|
|
$
|
75,621
|
|
|
78,423
|
|
|
233,573
|
|
|
189,543
|
|
($000s
omitted)
|
|
Unrealized
gain (loss) on hedging derivatives
|
|
Minimum
pension liability adjustment
|
|
Cumulative
foreign currency translation adjustment
|
|
Accumulated
other comprehensive income (loss)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
June
30, 2006
|
|
$
|
(3,267)
|
|
(11,789)
|
|
64,280
|
|
|
49,224
|
|
||
Foreign
currency translation adjustments
|
|
|
---
|
|
|
---
|
|
|
23,184
|
|
|
23,184
|
|
Change
in fair value of foreign currency cash flow
hedges
|
|
|
1,371
|
|
|
---
|
|
|
---
|
|
|
1,371
|
|
Minimum
pension liability adjustment
|
|
|
---
|
|
|
(22)
|
|
---
|
|
|
(22)
|
||
March
31, 2007
|
|
$
|
(1,896)
|
|
(11,811)
|
|
87,464
|
|
|
73,757
|
|
||
|
|
Three
months ended March 31,
|
|
||||||||||
(000s
omitted except per share amounts)
|
|
2007
|
|
2006
|
|
||||||||
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
||||
Net
income
|
|
$
|
71,043
|
|
|
71,043
|
|
|
64,026
|
|
|
64,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding
|
|
|
65,239
|
|
|
65,239
|
|
|
66,428
|
|
|
66,428
|
|
Employee
stock options
|
|
|
---
|
|
|
1,088
|
|
|
---
|
|
|
1,681
|
|
Total
weighted average shares outstanding
|
|
|
65,239
|
|
|
66,327
|
|
|
66,428
|
|
|
68,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share
|
|
$
|
1.09
|
|
|
1.07
|
|
|
0.96
|
|
|
0.94
|
|
|
|
Nine
months ended March 31,
|
|
||||||||||
(000s
omitted except per share amounts)
|
|
2007
|
|
2006
|
|
||||||||
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
||||
Net
income
|
|
$
|
209,040
|
|
|
209,040
|
|
|
190,528
|
|
|
190,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding
|
|
|
65,348
|
|
|
65,348
|
|
|
66,103
|
|
|
66,103
|
|
Employee
stock options
|
|
|
---
|
|
|
1,153
|
|
|
---
|
|
|
2,061
|
|
Total
weighted average shares outstanding
|
|
|
65,348
|
|
|
66,501
|
|
|
66,103
|
|
|
68,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share
|
|
$
|
3.20
|
|
|
3.14
|
|
|
2.88
|
|
|
2.80
|
|
|
Nine
months ended March 31,
|
||
|
2007
|
|
2006
|
|
|
|
|
Expected
volatility
|
35.0%
- 42.0%
|
|
38.0
- 42.0%
|
Weighted-average
volatility
|
39.1%
|
|
38.5%
|
Expected
annual dividend
|
$0.05
|
|
$0.05
|
Expected
term (in years)
|
1.55
- 7.69
|
|
4.24
- 6.33
|
Risk-free
rate
|
4.4%
- 5.0%
|
|
3.9
- 4.3%
|
|
|
Shares
|
|
Weighted
average exercise price
|
|
Weighted
average remaining contractual term
(years)
|
|
Aggregate
intrinsic
value
($000s
omitted)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Outstanding
at June 30, 2006
|
|
|
3,299,720
|
|
$ 47.04
|
|
|
|
|
|
|
|
|
Granted
|
|
|
331,000
|
|
|
80.91
|
|
|
|
|
|
|
|
Exercised
|
|
|
(596,868
|
)
|
|
38.41
|
|
|
|
|
|
|
|
Forfeited
or expired
|
|
|
(145,340
|
)
|
|
81.85
|
|
|
|
|
|
|
|
Outstanding
at March 31, 2007
|
|
|
2,888,512
|
|
|
50.95
|
|
|
5.99
|
|
|
$
131,966
|
|
Exercisable
at March 31, 2007
|
|
|
1,608,732
|
|
$ 32.02
|
|
|
4.56
|
|
|
$
103,620
|
|
|
|
|
Shares
|
|
Weighted
average
grant-date
fair
value
|
|
||
|
|
|
|
|
|
||
Nonvested
at June 30, 2006
|
|
|
37,000
|
|
$ 85.36
|
|
|
Granted
|
|
|
---
|
|
|
---
|
|
Vested
|
|
|
---
|
|
|
---
|
|
Forfeited
|
|
|
(25,000
|
)
|
|
86.98
|
|
Nonvested
at March 31, 2007
|
|
|
12,000
|
|
|
82.00
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
||||||||
|
|
March
31,
|
|
March
31,
|
|
||||||||
($000s
omitted)
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
Net
sales:
|
|
|
|
|
|
|
|
|
|
||||
Automotive
|
|
$
|
624,855
|
|
|
567,340
|
|
|
1,858,156
|
|
|
1,635,220
|
|
Consumer
|
|
|
117,960
|
|
|
106,810
|
|
|
374,097
|
|
|
373,186
|
|
Professional
|
|
|
139,956
|
|
|
127,337
|
|
|
407,778
|
|
|
380,374
|
|
Total
|
|
$
|
882,771
|
|
|
801,487
|
|
|
2,640,031
|
|
|
2,388,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
|
92,107
|
|
|
91,003
|
|
|
274,683
|
|
|
252,961
|
|
Consumer
|
|
|
1,727
|
|
|
5,215
|
|
|
11,979
|
|
|
37,786
|
|
Professional
|
|
|
18,857
|
|
|
13,526
|
|
|
56,030
|
|
|
41,377
|
|
Other
|
|
|
(10,368
|
)
|
|
(10,954
|
)
|
|
(37,731
|
)
|
|
(39,281
|
)
|
Total
|
|
$
|
102,323
|
|
|
98,790
|
|
|
304,961
|
|
|
292,843
|
|
|
|
Pension
benefits
|
|
Other
postretirement benefits
|
|
||||||||
($000s
omitted)
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
Components
of net periodic benefit
cost:
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
cost
|
|
$
|
386
|
|
|
303
|
|
|
373
|
|
|
400
|
|
Interest
cost
|
|
|
602
|
|
|
473
|
|
|
788
|
|
|
587
|
|
Expected
return on plan assets
|
|
|
(33
|
)
|
|
(24
|
)
|
|
---
|
|
|
---
|
|
Amortization
of prior service cost
|
|
|
---
|
|
|
---
|
|
|
215
|
|
|
182
|
|
Amortization
of net loss
|
|
|
---
|
|
13
|
|
|
303
|
|
|
368
|
|
|
Net
periodic benefit cost
|
|
$
|
955
|
|
|
765
|
|
|
1,679
|
|
|
1,537
|
|
|
|
Pension
benefits
|
|
Other
postretirement benefits
|
|
||||||||
($000s
omitted)
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
Components
of net periodic benefit
cost:
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
cost
|
|
$
|
1,142
|
|
|
910
|
|
|
1,149
|
|
|
1,200
|
|
Interest
cost
|
|
|
1,775
|
|
|
1,419
|
|
|
2,020
|
|
|
1,761
|
|
Expected
return on plan assets
|
|
|
(93
|
)
|
|
(72
|
)
|
|
---
|
|
|
---
|
|
Amortization
of prior service cost
|
|
|
---
|
|
|
---
|
|
|
579
|
|
|
546
|
|
Amortization
of net loss
|
|
|
---
|
|
|
40
|
|
|
1,179
|
|
|
1,104
|
|
Net
periodic benefit cost
|
|
$
|
2,824
|
|
|
2,297
|
|
|
4,927
|
|
|
4,611
|
|
|
|
Net
sales
|
|
Receivables
|
|
||||||||
|
|
Nine
months
ended
March 31,
|
|
March
31,
|
|
||||||||
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
DaimlerChrysler
|
|
|
26
|
% |
|
25
|
|
20
|
% |
|
20
|
||
Toyota/Lexus
|
10
|
9
|
7
|
6
|
|||||||||
Audi/VW
|
10
|
8
|
8
|
10
|
|||||||||
BMW
|
9
|
10
|
7
|
8
|
|||||||||
Other
Customers
|
|
|
45
|
|
|
48
|
|
|
58
|
|
|
56
|
|
Total
|
|
|
100
|
% |
|
100
|
|
100
|
% |
|
100
|
||
•
|
management’s
and our employees’ attention from our
day-to-day business may be diverted because matters related to the
proposed acquisition may require substantial commitments of their
time and
resources;
|
•
|
we
may lose key employees;
|
•
|
our
relationships with customers and vendors may be
substantially disrupted as a result of uncertainties with regard
to our
business and prospects;
|
•
|
certain
costs related to the proposed acquisition, such as
legal and accounting fees, are payable by us whether or not the
proposed
acquisition is completed;
|
•
|
under
certain circumstances, if the proposed acquisition is
not completed, we may be required to pay a termination (break-up)
fee of
up to $225 million; and
|
•
|
the
market price of shares of our common stock may decline
to the extent that the current market price of those shares reflects
a
market assumption that the proposed acquisition will be
completed.
|
•
|
changes
in credit markets that reduce available credit or
the ability to renew existing liquidity facilities on acceptable
terms;
|
•
|
changes
in interest rates;
|
•
|
a
deterioration of our credit or a reduction in our credit
ratings;
|
•
|
a
material breakdown in our risk management procedures; and
|
•
|
the
occurrence of material adverse changes in our businesses
that restrict our ability to access the credit
markets.
|
($000s
omitted)
|
|
Three
months ended March 31,
|
|
Nine
months ended March 31,
|
|
||||||||||||||||
|
|
2007
|
|
%
|
|
2006
|
|
%
|
|
2007
|
|
%
|
|
2006
|
|
%
|
|
||||
Net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive
|
|
$
|
624,855
|
|
71%
|
|
|
567,340
|
|
71%
|
|
$
|
1,858,156
|
|
70%
|
|
|
1,635,220
|
|
68%
|
|
Consumer
|
|
|
117,960
|
|
13%
|
|
106,810
|
|
13%
|
|
374,097
|
|
14%
|
|
373,186
|
|
16%
|
||||
Professional
|
|
|
139,956
|
|
16%
|
|
127,337
|
|
16%
|
|
407,778
|
|
16%
|
|
380,374
|
|
16%
|
||||
Total
|
|
$
|
882,771
|
|
100%
|
|
801,487
|
|
100%
|
$
|
2,640,031
|
|
100%
|
|
2,388,780
|
|
100%
|
||||
($000s
omitted)
|
Three
months ended March 31,
|
|
Nine
months ended March 31,
|
|
|||||||||||||||||
|
2007
|
|
Percent
of
net
sales
|
|
2006
|
Percent
of
net
sales
|
|
2007
|
Percent
of
net
sales
|
2006
|
Percent
of
net
sales
|
||||||||||
Gross
Profit:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Automotive
|
$
|
221,310
|
|
35.4%
|
|
200,575
|
35.4%
|
|
$
|
661,470
|
35.6%
|
|
|
591,757
|
36.2%
|
||||||
Consumer
|
|
30,978
|
|
26.3%
|
33,426
|
31.3%
|
|
97,521
|
26.1%
|
|
124,492
|
33.4%
|
|||||||||
Professional
|
|
54,337
|
|
38.8%
|
48,866
|
38.4%
|
157,061
|
38.5%
|
142,105
|
37.4%
|
|||||||||||
Other
|
|
(1,250)
|
|
---
|
(1,250)
|
|
---
|
|
|
(3,750)
|
|
---
|
(4,673)
|
|
---
|
||||||
Total
|
$
|
305,375
|
|
34.6%
|
281,617
|
|
35.1%
|
$
|
912,302
|
|
34.6%
|
853,681
|
35.7%
|
||||||||
($000s
omitted)
|
Three
months ended March 31,
|
|
Nine
months ended March 31,
|
|
||||||||||||||||||||
|
2007
|
|
Percent
of net sales
|
|
2006
|
|
Percent
of net sales
|
|
2007
|
|
Percent
of net sales
|
|
2006
|
|
Percent
of net sales
|
|
||||||||
SG&A
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive
|
$
|
129,203
|
|
|
20.7%
|
|
|
109,572
|
|
|
19.3%
|
|
$
|
386,787
|
|
|
20.8%
|
|
|
338,796
|
|
|
20.7%
|
|
Consumer
|
|
29,251
|
|
|
24.8%
|
|
28,211
|
|
|
26.4%
|
|
85,542
|
|
|
22.9%
|
|
86,706
|
|
|
23.2%
|
||||
Professional
|
|
35,480
|
|
|
25.4%
|
|
35,340
|
|
|
27.8%
|
|
101,031
|
|
|
24.8%
|
|
100,728
|
|
|
26.5%
|
||||
Other
|
|
9,118
|
|
|
---
|
|
|
9,704
|
|
|
---
|
|
|
33,981
|
|
|
---
|
|
|
34,608
|
|
|
---
|
|
Total
|
$
|
203,052
|
|
|
23.0%
|
|
182,827
|
|
|
22.8%
|
$
|
607,341
|
|
|
23.0%
|
|
560,838
|
|
|
23.5%
|
||||
Item
4.
|
Part
II.
|
OTHER
INFORMATION
|
Total
number of
shares
purchased
|
|
Average
price paid per share
|
|
Total
number of shares
purchased
as part of publicly
announced
plans or programs
|
|
Maximum
number of shares that may yet be purchased
under
the plans or programs
|
||
January
1, 2007 through January 31, 2007
|
90,000
|
$96.06
|
90,000
|
2,298,718
|
||||
February
1, 2007 through February 28, 2007
|
496,800
|
94.78
|
496,800
|
1,801,918
|
||||
March
1, 2007 through March 31, 2007
|
---
|
---
|
---
|
1,801,918
|
||||
586,800
|
$94.98
|
586,800
|
1,801,918
|
(1) | ||||
|
|
|
|
|
||||
(1) Our
share repurchase program was first publicly
announced on June 16, 1998. In August 2005, the Board authorized
the
purchase of up to an additional four million shares, bringing the
total
authorized to 20 million shares. The total number of shares repurchased
through March 31, 2007 was 18,198,082. We have suspended the share
repurchase program due to the proposed acquisition of our Company
by
affiliates of KKR and GSCP.
|
Exhibits
required by Item 601 of Regulation S-K
|
||
|
||
2.1
|
Agreement
and Plan of Merger, dated as of April 26, 2007, among
Harman International Industries, Incorporated, KHI Parent Inc. and
KHI
Merger Sub Inc. (filed as Exhibit 2.1 to the Current Report on Form
8-K
filed with the Commission on April 27, 2007 and hereby incorporated
by
reference).
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10.1
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Benefit
Agreement of Kevin Brown, dated April 30, 2007, under
our Supplemental Executive Retirement Plan.
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31.1
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Certification
of Sidney Harman pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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31.2
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Certification
of Kevin L. Brown pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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32.1
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Certification
of Sidney Harman and Kevin L. Brown, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
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Harman
International Industries,
Incorporated
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(Registrant)
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Date: May
10, 2007
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By: /s/ Kevin
L. Brown
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Kevin
L. Brown
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Executive
Vice President and Chief Financial
Officer
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(Principal
Financial Officer)
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Date: May
10, 2007
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By: /s/ Sandra
B. Robinson
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Sandra
B. Robinson
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Vice
President - Financial Operations and Chief Accounting
Officer (Principal Accounting Officer)
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