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07 Aug 15. Harris Corporation (HRS) reported fiscal 2015 fourth quarter results, which included results of Exelis Inc. following the May 29, 2015 acquisition closing date.
Revenue in the fourth quarter of fiscal 2015 was $1.53bn, compared with $1.33bn in the prior year. GAAP loss from continuing operations was $56m, or $0.51 per diluted share. Non-GAAP income from continuing operations in the fourth quarter was $148m, or $1.32 per diluted share, and excluded acquisition-related costs and charges for restructuring and other items. The net benefit from the Exelis acquisition to Harris non-GAAP income from continuing operations was $0.09 per diluted share. Prior year GAAP income from continuing operations was $138m, or $1.28 per diluted share. A reconciliation of GAAP to non-GAAP financial measures is provided in the tables.
Orders in the fourth quarter were $1.53bn compared with $1.09bn in the prior year. Free cash flow (net cash provided by operating activities less capital expenditures) in the fourth quarter was $413m compared with $334m in the prior year.
“Fourth quarter results were solid, and the integration of Harris and Exelis is off to a good start,” said William M. Brown, chairman, president and chief executive officer. “We announced our reorganization into four market-focused segments for fiscal 2016 and we consolidated headquarters, combining the top talent from across both companies. We also announced our intention to close Exelis’ Ft. Wayne tactical radio facility and consolidate operations into our world-class Rochester facility. These initial integration steps mark good progress towards achieving the significant cost savings and improved competitive position this combination affords us.”
For full fiscal year 2015, revenue was $5.08bn compared with $5.01bn in the prior year. GAAP income from continuing operations was $334m, or $3.11 per diluted share. Non-GAAP income from continuing operations was $551m, or $5.14 per diluted share. In the prior year, GAAP income from continuing operations was $540m, or $5.00 per diluted share. Fiscal 2015 free cash flow was $713m.
RF Communications
RF Communications revenue in the fourth quarter was $505m compared with $493m in the prior year. Tactical Communications revenue was $366m, increasing 5 percent, and Public Safety revenue was $139 m, decreasing 4 percent. Segment operating income was $157m and non-GAAP operating income was $159m, excluding restructuring charges. Operating income was $141 m in the prior year.
Orders for the segment totaled $530m, including $402m in Tactical Communications and $128 m in Public Safety. Book-to-bill for the segment was 1.05 for the fourth quarter and 0.93 for the fiscal year. Funded backlog was $488m in Tactical Communications and $514m in Public Safety.
Tactical radio orders included $74m from an international customer for the next phase of a tactical communications modernization program, $55 m from Australia for technical and logistics support for the Joint Project 2072 Battlespace Communications program, $21 m from a country in Central Asia, $12m from a country in the Middle East, and $36m from the U.S. Marine Corps. Harris was also awarded a 10-year (5-year base, 5 option years) $3.9bn ceiling, multi-award Indefinite Delivery Indefinite Quantity (IDIQ) contract from the U.S. Army for rifleman radios under the Joint Tactical Radio System (JTRS) Handheld, Manpack and Small-form Fit (HMS) program. Public Safety orders included $37m from the New York Metropolitan Transportation Authority.
Government Communications Systems
Government Communications Systems revenue in the fourth quarter was $485m compared with $480m in the prior year. Higher revenue from the Foundatio