Harris Corp HRS
Q2 2011 Earnings Call Transcript

Transcript Call Date 01/26/2011

Operator: Good day, ladies and gentlemen, and welcome to the Second Quarter 2011 Harris Earnings Conference Call. My name is Alisha and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session.

I would now like to turn the conference call over to your host for today, Ms. Pamela Padgett, Vice President, Investor Relations. Please proceed.

Pamela Padgett - VP, IR: Good afternoon everyone, and welcome to Harris's second quarter fiscal 2011 conference call. I am Pamela Padgett and on the call with me today is Howard Lance, Chairman, President and CEO and Gary McArthur, Senior Vice President and Chief Financial Officer.

Before we get start a few words about forward-looking statements. In the course of this teleconference, management may make forward-looking statements. Forward-looking statements involve assumptions, risks, and uncertainties that could cause actual results to differ materially from those statements. For more information and a discussion of such assumptions, risks and uncertainties please see the press release and filings made by Harris with the SEC.

In addition, in our press release and on this teleconference, we will discuss certain financial measures and information that are non-GAAP financial measures. A reconciliation to the comparable GAAP measures is included in the tables of our press release, and on the Investor Relations section of our website, which is A replay of this call will also be available on the Investor Relations section of our website.

With that, Howard, I'll turn it over to you.

Howard L. Lance - Chairman, President and CEO: Thank you, Pam and I want to welcome all of you to our second quarter fiscal 2011 earnings call. Harris' second quarter results were excellent, with contributions from all of our operating segments. RF Communications posted strong international growth. Government Communications Systems showed continued stability with better than industry average margins and we saw a good improvement in Broadcast Communications results.

I am pleased to report that the previously announced Schlumberger Global Connectivity Services acquisition is still expected to close in our third fiscal quarter. GCS adds scale to our global managed satellite communication services business, expands our global footprint and further diversifies the Company into faster-growing markets. When combined with the previously acquired, CapRock Communications business, this merger will create exciting new channels to provide Harris assured communication solutions to both government and commercial customers alike.

Our consolidated revenue in the second quarter was $1.44 billion. That was 18% higher than the prior year. On an organic basis when we adjust for the impact of acquisitions, revenue increased by a strong 9%. Non-GAAP income, which excludes acquisition-related costs, was $155 million in the second quarter or $1.20 per diluted share. That was an increase of 12% compared with the prior year quarter.

Non-GAAP earnings before interest, taxes, depreciation and amortization and also excluding acquisition-related costs, was $296 million in the quarter an 11% increase compared to the prior year.

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