Harris Corporation Reports Strong Fiscal 2018 Third Quarter Results with Revenue and Orders Growth Across All Segments

*Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

In the first three quarters of fiscal 2018, Harris generated adjusted free cash flow of $451 million, excluding a $300 million voluntary pension contribution in the third quarter, and returned $402 million to shareholders through dividends and share repurchases, ending the period with $443 million of cash.

Guidance

As a result of strong year-to-date performance, Harris updated its guidance for fiscal 2018 to the following:

  • Revenue of approximately $6.14 billion, up 4% from fiscal 2017 (tightened from previous guidance of $6.08 - 6.14 billion, up 3 - 4%)
  • GAAP EPS from continuing operations of $5.93 - $5.98 and non-GAAP EPS from continuing operations of $6.45 - $6.502 (tightened from previous guidance of $5.78 - $5.98 GAAP and $6.30 - $6.50 non-GAAP)
  • Adjusted free cash flow of $900 - 925 million2 (increased from previous guidance of approximately $900 million).
  • Tax rate of approximately 24.3% GAAP; 22.5% non-GAAP

Conference Call and Webcast

Harris will host a conference call today, May 2, at 8:30 a.m. Eastern Time (ET) to discuss its fiscal 2018 third quarter financial results. The dial-in numbers for the teleconference are (U.S.) (877) 407-6184 and (International) (201) 389-0877, and participants will be directed to an operator. Please allow at least 10 minutes before the scheduled start time to connect to the teleconference. Participants are encouraged to listen via live webcast and view management’s supporting slide presentation at https://www.harris.com/investors/financial-reports. A recording of the call will be available on the Harris website beginning at approximately 12 p.m. ET on May 2.

About Harris Corporation

Harris Corporation is a leading technology innovator, solving customers’ toughest mission-critical challenges by providing solutions that connect, inform and protect. Harris supports government and commercial customers in more than 100 countries and has approximately $6 billion in annual revenue. The company is organized into three business segments: Communication Systems, Electronic Systems and Space and Intelligence Systems. Learn more at harris.com.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission (“SEC”), including earnings per diluted share from continuing operations for the third quarter and first three quarters of fiscal 2018 and expected earnings per diluted share from continuing operations for fiscal 2018, in each case excluding the impact of estimated non-cash adjustments related to tax reform and charges related to a decision to transition and exit a commercial line of business and other items, and in the case of earnings per diluted share from continuing operations for the first three quarters of fiscal 2018 and expected earnings per diluted share from continuing operations for fiscal 2018, also excluding a non-cash charge from an adjustment for deferred compensation; operating income and operating margin for the third quarter and first three quarters of fiscal 2018, excluding charges related to a decision to transition and exit a commercial line of business and other items and a non-cash charge from an adjustment for deferred compensation; operating income, operating margin and earnings per diluted share from continuing operations for the third quarter and first three quarters of fiscal 2017, in each case excluding acquisition-related and other charges; net cash provided by operating activities and free cash flow for the first three quarters of fiscal 2018 and expected for full fiscal 2018, in each case adjusted for the voluntary pension contribution in the third quarter of fiscal 2018, and in the case of free cash flow, also excluding cash flow for capital expenditures; free cash flow for the third quarter and first three quarters of fiscal 2017, in each case excluding cash flow for capital expenditures; and the expected effective tax rate for fiscal 2018, excluding the impact of estimated non-cash adjustments related to tax reform and the tax effect of charges related to a decision to transition and exit a commercial line of business and other items. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). Harris management believes that these non-GAAP financial measures, when considered together with the 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 disproportionately positive or negative impact on results in any particular period. Harris management also believes that these non-GAAP financial measures enhance the ability of investors to analyze Harris business trends and to understand Harris performance. In addition, Harris may utilize non-GAAP financial measures as guides in forecasting, budgeting and long-term planning processes and to measure operating performance for some management compensation purposes. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures presented in accordance with GAAP.

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