Harman Kardon 2010 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2010 Harman Kardon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 137

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137

Professional segment primarily due to new product introductions compared to the prior fiscal year, which
previously had been negatively affected by the financial and economic crisis and reductions in the availability of
credit. Net sales were higher in our Consumer segment primarily due to favorable foreign currency translation.
Fiscal year 2009 net sales were $2.855 billion, a decrease of 30 percent compared to the prior fiscal year.
Foreign currency translation had a negative impact of approximately $194 million. Each of our three business
segments had lower net sales in fiscal year 2009 compared to the prior fiscal year. The decline in overall net sales
was attributable to weakness in the automotive market, as automakers cut production in response to weak
economic conditions, as well as Daimler’s strategic decision to move to dual-sourcing on select Mercedes
models. Our Professional and Consumer segments were also negatively affected by the global financial and
economic crisis, where reductions in the availability of credit and lower consumer spending resulted in lower net
sales.
A summary of our net sales by business segment is presented below:
Year Ended June 30,
($ in thousands) 2010 2009 2008
Net sales:
Automotive ............................................ $2,467,972 $2,004,837 $2,929,269
Consumer ............................................. 373,047 356,489 515,075
Professional ............................................ 522,736 492,876 627,289
Other ................................................. 673 693 726
Total ..................................................... $3,364,428 $2,854,895 $4,072,359
Automotive—Automotive net sales increased 23 percent in fiscal year 2010 compared to the prior fiscal
year. Foreign currency translation had a favorable impact on net sales of approximately $18 million compared to
the prior fiscal year. The increase in overall net sales was primarily attributable to increased mid-level
infotainment business resulting from the launch of new platforms, the ramp-up of new infotainment business,
overall production recovery and new acoustic model launches, partially offset by lower PND net sales due to our
exit from this distribution channel in January 2010 resulting in lower year over year sales. Since a significant
percentage of our sales are to customers in Europe, the majority of our foreign currency exposure is in the
Automotive segment.
Automotive net sales decreased 32 percent in fiscal year 2009 compared to the prior fiscal year. Foreign
currency translation adversely affected net sales by $160 million compared to the prior fiscal year. The decline in
fiscal year 2009 net sales when compared to the prior fiscal year was primarily due to Daimler’s strategic
decision to move to dual-sourcing on select Mercedes models, as well as reduced production at some of our
major Automotive customers including Chrysler, Toyota/Lexus, Porsche and SsangYong. These declines were
partially offset by higher volumes at BMW, new infotainment business at Audi/Volkswagen and PSA Peugeot
Citroën, as well as the ramp-up of the Genesis infotainment business at Hyundai/Kia.
Consumer—Consumer net sales increased 5 percent in fiscal year 2010 compared to the prior fiscal year.
Foreign currency translation had a favorable impact on net sales of approximately $8 million compared to the
prior fiscal year. The increase in net sales when compared to the prior fiscal year was primarily due to foreign
currency translation.
Consumer net sales decreased 31 percent in fiscal year 2009 compared to the prior fiscal year. Foreign
currency translation adversely affected net sales by $19 million compared to the prior fiscal year. The consumer
retail environment was challenging in North America and Europe, as consumer spending had slowed and resulted
in lower sales. Sales were also lower due to Consumer’s exit from the PND business and other unprofitable
products.
30