Harman Kardon 2011 Annual Report Download - page 5

3
HARMAN ANNUAL REPORT 2011
Fiscal Year 2011 was a time of
continued, dramatic progress for
HARMAN. Following the decisive
actions that helped our company
weather the most challenging
economic cycle of a lifetime, we
shifted our focus during the year to
driving these principles into every
level of the organization. Consistent
innovation, decisive execution
and operational excellence helped
HARMAN to endure when others
faltered, and these principles will
serve as the catalysts for continued
profi table growth.
Net sales in fi scal 2011 were $3.8
billion, an increase of 13 percent
compared to the prior year when
adjusted for constant currency. Sales
increased in all three divisions and
the Company continued to gain share
in selected markets. Operating income
in fi scal year 2011 was $190 million,
an increase of 122 percent compared
to the prior year. Our cash and short-
term investments balance increased
to $921 million during the fi scal year,
driven primarily by positive cash from
operations. Total liquidity increased
to $1.5 billion, providing signifi cant
fl exibility for the strategic initiatives
ahead.
All three HARMAN divisions posted
strong improvement during the year,
driven by dozens of new product
innovations, project execution,
and operational excellence. The
Automotive Division increased Net
Sales by 11 percent and more than
doubled Operating Income. The
Consumer Division increased Net
Sales by 13 percent and returned
to profi tability with $2 million in
Operating Income. The Professional
Division continued its strong
performance with a 17 percent
increase in Net Sales and 25 percent
growth in Operating Income. A look
back through some other headlines
for 2011 underscores the depth of
our continued progress.
As the year began, we announced
the fi rst of several important new
business awards for our scalable,
next-generation infotainment
system. Chrysler Group and Fiat
selected HARMAN to equip their new
vehicles sold worldwide, energizing
our established relationship with
Chrysler, and bringing an exciting new
global brand, Fiat, to our portfolio.
This multi-year agreement puts our
advanced connectivity, integrated
on-board navigation and audio tuning
capabilities within reach of millions of
new drivers.
In September, we further enriched
our infotainment off ering with the
acquisition of Aha Mobile, a Silicon
Valley pioneer for on-demand mobile
and location-based Internet content
services. Streaming, real-time Web
technology is a natural complement
to HARMAN’s premium systems,
and we will aggressively deploy this
new tool to strengthen our global
leadership as the provider of choice
for rich, interactive entertainment,
information, and telematics content.
Later the same month, we celebrated
the earlier acquisition of Brazilian
audio leader Selenium at Latin
America’s largest music industry
exhibition, ExpoMusic, in São
Paulo. Customers in the region were
energized by this new foothold for
HARMAN’s legendary brands, and we
collaborated personally with many of
the talented employees and channel
partners added through this strategic
acquisition. We announced plans to
expand production capacity at two
new HARMAN plants in Brazil, where
we are expected to see strong growth
over the next fi ve years.
A similar milestone event was held
in China during October, as HARMAN
hosted nearly 300 key customers,
channel partners and government
offi cials to exchange perspectives on
our mutual goals and unveil signifi cant
investments in the region. We broke
ground for a major new engineering
and manufacturing complex in the
northern city of Dandong, which
is beginning operation as I write
this and will ultimately become our
largest facility worldwide. Our local
stakeholders, as well as HARMAN’s
entire Executive Committee and
TO OUR SHAREHOLDERS