Harman Kardon 2013 Annual Report Download - page 3

We expect this to create a new revenue stream with
significantly higher margins that is less dependent on
automotive market introduction cycles. The HARMAN
services offered will include upgrades to installed
systems based on our deep knowledge of each
vehicle’s design, cloud-based services to expand
end-user connectivity, and customer relationship
management (CRM) services for automakers based
on aggregated data from our installed systems.
Market-leading innovation remains a sharp focus at
HARMAN, underscored by the receipt of some 40
industry awards during the year from prestigious
organizations including Red Dot and iF Design Award
(Germany), CES (United States), EISA (Europe), and
Red Star Awards (China). Several of these were
awarded to new HARMAN products even before their
public launch, adding momentum to our aggressive
marketing efforts ahead of the important holiday
shopping season. Including the new patents filed
during the year, we now have nearly 5,000 patents
awarded or pending. We also launched new initiatives
during the year to protect, prioritize, and monetize
these intellectual property assets.
In December, we announced the acquisition of Martin
Professional Lighting—a market-leading provider of
lighting solutions for the entertainment, architectural,
and commercial sectors. Martin’s intelligent lighting
solutions have long been favored for touring, events,
theatre and commercial installations, and have since
become a natural complement to HARMAN’s profes-
sional audio business. We also acquired iOnRoad,
a leading provider of automotive safety system
technologies, later in the fiscal year.
We kicked off calendar year 2013 at several key
global trade exhibitions, including the popular
Consumer Electronics Show (CES) where we premiered
both an entry-level infotainment solution based on
connected radio technology and a new premium
infotainment concept featuring such advancements
as interactive head-up displays, augmented navigation,
touch-free gesture controls, and connectivity
enhancements including 4G LTE high-speed networking
and in-car Wi-Fi for communication with individual
passenger devices.
Also at CES, we introduced HARMAN
QuantumLogic™ 3D—a revolutionary new surround
sound technology that identifies and distributes
multiple audio streams to create an unmatched
three-dimensional audio experience. A demonstra-
tion vehicle with 25 speakers and more than 2000
watts of power brought rave reviews from visitors
and journalists, who cited HARMAN’s systems
integration capabilities and recording industry roots
as unique among the industry.
HARMAN innovation continued at the Geneva Motor
Show in March, where we partnered with BMW
to showcase the automaker’s ConnectedDrive™
experience. The new platform combines wireless
connectivity, enhanced 3D navigation, real-time
location services and productivity applications that
transform the car into a safe and intuitive mobile
office. Three BMW models also premiered in
Geneva with premium Harman/Kardon branded
audio, and the automaker’s MINI brand showed
off its new MINI Clubman Bond Street Edition
equipped with a high-performance Harman/Kardon
system befitting the character of the classic car.
Rounding out the Geneva Motor Show, we celebrated
the European launch of the award-winning Uconnect
infotainment system developed by HARMAN for
Chrysler and Fiat vehicles. The system was named
“2012 Technology of the Year” by AOL Autos.
Underscoring HARMAN’s scalable approach to info-
tainment, we also unveiled a new and improved
Touch&Go multimedia platform for Toyota vehicles
in Europe.
At the core of these achievements is HARMAN’s
robust talent pool. We are continually working
to attract a diverse workforce by communicating our
vision across varied organizations and events, and
our managers are measured on the success of this
outreach. We are developing new and existing talent
through leadership communications, networking,
and diversity-focused training. And we are committed
to retaining high-quality employees by creating
an environment of talent recognition, celebrations
and awards that embraces our multi-faceted
employee population.
We also strengthened the HARMAN leadership both
at the management and at the Board level. After
a great career of 16 years with Pepsi and Samsung,
Ralph Santana joined HARMAN as our Chief Marketing
Officer. We also added three seasoned professionals
to our board of directors. Frank Sklarsky, currently
Executive Vice President and CFO at PPG Industries,
joined us as the fiscal year began. John Diercksen,
former Executive Vice President at Verizon, and
Adriane Brown, President and Chief Operating Officer
of Intellectual Ventures, were both appointed to
our Board in June 2013.
As the fiscal year drew to a close, we announced
that HARMAN would double its annual dividend
for the second time in two years, raising it to $1.20.
We also announced approval of a share buyback
program of up to $200 million, complementing a similar
repurchase authorized by the Board in October 2011.
We believe these programs will deliver excellent value
to our shareholders. To further demonstrate
our confidence in continuous progress, we provided
guidance to the market for the Fiscal Year 2014.
Our sales are expected to grow by 9% to
$4,700 million and our EPS to grow by 25% to $3.85.
I am very grateful to our investors, employees and
customers for their continued support during the year,
and our entire team remains committed to delivering
value. We recognize the remaining challenges of a
global economy still in transition, but we believe that
HARMAN is well positioned not only to face these
challenges but to build upon our multi-year track
record of solid operational improvement. We look
forward to your continued support as we unlock new
opportunities in Fiscal Year 2014 and beyond.