L3harris Technologies, Inc. · NYSE:LHX
L3harris Technologies — Harris — Merger or Acquisition (September 2006)
23 slides from L3harris Technologies's merger presentation, Sep 7, 2006
Slide 1: Creating a Leading Global Wireless Transmission Networks Solutions Provider
Harris Stratex Networks, Inc. Creating a Leading Global Wireless Transmission Networks Solutions Provider Conference Call September 5, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation constitute "forward-looking statements." Forward-looking statements in this presentation include, but are not limited to, the expected benefits and costs of the transaction; the anticipated timing of completion of the transaction; an
Slide 3: Harris Stratex Networks
Harris Stratex Networks Industry Leadership Scale Innovative solutions Financial performance Complete Infrastructure Solutions End-to-end wireless transmission capabilities Transport, access, and carrier-grade Ethernet microwave systems Nodal processors Software upgrades Network management solutions
Slide 4: Transaction Overview
Transaction Overview Financial Structure Harris contributes Microwave Communications Division and $25M of cash for approximately 56% ownership Stratex shareholders exchange their shares for approximately 44% ownership Two-year standstill, with limitations in years three and four Fiscal year ending J
Slide 5: Snapshot of the Two Companies
Snapshot of the Two Companies (Microwave Communications Division) Continuing improvement in financial performance LTM revenue of $349M and growing at 9% Generated $21.7M in Non-GAAP operating income* and margin of 6.2% Latest quarter Non-GAAP operating margin* reached 9.1% Continuing improvement in
Slide 6: Compelling Strategic and Financial Rationale
Compelling Strategic and Financial Rationale Creates significantly greater scale -- the largest independent provider of wireless transmission network solutions Compared to all suppliers - #3 Globally and #1 in North America Delivers complementary global distribution channels Minimal customer overlap
Slide 7: A Leading Global Provider of Wireless Transmission Network Solutions
Global Market Harris Stratex 15% Stratex 6% Harris 9% A Leading Global Provider of Wireless Transmission Network Solutions North American Market Harris Stratex 48% Estimated based on calendar year 2005 global market of $3.5 billion Source: Management estimates Harris 46% Stratex 2%
Slide 8: Complementary Global Distribution Channels With Less Than 5% Overlap
Complementary Global Distribution Channels With Less Than 5% Overlap $ 175 $ 11 $ 186 $ 29 $ 22 $ 51 $ 21 $ 56 $ 77 $ 100 $ 81 $ 181 $ 24 $ 72 $ 96 North America Latin America Middle East/Africa Europe (incl. Russia) Asia Pacific * Based on the latest twelve months ended June 30, 2006 Revenue by Reg
Slide 9: Microwave Market Growth
Microwave Market Growth Expected Total Global Market Growth of 8%; Strong Positioning in Higher Growth Segments Source: Management estimates 2006 2007 2008 2009 PDH access 2317 2461 2608 2859 PDH Transport 200 210 210 215 SDH Access (incl Ethernet) 713 847 976 1083 SDH Transport 705 711 750 780 ($ i
Slide 10: Unmatched End-to-End Product Portfolio
Unmatched End-to-End Product Portfolio Other Independent Suppliers Transport SDH PDH Access SDH PDH Network management solutions IP Turnkey planning, engineering, and implementation Source: Management estimates
Slide 11: Solid, Achievable Plan for Cost Synergies
Solid, Achievable Plan for Cost Synergies Cost of goods sold Increased outsourcing on some products to low-cost contract manufacturers Supply chain volume leverage Low-cost design architecture "best of the best" Operating expenses* Duplicate administrative and overhead costs Adherence to common engi
Slide 12: Harris Stratex Networks Performance Targets
Harris Stratex Networks Performance Targets Latest twelve months performance* Latest twelve months performance* Targets Harris Microwave Stratex Networks 2008-2009 Year-over-year revenue growth 9% 28% 10-15% Gross margin 34% 30% 40% Operating expenses as % of sales 27% 24% 25% Operating income margi
Slide 13: In Summary
In Summary The transaction is projected to be accretive to both Stratex and Harris shareholders From inception, creates a leading global provider of wireless transmission network solutions with leadership products and services Provides the scale to win major contracts, deliver sustainable growth, an
Slide 14: Financial Information Appendix
Financial Information Appendix
Slide 15: Combined Pro Forma Latest Twelve Months Ended June 30, 2006
Combined Pro Forma Latest Twelve Months Ended June 30, 2006 ($ in millions) * See reconciliation of non-GAAP financial measures in the Financial Information Appendix
Slide 16: Combined Pro Forma Balance Sheet as of June 30, 2006
Combined Pro Forma Balance Sheet as of June 30, 2006 ($ in millions) * Represents cash, cash equivalents and short-term investments
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Harris Stratex Networks, Inc. September 5, 2006
Slide 18: Reconciliation of Non-GAAP Financial Measures: Snapshot of the Two Companies
Reconciliation of Non-GAAP Financial Measures Slide Title: Snapshot of the Two Companies
Slide 19: Reconciliation of Non-GAAP Financial Measures: Snapshot of the Two Companies
Reconciliation of Non-GAAP Financial Measures Slide Title: Snapshot of the Two Companies
Slide 20: Reconciliation of Non-GAAP Financial Measures: Plan for Cost Synergies
Reconciliation of Non-GAAP Financial Measures Slide Title: Solid, Achievable plan for Cost Synergies
Slide 21: Reconciliation of Non-GAAP Financial Measures: Plan for Cost Synergies
Reconciliation of Non-GAAP Financial Measures Slide Title: Solid, Achievable plan for Cost Synergies
Slide 22: Reconciliation of Non-GAAP Financial Measures: Performance Targets
Reconciliation of Non-GAAP Financial Measures Slide Title: Harris Stratex Networks Performance Targets
Slide 23: Reconciliation of Non-GAAP Financial Measures: Combined Pro Forma LTM
Reconciliation of Non-GAAP Financial Measures Slide Title: Combined Pro Forma Latest Twelve Months Ended June 30, 2006