Harris Stratex Networks Inc. (HSTX) filed Quarterly Report for the period ended 2009-10-02.
HARRIS STRATEX NETWORKS, INC. is the world's leading independent supplier of turnkey wireless transmission solutions. The company offers reliable, flexible and scalable wireless network solutions, backed by comprehensive professional services and support. Harris Stratex Networks serves all global markets, including mobile network operators, public safety agencies, private network operators, utility and transportation companies, government agencies and broadcasters. Harris Stratex Networks is recognized around the world for innovative, best-in-class wireless networking solutions and services. Harris Stratex Networks Inc. has a market cap of $358.6 million; its shares were traded at around $6.09 with and P/S ratio of 0.5.
Highlight of Business Operations:
As a result of an increase in the level of outsourcing activity, we expect to incur $10 million in restructuring charges with the majority of such charges occurring in the North America segment. Specifically, we expect to incur $6 million of costs to restructure our manufacturing operations in San Antonio with an additional $2 million to be used for related severance payments.
Gross margin in the first quarter of fiscal 2010 was $37.7 million, or 31.4% of revenue, compared with $59.1 million, or 30.2% of revenue in fiscal 2009. Gross margin in the first quarter of fiscal 2010 was reduced by $2.1 million for amortization of developed technology and $0.1 million of amortization of the fair value of adjustments for fixed assets acquired from Stratex.
The North America segment first quarter fiscal 2010 operating loss included deductions for the following amounts related to the acquisition of Stratex: $0.1 million for amortization of the fair value adjustments for fixed assets, $0.7 million for amortization of developed technology, trade names and customer relationships and $0.8 million of restructuring charges. The total of such charges was less for this segment than in the first quarter of fiscal 2009.
The International segment operating loss in the first quarter of fiscal 2010 resulted primarily from the decline in revenue when compared with the first quarter of fiscal 2009. The operating loss in the first quarter of fiscal 2010 included deductions for the following charges related to the acquisition of Stratex: $0.1 million for amortization of the fair value adjustments for fixed assets, $2.9 million for amortization of developed technology, trade names and customer relationships and $0.3 million of restructuring charges. The total of such charges was less for this segment than in the first quarter of fiscal 2009.
As of October 2, 2009, our principal sources of liquidity consisted of $133.0 million in cash and cash equivalents plus $46.8 million of available credit under our current $70 million credit facility with two commercial banks. Cash flow from operations for the first quarter of fiscal 2010 totaled $4.4 million. However, our total accounts receivable has declined to $114.3 million as of October 2, 2009 from $142.9 million as of July 3, 2009. As a result, we have a lower level of receivables compared with prior periods as a source of cash, which may negatively affect our cash flow.
As of October 2, 2009, we had $46.8 million of credit available under our $70 million revolving credit facility with two commercial banks as mentioned above. The total amount of revolving credit available was $70 million less $10 million in outstanding short term loans which mature by December 2010, and $13.2 million in outstanding standby letters of credit issued under the facility.
HSTX is in the portfolios of Ronald Muhlenkamp of Muhlenkamp Fund, Kenneth Fisher of Fisher Asset Management, LLC.
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