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Harman International Industries, Inc. Reports Second Quarter Earnings

WASHINGTON--(BUSINESS WIRE)--Jan. 30, 2002--Harman International (NYSE:HAR) today reported financial results for the second quarter and first six months ended December 31, 2001.

Net sales for the second quarter totaled $467.4 million, a 7 percent increase compared to net sales of $438.2 million in the same period last year. The Company reported pretax income of $24.8 million before recording an $8.3 million legal reserve. Net income for the quarter before the reserve was $17.6 million, equal to $0.53 per diluted share. The reserve represents $0.18 per diluted share.

For the six months ended December 31, 2001, net sales were $866.4 million versus $833.2 million in the prior year period, an increase of 4 percent. Earnings per diluted share before recording the legal reserve were $0.68 for the first half.

The legal reserve was recorded after the United States Court of Appeals affirmed a judgment in the lawsuit entitled Bose Corporation v. JBL Incorporated on December 17, 2001. The Company has filed a petition with the Court of Appeals and has been notified that the United States Patent and Trademark Office will reexamine the patent that was the subject of the lawsuit.

The Company believes that it should prevail as a result of the petition and the reexamination. The charge is without future effect because the simple port design, which was the subject of the suit, was discontinued over two years ago.

The Consumer Systems Group reported sales of $657.4 million for the six months ended December 31, 2001, an increase of 7 percent over the prior year. Sales to the automakers increased 11 percent during the period as aggressive dealer incentive programs drove higher vehicle sales.

In North America and Asia, Mark Levinson digital audio system shipments to Lexus and JBL system sales to Toyota were above the prior year, offsetting lower sales to Chrysler. In Europe, Harman/Becker reported increased sales to BMW for systems supporting the 3-series and higher than planned volumes for the new 7-series Infotainment system.

Multimedia sales to Dell and the aftermarket were above last year's levels partially offset by lower sales to Apple and Compaq. Consumer audio product sales approximated the same prior year period.

Professional Group sales for the six months ended December 31, 2001 were $209.0 million, a 3 percent decrease from last year after adjusting for the sale of a unit in the prior year. JBL Professional reported sales above last year's levels while the remainder of the group experienced modest sales declines.

Dr. Sidney Harman, Executive Chairman, and Bernard Girod, Vice Chairman and Chief Executive Officer, commented:

``The Company performed well during the second quarter and first half of fiscal 2002 despite continued economic uncertainty both domestically and abroad. Audio system sales to an expanding list of automotive customers and platforms remain strong even though sales to Chrysler continue to reflect their restructuring. The cost reduction programs initiated in the past are proving beneficial, as the consumer audio market remains soft. Multimedia continues to perform better than that industry as a whole. The Professional Group continues to do well in a market that has been affected by the languishing economy.

``The second half will present both challenge and opportunity. A major new automotive award will be formally announced in February. We have already taken the necessary steps to enlarge our engineering resources to process it.''

At 4:30 p.m. EDT today, Harman International will host a conference call to discuss the results for its second quarter and first half ended December 31, 2001, and to offer management's outlook for future periods. To participate in the conference call, please call (US) 888/273-9890 or for international calls dial 612/332-0418 prior to 4:30 p.m. EDT.

Please let the operator know that you would like to join the Harman International call.

A replay of the conference call will be available beginning at 8:00 p.m. EDT on January 30, 2002. The replay will be available through February 7, 2002. To access the replay, please call (US) 800/475-6701 or for international calls 320/365-3844. Access code 624216.

Harman International Industries, Incorporated (www.harman.com) is a leading manufacturer of high-quality audio products and electronic systems for the consumer and professional markets. The Company's stock is traded on the New York Stock Exchange under the symbol: HAR.

Note: Except for historical information contained herein, the matters discussed are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, as well as our perception of historical trends, current market conditions, expected future developments and other factors that we believe are appropriate under the circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to the effect of changes in consumer confidence and spending, automobile industry sales and production rates; model-year changeovers in the automotive industry, our ability to satisfy contract performance criteria, availability of key components to the products we manufacture, competitive products, currency exchange rates, the outcome of pending or future litigation and other claims, labor disputes at our facilities or those of our significant customers, general economic conditions and other risks detailed in the Company's filings with the Securities and Exchange Commission.

             HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
                 SECOND QUARTER RESULTS - FISCAL 2002
                  FOR THE THREE AND SIX MONTHS ENDED
                      December 31, 2001 and 2000
                (000s omitted except per share amounts)




                            Three Months Ended       Six Months Ended
                               December 31,            December 31,
                            2001        2000        2001        2000
                          --------    --------    --------    --------

Net sales                  467,432     438,176     866,441     833,152
Cost of sales              339,994     316,583     635,282     601,849
                          --------    --------    --------    --------
Gross profit               127,438     121,593     231,159     231,303

Selling, general
 and
 administrative
 expenses                  104,897      81,910     195,274     175,477
                          --------    --------    --------    --------
Operating income            22,541      39,683      35,885      55,826

Other expense:
  Interest
   expense                   5,508       5,615      11,600      11,345
  Miscellaneous,
   net                         512          48         677         251
                          --------    --------    --------    --------
Income before
 income taxes               16,521      34,020      23,608      44,230

Income tax
 expense                     4,791       9,866       6,847      12,831
                          --------    --------    --------    --------
Net income                $ 11,730    $ 24,154      16,761    $ 31,399
                          ========    ========    ========    ========

Basic EPS                 $   0.37    $   0.75    $   0.52    $   0.96
Diluted EPS               $   0.35    $   0.72    $   0.50    $   0.92

Shares
 outstanding -
 basic                      32,116      32,130      32,096      32,573
Shares
 outstanding -
 diluted                    33,525      33,764      33,595      34,118







             HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
                      CONSOLIDATED BALANCE SHEETS
                            (000s omitted)

                                              Dec. 31,       Dec. 31,
                                                2001           2000
                                             ----------     ----------
ASSETS
Current assets
  Cash and cash equivalents                  $    5,301     $    7,414
  Accounts receivable                           310,717        322,938
  Inventories                                   335,061        368,636
  Other current assets                           68,593         66,319
                                             ----------     ----------
Total current assets                            719,672        765,307
                                             ----------     ----------

Property, plant and equipment                   274,623        265,798
Excess of cost over fair value
 of assets acquired                             144,468        160,420
Other assets                                     58,696         39,079
                                             ----------     ----------

Total assets                                 $1,197,459     $1,230,604
                                             ==========     ==========

LIABILITIES AND SHAREHOLDERS'
 EQUITY
Current liabilities
  Short-term borrowings                      $   14,921     $   17,486
  Current portion of
   long-term debt                               223,800          4,392
  Accounts payable and
   accrued liabilities                          302,305        309,600
                                             ----------     ----------
Total current liabilities                       541,026        331,478
                                             ----------     ----------

Long-term debt                                  162,166        416,499
Other non-current liabilities                    47,035         34,975
Minority interest                                   945          1,062

Total shareholders' equity                      446,287        446,590
                                             ----------     ----------

Total liabilities and
 shareholders' equity                        $1,197,459     $1,230,604
                                             ==========     ==========



 

Contact:

     Harman International Industries, Inc., Washington
     Frank Meredith, 818/893-8411

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