Acquisition of Multimax Incorporated
Acquisition of Multimax Incorporated
Acquisition of Multimax Incorporated
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Government<br />
Communications<br />
Systems<br />
<strong>Acquisition</strong> <strong>of</strong><br />
<strong>Multimax</strong><br />
<strong>Incorporated</strong>
Forward-looking Statements<br />
Statements in this presentation that are not historical facts are forward-looking statements that reflect management's current<br />
expectations, assumptions, and estimates <strong>of</strong> future performance and economic conditions. Such statements are made in reliance<br />
upon the safe harbor provisions <strong>of</strong> Section 27A <strong>of</strong> the Securities Act <strong>of</strong> 1933 and Section 21E <strong>of</strong> the Securities Exchange Act <strong>of</strong><br />
1934. Forward-looking statements in this presentation include but are not limited to: anticipated timing <strong>of</strong> the closing <strong>of</strong> the<br />
acquisition <strong>of</strong> <strong>Multimax</strong> and satisfaction or the conditions to closing, the impact <strong>of</strong> the acquisition on Harris fiscal 2008 earnings,<br />
earnings-per-share guidance for fiscal 2007 and 2008, and statements regarding revenue growth and outlook. The Company<br />
cautions investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and<br />
future trends to differ materially from those matters expressed in or implied by such forward-looking statements. The Company's<br />
consolidated results and the forward-looking statements could be affected by many factors, including but not limited to: our<br />
participation in markets that are <strong>of</strong>ten subject to uncertain economic conditions which makes it difficult to estimate growth in our<br />
markets and, as a result, future income and expenditures; our dependence on the U.S. government for a significant portion <strong>of</strong> our<br />
revenues, and the loss <strong>of</strong> this relationship or a shift in U.S. government funding could have adverse consequences on our future<br />
business; potential changes in U.S. government or customer priorities due to program reviews or revisions to strategic objectives,<br />
including termination <strong>of</strong> or potential failure to fund U.S. government contracts; risks inherent with large long-term fixed-price<br />
contracts, particularly the ability to contain cost overruns; the performance <strong>of</strong> critical subcontractors or suppliers; financial and<br />
government and regulatory risks relating to international sales and operations, including fluctuations in foreign currency exchange<br />
rates and the effectiveness <strong>of</strong> our currency hedging program; our ability to continue to develop new products that achieve market<br />
acceptance; the consequences <strong>of</strong> future geo-political events, which may affect adversely the markets in which we operate, our<br />
ability to insure against risks, our operations or our pr<strong>of</strong>itability; strategic acquisitions and the risks and uncertainties related<br />
thereto, including our ability to manage and integrate acquired businesses; potential claims that we are infringing the intellectual<br />
property rights <strong>of</strong> third parties; the successful resolution <strong>of</strong> patent infringement claims and the ultimate outcome <strong>of</strong> other<br />
contingencies, litigation and legal matters; customer credit risk; the fair values <strong>of</strong> our portfolio <strong>of</strong> passive investments, which<br />
values are subject to significant price volatility or erosion; risks inherent in developing new technologies; the potential impact <strong>of</strong><br />
hurricanes on our operations in Florida and the potential impact <strong>of</strong> earthquakes on our operations in California; the impact <strong>of</strong> the<br />
results <strong>of</strong> Harris Stratex Networks, which may vary significantly and may be difficult to forecast; the ability to recruit and retain<br />
qualified personnel; and general economic conditions in the markets in which we operate. Further information relating to factors<br />
that may impact the Company's results and forward-looking statements are disclosed in the Company's filings with the SEC.<br />
Harris disclaims any intention or obligation, other than imposed by law, to update or revise any forward-looking statements,<br />
whether as a result <strong>of</strong> new information, future events, or otherwise.<br />
<strong>Multimax</strong> Investor Presentation – 2<br />
assuredcommunications ™<br />
31-May-2007
<strong>Multimax</strong> Overview<br />
• Leading provider <strong>of</strong> mission-critical communications and IT network<br />
systems and services for U.S. government<br />
• Key positions on important contracts with U.S. Air Force, Army, Navy, and<br />
Department <strong>of</strong> Homeland Security (DHS)<br />
• Headquarters in Herndon, VA; privately owned<br />
• Experienced management team and workforce<br />
– 1,100 employees; primarily located at customer sites, providing strong<br />
relationships and access to new opportunities<br />
– Majority with IT technical certifications<br />
– 85% have security clearances<br />
– Excellent track record <strong>of</strong> meeting service-level commitments<br />
• Track record <strong>of</strong> strong revenue growth and excellent pr<strong>of</strong>itability<br />
– Latest 12 months pro forma revenue ended March 31, 2007 <strong>of</strong> $315 million and<br />
EBIT <strong>of</strong> $55 million<br />
• Accretive to Harris earnings in fiscal year 2008<br />
– Expected to contribute $.08 per diluted share, excluding<br />
acquisition-related charges<br />
<strong>Multimax</strong> Investor Presentation – 3<br />
assuredcommunications ™<br />
31-May-2007
Key Contracts and Customers<br />
<strong>Multimax</strong> Investor Presentation – 4<br />
• The NETCENTS program for the U.S. Air Force, a<br />
procurement vehicle for network-centric information<br />
technology with a $9 billion ceiling (Prime contract)<br />
• The ITES-2S program for the U.S. Army, a procurement<br />
vehicle for information technology enterprise solutions with<br />
a $20 billion ceiling (Prime contract)<br />
• The EAGLE program for the Department <strong>of</strong> Homeland<br />
Security, a procurement vehicle for systems and services,<br />
with a $45 billion ceiling (Prime contract with Array)<br />
• The FirstSource program for the Department <strong>of</strong> Homeland<br />
Security, a procurement vehicle for products with a<br />
$3 billion ceiling (Prime contract with Array)<br />
• The Navy Marine Corps Intranet (NMCI) program providing<br />
a full range <strong>of</strong> network-based voice, video and data<br />
communications on a single, enterprise-wide Intranet<br />
(sub-contract to EDS)<br />
assuredcommunications ™<br />
31-May-2007
<strong>Multimax</strong> Locations<br />
Alaska<br />
Hawaii<br />
Offices<br />
Employees<br />
Service area<br />
with 4-hour<br />
maximum to<br />
respond<br />
Network services support more than 800,000 users at 3,800 locations locations<br />
<strong>Multimax</strong> Investor Presentation – 5 assuredcommunications 31-May-2007<br />
™ 1-June-2007<br />
HQ
Strategic Rationale<br />
• Capitalizes on U.S. government market trend for increased outsourcing <strong>of</strong><br />
IT systems and communications networks support services<br />
• Complements existing Harris services business, while adding greater scale<br />
– Creates a comm’s and IT services pro forma revenue base <strong>of</strong> $700 million<br />
– Adds management talent and services workforce <strong>of</strong> 1,100 for a combined<br />
workforce <strong>of</strong> more than 3,000<br />
• Opportunity to contribute double-digit revenue growth at operating margins<br />
that are above the Government Communications Systems segment ROS<br />
• Broadens customer list<br />
– New DoD customers within Air Force, Army and Navy<br />
• Provides services to key bases such as Wright Patterson AFB, Gunter AFB,<br />
and Ft. Monmouth Army base<br />
– Department <strong>of</strong> Homeland Security<br />
– Department <strong>of</strong> Veterans Affairs<br />
• Provides excellent growth opportunities through <strong>Multimax</strong>’s prime positions<br />
on large Government-Wide <strong>Acquisition</strong> Contracts (GWACs)<br />
<strong>Multimax</strong> Investor Presentation – 6<br />
assuredcommunications ™<br />
31-May-2007
Deal Terms, Financing Plan,<br />
and Timetable<br />
• Harris to purchase <strong>Multimax</strong> for $400 million in cash<br />
– Subject to customary regulatory reviews and closing conditions<br />
• Purchase price will be funded through existing $500M credit facility<br />
– Long-term debt financing will be put into place post-closing<br />
• <strong>Acquisition</strong> expected to close prior to Harris fiscal year end<br />
June 29, 2007<br />
<strong>Multimax</strong> Investor Presentation – 7<br />
assuredcommunications ™<br />
31-May-2007
assuredcommunications ™