FORM 10-K - Harman

was attributable to continued weakness in the automotive market, as automakers cut production in response to
weak economic conditions, as well as Daimler’s strategic decision to move to dual-sourcing on select Mercedes
models. Our Professional and Consumer segments were also negatively affected by the global financial and
economic crisis, where reductions in the availability of credit and lower consumer spending resulted in lower net
sales.
Fiscal year 2008 net sales were $4.113 billion, an increase of 16 percent compared to the prior year. Foreign
currency translation contributed approximately $275 million to the increase in net sales. Each of our four
business segments had higher net sales in fiscal year 2008 compared to the prior year. The strong growth in net
sales was primarily due to full production of an infotainment system for Chrysler, higher infotainment systems
sales to European automakers, and higher sales of professional audio products.
A summary of our net sales by business segment is presented below:
($ in thousands)
Net sales:
2009
Year Ended June 30,
2008 2007
Automotive ............................................ $2,004,837 $2,929,269 $2,459,646
Consumer ............................................. 356,489 515,075 480,836
Professional ............................................ 492,876 627,289 577,493
Other ................................................. 36,820 40,870 33,169
Total ..................................................... $2,891,022 $4,112,503 $3,551,144
Automotive—Automotive net sales decreased 32 percent in fiscal year 2009 compared to the prior year.
Foreign currency translation adversely affected net sales by $160 million compared to the prior year. Since a
significant percentage of our sales are to customers in Europe, the majority of our foreign currency exposure is in
the Automotive segment. The decline in fiscal year 2009 net sales when compared to the prior year was primarily
due to Daimler’s strategic decision to move to dual-sourcing on select Mercedes models, as well as reduced
production at some of our major Automotive customers including Chrysler, Toyota/Lexus, Porsche and
SsangYong. These declines were partially offset by higher volumes at BMW, new infotainment business at Audi/
Volkswagen and PSA Peugeot Citroën, as well as the ramp-up of the Genesis infotainment business at Hyundai/
Kia.
Automotive net sales increased 19 percent in fiscal year 2008 compared to the prior year. Foreign currency
translation contributed approximately $229 million to the net sales increase compared to the prior year. Net sales
were higher in North America due to a full year of producing the MyGIG infotainment system for Chrysler, our
first infotainment system launch in North America. We also had higher infotainment system sales to Hyundai/Kia
in support of their Genesis launch and we began producing infotainment systems for SsangYong during the year.
Audio system sales to Toyota were higher than fiscal year 2007 and we had increased shipments of Mark
Levinson premium audio systems to Lexus. Additionally, we began a new relationship with Subaru late in fiscal
year 2008 pursuant to which we provide the automaker with acoustic systems. Excluding foreign currency
translation, sales in Europe were higher due to increased shipments of infotainment systems to Audi for the new
A4 and A5 models. We also had higher sales to BMW supporting several mid-level platforms. These sales
increases were partially offset by lower sales to Mercedes due to reduced E-Class production and price
reductions. Aftermarket sales of PNDs in fiscal year 2008 were also lower than the prior year and may continue
to decline as a result of our decision to focus exclusively on the automotive aftermarket premium sector.
Consumer—Consumer net sales decreased 31 percent in fiscal year 2009 compared to the prior year.
Foreign currency translation adversely affected net sales by $19 million compared to the prior year. The
consumer retail environment continued to be challenging in North America and Europe, as consumer spending
has slowed and resulted in lower sales. Sales were also lower due to Consumer’s exit from the PND business and
other unprofitable products.
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