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February 7, 2012 -- FOR IMMEDIATE RELEASE

HARMAN Second Quarter Fiscal Year 2012 Sales Up 18%; Operating Income Up 41%

• Ninth consecutive quarter of year-over-year improvement; all divisions post higher sales, operating margins
• BRIC countries sales increase 32%; China sales increase 44%
• Infotainment sales increase 20% and operating margin improves to 8.3%
• Lifestyle sales increase 20% and operating margin improves to 12.6%

STAMFORD, Conn.--(BUSINESS WIRE)-- Harman International Industries, Incorporated, the leading global audio and infotainment group (NYSE: HAR), today announced results for the second quarter ended December 31, 2011.

Net sales for the second quarter were $1,127 million, an increase of 18 percent compared to the same period last year. Excluding foreign currency translation, net sales increased by 19 percent. Second quarter operating income was $95 million, compared to $68 million in the same period last year. Excluding restructuring charges, operating profit in the second quarter grew by 32 percent to $96 million, compared to $73 million in the same period last year. On the same non-GAAP basis, earnings per diluted share were $0.83 for the quarter compared to $0.79 in the same period last year. On a GAAP basis, earnings per diluted share were $0.82 for the quarter compared to $0.74 in the same period last year.

During this quarter, all three of the Company's divisions reported higher sales and operating margins. The operating margin improvement was primarily driven by leveraging higher sales volume on a lower and more efficient cost base.

At December 31, 2011, the Company's cash and short term investments balance was $769 million, compared to $690 million as of September 30, 2011. This change was primarily driven by $123 million of cash generated by operations.

Dinesh C. Paliwal, the Company's Chairman, President and CEO, said, "We are earning trust with key stakeholders by delivering sound financial returns, by investing in bringing new innovation to market and by gaining share from our competitors. With over 4000 patents and patents pending, we believe our accelerated pace of innovation is a key driver of our continued profitable growth. Our hard work to optimize our footprint has led to a lower cost base, and combined with global supply chain management has allowed us to deliver nine consecutive quarters of year-over-year improvement in sales and earnings. With our current production footprint in emerging markets, we have the flexibility and scalability to meet our future growth targets while maximizing our return on invested capital."

Summary of Operations — Gross Margin and SG&A

Gross margin on a non-GAAP basis decreased 1.2 percentage points to 27.1 percent in the second quarter of fiscal 2012. The decline was primarily due to the cost increase of rare earth neodymium magnets used in some of our products.

SG&A and Other expense as a percentage of sales on a non-GAAP basis in the second quarter of fiscal 2012 declined 2.1 percentage points to 18.6 percent. This improvement is primarily related to our ability to better leverage productivity gains across our operations.

Investor Call on Tuesday, February 7, 2012

At 11:00 a.m. EST on Tuesday, February 7, 2012, HARMAN's management will host an analyst and investor conference call to discuss the second quarter results. Those who wish to participate via audio in the earnings conference call should dial 1 (800) 909-4252 (U.S.) or +1 (212) 231-2913 (International) ten minutes before the call and reference HARMAN, Access Code: 21575666.

In addition, HARMAN invites you to visit the Investors section of its website at: www.harman.com where visitors can sign-up for email alerts and conveniently download copies of historical earnings releases and supporting slide presentations, among other documents. The fiscal second quarter earnings release and supporting materials will be posted on the site at approximately 8:00 a.m. EST, Tuesday, February 7, 2012.

A replay of the call will also be available following its completion at approximately 1:00 pm EST. The replay will be available through April 7, 2012. To listen to the replay, dial 1 (800) 633-8284 (U.S.) or +1 (402) 977-9140 (International), Access Code: 21575666.

If you need technical assistance, call the toll-free Global Crossing Customer Care Line at 1 (800) 473-0602 (US) or +1 (303) 446-4604 (International).

General Information

HARMAN (www.harman.com) designs, manufactures and markets a wide range of audio and infotainment solutions for the automotive, consumer and professional markets — supported by 15 leading brands, including AKG®, Harman Kardon®, Infinity®, JBL®, Lexicon® and Mark Levinson®. The company is admired by audiophiles across multiple generations and supports leading professional entertainers and the venues where they perform. More than 25 million automobiles on the road today are equipped with HARMAN audio and infotainment systems. HARMAN has a workforce of about 13,000 people across the Americas, Europe and Asia, and reported net sales of $4.2 billion for twelve months ending December 31, 2011. The Company's shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.

A reconciliation of the non-GAAP measures included in this press release to the most comparable GAAP measures is provided in the tables contained at the end of this press release. HARMAN does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Forward-Looking Information

Except for historical information contained herein, the matters discussed in this earnings release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. One 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, current economic data, 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: (1) our ability to maintain profitability in our infotainment division if there are delays in our product launches which may give rise to significant penalties and increased engineering expense; (2) the loss of one or more significant customers, or the loss of a significant platform with an automotive customer; (3) warranty obligations for defects in our products; (4) fluctuations in currency exchange rates, particularly with respect to the value of the U.S. Dollar and the Euro; (5) our ability to successfully implement our global footprint initiative, including achieving cost reductions and other benefits in connection with the restructuring of our manufacturing, engineering, procurement and administrative organizations; (6) fluctuations in the price and supply of raw materials including, without limitation, petroleum, copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components; (7) the inability of our suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; (8) our ability to attract and retain qualified senior management and to prepare and implement an appropriate succession plan for our critical organizational positions; (9) our failure to implement and maintain a comprehensive disaster recovery program; (10) our failure to comply with governmental rules and regulations, including the Foreign Corrupt Practices Act and U.S. export control laws, and the cost of compliance with such laws; (11) our ability to maintain a competitive technological advantage through innovation and leading product designs; (12) our failure to maintain the value of our brands and implementing a sufficient brand protection program; (13) the outcome of pending or future litigation and other claims, including, but not limited to, the current stockholder and Employee Retirement Income Security Act of 1974 lawsuits; (14) our ability to enforce or defend our ownership and use of intellectual property rights; and (15) other risks detailed in Harman International Industries, Incorporated Annual Report on Form 10-K for the fiscal year ended June 30, 2011 and other filings made by the Company with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statement except as required by law. This earnings release also makes reference to the Company's awarded business, which represents the estimated future lifetime net sales for all customers. The Company's future awarded business does not represent firm customer orders. The Company calculates its awarded business using various assumptions including global vehicle production forecasts, customer take rates for the Company's products, revisions to product life cycle estimates and the impact of annual price reductions, among other factors. These assumptions are updated on an annual basis. The Company updates the estimates quarterly by adding the value of new awards received and subtracting sales recorded during the quarter.

HAR-E

APPENDIX

Infotainment Division

Net sales in the second quarter were $600 million, an increase of 20 percent and also 20 percent when adjusted for constant currency. Higher sales were driven by robust demand in the luxury automotive segment and rapid adoption of the scalable platform. Continued growth in BRIC countries was led by 35 percent growth in China. Gross margin on a non-GAAP basis in the second quarter increased 0.7 percentage points to 23.2 percent.

As a percentage of sales, SG&A and Other declined 0.6 percentage points to 14.9 percent.

Infotainment Division Highlights

During the quarter, HARMAN extended its relationship with automaker VW Group to provide scalable infotainment systems to its car lineup. HARMAN also announced that its Aha Radio unit won new contracts with five automotive manufacturers. This cloud-based platform brings automotive-specific apps and personalized user content safely into vehicles.

During the quarter, HARMAN announced a new contract with Changan Motors to develop an infotainment platform for the automaker's new mid-sized luxury sedan. It is HARMAN's first such agreement with a Chinese automaker.

At the New Delhi Auto Expo, HARMAN launched its new entry-level scalable infotainment platform. Targeting two-wheel as well as micro- and sub-compact vehicles, the new platform includes a full range of features including turn-by-turn navigation, Internet radio, HARMAN's Aha Radio service, and smart phone connectivity.

In the technology space, HARMAN is advancing the integration of 4G/Long Term Evolution (LTE) modules into production-ready infotainment systems and is now beginning road tests in Europe. The seamless collaboration between HARMAN and Sierra Wireless underlines HARMAN's leadership in technological innovation that enables the "always-connected car" with several online services.

HARMAN also announced the formation of a special interest group (SIG), established to drive wide-scale adoption of Ethernet-based automotive connectivity. Jointly developed with other founding members BMW, Hyundai Motor Company and Jaguar Land Rover, the OPEN Alliance (One-Pair Ether-Net) SIG will address industry requirements for improving in-vehicle safety, comfort, and infotainment, while significantly reducing network complexity and cabling costs.

Lifestyle Division

Net sales in the second quarter were $369 million, an increase of 20 percent, or 21 percent when adjusted for constant currency. Higher sales were primarily driven by robust demand in the luxury automotive segment and continued growth in BRIC countries, led by 83 percent growth in China. Gross margin on a non-GAAP basis in the second quarter decreased 3.5 percentage points to 28.5 percent. Approximately 140 basis points of this decline was due to the dilutive effect of the passed-through cost increases related to neodymium magnets with an additional 110 basis points due to extraordinary air freight and expediting expenses related to the Japanese earthquake-tsunami.

SG&A and Other expense as a percentage of sales, on a non-GAAP basis, in the second quarter declined 4.0 percentage points to 15.9 percent. The SG&A expense includes $4 million of proceeds from our Japanese earthquake-tsunami business interruption insurance settlement.

Lifestyle Division Highlights

During the quarter, the Company announced it was awarded a multi-year contract by BMW AG to provide the high-end surround sound system for its compact class luxury vehicle platforms. HARMAN also expanded its premium audio relationship with Daimler for its smart™ car lineup, and a $140 million extension of the Company's relationship with Hyundai to provide a Lexicon-branded audio system for the next generation Hyundai sedan.

The Company's expansion into the domestic Chinese market continued with a branded audio award by Changan Motors, and into the Korean market with a contract for Harman Kardon branded audio for the Ssangyong Chairman luxury class vehicle.

During the quarter, Lexus launched HARMAN's new high-efficiency Mark Levinson audio system on board the 2013 GS. This system includes HARMAN's proprietary, environmentally-friendly GreenEdge™ technology that delivers enhanced dynamic performance and higher sound pressure levels (SPL) with considerably lower power consumption, setting a new benchmark for high-end audio systems in luxury vehicles.

At the IAA in Frankfurt, Mercedes launched the all new B-Class with a Harman Kardon Logic 7 surround system, and at CES and the Detroit Auto Show, Mercedes unveiled the new Harman Kardon audio system featuring the new FrontBass design — standard aboard the new Mercedes-Benz SL Roadster. In the US, Kia launched a new Infinity premium audio system on the Soul car platform which further expands HARMAN audio systems on this OEM's line up. Meanwhile, Toyota launched a state-of-the-art JBL GreenEdge™ system on the all new Camry which further extends our energy-efficient sound systems across the Toyota family of cars.

HARMAN's leadership in quality and innovation was reflected in the outstanding sales performance of its recently launched new home and multimedia products, particularly JBL OnBeat docking stations and Harman Kardon BDS home theater systems. In addition, new JBL and AKG headphones were launched, including new noise-cancelling models.

HARMAN officially inaugurated its new Chinese manufacturing facility in Dandong to meet increasing demand from domestic and global automakers. The facility will be a manufacturing hub in the development of audio systems.

The Company also unveiled its global "Harman Kardon Beautiful Sound" campaign featuring Jennifer Lopez. This complements the previously launched JBL "Hear the Truth" campaign featuring Maroon 5. Both will increase overall brand awareness, helping drive car audio take rates, home audio and multimedia sales.

Professional Division

Net sales in the second quarter were $158 million, an increase of 8 percent and also 8 percent when adjusted for constant currency. Gross margin on a non-GAAP basis in the second quarter decreased 1.1 percentage points to 39.1 percent. The primary reason for the gross margin decline was higher costs for neodymium magnets. Additionally, the Company continued to invest in production capacity to support future growth. SG&A and Other expense on a non-GAAP basis in the second quarter decreased as a percentage of sales by 2.4 percentage points to 22.3 percent.

Professional Division Highlights

In the quarter, HARMAN displayed new product offerings at major tradeshows for audio engineers at AES in New York, broadcast engineers at InterBee in Japan, and cinema owners in both the US and Asia. Large stadium installations included the Texas Rangers Ballpark, Texas Christian University Stadium, Melbourne Australia Cricket Grounds, and BC Place Stadium in Canada.

HARMAN's new IDX™ hardware/software system solution for paging and pedestrian flow management in large-scale transit and other public venues is beginning to show results. IDX systems are being deployed at the Edmonton International Airport in Canada and Tambo International Airport in Johannesburg, South Africa.

New professional and high performance audio visual products continue to lead the industry, as evidenced by the recent CES Innovation Award for HARMAN's Lexicon DD-8 multi-room power amplifier.

HARMAN's Soundcraft and Studer digital sound mixing consoles were installed in major facilities across Europe, the Middle East, Africa and the USA.

HARMAN officially inaugurated its new Chinese manufacturing facility in Dandong to meet increasing demand in Asia. The facility will be a manufacturing hub in the development of loudspeakers.

Next time you visit your local Apple Store you will most likely be shopping while listening to background music from a HARMAN professional system.

Other (Corporate)

The Company continued the rollout of its global marketing campaigns. The Company's Corporate Technology Center (CTC) is driving and enabling cutting-edge development in connectivity and networking, cloud computing, wireless technologies, digital signal processing, and energy-efficient solutions. The Company is building on its base of more than 4000 patents and patents pending, with 100 patent applications in this fiscal year. As previously announced, Dr. I.P.Park, formerly of Samsung Electronics, has joined the Company as Chief Technology Officer.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company's performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company's performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company's performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company's performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50159470&lang=en

Harman International Industries, Incorporated
Robert V. Lardon, 203-328-3500
robert.lardon@harman.com

Source: Harman International Industries, Incorporated

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