No. 13: Harris keeps growing strong

Pickup of Multimax helps company's growth in the federal market

Harris Corp.

Top 100 revenue: $1.9 billion

2007 revenue: $4.2 billion

2007 net earnings: $480.4 million

2006 revenue: $3.5 billion

2006 net earnings: $237.9 million

Employees: 16,000

http://www.harris.com

When you're 113 years old and still going
strong, it could be because of the company you
keep ? and the companies you possess.
In June 2007, Harris Corp., which was
founded in 1895, acquired Multimax Inc., a
supplier of network-centric information technology
and communications services. With the
$400 million Multimax buy, Harris substantially
boosted its IT offerings by adding more
than 1,000 employees and creating a new business
unit, Harris Information Technology
Services.

The company ranks No. 13 on this year's Top
100 list with $1.9 billion in 2007 prime contracting
revenue.

"The biggest trend in acquisitions is targeted
capabilities," said Jeremy Wensinger, group
president of Harris Government
Communications Systems. "People are going
after gaps in their portfolios.

The niche companies ? we
call them tuck-ins ? can
deliver whole new solutions
to the customer."

Harris' new group continues
to work primarily at
customer locations, supporting
a portfolio of mission-
critical network infrastructure
programs that
serve more than 800,000 users at some 3,800
locations in United States and overseas. A large
portion of the workforce is technically certified,
and about 85 percent have security clearances.

Multimax customers that transferred to
Harris include the Navy, Marine Corps, Air
Force, Army, Federal Aviation Administration
and Homeland Security, State and Veterans
Affairs departments. The acquisition establishes
Harris as a critical player on major awards,
such as the Navy Marine Corps Intranet program,
where it is a subcontractor to EDS Corp.
Multimax also brought
large task-order contracts,
such as the Network
Centric Solutions contract
by the Air Force and the
Enterprise Acquisition
Gateway for Leading Edge Solutions contract
at the Homeland Security Department.

"From the day we acquired them, they hit the
ground running and contributed," Wensinger
said. "Our IT service has basically doubled."

Other areas of Harris concentration include
radio-frequency and broadcast communications;
defense-related services, equipment and
integrated systems; and intelligence, surveillance
and reconnaissance technologies. The
company counts nearly
7,000 engineers and scientists
among its 16,000
employees.

"We have been bullish on
Harris and still are, based
on the fundamentals," said
David Weissman, senior
telecommunications analyst
at Zacks Investment
Research Inc. in Chicago.

In March, the National Security Agency
awarded Harris a five-year, $41.6 million contract
to build top-secret wireless networks for
federal agencies and other approved customers.
The technology is designed to be interoperable
with other military platforms, such as the
Army's Warfighter Information Network-
Tactical, Command Post Platform and Joint
Network Node programs.

Weissman said he credits Harris with a savvy
balance between public- and private-sector
business so risk is minimized. Overall, the company
had $4.2 billion in
2007 revenue. About 80
percent of Harris' business
is in the United
States. Of that, 46 percent
is government-related
and 54 percent is commercial. Annual
growth during the past five years has been in
the double digits, averaging between 17 percent
and 19 percent. Weissman projects 20 percent
growth for the remainder of 2008.

"Harris is exploiting their relationships with
government clients, on both the defense and
civilian sides," Weissman said. "They also have
significant relationships with major defense
contractors like General Dynamics, Lockheed
Martin and Northrop Grumman. That adds a
level of security for their recurring revenue
streams."

One of the company's concerns is keeping
the pipeline full of younger technologists.
Wensinger said Harris is aggressively supporting
college-level courses in fields such as cybersecurity
and information assurance at schools
such as the Florida Institute of Technology and
the University of Central Florida.

"For us to maintain our technology edge, we
have to support higher graduating numbers of
engineers," he said. "Then we have to attract
them to the aerospace and defense industries.
You need to build relationships with kids early
on. The sooner and the more they know about
you, the more excited they'll get about the work
they will be doing."

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