Infotainment division
Net sales in the second quarter of fiscal 2015 were $774 million, an increase of 12 percent compared to the same period in the prior year or 18 percent excluding the impact of foreign currency translation. The increases in net sales were due to the expansion of recently launched platforms, stronger automotive production and higher take rates, partially offset by unfavorable foreign currency translation.
On a non-GAAP basis in the second quarter of fiscal 2015, gross margin increased 137 basis points to 25.5 percent compared to the same period in the prior year primarily due to the impact of improved leverage on fixed production costs and benefits from footprint migration restructuring initiatives. SG&A spending decreased 181 basis points to 13.4 percent primarily due to improved operating leverage on higher sales.
Infotainment Division Highlights
During the quarter, HARMAN continued to position itself for long-term growth in the emerging markets. In India, HARMAN secured new business with TATA Motors, and in recognition of its strategic contribution to the recently launched ConnectNext connectivity platform, HARMAN was awarded the TATA Technology Supplier of the Year award. HARMAN also opened its first manufacturing plant in Pune, India to deliver cutting-edge infotainment and audio solutions for regional automakers.
HARMAN gained new business awards with Guangzhou Automotive Group/Chrysler (CGC)/FIAT (GAC/FIAT), Jaguar Land Rover and Toyota. In addition, HARMAN announced a strategic collaboration with Baidu, the most popular search engine and mobile map provider in China. HARMAN will seamlessly integrate Baidus new CarLife networking solution into HARMANs infotainment head units. HARMAN and Baidu will bring a tailored in-vehicle user experience and personalized content to the Chinese market, offering advanced internet capabilities, entertainment features and location-based services, resulting in a richer and more immersive connected car experience.
At CES 2015, HARMAN introduced several breakthrough technologies. HARMAN unveiled the newest evolution of its scalable infotainment platform. Designed for entry- and mid-level vehicles, the solution offers flexible smartphone connectivity, including Apple CarPlay and Android Auto along with on-board navigation options, integrated audio support, and robust cyber security. The Company also launched the industrys first connected navigation solution based on the Navigation Data Standard (NDS) that incrementally updates map data in the field. This over-the-air (OTA) update capability ensures map data is always up-to-date and is delivered seamlessly to cars on the road. BMW is the first automaker to deploy the solution across the HARMAN-developed NBT infotainment platform.
During the quarter, HARMAN announced it plans to acquire Stuttgart-based S1nn GmbH, an innovative developer of infotainment systems, connectivity, and car audio solutions with strong HTML5 based capabilities. S1nn customers include Volkswagen, Porsche, Audi and Tesla Motors.