Profitability Till's ‘top priority' as Harris posts Q3 loss

US-- Harris Interactive president and CEO Kimberly Till said that making the firm profitable again was her “top priority” after results for the third quarter of fiscal 2009 showed an operating loss of $7.3m.

Revenues were down 30% year-on-year to $39.3m for the three months ending 31 March. Unfavourable foreign exchange rates impacted results to the tune of $4.4m.

Figures for the quarter included $5.3m worth of restructuring and other charges, including $3.4m in severance for laid-off workers in the US and UK.

Till said that given the economic environment, Harris had “anticipated that there would be an impact on revenue and our overall financial performance”.

“We took certain cost reduction actions during the second quarter, and additional actions during the third quarter, which taken together, we expect to yield approximately $21m in annualized savings,” Till said.

Addressing investors, she added: “I want to be very clear and assure you that returning Harris to revenue growth and profitability remains our top priority.”

US sales were down 33% in the quarter, with declines of 25% in Germany, 40% in Canada and 27% in the UK. Expressed in local currencies, however, the situation looked better: the UK was actually up 2%, while Germany and Canada were down 17% and 25% respectively.

The brightest spots for Harris were France and Asia where revenue grew 24% and 81% respectively in local currency, or 9% and 76% on a US dollar basis.

Alongside its results, the firm announced yesterday the appointment of Robert Salvoni as managing director for Europe, replacing George Terhanian who recently returned to the US in the new role of president of global solutions. Salvoni joins from IRIS Accountancy Practice Solutions where he was managing director and has previously been a senior executive at BT.

Harris has also successfully amended its credit agreement with lenders, having been in violation of the leverage ratio and interest coverage covenants of its previous credit facilities since the beginning of the year.

Till said: “The revised terms of the credit agreement provide us with important financial stability and flexibility as we continue implementing our strategic plan.”

Author: James Verrinder

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