Shareholder suggests that Harman International consider alternatives

By Lisa Kerner

Charlotte, N.C., April 8 - Relational Investors, LLC said it believes Harman International Industries, Inc.'s board of directors will have to consider strategic alternatives if the company's STEP Change restructuring targets are not met or are unlikely to be met.

The investor also said several factors have contributed to the undervaluation and underperformance of Harman's shares, according a schedule 13D/A filed on Wednesday with the Securities and Exchange Commission.

These factors, as stated by the shareholder, include prior management's history of:

• Failing to optimize Harman's cost structure for manufacturing and engineering;

• Entering into uneconomic contracts with some customers;

• Poor operating results; and

• Poor forecasting and investor communications.

Relational Investors beneficially owns 4.7 million shares, or 8.02%, of the company's outstanding stock.

Harman is a Washington, D.C., manufacturer of high-fidelity audio products and electronic systems for the automotive, consumer and professional markets.

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