Harley-Davidson, Inc. Reports Record Second Quarter Sales and Earnings; Additional Motorcycle Production Facility to be Located in York, Pa.
Harley-Davidson, Inc. Reports Record Second Quarter Sales and Earnings; Additional Motorcycle Production Facility to be Located in York, Pa.
MILWAUKEE, July 11 Harley-Davidson, Inc. today
announced record sales and earnings for its second quarter ended June 24,
2001. The Company's second quarter sales were $850.9 million, an increase of
12.7 percent over the same period last year. Diluted earnings per share for
the second quarter were 38 cents, a 28.3 percent increase compared to last
year.
"We've delivered another record quarter, led by strong motorcycle sales,"
said Jeffrey L. Bleustein, chairman and chief executive officer of
Harley-Davidson, Inc. "Our consistent performance, as well as our ability to
bring new products and services to market, reinforces our confidence in the
Company's long-term growth. In fact, today we are finalizing plans to invest
$145 million in a new 350,000-square-foot manufacturing facility in York,
Pennsylvania."
Motorcycles and Related Products Segment -- Second Quarter Results
Second quarter sales of Harley-Davidson(R) motorcycles were
$664.0 million, an increase of 15.1 percent over last year. Shipments of
Harley-Davidson motorcycles in the second quarter totaled 60,161 units, up
6,832 units or 12.8 percent over last year. As a result of continued
manufacturing success and product demand, the Company is increasing its 2001
target for Harley-Davidson motorcycles to 231,000 units, or a 12.9 percent
increase over the prior year. The Company has set a goal of 256,000
Harley-Davidson units for 2002, a 10.8 percent increase over the 2001 goal.
Second quarter sales of Parts and Accessories (P&A), which consist of
Genuine Motor Parts and Genuine Motor Accessories, totaled $138.0 million, a
13.9 percent increase from the year-ago quarter.
General Merchandise second quarter sales, which consist of
MotorClothes(TM) apparel and collectibles, totaled $33.2 million, down
8.1 percent over the same period last year. Harley-Davidson's annual sales
meeting is being held nearly three weeks earlier than in 2000, and the Company
believes the timing of this event has had an impact on dealer orders during
the second quarter.
On a longer-term basis, the Company expects the growth rate for P&A
revenues to increase slightly faster than Harley-Davidson's motorcycle unit
growth rate. General Merchandise is expected to grow slightly slower than the
motorcycle unit growth rate.
Second quarter gross margin was 34.7 percent of revenue, up from
34.1 percent of revenue last year. A stronger mix of higher margin P&A
categories as well as slightly improved General Merchandise margins accounted
for much of the improvement.
Second quarter operating margin for the Motorcycles and Related Products
Segment was 18.1 percent of revenue, compared to 16.9 percent of revenue for
the same period last year. The Company's gross margin improvement has driven
operating margin improvement. Additionally, last year's second quarter
operating expenses were negatively impacted by a $3 million recall reserve at
the Buell Motorcycle Company subsidiary.
Harley-Davidson Retail Data
"For the first half of the year, U.S. registrations of Harley-Davidson
motorcycles were up nearly 12 percent in a growing market, as we continue to
fulfill the dreams of our customers," said Bleustein. Through June, retail
registrations of Harley-Davidson motorcycles in Europe were down 9.9 percent,
in a European heavyweight motorcycle market that has declined. The Company
believes the softer European economy has caused a weakened heavyweight market.
Through June, Harley-Davidson sales in the Asia-Pacific region were up
3.9 percent in a generally flat market. Although industry data through June
is not yet available, the most recent market data is listed in the
accompanying table.
Financial Services Segment -- Second Quarter Results
Harley-Davidson Financial Services, Inc. (HDFS) reported second quarter
operating income of $23.1 million, up from $11.3 million in the year-ago
quarter. The subsidiary's performance was driven by strong acceptance of its
new consumer financing program, declining interest rates and strength across
all product lines. The Company expects HDFS's total year 2001 operating
income to be 55 to 60 percent higher than 2000 performance.
Harley-Davidson, Inc. -- Six-Month Results
For the six-month period, sales totaled $1.62 billion, a 12.7 percent
increase over the year-ago period. Diluted earnings per share were 68 cents,
an increase of 22.2 percent compared to the first six months last year. When
the sale of the Harley-Davidson(R) Chrome VISA(R) card in first quarter 2000
is excluded, diluted earnings per share increased 27.3 percent.
Through the first six months of this year, Harley-Davidson motorcycle
revenue was $1.27 billion, a 14.1 percent increase.
For the first six months of 2001, P&A revenue totaled $246.2 million, a
14.0 percent increase, while General Merchandise revenue totaled
$72.3 million, a 4.0 percent increase compared with the same period in 2000.
For the first six months, HDFS operating income was $28.1 million, a
$13.5 million increase.
Harley-Davidson, Inc. is the parent company for the group of companies
doing business as Harley-Davidson Motor Company, Buell Motorcycle Company and
Harley-Davidson Financial Services, Inc. Harley-Davidson Motor Company, the
only major U.S.-based motorcycle manufacturer, produces heavyweight
motorcycles and offers a complete line of motorcycle parts, accessories,
apparel, and general merchandise. Buell Motorcycle Company produces sport and
sport-touring motorcycles. Harley-Davidson Financial Services, Inc. provides
wholesale and retail financing and insurance programs to Harley-Davidson
dealers and customers.
Forward-Looking Statements
The Company intends that certain matters discussed in this release are
"forward-looking statements" intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because
the context of the statement will include words such as the Company
"believes," "anticipates," "expects" or "estimates" or words of similar
meaning. Similarly, statements that describe future plans, objectives,
outlooks, targets or goals are also forward-looking statements. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those anticipated as of
the date of this release. Certain of such risks and uncertainties are
described below. Shareholders, potential investors, and other readers are
urged to consider these factors in evaluating the forward-looking statements
and cautioned not to place undue reliance on such forward-looking statements.
The forward-looking statements included in this release are only made as of
the date of this release, and the Company undertakes no obligation to publicly
update such forward-looking statements to reflect subsequent events or
circumstances.
The Company's ability to reach targeted production objectives and maintain
revenue and income growth depends upon, among other factors, the Company's
ability to: (i) continue to realize production efficiencies at its production
facilities through the implementation of innovative manufacturing techniques
and other means, (ii) successfully implement production capacity increases in
its facilities, (iii) successfully introduce new products and services, (iv)
avoid unexpected P&A /general merchandise supplier backorders, (v) sell all of
the motorcycles it has the capacity to produce, (vi) continue to develop the
capacity of its distributor and dealer network, (vii) avoid unexpected changes
in the regulatory environment for its products, and (viii) successfully adjust
to foreign currency exchange rate fluctuations. In addition, the Company
could experience delays in the operation of manufacturing facilities, work
stoppages, difficulty with suppliers, natural causes or other factors. Risk
factors are also disclosed in documents previously filed by the Company with
the Securities and Exchange Commission.
Harley-Davidson, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 24, June 25, June 24, June 25,
2001 2000 2001 2000
Net sales $850,944 $754,973 $1,618,221 $1,436,086
Gross profit 294,953 257,146 588,070 488,451
Operating income
Motorcycles and
related products 153,998 127,228 289,554 239,868
Financial services 23,086 11,282 28,065 14,614
Corporate expenses (3,974) (2,259) (6,776) (5,264)
Total operating income 173,110 136,251 310,843 249,218
Interest income, net 4,794 3,424 9,593 6,296
Gain on sale of credit
card business -- -- -- 18,915
Other income (expense), net (17) 189 (937) (136)
Income before provision
for taxes 177,887 139,864 319,499 274,293
Provision for income taxes 62,260 49,277 111,824 103,479
Net income $115,627 $90,587 $207,675 $170,814
Earnings per common share:
Basic $.38 $.30 $.69 $.56
Diluted $.38 $.29 $.68 $.55
Weighted-average common shares:
Basic 302,621 303,337 302,285 303,123
Diluted 306,569 308,104 306,330 307,914
Harley-Davidson, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 24, Dec 31, June 25,
2001 2000 2000
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $546,656 $419,736 $297,917
Accounts receivable, net 136,781 98,311 115,743
Finance receivables, net 545,883 530,859 451,983
Inventories 177,678 191,931 157,415
Other current assets 63,025 56,427 50,760
Total current assets 1,470,023 1,297,264 1,073,818
Finance receivables, net 452,247 234,091 329,082
Other long-term assets 920,031 905,049 782,326
Total assets $2,842,301 $2,436,404 $2,185,226
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of
finance debt
$192,044 $89,509 $48,163
Other current liabilities 477,504 408,234 422,066
Total current liabilities 669,548 497,743 470,229
Finance debt 355,000 355,000 280,000
Other long-term liabilities 101,911 97,340 81,749
Postretirement health
care benefits 85,148 80,666 78,222
Shareholders' equity 1,630,694 1,405,655 1,275,026
Total liabilities and
shareholders' equity $2,842,301 $2,436,404 $2,185,226
Harley-Davidson, Inc.
Net Sales and Motorcycle
Shipment Data
Three Months Ended Six Months Ended
June 24, June 25, June 24, June 25,
2001 2000 2001 2000
NET SALES (in thousands)
Harley-Davidson(R)
motorcycles $663,994 $576,949 $1,268,604 $1,112,199
Buell(R) motorcycles 15,739 20,188 30,903 36,950
Parts & Accessories 137,984 121,101 246,229 215,967
General Merchandise 33,162 36,067 72,333 69,562
Other 65 668 152 1,408
Total net sales $850,944 $754,973 $1,618,221 $1,436,086
HARLEY-DAVIDSON UNITS
Motorcycle shipments:
United States 48,072 42,252 88,339 78,576
Export 12,089 11,077 25,976 23,810
Total 60,161 53,329 114,315 102,386
Motorcycle product mix:
Touring 28.4% 29.0% 27.7% 27.9%
Custom 50.2 49.4 51.0 50.6
Sportster(R) 21.4 21.6 21.3 21.5
Total 100.0 100.0 100.0 100.0
BUELL UNITS
Motorcycle shipments:
Buell (excluding
Blast(TM)) 1,757 1,955 3,350 3,802
Buell Blast 711 1,325 1,565 1,816
2,468 3,280 4,915 5,618
Year-to-date Heavyweight (651+ cc)
Motorcycle Retail Registrations (Units),
2001, data through month indicated.
2001 2000 % change
United States
-- H-D (June) 93,851 83,691 +11.8
-- Industry (May) 182,002 159,198 +14.3
Europe
-- H-D (June) 13,038 14,466 -9.9
-- Industry (April) 117,760 128,176 -8.1
Japan/Australia
-- H-D (June) 5,822 5,603 +3.9
-- Industry (March) 12,840 12,891 -0.4
Only Harley-Davidson(R) motorcycles are included in the Harley-Davidson
(H-D) data.
Sources: Motorcycle Industry Council, Giral S.A., JAMA, ABS, Company
reports.