Harley-Davidson, Inc. Reports Record Third Quarter; Remains Confident Of Long-Term Growth
10/9/01 5:05 PM ET
MILWAUKEE, Oct. 9 /PRNewswire/ -- Harley-Davidson, Inc. (NYSE: HDI) today
announced record sales and earnings for its third quarter ended September 23,
2001. The Company's third quarter sales were $850.8 million, an increase of
19.1 percent over the third quarter last year. Diluted earnings per share
were 36 cents, a 34.9 percent increase compared with last year.
"For the first few days following the tragedies of September 11, many of
our U.S. Harley-Davidson dealers reported a slowdown in retail activities,"
said Jeffrey L. Bleustein, chairman and chief executive officer of
Harley-Davidson, Inc. "This was particularly noticeable in areas around New
York City and Washington D.C. As time progressed, however, it appears as if
aggregate retail activity has returned to expected levels for this time of
year.
"We remain confident in the continued long-term growth of
Harley-Davidson," said Bleustein. "In fact, we are increasing our 2001
production target for Harley-Davidson(R) motorcycles from 231,000 to 232,500.
At the same time, we continue to carefully watch our internal and external
indicators as well as world events so that we can best manage our business
through these challenging times." As previously reported, the Company has a
2002 goal of 256,000 Harley-Davidson units which represents a 10.1 percent
increase over the new 2001 goal.
Motorcycles and Related Products Segment - Third Quarter Results
Third quarter sales of Harley-Davidson motorcycles were $638.2 million, an
increase of 20.8 percent over the third quarter last year. Shipments totaled
56,611 units, up 8,534 units or 17.8 percent over the same period.
Sales of Parts and Accessories (P), which consist of Genuine Motor Parts
and Genuine Motor Accessories, totaled $150.2 million, a 12.6 percent increase
from the year-ago quarter. Third quarter sales of General Merchandise, which
consist of MotorClothes(TM) apparel and collectibles, totaled $44.1 million, a
7.0 percent increase over the same period last year. On a longer-term basis,
the Company expects the growth rate for P revenues to be slightly higher
than Harley-Davidson's motorcycle unit growth rate. The General Merchandise
growth rate is expected to be lower than the motorcycle unit growth rate over
the long term.
Third quarter gross margin was 35.5 percent of revenue, up from
33.6 percent of revenue for the same period last year. Gross margin improved
primarily due to favorable product mix, worldwide price increases and a higher
percentage of U.S. shipments.
Third quarter operating margin for the Motorcycles and Related Products
Segment was 18.3 percent of revenue, an improvement on last year's third
quarter margin of 16.3 percent. The increase in gross margin drove the
corresponding increase in operating margin.
Harley-Davidson Motorcycle Retail Data
Harley-Davidson retail sales through September grew in the U.S. and in
Japan, up 14.9 and 7.5 percent, respectively compared to the same period last
year. Harley-Davidson retail sales in Europe are down 4.3 percent through
September compared with the year ago period. The Company believes the strong
U.S. dollar is contributing to slower Harley-Davidson sales in Europe. "While
our retail sales in Europe lagged behind the heavyweight motorcycle industry
through August, we are confident that our improving distribution, new product
offerings and brand development activities will have a positive impact on our
longer term success in this market," said Bleustein.
Industry data through September is not yet available; the most recent
market data is listed in the accompanying table.
Financial Services Segment - Third Quarter Results
Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of
Harley-Davidson, Inc., reported third quarter operating income of
$16.2 million, a $6.6 million increase compared to the year-ago quarter. The
subsidiary continues to benefit from the increase in Harley-Davidson's U.S.
motorcycle sales, strong acceptance of its improved consumer financing program
and decreasing cost of funds due to lower interest rates. HDFS also completed
a $400 million asset-backed securitization during the quarter. The Company
expects HDFS's full year 2001 operating income to be approximately 60 percent
higher than 2000 performance.
Harley-Davidson Share Repurchase
During the third quarter, Harley-Davidson repurchased approximately
2.2 million shares of its common stock.
Harley-Davidson, Inc. - Nine Month Results
For the nine month period ended September 23, 2001, sales totaled
$2.47 billion, a 14.8 percent increase over the year-ago period. Diluted
earnings per share were $1.04, an increase of 26.4 percent. When the sale of
the Harley-Davidson(R) Chrome VISA(R) card in first quarter 2000 is excluded,
diluted earnings per share increased 29.9 percent.
Through the first nine months of this year, Harley-Davidson(R) motorcycle
revenue was $1.91 billion, a 16.2 percent increase.
For the first nine months of the year, shipments of Harley-Davidson
motorcycles were 170,926, a 13.6 percent increase.
For the first nine months of 2001, P revenue totaled $396.5 million, a
13.5 percent increase compared with the same period in 2000, while General
Merchandise revenue totaled $116.4 million, a 5.1 percent increase.
Through the first nine months of 2001, HDFS operating income was
$44.3 million, an 82.9 percent increase over last year.
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
selected financial services 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 be statements that describe the Company's
future plans, objectives, targets, estimates, beliefs or goals. 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 growth
targets depends upon, among other factors, (i) continued realization of
production efficiencies at its manufacturing facilities; (ii) successful
implementation of production capacity increases in its facilities; (iii) the
sale of all motorcycles the Company has the capacity to produce; (iv) product
availability; (v) continued development of its distributor and dealer network;
(vi) successful introduction of new products; (vii) changes in political
conditions; and (viii) successful adjustment to foreign currency exchange rate
and interest 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 securities documents previously filed by the Company with
the Securities and Exchange Commission. |
