Harley-Davidson Reports Another Record First Quarter

Apr 10, 2001, 01:00 ET from Harley-Davidson, Inc.

    MILWAUKEE, April 10 /PRNewswire/ -- Harley-Davidson, Inc. (NYSE:   HDI)
 today announced record sales and earnings for its first quarter ended
 March 25, 2001.  Revenue for the quarter was $767.3 million compared with
 $681.1 million in the year-ago quarter, a 12.7 percent increase.  First
 quarter diluted earnings per share (EPS) were 30 cents, a 26.2 percent
 increase compared with last year's 24 cents, which excludes last year's first
 quarter gain from the sale of the Harley-Davidson credit card program.  The
 Company's diluted EPS grew 15.4 percent from 26 cents when the credit card
 sale is included in last year's first quarter.
     "We are delighted to announce another outstanding quarter and to report
 that demand for Harley-Davidson products remains strong during this period of
 economic uncertainty.  We are in very close contact with our market, and our
 U.S. dealers have demonstrated confidence that 2001 will be another record
 year for Harley-Davidson(R) motorcycle sales," said Jeffrey L. Bleustein,
 chairman and chief executive officer of Harley-Davidson, Inc.  "Based on
 continued demand and our manufacturing success, we are raising the 2001
 production target for Harley-Davidson motorcycles to 229,000 units, up from
 the previous target of 227,000.
     "I am also pleased with a new seven-year labor contract that was recently
 agreed upon with our Wisconsin-based unions.  This agreement, together with
 the multi-year contract we signed with our York, Pennsylvania union last fall,
 underscores the unique working relationship we have with our employees and
 supports our long term plan for sustainable growth," added Bleustein.
 
     Motorcycles and Related Products Segment
     First quarter sales of Harley-Davidson motorcycles were $604.6 million, an
 increase of 13.0 percent over the first quarter last year.  Shipments of
 Harley-Davidson motorcycles totaled 54,154, up 5,097 units or 10.4 percent
 over last year.  To support the new full year production target of 229,000
 units, Harley-Davidson is increasing its second quarter production target to
 59,000 units.
     First quarter sales of Parts and Accessories (P&A), which consist of
 Genuine Motor Parts(TM) and Genuine Motor Accessories(TM), totaled
 $108.2 million, a 14.1 percent increase over the year-ago quarter.  General
 Merchandise first quarter sales, which consist of MotorClothes(R) apparel and
 collectibles, totaled $39.2 million, up 16.9 percent over the same period last
 year.
     For the long term, the Company expects P&A revenues to increase somewhat
 faster than Harley-Davidson's motorcycle unit growth rate and expects General
 Merchandise to grow slightly slower than the motorcycle unit growth rate.
     First quarter gross margin for the Motorcycles and Related Products
 Segment was 34.3 percent of revenue, up from 34.0 percent of revenue last
 year, while operating margin was 17.7 percent of revenue, compared to
 16.5 percent of revenue for the same period last year.  The improvement in
 operating margin was driven by the improvement in gross margin as well as
 operating expenses that grew at a slower rate than the Company's revenue.
 
     Harley-Davidson Retail Data
     Retail sales figures for Harley-Davidson motorcycles in the United States
 were up 6.4 percent for the period January through March 2001, when compared
 to the same period last year, which showed a 25.9 percent increase.  Over the
 previous five years, Harley-Davidson's first quarter retail registration
 growth rates have fluctuated between 7.0 percent and 32.8 percent.  Growth
 rates in the first quarter have not correlated to annual growth rates, and in
 fact, annual growth rates over this same period have ranged from 14.2 percent
 to 23.3 percent.
 
     Financial Services Segment
     Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of
 Harley-Davidson, Inc., reported first quarter operating income of
 $5.0 million, up from $3.3 million in the year-ago quarter.  HDFS performance
 was driven by strong acceptance of its new consumer financing rates as well as
 strength across all product lines.  The Company expects HDFS to grow operating
 income between 25 and 30 percent for 2001.
 
     Income Tax Rate
     The Company has reduced its effective income tax rate to 35.0 percent for
 the first quarter and expects to maintain this improved rate for the remainder
 of the year.
 
     Company Background
     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, (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
                                                     Mar. 25,         Mar. 26,
                                                       2001            2000
 
     Net sales                                       $767,277       $681,113
     Gross profit                                     263,117        231,305
     Operating income:
       Motorcycles and Related Products               135,556        112,640
       Financial Services                               4,979          3,332
       Corporate expenses                              (2,802)        (3,005)
     Total operating income                           137,733        112,967
     Gain on sale of credit card business                  --         18,915
     Interest income, net                               4,799          2,872
     Other expense, net                                  (920)          (325)
     Income before provision for income taxes         141,612        134,429
     Provision for income taxes                        49,564         54,202
     Net income                                      $ 92,048       $ 80,227
 
     Earnings per common share:
       Basic                                             $.30           $.26
       Diluted                                           $.30           $.26
 
     Weighted-average common shares:
       Basic                                          301,922        302,898
       Diluted                                        306,063        307,712
 
 
                             Harley-Davidson, Inc.
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
                                    Mar. 25,        Dec. 31,       Mar. 26,
                                      2001            2000           2000
                                  (unaudited)                     (unaudited)
 
     ASSETS
       Current assets:
         Cash and cash equivalents  $399,339        $419,736      $208,996
         Accounts receivable, net    162,618          98,311       151,544
         Finance receivables, net    613,607         530,859       471,780
         Inventories                 187,982         191,931       168,560
         Other current assets         56,888          56,427        49,703
       Total current assets        1,420,434       1,297,264     1,050,583
 
       Finance receivables, net      451,873         234,091       371,386
       Other long-term assets        895,445         905,049       780,348
 
     Total assets                 $2,767,752      $2,436,404    $2,202,317
 
     LIABILITIES AND
      SHAREHOLDERS' EQUITY
       Current liabilities:
         Accounts payable and
          accrued expenses          $442,882        $408,234      $398,476
         Current portion of
          finance debt               293,553          89,509       123,815
       Total current liabilities     736,435         497,743       522,291
 
       Finance debt                  355,000         355,000       280,000
       Other long-term liabilities    99,564          97,340        80,740
       Postretirement health
        care benefits                 83,122          80,666        76,900
       Total shareholders' equity  1,493,631       1,405,655     1,242,386
 
     Total liabilities and
      shareholders' equity        $2,767,752      $2,436,404    $2,202,317
 
 
                             Harley-Davidson, Inc.
                            Net Sales and Motorcycle
                                 Shipment Data
 
                                                       Three Months Ended
                                                      Mar. 25,      Mar. 26,
                                                       2001           2000
 
     NET SALES (in thousands)
     Harley-Davidson(R) motorcycles                  $604,610       $535,250
     Buell(R) motorcycles                              15,164         16,762
     Parts & Accessories                              108,245         94,866
     General Merchandise                               39,171         33,495
     Other                                                 87            740
     Total                                           $767,277       $681,113
 
     HARLEY-DAVIDSON UNITS
     Motorcycle shipments:
       United States                                   40,267         36,324
       Export                                          13,887         12,733
       Total                                           54,154         49,057
 
     Motorcycle product mix:
       Touring                                           26.9%          27.5%
       Custom                                            52.0           51.0
       Sportster(R)                                      21.1           21.5
       Total                                            100.0%         100.0%
 
     BUELL UNITS
     Motorcycle shipments:
       Buell (excluding Blast)                          1,593          1,847
       Buell Blast                                        854            491
       Total                                            2,447          2,338
 
 
   Heavyweight (651cc+) Motorcycle Retail Registrations (Units) -- Full Year
 
                                      2000            1999         % change
 
     UNITED STATES                   337,165         275,557         +22.4
       HDI                           159,271         138,407         +15.1
 
     CANADA                           25,402          22,296         +13.9
       HDI                             8,171           7,657          +6.7
 
     EUROPE                          293,424         306,748          -4.3
       HDI                            21,782          19,915          +9.4
 
     JAPAN/AUSTRALIA                  62,667          63,097          -0.7
       HDI                            12,871          12,343          +4.3
 
 
     HDI includes both Harley-Davidson and Buell motorcycle brands.
 
     Sources:  Harley-Davidson, Motorcycle Industry Council, Giral S.A., JAMA,
               ABS
 
 

SOURCE Harley-Davidson, Inc.
    MILWAUKEE, April 10 /PRNewswire/ -- Harley-Davidson, Inc. (NYSE:   HDI)
 today announced record sales and earnings for its first quarter ended
 March 25, 2001.  Revenue for the quarter was $767.3 million compared with
 $681.1 million in the year-ago quarter, a 12.7 percent increase.  First
 quarter diluted earnings per share (EPS) were 30 cents, a 26.2 percent
 increase compared with last year's 24 cents, which excludes last year's first
 quarter gain from the sale of the Harley-Davidson credit card program.  The
 Company's diluted EPS grew 15.4 percent from 26 cents when the credit card
 sale is included in last year's first quarter.
     "We are delighted to announce another outstanding quarter and to report
 that demand for Harley-Davidson products remains strong during this period of
 economic uncertainty.  We are in very close contact with our market, and our
 U.S. dealers have demonstrated confidence that 2001 will be another record
 year for Harley-Davidson(R) motorcycle sales," said Jeffrey L. Bleustein,
 chairman and chief executive officer of Harley-Davidson, Inc.  "Based on
 continued demand and our manufacturing success, we are raising the 2001
 production target for Harley-Davidson motorcycles to 229,000 units, up from
 the previous target of 227,000.
     "I am also pleased with a new seven-year labor contract that was recently
 agreed upon with our Wisconsin-based unions.  This agreement, together with
 the multi-year contract we signed with our York, Pennsylvania union last fall,
 underscores the unique working relationship we have with our employees and
 supports our long term plan for sustainable growth," added Bleustein.
 
     Motorcycles and Related Products Segment
     First quarter sales of Harley-Davidson motorcycles were $604.6 million, an
 increase of 13.0 percent over the first quarter last year.  Shipments of
 Harley-Davidson motorcycles totaled 54,154, up 5,097 units or 10.4 percent
 over last year.  To support the new full year production target of 229,000
 units, Harley-Davidson is increasing its second quarter production target to
 59,000 units.
     First quarter sales of Parts and Accessories (P&A), which consist of
 Genuine Motor Parts(TM) and Genuine Motor Accessories(TM), totaled
 $108.2 million, a 14.1 percent increase over the year-ago quarter.  General
 Merchandise first quarter sales, which consist of MotorClothes(R) apparel and
 collectibles, totaled $39.2 million, up 16.9 percent over the same period last
 year.
     For the long term, the Company expects P&A revenues to increase somewhat
 faster than Harley-Davidson's motorcycle unit growth rate and expects General
 Merchandise to grow slightly slower than the motorcycle unit growth rate.
     First quarter gross margin for the Motorcycles and Related Products
 Segment was 34.3 percent of revenue, up from 34.0 percent of revenue last
 year, while operating margin was 17.7 percent of revenue, compared to
 16.5 percent of revenue for the same period last year.  The improvement in
 operating margin was driven by the improvement in gross margin as well as
 operating expenses that grew at a slower rate than the Company's revenue.
 
     Harley-Davidson Retail Data
     Retail sales figures for Harley-Davidson motorcycles in the United States
 were up 6.4 percent for the period January through March 2001, when compared
 to the same period last year, which showed a 25.9 percent increase.  Over the
 previous five years, Harley-Davidson's first quarter retail registration
 growth rates have fluctuated between 7.0 percent and 32.8 percent.  Growth
 rates in the first quarter have not correlated to annual growth rates, and in
 fact, annual growth rates over this same period have ranged from 14.2 percent
 to 23.3 percent.
 
     Financial Services Segment
     Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of
 Harley-Davidson, Inc., reported first quarter operating income of
 $5.0 million, up from $3.3 million in the year-ago quarter.  HDFS performance
 was driven by strong acceptance of its new consumer financing rates as well as
 strength across all product lines.  The Company expects HDFS to grow operating
 income between 25 and 30 percent for 2001.
 
     Income Tax Rate
     The Company has reduced its effective income tax rate to 35.0 percent for
 the first quarter and expects to maintain this improved rate for the remainder
 of the year.
 
     Company Background
     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, (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
                                                     Mar. 25,         Mar. 26,
                                                       2001            2000
 
     Net sales                                       $767,277       $681,113
     Gross profit                                     263,117        231,305
     Operating income:
       Motorcycles and Related Products               135,556        112,640
       Financial Services                               4,979          3,332
       Corporate expenses                              (2,802)        (3,005)
     Total operating income                           137,733        112,967
     Gain on sale of credit card business                  --         18,915
     Interest income, net                               4,799          2,872
     Other expense, net                                  (920)          (325)
     Income before provision for income taxes         141,612        134,429
     Provision for income taxes                        49,564         54,202
     Net income                                      $ 92,048       $ 80,227
 
     Earnings per common share:
       Basic                                             $.30           $.26
       Diluted                                           $.30           $.26
 
     Weighted-average common shares:
       Basic                                          301,922        302,898
       Diluted                                        306,063        307,712
 
 
                             Harley-Davidson, Inc.
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
                                    Mar. 25,        Dec. 31,       Mar. 26,
                                      2001            2000           2000
                                  (unaudited)                     (unaudited)
 
     ASSETS
       Current assets:
         Cash and cash equivalents  $399,339        $419,736      $208,996
         Accounts receivable, net    162,618          98,311       151,544
         Finance receivables, net    613,607         530,859       471,780
         Inventories                 187,982         191,931       168,560
         Other current assets         56,888          56,427        49,703
       Total current assets        1,420,434       1,297,264     1,050,583
 
       Finance receivables, net      451,873         234,091       371,386
       Other long-term assets        895,445         905,049       780,348
 
     Total assets                 $2,767,752      $2,436,404    $2,202,317
 
     LIABILITIES AND
      SHAREHOLDERS' EQUITY
       Current liabilities:
         Accounts payable and
          accrued expenses          $442,882        $408,234      $398,476
         Current portion of
          finance debt               293,553          89,509       123,815
       Total current liabilities     736,435         497,743       522,291
 
       Finance debt                  355,000         355,000       280,000
       Other long-term liabilities    99,564          97,340        80,740
       Postretirement health
        care benefits                 83,122          80,666        76,900
       Total shareholders' equity  1,493,631       1,405,655     1,242,386
 
     Total liabilities and
      shareholders' equity        $2,767,752      $2,436,404    $2,202,317
 
 
                             Harley-Davidson, Inc.
                            Net Sales and Motorcycle
                                 Shipment Data
 
                                                       Three Months Ended
                                                      Mar. 25,      Mar. 26,
                                                       2001           2000
 
     NET SALES (in thousands)
     Harley-Davidson(R) motorcycles                  $604,610       $535,250
     Buell(R) motorcycles                              15,164         16,762
     Parts & Accessories                              108,245         94,866
     General Merchandise                               39,171         33,495
     Other                                                 87            740
     Total                                           $767,277       $681,113
 
     HARLEY-DAVIDSON UNITS
     Motorcycle shipments:
       United States                                   40,267         36,324
       Export                                          13,887         12,733
       Total                                           54,154         49,057
 
     Motorcycle product mix:
       Touring                                           26.9%          27.5%
       Custom                                            52.0           51.0
       Sportster(R)                                      21.1           21.5
       Total                                            100.0%         100.0%
 
     BUELL UNITS
     Motorcycle shipments:
       Buell (excluding Blast)                          1,593          1,847
       Buell Blast                                        854            491
       Total                                            2,447          2,338
 
 
   Heavyweight (651cc+) Motorcycle Retail Registrations (Units) -- Full Year
 
                                      2000            1999         % change
 
     UNITED STATES                   337,165         275,557         +22.4
       HDI                           159,271         138,407         +15.1
 
     CANADA                           25,402          22,296         +13.9
       HDI                             8,171           7,657          +6.7
 
     EUROPE                          293,424         306,748          -4.3
       HDI                            21,782          19,915          +9.4
 
     JAPAN/AUSTRALIA                  62,667          63,097          -0.7
       HDI                            12,871          12,343          +4.3
 
 
     HDI includes both Harley-Davidson and Buell motorcycle brands.
 
     Sources:  Harley-Davidson, Motorcycle Industry Council, Giral S.A., JAMA,
               ABS
 
 SOURCE  Harley-Davidson, Inc.

RELATED LINKS

http://www.harley-davidson.com