Harley-Davidson Reports Record Fourth Quarter and 16th Consecutive Record Year
MILWAUKEE, Jan. 17 /PRNewswire-FirstCall/ --
Harley-Davidson, Inc. (NYSE: HDI - news) today announced record sales and earnings for its fourth quarter and year ended December 31, 2001. Revenue for the quarter was $894.4 million compared with $756.2 million in the year-ago quarter, an 18.3 percent increase. Fourth quarter diluted earnings per share (EPS) were 39 cents, a 26.8 percent increase compared with last year's 31 cents. Revenue for the full year was $3.36 billion, compared with $2.91 billion in 2000, a 15.7 percent increase. Net income for the year was $437.7 million, a 25.9 percent increase versus last year's $347.7 million, while diluted EPS for the full year were $1.43, a 26.4 percent increase compared with $1.13 in 2000.
``The year 2001 was our 16th consecutive year of record revenue and income, in spite of the weaker global economy,'' said Jeffrey L. Bleustein, chairman and chief executive officer of Harley-Davidson, Inc. ``Worldwide retail sales of Harley-Davidson® motorcycles in the fourth quarter were strong with 12.9 percent unit growth over last year.
``In addition to strong demand for our traditional products, we also successfully launched our new performance cruiser, the V-Rod(TM). In late November, we began shipping V-Rod motorcycles to our dealer network. Dealers and customers alike were anxiously awaiting this innovative new product which has received acclaim from industry experts worldwide.
``Even though the world is experiencing difficult economic conditions, fourth quarter retail sales of Harley-Davidson motorcycles and progress in expanding our motorcycle capacity have given us the confidence to increase our production target to 258,000 Harley-Davidson motorcycles for 2002,'' said Bleustein. ``We will continue to manage our business for the long-term while carefully monitoring the motorcycle market and other near-term indicators.''
Motorcycles and Related Products Segment -- Fourth Quarter Results
Fourth quarter shipments of Harley-Davidson motorcycles totaled 63,535 units, up 9,406 units or 17.4 percent over the same period last year. Included in the 2001 figures are 1,703 V-Rod motorcycles. Revenue from Harley-Davidson motorcycles was $723.3 million, an increase of $117.2 million or 19.3 percent.
Sales of Parts and Accessories (P&A), which consist of Genuine Motor Parts and Genuine Motor Accessories, totaled $110.8 million, an increase of $12.3 million, or 12.5 percent from the year-ago quarter. Sales of General Merchandise, which consists of MotorClothes(TM) apparel and collectibles, totaled $47.5 million, an increase of $6.8 million or 16.8 percent.
Fourth quarter gross margin was 35.7 percent of revenue, up from 34.7 percent last year. Gross margin improved primarily due to a higher percentage of U.S. shipments, favorable product mix and wholesale motorcycle price increases.
Fourth quarter operating margin for the Motorcycles and Related Products Segment was 18.8 percent of revenue, which was better than last year's fourth quarter operating margin of 17.3 percent. The increase in operating margin was driven primarily by the increase in gross margin.
Financial Services Segment -- Fourth Quarter Results
Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of Harley-Davidson, Inc., reported fourth quarter operating income of $17.0 million, up $4.0 million or 31 percent compared to the year-ago quarter.
``Harley-Davidson Financial Services continues to help make the dream of owning a new Harley-Davidson motorcycle a reality,'' said Bleustein. The subsidiary benefited 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 market interest rates.
HDFS also entered into an agreement to sell $315 million of asset-backed securitizations during the quarter. The Company expects HDFS's full year 2002 operating income growth rate to be slightly higher than the Harley-Davidson motorcycle unit growth rate.
Harley-Davidson Motorcycle Retail Data
Harley-Davidson retail sales for 2001 grew in the U.S. and in Japan, up 14.4 and 10.7 percent, respectively, compared to last year. Harley-Davidson retail sales in Europe were down 2.0 percent compared with 2000. The Company believes the strong U.S. dollar and weak European economies are contributing to slower Harley-Davidson sales in Europe. ``While complete data is not available, we expect to grow worldwide market share for heavyweight motorcycles in 2001,'' said Bleustein.
The most recent market data is listed in the accompanying table.
Share Repurchase
During the year, Harley-Davidson repurchased approximately 2.4 million shares of its common stock, of which 0.2 million shares were repurchased during the fourth quarter.
Twelve Month Results
For the fiscal year ended 2001, total Harley-Davidson motorcycle shipments were 234,461 units compared with 204,592 units in 2000, a 14.6 percent increase. Harley-Davidson motorcycle revenue was $2.63 billion, an increase of $383.7 million or 17.1 percent.
P&A revenue totaled $507.3 million, a 13.3 percent increase, while General Merchandise revenue totaled $163.9 million, an 8.2 percent increase compared with 2000.
On a longer-term basis, the Company expects the growth rate for P&A revenues to be slightly higher than the Harley-Davidson motorcycle unit growth rate. The General Merchandise growth rate is expected to be lower than the motorcycle unit growth rate over the long term.
Full year operating income for HDFS was $61.3 million, an increase of $24.1 million or 64.8 percent compared to 2000.
Diluted earnings per share were $1.43, an increase of 26.4 percent. If the sale of the Harley-Davidson® Chrome VISA® card in 2000 is excluded, diluted earnings per share increased 28.9 percent.
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, insurance and credit card 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 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) interest rate fluctuations and successful adjustment to
foreign currency exchange rates.
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.
Harley-Davidson, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
(unaudited) (unaudited)
Net sales $894,401 $756,160 $3,363,414 $2,906,365
Gross profit 319,628 262,753 1,180,005 990,818
Operating income
Motorcycles and
related products 168,426 131,179 613,311 487,485
Financial services 16,970 12,955 61,273 37,178
Corporate expenses (2,944) (2,409) (12,083) (9,691)
Total operating income 182,452 141,725 662,501 514,972
Gain on sale of credit
card business -- -- -- 18,915
Interest income, net 3,386 5,964 17,478 17,583
Other income, net (3,762) (2,166) (6,524) (2,914)
Income before provision
for taxes 182,076 145,523 673,455 548,556
Provision for income
taxes 63,726 51,662 235,709 200,843
Net income $118,350 $93,861 $437,746 $347,713
Earnings per common
share:
Basic $.39 $.31 $1.45 $1.15
Diluted $.39 $.31 $1.43 $1.13
Weighted-average
common shares:
Basic 302,343 302,560 302,506 302,691
Diluted 305,512 307,158 306,248 307,470
Harley-Davidson, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 31,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $439,438 $419,736
Marketable securities 196,011 --
Accounts receivable, net 118,843 98,311
Finance receivables, net 656,421 530,859
Inventories 181,115 191,931
Other current assets 73,436 56,427
Total current assets 1,665,264 1,297,264
Finance receivables, net 379,335 234,091
Other long-term assets 1,073,896 905,049
Total assets $3,118,495 $2,436,404
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $499,059 $408,234
Current portion of finance debt 242,051 89,509
Total current liabilities 741,110 497,743
Finance debt 355,000 355,000
Other long-term liabilities 176,190 97,340
Postretirement health care benefits 89,912 80,666
Total shareholders' equity 1,756,283 1,405,655
Total liabilities and shareholders' equity $3,118,495 $2,436,404
Harley-Davidson, Inc.
Net Sales and Motorcycle
Shipment Data
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
NET SALES (in thousands)
Harley-Davidson(R) motorcycles $723,304 $606,076 $2,630,099 $2,246,403
Buell(R) motorcycles 12,716 10,661 61,876 58,053
Parts & Accessories 110,805 98,473 507,263 447,846
General Merchandise 47,474 40,660 163,909 151,438
Other 102 290 267 2,625
Total net sales $894,401 $756,160 $3,363,414 $2,906,365
HARLEY-DAVIDSON UNITS
Motorcycle shipments:
United States 53,616 44,035 186,915 158,817
Export 9,919 10,094 47,546 45,775
Total 63,535 54,129 234,461 204,592
Motorcycle product mix:
Touring 27.6% 27.5% 27.9% 28.0%
Custom 50.9 49.3 50.4 49.4
Sportster 21.5 23.2 21.7 22.6
Total 100.0% 100.0% 100.0% 100.0%
BUELL UNITS
Buell (excluding Blast) 1,208 1,014 6,436 5,043
Blast 963 926 3,489 5,146
Total 2,171 1,940 9,925 10,189
2001 Year-to-date Heavyweight (651+ cc)
Motorcycle Retail Registrations (Units),
data through month indicated.
2001 2000 % change
United States
- H-D (December) 177,414 155,081 +14.4
- Industry (December) 394,294 339,997 +16.0
Europe
- H-D (December) 23,547 24,020 -2.0
- Industry (November) 287,399 286,574 +0.3
Japan
- H-D (December) 8,990 8,120 +10.7
- Industry (November) 45,470 46,426 -2.1
Only Harley-Davidson(R) motorcycles are included in the Harley-Davidson
(H-D) data.
Data Sources: United States - Motorcycle Industry Council; Europe -
Company reports and Giral S.A.; Japan - Company reports and JAMA.