Harley-Davidson Reports Record Q4 and 15th Consecutive Record Year
18 January 2001
Harley-Davidson Reports Record Fourth Quarter and 15th Consecutive Record Year; 2000 Net Income Increased 30.1% on 18.5% Higher Revenue
MILWAUKEE, Jan. 17 Harley-Davidson, Inc. today
announced record sales and earnings for its fourth quarter and year ended
December 31, 2000. Revenue for the quarter was $756.2 million compared with
$662.5 million in the year-ago quarter, a 14.1 percent increase. Fourth
quarter diluted earnings per share (EPS) were 31 cents, a 26.5 percent
increase compared with last year's 24 cents. Revenue for the full year was
$2.91 billion, compared with $2.45 billion in 1999, an 18.5 percent increase.
Diluted EPS for the full year were $1.13, a 31.1 percent increase compared
with $0.86 in 1999.
"Our 15th consecutive record year exceeded our expectations, and despite
the current economic uncertainty in the United States, the outlook for retail
sales of Harley-Davidson(R) motorcycles continues to be very strong," said
Jeffrey L. Bleustein, chairman and chief executive officer of Harley-Davidson,
Inc.
"Through the continued introduction of market-defining products, a dealer
network that is the envy of the industry, and our demonstrated ability to
focus on and to fulfill our customers' dreams, we are confident we will
continue to deliver record revenues and income."
"Fourth quarter results, current demand and our continued success in
expanding motorcycle production, have given us the confidence to increase our
production target to 227,000 Harley-Davidson motorcycles for 2001," said
Bleustein.
Motorcycles and Related Products Segment - Fourth Quarter Results
Fourth quarter shipments of Harley-Davidson motorcycles totaled 54,129
units, up 5,509 units or 11.3 percent over the same period last year. Sales
of Harley-Davidson motorcycles were $606.1 million, an increase of
$75.9 million or 14.3 percent.
Sales of Parts and Accessories (P&A), which consist of Genuine Motor Parts
and Genuine Motor Accessories, totaled $98.5 million, an increase of
$20.2 million or a 25.9 percent increase from the year-ago quarter. Fourth
quarter sales of General Merchandise, which consists of MotorClothes(TM)
apparel and collectibles, totaled $40.7 million, an increase of $5.6 million
or 15.9 percent over the same period last year.
"We are very pleased with the outstanding performance of both our Parts &
Accessories and General Merchandise businesses during the fourth quarter.
These exceptional results are evidence of our customers' strong desire for the
total Harley-Davidson experience," added Bleustein.
Longer term, the Company expects the growth rate for P&A revenues to
increase slightly faster than Harley-Davidson's motorcycle unit growth rate,
while it expects the growth rate for General Merchandise to grow slightly
slower than the motorcycle unit growth rate.
Fourth quarter gross margin was 34.7 percent of revenue, up slightly from
34.6 percent of revenue last year.
Fourth quarter operating margin for the Motorcycles and Related Products
Segment was 17.3 percent of revenue, which was better than last year's fourth
quarter operating margin of 16.6 percent. Operating expenses did not increase
as rapidly as revenue, resulting in improved operating margins. Included in
operating expenses was a charge of $4 million related to the cost of extending
the warranty for a rear cam bearing in certain Twin Cam 88(TM) engines.
Harley-Davidson/Buell retail registrations in 2000 have grown in all major
markets, with the U.S. up 15.4 percent through November, Europe up 8.8 percent
through October and Japan/Australia up 3.6 percent through October. (See Table
that follows for more detail.)
"Our success in international markets is a direct result of the actions we
have taken over the last several years, such as accelerated dealer
development, new product introductions and focused marketing programs. In
fact, 2000 will mark the second consecutive year that we will gain market
share in Europe and Japan," commented Bleustein.
Financial Services Segment
Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of
Harley-Davidson, Inc., reported fourth quarter operating income of
$13.0 million, up $4.5 million 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, with strong customer demand
for its product offerings," said Bleustein. A significant contributor to the
segment's outstanding financial performance was the favorable market
acceptance of its fourth quarter asset-backed securitization. Advantageous
pricing was achieved through a combination of high quality retail credit
contracts secured by the solid collateral of Harley-Davidson motorcycles.
Share Repurchase
During the fourth quarter, Harley-Davidson repurchased approximately
1.5 million shares of its common stock, which brings the full year total to
just under 3.3 million shares.
Twelve Month Results
For the fiscal year ended 2000, total Harley-Davidson motorcycle shipments
were 204,592 units compared with 177,187 units in 1999, a 15.5 percent
increase. Harley-Davidson motorcycle revenue was $2.25 billion, an increase
of $355.5 million or an 18.8 percent increase.
Total Buell(R) motorcycle shipments were 10,189 units compared with
7,767 units in 1999, a 31.2 percent gain. Buell motorcycle revenue was
$58.1 million, a decrease of $5.4 million or 8.5 percent. The decline in
revenue was driven primarily by a shift to production of lower-priced Buell
Blast motorcycles, which target new riders.
P&A revenue totaled $447.8 million, a 23.5 percent increase, while General
Merchandise revenue totaled $151.4 million, a 14.1 percent increase compared
to 1999.
Full year operating income for HDFS was $37.2 million, an increase of
$9.5 million or 34.3 percent compared to 1999.
Diluted earnings per share were $1.13, an increase of 31.1 percent. After
the first quarter sale of the Harley-Davidson(R) Chrome VISA(R) card is
excluded, diluted earnings per share were $1.11, an increase of 28.5 percent.
TABLES FOLLOW
Harley-Davidson, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
(unaudited)
Net sales $756,160 $662,463 $2,906,365 $2,452,939
Gross profit 262,753 228,900 990,818 835,686
Operating income
Motorcycles and
related products 131,179 110,077 487,485 397,601
Financial services 12,955 8,411 37,178 27,685
Corporate expenses (2,409) (1,977) (9,691) (9,427)
Total operating income 141,725 116,511 514,972 415,859
Gain on sale of credit
card business -- -- 18,915 --
Interest income, net 5,964 2,443 17,583 8,014
Other income, net (2,166) (2,062) (2,914) (3,080)
Income before provision
for taxes 145,523 116,892 548,556 420,793
Provision for income
taxes 51,662 42,668 200,843 153,592
Net income $93,861 $74,224 $347,713 $267,201
Earnings per common
share:
Basic $.31 $.25 $1.15 $.88
Diluted $.31 $.24 $1.13 $.86
Weighted-average common
shares:
Basic 302,560 302,528 302,691 304,748
Diluted 307,158 307,244 307,470 309,714
Harley-Davidson, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalent $419,736 $183,415
Accounts receivable, net 98,311 101,708
Finance receivables, net 530,859 440,951
Inventories 191,931 168,616
Other current assets 56,427 54,304
Total current assets 1,297,264 948,994
Finance receivables, net 234,091 354,888
Other long-term assets 905,049 808,195
Total assets $2,436,404 $2,112,077
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of finance debt $89,509 $181,163
Other current liabilities 408,234 336,991
Total current liabilities 497,743 518,154
Finance debt 355,000 280,000
Other long-term liabilities 97,340 77,124
Postretirement health care benefits 80,666 75,719
Total shareholders' equity 1,405,655 1,161,080
Total liabilities and shareholders' equity $2,436,404 $2,112,077
Harley-Davidson, Inc.
Net Sales and Motorcycle
Shipment Data
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
NET SALES (in thousands)
Harley-Davidson(R) motorcycles $606,076 $530,199 $2,246,403 $1,890,932
Buell(R) motorcycles 10,661 18,160 58,053 63,474
Parts & Accessories 98,473 78,245 447,846 362,598
General Merchandise 40,660 35,080 151,438 132,705
Other 290 779 2,625 3,230
Total net sales $756,160 $662,463 $2,906,365 $2,452,939
HARLEY-DAVIDSON UNITS
Motorcycle shipments:
United States 44,035 38,074 158,817 135,614
Export 10,094 10,546 45,775 41,573
Total 54,129 48,620 204,592 177,187
Motorcycle product mix:
Touring 27.7% 25.7% 28.1% 26.8%
Custom 49.1 50.6 49.3 49.6
Sportster 23.2 23.7 22.6 23.6
Total 100.0% 100.0% 100.0% 100.0%
BUELL UNITS
Buell (excluding Blast) 1,014 2,258 5,043 7,767
Blast 926 -- 5,146 --
Total 1,940 2,258 10,189 7,767
Available 651cc+ Motorcycle Retail Registrations (Units).
2000 1999 % change
UNITED STATES (November YTD) 320,879 261,368 +22.8
HDI 149,225 129,268 +15.4
EUROPE (October YTD) 277,410 291,084 -4.7
HDI 20,379 18,732 +8.8
JAPAN/AUSTRALIA (October YTD) 53,769 54,712 -1.7
HDI 10,836 10,458 +3.6
HDI includes both Harley-Davidson and Buell motorcycles
Sources: Motorcycle Industry Council, Giral S.A., JAMA, ABS