Harley-Davidson Third-Quarter Retail Motorcycle Sales Rise
Through nine months,
"
Retail Harley-Davidson Motorcycle Sales
Dealers worldwide sold 73,217 new Harley-Davidson® motorcycles in the third quarter of 2014 compared to 70,517 motorcycles in the year-ago quarter.
"With the successful launch of the 2015 motorcycles in late August, including the return of the Road Glide models, and the outstanding efforts of our dealers, third-quarter retail
In last year's third quarter, the Company launched its game-changing Project Rushmore line of touring motorcycles, which spurred year-over-year retail sales growth of 20.1 percent in the U.S. and 15.5 percent worldwide, giving the third quarter of 2013 one of the strongest single-quarter retail increases in recent years for
This year, U.S. dealers sold 50,167 new
In international markets, dealers sold 23,050 new
Through the first nine months of 2014, dealers sold 220,850 new
Harley-Davidson Motorcycles and Related Products Segment Results
Third-Quarter Results: Operating income from motorcycles and related products was
Revenue from motorcycles was
Revenue from motorcycle parts and accessories was
Gross margin was 34.9 percent in the third quarter of 2014, compared to 35.3 percent in the third quarter of 2013. Third-quarter operating margin from motorcycles and related products was 12.9 percent, compared to operating margin of 14.9 percent in last year's third quarter.
Nine-Month Results: Through nine months the Company shipped 223,569 motorcycles to dealers and distributors worldwide, a 4.5 percent increase compared to the year-ago period. Nine-month revenue from motorcycles grew 9.6 percent to
Financial Services Segment Results
Operating income from financial services was
Guidance
Income Tax Rate
Through nine months, the Company's effective income tax rate was 34.9 percent compared to 34.3 percent in the year-ago period. The higher 2014 rate primarily reflects the absence of the Research and Development Tax Credit, which expired at the end of 2013. The Company now expects its full-year 2014 effective tax rate to be approximately 35.0 percent, down a half percentage point from prior guidance due to a higher projected benefit from the U.S. manufacturing deduction.
Cash Flow
Cash and marketable securities totaled
Company Background
Conference Call and Webcast Presentation
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," "plans," or "estimates" or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets, guidance 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 disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
The Company's ability to meet the targets and expectations noted depends upon, among other factors, the Company's ability to (i) execute its business strategy, (ii) adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices, (iii) manage through inconsistent economic conditions, including changing capital, credit and retail markets, (iv) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles, (v) manage supply chain issues, including any unexpected interruptions or price increases caused by raw material shortages or natural disasters, (vi) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations, (vii) develop and implement sales and marketing plans that retain existing retail customers and attract new retail customers in an increasingly competitive marketplace, (viii) implement and manage enterprise-wide information technology solutions, including solutions at its manufacturing facilities, and secure data contained in those systems, (ix) anticipate the level of consumer confidence in the economy, (x) continue to realize production efficiencies at its production facilities and manage operating costs including materials, labor and overhead, (xi) manage production capacity and production changes, (xii) provide products, services and experiences that are successful in the marketplace, (xiii) manage risks that arise through expanding international manufacturing, operations and sales, (xiv) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS' loan portfolio, (xv) continue to manage the relationships and agreements that it has with its labor unions to help drive long-term competitiveness, (xvi) adjust to healthcare inflation and reform, pension reform and tax changes, (xvii) retain and attract talented employees, (xviii) manage the risks that our independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand, (xix) continue to have access to reliable sources of capital funding and adjust to fluctuations in the cost of capital, (xx) continue to develop the capabilities of its distributor and dealer network, and (xxi) detect any issues with our motorcycles or manufacturing processes to avoid delays in new model launches, recall campaigns, increased warranty costs or litigation.
In addition, the Company could experience delays or disruptions in its operations as a result of work stoppages, strikes, natural causes, terrorism or other factors. Other factors are described in risk factors that the Company has disclosed in documents previously filed with the
The Company's ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the Company's independent dealers to sell its motorcycles and related products and services to retail customers. The Company depends on the capability and financial capacity of its independent dealers and distributors to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the Company. In addition, the Company's independent dealers and distributors may experience difficulties in operating their businesses and selling
TABLES FOLLOW
Harley-Davidson, Inc. |
||||||||
Condensed Consolidated Statements of Operations |
||||||||
(In thousands, except per share amounts) |
||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||
Three months ended |
Nine months ended |
|||||||
September 28, |
September 29, |
September 28, |
September 29, |
|||||
2014 |
2013 |
2014 |
2013 |
|||||
Motorcycles and related products revenue |
$ 1,130,558 |
$ 1,180,284 |
$ 4,536,531 |
$ 4,225,998 |
||||
Gross profit |
394,600 |
416,315 |
1,710,870 |
1,537,627 |
||||
Selling, administrative and engineering expense |
248,286 |
240,198 |
743,608 |
729,443 |
||||
Restructuring expense |
- |
646 |
- |
(1,713) |
||||
Operating income from motorcycles & related products |
146,314 |
175,471 |
967,262 |
809,897 |
||||
Financial services revenue |
171,046 |
163,434 |
491,820 |
483,240 |
||||
Financial services expense |
93,287 |
87,366 |
276,432 |
261,471 |
||||
Operating income from financial services |
77,759 |
76,068 |
215,388 |
221,769 |
||||
Operating income |
224,073 |
251,539 |
1,182,650 |
1,031,666 |
||||
Investment income |
1,509 |
1,161 |
4,940 |
4,546 |
||||
Interest expense |
77 |
11,369 |
4,147 |
33,998 |
||||
Income before income taxes |
225,505 |
241,331 |
1,183,443 |
1,002,214 |
||||
Provision for income taxes |
75,439 |
78,615 |
413,307 |
343,630 |
||||
Net income |
$ 150,066 |
$ 162,716 |
$ 770,136 |
$ 658,584 |
||||
Earnings per common share: |
||||||||
Basic |
$ 0.70 |
$ 0.73 |
$ 3.54 |
$ 2.95 |
||||
Diluted |
$ 0.69 |
$ 0.73 |
$ 3.52 |
$ 2.93 |
||||
Weighted-average common shares: |
||||||||
Basic |
215,572 |
221,936 |
217,429 |
223,134 |
||||
Diluted |
216,893 |
223,486 |
218,838 |
224,696 |
||||
Cash dividends per common share |
$ 0.275 |
$ 0.210 |
$ 0.825 |
$ 0.630 |
Harley-Davidson, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(In thousands) |
||||||||
(Unaudited) |
(Unaudited) |
|||||||
September 28, |
December 31, |
September 29, |
||||||
2014 |
2013 |
2013 |
||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ 979,866 |
$ 1,066,612 |
$ 1,029,955 |
|||||
Marketable securities |
57,579 |
99,009 |
122,234 |
|||||
Accounts receivable, net |
286,256 |
261,065 |
290,158 |
|||||
Finance receivables, net |
2,012,466 |
1,773,686 |
1,829,612 |
|||||
Inventories |
460,958 |
424,507 |
401,199 |
|||||
Restricted cash |
142,286 |
144,807 |
194,329 |
|||||
Other current assets |
263,067 |
219,117 |
225,188 |
|||||
Total current assets |
4,202,478 |
3,988,803 |
4,092,675 |
|||||
Finance receivables, net |
4,653,034 |
4,225,877 |
4,355,278 |
|||||
Prepaid pension costs |
261,983 |
244,871 |
- |
|||||
Other long-term assets |
908,011 |
945,489 |
1,036,055 |
|||||
$ 10,025,506 |
$ 9,405,040 |
$ 9,484,008 |
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable & accrued liabilities |
$ 836,294 |
$ 667,129 |
$ 865,940 |
|||||
Short-term debt |
352,430 |
666,317 |
394,460 |
|||||
Current portion of long-term debt |
1,518,320 |
1,176,140 |
721,316 |
|||||
Total current liabilities |
2,707,044 |
2,509,586 |
1,981,716 |
|||||
Long-term debt |
3,573,118 |
3,416,713 |
4,067,733 |
|||||
Pension and postretirement healthcare liabilities |
243,484 |
252,536 |
412,482 |
|||||
Other long-term liabilities |
217,497 |
216,719 |
140,230 |
|||||
Total shareholders' equity |
3,284,363 |
3,009,486 |
2,881,847 |
|||||
$ 10,025,506 |
$ 9,405,040 |
$ 9,484,008 |
||||||
Harley-Davidson, Inc. |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(In thousands) |
||||||||
(Unaudited) |
(Unaudited) |
|||||||
Nine months ended |
||||||||
September 28, |
September 29, |
|||||||
2014 |
2013 |
|||||||
Net cash provided by operating activities |
$ 966,868 |
$ 825,103 |
||||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(120,316) |
(111,690) |
||||||
Finance receivables, net |
(610,644) |
(446,181) |
||||||
Net change in marketable securities |
41,010 |
12,107 |
||||||
Other |
275 |
6,721 |
||||||
Net cash used by investing activities |
(689,675) |
(539,043) |
||||||
Cash flows from financing activities: |
||||||||
Repayment of senior unsecured notes |
(303,000) |
- |
||||||
Proceeds from issuance of medium-term notes |
594,431 |
- |
||||||
Repayments of medium-term notes |
(7,220) |
(27,858) |
||||||
Proceeds from securitization debt |
847,126 |
647,516 |
||||||
Repayments of securitization debt |
(631,302) |
(650,424) |
||||||
Net (decrease) increase in credit facilities and unsecured commercial paper |
(315,278) |
99,416 |
||||||
Borrowings of asset-backed commercial paper |
57,669 |
69,555 |
||||||
Repayments of asset-backed commercial paper |
(58,717) |
(58,990) |
||||||
Net change in restricted cash |
2,521 |
(6,321) |
||||||
Dividends paid |
(179,860) |
(140,772) |
||||||
Purchase of common stock for treasury |
(393,459) |
(302,196) |
||||||
Excess tax benefits from share-based payments |
8,873 |
18,444 |
||||||
Issuance of common stock under employee stock option plans |
28,850 |
39,145 |
||||||
Net cash used by financing activities |
(349,366) |
(312,485) |
||||||
Effect of exchange rate changes on cash and cash equivalents |
(14,573) |
(11,758) |
||||||
Net decrease in cash and cash equivalents |
$ (86,746) |
$ (38,183) |
||||||
Cash and cash equivalents: |
||||||||
Cash and cash equivalents - beginning of period |
$ 1,066,612 |
$ 1,068,138 |
||||||
Net decrease in cash and cash equivalents |
(86,746) |
(38,183) |
||||||
Cash and cash equivalents - end of period |
$ 979,866 |
$ 1,029,955 |
||||||
Motorcycles and Related Products Revenue and |
||||||||
Motorcycle Shipment Data |
||||||||
(Unaudited) |
||||||||
Three months ended |
Nine months ended |
|||||||
September 28, |
September 29, |
September 28, |
September 29, |
|||||
2014 |
2013 |
2014 |
2013 |
|||||
MOTORCYCLES AND RELATED PRODUCTS REVENUE (in thousands) |
||||||||
Motorcycles |
$ 815,375 |
$ 857,029 |
$ 3,601,328 |
$ 3,285,738 |
||||
Parts & Accessories |
239,731 |
250,153 |
709,438 |
703,779 |
||||
General Merchandise |
69,282 |
66,134 |
209,782 |
219,978 |
||||
Other |
6,170 |
6,968 |
15,983 |
16,503 |
||||
$ 1,130,558 |
$ 1,180,284 |
$ 4,536,531 |
$ 4,225,998 |
|||||
MOTORCYCLE SHIPMENTS: |
||||||||
United States |
28,106 |
32,061 |
145,440 |
139,814 |
||||
International |
22,564 |
21,964 |
78,129 |
74,039 |
||||
Total |
50,670 |
54,025 |
223,569 |
213,853 |
||||
MOTORCYCLE PRODUCT MIX: |
||||||||
Touring |
22,844 |
23,011 |
100,117 |
86,727 |
||||
Custom |
14,722 |
19,111 |
76,102 |
84,728 |
||||
Sportster® / Street |
13,104 |
11,903 |
47,350 |
42,398 |
||||
Total |
50,670 |
54,025 |
223,569 |
213,853 |
Worldwide Retail Sales of Harley-Davidson Motorcycles |
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Three months ended |
Nine months ended |
|||||||
September 30, |
September 30, |
September 30, |
September 30, |
|||||
2014 |
2013 |
2014 |
2013 |
|||||
North America Region |
||||||||
United States |
50,167 |
48,529 |
144,122 |
141,476 |
||||
Canada |
2,598 |
2,759 |
8,753 |
9,876 |
||||
Total North America Region |
52,765 |
51,288 |
152,875 |
151,352 |
||||
Europe, Middle East and Africa Region (EMEA) |
||||||||
Europe* |
8,255 |
8,071 |
32,376 |
30,440 |
||||
Other |
1,541 |
1,558 |
5,124 |
4,970 |
||||
Total EMEA Region |
9,796 |
9,629 |
37,500 |
35,410 |
||||
Asia Pacific Region |
||||||||
Japan |
2,621 |
2,821 |
8,024 |
8,168 |
||||
Other |
4,852 |
3,805 |
13,929 |
11,609 |
||||
Total Asia Pacific Region |
7,473 |
6,626 |
21,953 |
19,777 |
||||
Latin America Region |
3,183 |
2,974 |
8,522 |
8,425 |
||||
Total Worldwide Retail Sales |
73,217 |
70,517 |
220,850 |
214,964 |
||||
Total International Retail Sales |
23,050 |
21,988 |
76,728 |
73,488 |
||||
Data Source |
||||||||
Data source for retail sales figures shown above is new sales warranty and registration information provided by Harley-Davidson dealers and compiled by the Company. The Company must rely on information that its dealers supply concerning new retail sales, and this information is subject to revision. |
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* Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. |
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Motorcycle Registration Data(1) |
||||||||
Nine months ended |
||||||||
September 30, |
September 30, |
|||||||
2014 |
2013 |
|||||||
United States(2) |
261,851 |
256,476 |
||||||
Nine months ended |
||||||||
September 30, |
September 30, |
|||||||
2014 |
2013 |
|||||||
Europe(3) |
284,382 |
251,280 |
||||||
1 - Data includes on-road 601+cc models. On-road 601+cc models include on-highway, dual purpose models and three-wheeled vehicles. |
||||||||
2 - United States data is derived from information provided by Motorcycle Industry Council (MIC). This third party data is subject to revision and update. |
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3 - Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 601+cc models derived from information provided by Association des Constructeurs Europeens de Motocycles (ACEM), an independent agency. This third-party data is subject to revision and update. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/harley-davidson-third-quarter-retail-motorcycle-sales-rise-467192993.html
SOURCE
Media Contact: Bob Klein, (414) 343-8664, Financial Contact: Amy Giuffre, (414) 343-8002