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HARLEY-DAVID Annual
Worldwide Retail Sales Increase 8.5 Percent
Milwaukee, Wis., January 18, 2007 -- Harley-Davidson, Inc. (NYSE:
HOG) today
announced its
results for the fourth quarter and year ended December 31, 2006.
Revenue for the
quarter was $1.50
billion compared to $1.34 billion in the year-ago quarter, an 11.9
percent increase. Net
income for the quarter was $252.4 million compared to $230.0 million, an
increase of 9.7 percent over the fourth quarter of 2005.
Fourth quarter diluted earnings per share (EPS) were $0.97, a
15.5 percent increase compared to last year’s $0.84.
Revenue for the full year was $5.80 billion, compared with $5.34 billion in 2005, an 8.6 percent
increase. Wholesale
shipments of Harley-Davidsonâ motorcycles were
349,196 units for the year, a 6.1 percent increase compared to 2005.
Net income for the year was $1.04 billion, an 8.7 percent
increase versus last year’s $959.6 million. Diluted
EPS for the full year were $3.93, a 15.2 percent increase compared with
$3.41 in 2005.
“In 2006, the Company’s revenue and earnings surpassed 2005
results demonstrating continued growth.
At the same time, our dealers achieved impressive Harley-Davidson
motorcycle sales volumes. The
enthusiastic worldwide response to the changes in our 2007 models
contributed to an 8.5 percent increase in retail sales during the
year,” said Ziemer.
“Furthermore, the Company continued to return significant value
to shareholders in 2006. We
increased dividend payments by 22.5 percent over the prior year and
repurchased 19.3 million shares of our common stock during 2006 at a
cost of $1.06 billion.”
“As we look to the future, we believe Harley-Davidson will
deliver EPS growth in the range of 11 – 17 percent each year through
2009. On an annual basis we expect solid revenue growth, margin
improvement, and the benefits of strong free cash flow to drive this
earnings growth,” said Ziemer.
The Company also expects to ship between 82,000 and 84,000
Harley-Davidson motorcycles for the first quarter of 2007. Motorcycles
and Related Products Segment – Fourth Quarter Results
Revenue from Harley-Davidson motorcycles was $1.22 billion, an
increase of $135.6 million or 12.5 percent over the same period last
year. Shipments of Harley-Davidson motorcycles totaled 92,848
units, an increase of 5,260 units or 6.0 percent over last year’s
fourth quarter. Revenue
from Parts and Accessories (P&A), which consists of Genuine Motor
Parts and Genuine Motor Accessories, totaled $179.2 million, an increase
of $9.3 million or 5.5 percent over the year-ago quarter.
Revenue from General Merchandise, which consists of MotorClothesâ
apparel and collectibles, totaled $70.6 million, an increase of $10.1
million or 16.7 percent over the year-ago quarter.
Gross margin for the fourth quarter of 2006 was 38.0 percent of
revenue compared to 38.3 percent for the fourth quarter last year.
Fourth quarter operating margin decreased to 22.8 percent from
23.4 percent in the fourth quarter of 2005. Motorcycle
Retail Sales Data During the fourth quarter, worldwide retail sales of Harley-Davidson motorcycles increased 6.4 percent over the prior year quarter. In the U.S., retail sales of Harley-Davidson motorcycles increased 0.3 percent for the quarter while the heavyweight motorcycle industry in the U.S. decreased 1.7 percent. Retail sales of Harley-Davidson motorcycles grew 29.4 percent in international markets during the fourth quarter of 2006 compared to the fourth quarter of 2005. Fourth quarter retail sales increased 31.2 percent in Europe; Japan was up 19.6 percent; Canada was up 37.4 percent and all other international markets combined were up 34.0 percent. Worldwide retail sales of Harley-Davidson motorcycles increased 8.5 percent in 2006 compared to 2005. In the U.S., retail sales of Harley-Davidson motorcycles increased 5.9 percent while the U.S. heavyweight motorcycle market was up 4.9 percent for the same period. In our international markets, Harley-Davidson retail sales for the full year grew 18.6 percent. Retail sales in Europe increased 14.6 percent; Japan was up 16.3 percent; Canada was up 15.9 percent and all other international markets combined were up 34.3 percent. Data is listed in the accompanying tables. Financial Services
Segment
Harley-Davidson Financial Services (HDFS) reported fourth quarter
operating income of $47.6 million, an increase of $8.1 million or 20.7
percent compared to the year-ago quarter.
The increase is primarily due to higher wholesale and retail net
interest income. Income Tax Rate The Company's fourth quarter effective income tax
rate was 35.1 percent compared to 35.5 percent in the same quarter last
year. This decrease primarily reflects the retroactive
reinstatement of the federal research and development tax credit. The
Company’s full year effective tax rate in 2006 was 35.8 percent. Harley-Davidson,
Inc. - Twelve Month Results For the fiscal year ended
2006, revenue totaled $5.80 billion, an 8.6 percent increase over 2005.
EPS were $3.93, an increase of 15.2 percent compared to 2005. Shipments of Harley-Davidson
motorcycles were 349,196 units in 2006, a 6.1 percent increase compared
to last year’s 329,017 units. Harley-Davidson
motorcycle revenue was $4.55 billion, up 8.8 percent compared to last
year’s $4.18 billion. P&A
revenue totaled $862.3 million, a 5.7 percent increase over last
year’s $815.7 million. General
Merchandise revenue totaled $277.5 million, a 12.0 percent increase
compared to $247.9 million during 2005.
Motorcycle segment gross margin for the full year was 38.5
percent of revenue compared to 38.2 percent for 2005.
Full year 2006 operating margin increased to 24.4 percent from
24.3 percent compared to the prior year. HDFS operating income was
$210.7 million, a 10.0 percent increase over last year’s $191.6
million. Cash Flow Cash and marketable
securities totaled $896.5 million as of December 31, 2006.
Cash flow from operations was $761.8 million and capital
expenditures were $219.6 million during 2006.
In 2007, capital expenditures are expected to be between $300
million and $325 million. Stock Repurchase The Company repurchased 2.1 million shares of its common stock at a cost of $151.0 million during the fourth quarter of 2006. For the full year of 2006, the Company repurchased 19.3 million shares of its common stock at a cost of $1.06 billion. On December 31, 2006, the Company had 258,052,356 shares of common stock outstanding.
As of December 31, 2006, there are 22.8
million shares remaining on two board-approved share repurchase
authorizations. An
additional board-approved share repurchase authorization is in place to
offset option exercises. 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.
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 motorcycles.
Harley-Davidson Financial Services provides wholesale and retail
financing and insurance programs to Harley-Davidson dealers and their
retail 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,” “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) continue to
realize production efficiencies at its production facilities and manage
operating costs including materials, labor and overhead, (ii) manage
production capacity and production changes, (iii) manage supply chain
issues, (iv) provide products, services and experiences that are
successful in the marketplace, (v) develop and implement sales and
marketing plans that retain existing retail customers and attract new
retail customers in an increasingly competitive marketplace, (vi) sell
all of its motorcycles and related products and services to its
independent dealers and distributors, (vii) continue to develop the
capacity of its distributor and dealer network, (viii) manage changes
and prepare for requirements in legislative and regulatory environments
for its products, services and operations, (ix) adjust to fluctuations
in foreign currency exchange rates, interest rates and commodity prices,
(x) manage regional and worldwide demographic trends and economic and
political conditions, including healthcare inflation, pension reform and
tax changes (xi) manage the credit quality and recovery rates of
HDFS’s loan portfolio, (xii) retain and attract talented employees and
(xiii) detect any defects in our motorcycles to minimize 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 Securities and
Exchange Commission. The
Company’s ability to sell all of its motorcycles and related products
and services also depends on the ability of the Company’s independent
dealer network to sell them to retail customers.
The Company depends on the capability 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 selling Harley-Davidson motorcycles and
related products and services as a result of weather, economic
conditions or other factors. |
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