Post by Crossbones Dennis on Apr 28, 2011 6:01:35 GMT -6
Harley-Davidson announced today that its U.S. dealer network sold 31,691 new motorcycles during the first quarter, down 0.5 percent compared to the year-ago period. But according to the company, overall U.S. retail unit sales of heavyweight new motorcycles (at least 651cc in size) actually rose 3.1 percent.
In the same announcement, Harley shared how the Japan earthquake has modestly affected production (detailed below).
On a worldwide basis, first-quarter Harley-Davidson retail new motorcycle sales grew 3.5 percent compared to last year’s first quarter. Dealers sold 17,904 new Harley-Davidson motorcycles in international markets, an 11.3 percent increase.
This performance helped the company report first-quarter income from continuing operations of $119.3 million, or $0.51 per share, compared to income from continuing operations of $68.7 million, or $0.29 per share in the year-ago period.
“We are pleased by the growth of our dealers’ new motorcycle sales on a worldwide basis, led by strength in Europe, even as we continue to encounter some headwinds in the U.S. related to the challenging macro-economic conditions,” said Keith Wandell, Harley-Davidson Inc. president and CEO.
The company’s improved first-quarter earnings performance was driven by operating income from financial services, which climbed 154.6 percent compared to the first quarter of 2010. Operating income from motorcycles and related products was flat with the year-ago quarter and was impacted by expected inefficiencies related to the restructuring and implementation of the new operating system underway at the company’s manufacturing operations.
“Our entire team remains focused on transforming our company to be leaner, more agile and more effective than ever at delivering great products and experiences to an increasingly global community of customers,” said Wandell. “Harley-Davidson’s results for the quarter reflect the continued improvement at HDFS, as well as the near-term inefficiencies related to the transformation underway in manufacturing operations at York. We expect to continue to see an impact on our motorcycles segment financial performance in the coming quarters as we complete the transformation of our York operations. When this manufacturing transition is completed next year, we will have a best-in-class, flexible, lean operating structure that we expect will yield substantial ongoing savings.
“While we continue to be encouraged by our overall progress, we are maintaining a cautious outlook for the year,” Wandell said. “I would like to thank all our employees, dealers and suppliers for their dedication and commitment to the transformation of our business.”
Harley-Davidson Motorcycles and Related Products Segment Financial Results Revenue from Harley-Davidson motorcycles in the first quarter of 2011 was $833.4 million, up 3.0 percent compared to the year-ago period. The company shipped 53,827 Harley-Davidson motorcycles to dealers and distributors worldwide during the quarter, compared to shipments of 53,674 motorcycles in the first quarter of 2010.
Revenue from Parts and Accessories totaled $164.3 million during the quarter, up 10.2 percent, and revenue from General Merchandise, which includes MotorClothes apparel, was $62.6 million, down 5.6 percent, compared to the year-ago period.
The financial services segment recorded operating income of $67.9 million in the quarter, compared to operating income of $26.7 million in the year-ago quarter. The increase in year-over-year operating income is largely the result of continued improvement in credit performance.
Harley-Davidson expects all previously announced companywide restructuring activities, including those related to the ratification of new labor agreements at its vehicle operations in Kansas City, Mo., to result in one-time charges of $510 million to $525 million, and annual ongoing savings of $305 million to $325 million when fully implemented. In 2011, Harley-Davidson expects to incur restructuring charges of $95 million to $105 million. The company expects to realize savings on a cumulative basis in 2011 of $210 million to $230 million from restructuring activities initiated since early 2009. In the first quarter of 2011, the company incurred restructuring charges of $23 million.
Cash and marketable securities totaled $1.05 billion as of March 27, 2011, compared to $1.48 billion at the end of last year’s first quarter. During the first three months of 2011, the company contributed $200 million to its pension plans leading to a cash outflow from operating activities of $104.9 million. This compares to a $200.8 million cash inflow from operating activities in the year-ago quarter. Capital expenditures were $27.7 million for the three months ended in March 2011.
Effect of Japan earthquake
In a move related to what it believes will be a modest level of supply chain interruption to the company arising from the March 11 earthquake and tsunami in Japan, Harley-Davidson is widening full-year shipment guidance. The company now expects to ship 215,000 to 228,000 Harley-Davidson motorcycles to dealers and distributors worldwide in 2011, compared to prior shipment guidance of 221,000 to 228,000 motorcycles.
In the second quarter of 2011, Harley-Davidson expects to ship 62,000 to 67,000 motorcycles.
Harley-Davidson and its direct suppliers source a limited number of components and subcomponents, including motorcycle electronics, through suppliers in Japan, and the company has several of these subcomponent parts on close watch for possible shortages related to the situation there. The company has identified a supply issue related to an electronic subcomponent used in radios for its motorcycles that could affect shipment volume, and the company is adjusting shipment guidance accordingly. Based on currently available information, Harley-Davidson believes it has viable solutions for the radios and other subcomponents on its watch list and the company continues to work closely with its suppliers to monitor the situation and address issues as necessary.
“We continue to assess our supply chains, and as a precaution we have decided to modestly reduce the lower end of shipment guidance following the events in Japan,” said Wandell. “Our hearts go out to all the people of Japan, including our community of riders there. We are thankful for the safety of our employees and dealers in Japan and commend them for their tremendous resilience through this difficult period.”
Posted by Arlo Redwine
In the same announcement, Harley shared how the Japan earthquake has modestly affected production (detailed below).
On a worldwide basis, first-quarter Harley-Davidson retail new motorcycle sales grew 3.5 percent compared to last year’s first quarter. Dealers sold 17,904 new Harley-Davidson motorcycles in international markets, an 11.3 percent increase.
This performance helped the company report first-quarter income from continuing operations of $119.3 million, or $0.51 per share, compared to income from continuing operations of $68.7 million, or $0.29 per share in the year-ago period.
“We are pleased by the growth of our dealers’ new motorcycle sales on a worldwide basis, led by strength in Europe, even as we continue to encounter some headwinds in the U.S. related to the challenging macro-economic conditions,” said Keith Wandell, Harley-Davidson Inc. president and CEO.
The company’s improved first-quarter earnings performance was driven by operating income from financial services, which climbed 154.6 percent compared to the first quarter of 2010. Operating income from motorcycles and related products was flat with the year-ago quarter and was impacted by expected inefficiencies related to the restructuring and implementation of the new operating system underway at the company’s manufacturing operations.
“Our entire team remains focused on transforming our company to be leaner, more agile and more effective than ever at delivering great products and experiences to an increasingly global community of customers,” said Wandell. “Harley-Davidson’s results for the quarter reflect the continued improvement at HDFS, as well as the near-term inefficiencies related to the transformation underway in manufacturing operations at York. We expect to continue to see an impact on our motorcycles segment financial performance in the coming quarters as we complete the transformation of our York operations. When this manufacturing transition is completed next year, we will have a best-in-class, flexible, lean operating structure that we expect will yield substantial ongoing savings.
“While we continue to be encouraged by our overall progress, we are maintaining a cautious outlook for the year,” Wandell said. “I would like to thank all our employees, dealers and suppliers for their dedication and commitment to the transformation of our business.”
Harley-Davidson Motorcycles and Related Products Segment Financial Results Revenue from Harley-Davidson motorcycles in the first quarter of 2011 was $833.4 million, up 3.0 percent compared to the year-ago period. The company shipped 53,827 Harley-Davidson motorcycles to dealers and distributors worldwide during the quarter, compared to shipments of 53,674 motorcycles in the first quarter of 2010.
Revenue from Parts and Accessories totaled $164.3 million during the quarter, up 10.2 percent, and revenue from General Merchandise, which includes MotorClothes apparel, was $62.6 million, down 5.6 percent, compared to the year-ago period.
The financial services segment recorded operating income of $67.9 million in the quarter, compared to operating income of $26.7 million in the year-ago quarter. The increase in year-over-year operating income is largely the result of continued improvement in credit performance.
Harley-Davidson expects all previously announced companywide restructuring activities, including those related to the ratification of new labor agreements at its vehicle operations in Kansas City, Mo., to result in one-time charges of $510 million to $525 million, and annual ongoing savings of $305 million to $325 million when fully implemented. In 2011, Harley-Davidson expects to incur restructuring charges of $95 million to $105 million. The company expects to realize savings on a cumulative basis in 2011 of $210 million to $230 million from restructuring activities initiated since early 2009. In the first quarter of 2011, the company incurred restructuring charges of $23 million.
Cash and marketable securities totaled $1.05 billion as of March 27, 2011, compared to $1.48 billion at the end of last year’s first quarter. During the first three months of 2011, the company contributed $200 million to its pension plans leading to a cash outflow from operating activities of $104.9 million. This compares to a $200.8 million cash inflow from operating activities in the year-ago quarter. Capital expenditures were $27.7 million for the three months ended in March 2011.
Effect of Japan earthquake
In a move related to what it believes will be a modest level of supply chain interruption to the company arising from the March 11 earthquake and tsunami in Japan, Harley-Davidson is widening full-year shipment guidance. The company now expects to ship 215,000 to 228,000 Harley-Davidson motorcycles to dealers and distributors worldwide in 2011, compared to prior shipment guidance of 221,000 to 228,000 motorcycles.
In the second quarter of 2011, Harley-Davidson expects to ship 62,000 to 67,000 motorcycles.
Harley-Davidson and its direct suppliers source a limited number of components and subcomponents, including motorcycle electronics, through suppliers in Japan, and the company has several of these subcomponent parts on close watch for possible shortages related to the situation there. The company has identified a supply issue related to an electronic subcomponent used in radios for its motorcycles that could affect shipment volume, and the company is adjusting shipment guidance accordingly. Based on currently available information, Harley-Davidson believes it has viable solutions for the radios and other subcomponents on its watch list and the company continues to work closely with its suppliers to monitor the situation and address issues as necessary.
“We continue to assess our supply chains, and as a precaution we have decided to modestly reduce the lower end of shipment guidance following the events in Japan,” said Wandell. “Our hearts go out to all the people of Japan, including our community of riders there. We are thankful for the safety of our employees and dealers in Japan and commend them for their tremendous resilience through this difficult period.”
Posted by Arlo Redwine