MILWAUKEE, Oct. 22, 2019 /PRNewswire/ -- Harley-Davidson,
Inc. (NYSE:HOG) today reported third quarter 2019 results.
During the quarter, the company delivered earnings per share and
Motorcycles segment operating margin ahead of expectations. The
company was encouraged by global retail sales results driven by its
actions and tempered U.S. industry rate of decline. The company
also advanced its brand amplification efforts and developed
capabilities to invigorate the Harley-Davidson experience and build
committed riders.
Third Quarter 2019 Highlights
- Delivered GAAP diluted EPS of $0.55
- Repurchased $112.5 million of
shares; paid dividends of $0.375 per
share
- Improved worldwide year-over-year retail sales rate
- Launched new model year 2020 motorcycles, including Low Rider®
S, CVO™ Tri Glide® and LiveWire™ – the company's first electric
motorcycle
- Introduced the Harley-Davidson IRONe™ electric-powered
two-wheelers for kids
- Realized significant savings from manufacturing optimization
initiative
- Progressed More Roads to Harley-Davidson accelerated plan for
growth
- Activated Amplify Brand as fourth More Roads growth catalyst to
build committed riders
Third quarter 2019 GAAP diluted EPS was $0.55. Year-ago GAAP diluted EPS was $0.68. Excluding restructuring plan costs and the
impact of recent EU and China
tariffs, adjusted third quarter 2019 diluted EPS was $0.70 compared to $0.82 in the third quarter of 2018. Third quarter
2019 net income was $86.6 million on
consolidated revenue of $1.27 billion
versus net income of $113.9 million
on consolidated revenue of $1.32
billion in 2018.
Harley-Davidson international retail sales were up 2.7 percent.
The U.S. retail sales rate of decline tempered compared to recent
quarters and was down 3.6 percent.
"We are driving stability in our business and bringing data
insights and intensified consumer focus to guide our efforts to
build committed riders and meet our near and long-term objectives,"
said Matt Levatich, president and
chief executive officer of Harley-Davidson. "We'll continue to fuel
all aspects of the riding experience and add new solutions to fully
develop, engage and retain riders through their journey, starting
with the very first spark of interest" said Levatich.
Strategy to Build the Next Generation of Riders
Building committed riders
During the quarter, Harley-Davidson sharpened its U.S. and
international objectives through 2027 to better align with its
expanded efforts to build committed riders.
Harley-Davidson's strategic objectives through 2027 are: expand
to 4 million total Harley-Davidson riders in the U.S., grow
international business to 50 percent of annual HDMC revenue, launch
100 new high impact motorcycles and do so profitably and
sustainably.
Accelerated plan for growth
More Roads to Harley-Davidson is the company's accelerated plan for
growth that drives the company's strategy to deliver sustainable
growth and build the next generation of riders from 2018 through
2022. The company is focusing investment and building new
capabilities to invigorate the Harley-Davidson brand to spark
passion that deepens rider commitment. To reflect this, Amplify
Brand was added as a growth catalyst in the More Roads plan
and will bolster the other growth catalysts of New Products,
Broader Access and Stronger Dealers.
The company plans to maintain its investment and return profile
and capital allocation strategy, while it funds strategic
opportunities expected to drive revenue growth and expand operating
margin, through 2022.
During the third quarter, Harley-Davidson continued to advance
its More Roads plan initiatives:
- Realized improvements in retail sales, service revenue and
website visits for dealers participating in Harley-Davidson
performance consulting
- Strengthened its leadership in the electrification of
motorcycles
- Launched high impact new models and added significant
technology to its class-leading model year 2020 motorcycles to
inspire new and existing riders
- Announced the presenting partnership with 2020 Hella Mega music
experience tour
Manufacturing Optimization
Harley-Davidson realized total savings of $16.7 million and incurred costs of $10.0 million in the third quarter from its
manufacturing optimization initiative, which was designed to
further improve manufacturing operations and cost structure. Since
the first quarter of 2018, the company closed its wheel
manufacturing facility in Australia and consolidated its motorcycle
assembly plant in Kansas City, Mo.
into its plant in York, Pa. The
company continues to expect 2019 full year costs of $40 million to $50
million, 2019 full year savings of $25 million to $30
million and ongoing annual cash savings of $65 million to $75
million after 2020.
Harley-Davidson Retail Motorcycle Sales
Vehicles
|
3rd
Quarter
|
9
months
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
U.S.
|
34,903
|
36,220
|
(3.6)%
|
105,756
|
112,019
|
(5.6)%
|
EMEA
|
10,483
|
10,543
|
(0.6)%
|
36,899
|
39,249
|
(6.0)%
|
Asia
Pacific
|
8,078
|
7,433
|
8.7 %
|
21,822
|
21,480
|
1.6 %
|
Latin
America
|
2,498
|
2,577
|
(3.1)%
|
7,255
|
7,652
|
(5.2)%
|
Canada
|
2,560
|
2,453
|
4.4 %
|
7,787
|
8,340
|
(6.6)%
|
International
Total
|
23,619
|
23,006
|
2.7
%
|
73,763
|
76,721
|
(3.9)%
|
Worldwide
Total
|
58,522
|
59,226
|
(1.2)%
|
179,519
|
188,740
|
(4.9)%
|
The U.S. 601+cc industry was down 1.7 percent in the third
quarter compared to the same period in 2018. Harley-Davidson's
third quarter U.S. market share was 49.8 percent. Harley-Davidson's
year-to-date Europe market share
was 8.9 percent through September.
Motorcycles and Related Products Segment Results
$ in
thousands
|
3rd
Quarter
|
9
months
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Motorcycle
Shipments (vehicles)
|
45,837
|
48,639
|
(5.8)%
|
173,485
|
185,176
|
(6.3)%
|
Revenue
|
$1,068,942
|
$1,123,945
|
(4.9)%
|
$3,698,583
|
$4,013,013
|
(7.8)%
|
Motorcycles
|
$779,344
|
$821,670
|
(5.2)%
|
$2,871,982
|
$3,144,796
|
(8.7)%
|
Parts
& Accessories
|
$203,173
|
$212,406
|
(4.3)%
|
$584,134
|
$612,495
|
(4.6)%
|
General
Merchandise
|
$60,334
|
$58,266
|
3.5%
|
$180,379
|
$183,520
|
(1.7)%
|
Gross
Margin
|
29.9%
|
30.9%
|
(1.0) pts.
|
30.3%
|
33.7%
|
(3.4) pts.
|
Operating
Income
|
$46,971
|
$65,662
|
(28.5)%
|
$336,080
|
$481,906
|
(30.3)%
|
Operating
Margin
|
4.4%
|
5.8%
|
(1.4) pts.
|
9.1%
|
12.0%
|
(2.9) pts.
|
Revenue from the Motorcycles and Related Products (Motorcycles)
segment was down in the third quarter behind lower shipments.
Operating income decreased primarily due to lower revenues and
increased tariff costs, partially offset by savings realized from
the company's manufacturing optimization initiative.
Financial Services Segment Results
$ in
thousands
|
3rd
Quarter
|
9
months
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Revenue
|
$203,577
|
$191,724
|
6.2%
|
$590,935
|
$558,000
|
5.9%
|
Operating
Income
|
$72,873
|
$83,754
|
(13.0)%
|
$207,133
|
$227,874
|
(9.1)%
|
Financial Services segment third quarter operating income of
$72.9 million was down 13.0
percent.
Other Results
Cash and marketable securities were $862.4 million at the end of the third
quarter of 2019, compared to $937.0 million in 2018. Through
September, Harley-Davidson generated $848.6
million of cash from operating activities in 2019 compared
to $1.12 billion in 2018. The company paid a cash
dividend of $0.375 per share in the
third quarter, and a cumulative total of $1.125 per share for the first nine months of
2019. On a discretionary basis, Harley-Davidson repurchased
3.3 million shares of its common stock during the quarter
for $112.5 million. During the quarter, there were
approximately 156.9 million weighted-average diluted common shares
outstanding. At the end of the quarter, 10.4 million shares
remained on a board-approved share repurchase authorization.
Harley-Davidson's year-to-date effective tax rate was 24.6
percent.
2019 Outlook
For the full year 2019, the company continues to expect:
- Motorcycle shipments to be approximately 212,000 to 217,000. In
the fourth quarter, the company expects to ship approximately
38,500 to 43,500 motorcycles
- Motorcycles segment operating margin as a percent of revenue to
be approximately 6 to 7 percent
- Financial Services segment operating income to be down
year-over-year
- Effective tax rate of approximately 24 to 25 percent
Additionally, the company now expects:
- Capital expenditures of $205
million to $225 million
(including approximately $20 million
to support manufacturing optimization); $20
million less than prior quarter guidance
Company Background
Harley-Davidson, Inc. is the parent company of Harley-Davidson
Motor Company and Harley-Davidson Financial Services. Since 1903,
Harley-Davidson has fulfilled dreams of personal freedom by leading
the innovation of two-wheeled mobility. The company offers an
expanding range of leading-edge, distinctive and customizable
motorcycles and brings the brand to life through Harley-Davidson
riding experiences and exceptional motorcycle parts, accessories,
riding gear and apparel. Harley-Davidson Financial Services
provides financing, insurance and other programs to help get
Harley-Davidson riders on the road. Learn more about how
Harley-Davidson is Building the Next Generation of Riders at
www.harley-davidson.com.
Webcast Presentation
Harley-Davidson will discuss third quarter results and its
outlook on an audio webcast at 8:00 a.m. CT today. The
webcast login and supporting slides can be accessed
at http://investor.harley-davidson.com/news-and-events/events-and-presentations.
The audio replay will be available by approximately 10:00 a.m. CT.
Non-GAAP Measures
This press release includes financial measures that have not
been calculated in accordance with U.S. generally accepted
accounting principles (GAAP) and are therefore referred to as
non-GAAP financial measures. The non-GAAP measures described below
are intended to be considered by users as supplemental information
to the equivalent GAAP measures, to aid investors in better
understanding the company's financial results. The company believes
that these non-GAAP measures provide useful perspective on
underlying business results and trends, and a means to assess
period-over-period results. These non-GAAP measures should not be
considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. These
non-GAAP measures may not be the same as similarly titled measures
used by other companies due to possible differences in method and
in items or events being adjusted.
The non-GAAP measures included in this press release are
adjusted net income and adjusted diluted EPS excluding
restructuring plan costs and the impact of recent EU and
China tariffs. Restructuring plan
costs include restructuring expenses as presented in the
consolidated statements of income and costs associated with
temporary inefficiencies incurred in connection with the
manufacturing optimization initiative included in Motorcycles and
Related Products cost of goods sold. The impact of recent EU and
China tariffs includes incremental
European Union and China tariffs
imposed beginning in 2018 on the company's products shipped from
the U.S., as well as incremental U.S. tariffs imposed beginning in
2018 on certain items imported from China. The impact of recent EU and
China tariffs excludes higher
metals cost resulting from the U.S. steel and aluminum tariffs.
These adjustments are consistent with the approach used for 2018 to
determine performance relative to financial objectives under the
company's incentive compensation plans. A reconciliation of these
non-GAAP measures from the comparable GAAP measure is included
later in this press release.
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," "may," "will," "estimates," or
words of similar meaning. Similarly, statements that describe
future plans, strategies, objectives, outlooks, targets, guidance,
commitments, 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,
unfavorably or favorably, 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
above depends upon, among other factors, the company's ability to
(i) execute its business plans and strategies, including the
elements of the More Roads to Harley-Davidson accelerated plan for
growth that the company disclosed on July
30, 2018 and updated September 24,
2019, and strengthen its existing business while enabling
growth, (ii) manage and predict the impact that new or adjusted
tariffs may have on the company's ability to sell product
internationally, and the cost of raw materials and components,
(iii) execute its strategy of growing ridership, globally, (iv)
effectively execute the company's manufacturing optimization
initiative within expected costs and timing and successfully carry
out its global manufacturing and assembly operations, (v)
accurately analyze, predict and react to changing market conditions
and successfully adjust to shifting global consumer needs and
interests, (vi) successfully launch a smaller displacement
motorcycle in India, (vii) develop
and introduce products, services and experiences on a timely basis
that the market accepts, that enable the company to generate
desired sales levels and that provide the desired financial
returns, (viii) perform in a manner that enables the company to
benefit from market opportunities while competing against existing
and new competitors, (ix) realize expectations concerning market
demand for electric models, which will depend in part on the
building of necessary infrastructure, (x) prevent, detect, and
remediate any issues with its motorcycles or any issues associated
with the manufacturing processes to avoid delays in new model
launches, recall campaigns, regulatory agency investigations,
increased warranty costs or litigation and adverse effects on its
reputation and brand strength, and carry out any product programs
or recalls within expected costs and timing, (xi) manage supply
chain issues, including quality issues and any unexpected
interruptions or price increases caused by raw material shortages
or natural disasters, (xii) manage the impact that prices for and
supply of used motorcycles may have on its business, including on
retail sales of new motorcycles, (xiii) reduce other costs to
offset costs of the More Roads to Harley-Davidson plan and redirect
capital without adversely affecting its existing business, (xiv)
balance production volumes for its new motorcycles with consumer
demand, (xv) manage risks that arise through expanding
international manufacturing, operations and sales, (xvi) manage
through changes in general economic and business conditions,
including changing capital, credit and retail markets, and the
changing political environment, (xvii) successfully determine,
implement on a timely basis, and maintain a manner in which to sell
motorcycles in the European Union, China, and ASEAN countries that does not
subject its motorcycles to incremental tariffs, (xviii) accurately
estimate and adjust to fluctuations in foreign currency exchange
rates, interest rates and commodity prices, (xix) continue to
develop the capabilities of its distributors and dealers,
effectively implement changes relating to its dealers and
distribution methods and manage the risks that its independent
dealers may have difficulty obtaining capital and managing through
changing economic conditions and consumer demand, (xx) retain and
attract talented employees, (xxi) prevent a cybersecurity breach
involving consumer, employee, dealer, supplier, or company data and
respond to evolving regulatory requirements regarding data
security, (xxii) manage the credit quality, the loan servicing and
collection activities, and the recovery rates of HDFS' loan
portfolio, (xxiii) adjust to tax reform, healthcare inflation and
reform and pension reform, and successfully estimate the impact of
any such reform on the company's business, (xxiv) manage through
the effects inconsistent and unpredictable weather patterns may
have on retail sales of motorcycles, (xxv) implement and manage
enterprise-wide information technology systems, including systems
at its manufacturing facilities, (xxvi) manage changes and prepare
for requirements in legislative and regulatory environments for its
products, services and operations, (xxvii) manage its exposure to
product liability claims and commercial or contractual disputes,
(xxviii) successfully access the capital and/or credit markets on
terms (including interest rates) that are acceptable to the company
and within its expectations, (xxix) manage its Thailand corporate and manufacturing operation
in a manner that allows the company to avail itself of preferential
free trade agreements and duty rates, and sufficiently lower prices
of its motorcycles in certain markets, (xxx) continue to manage the
relationships and agreements that the company has with its labor
unions to help drive long-term competitiveness, (xxxi) accurately
predict the margins of its Motorcycles & Related Products
segment in light of, among other things, tariffs, the cost
associated with the More Roads to Harley-Davidson plan, the
company's manufacturing optimization plan, and the company's
complex global supply chain, and (xxxii) develop and maintain a
productive relationship with Zhejiang Qianjiang Motorcycle Co.,
Ltd. and launch related products in a timely manner.
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. Many of these
risk factors are impacted by the current changing capital, credit
and retail markets and the company's ability to manage through
inconsistent economic conditions.
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 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
Harley-Davidson motorcycles and related products and services as a
result of weather, economic conditions or other factors. In recent
years, HDFS has experienced historically low levels of retail
credit losses, but there is no assurance that this will continue.
The company believes that HDFS' retail credit losses may increase
over time due to changing consumer credit behavior and HDFS'
efforts to increase prudently structured loan approvals to
sub-prime borrowers, as well as actions that the company has taken
and could take that impact motorcycle values. Refer to "Risk
Factors" under Item 1A of the company's Annual Report on Form 10-K
for the year ended December 31, 2018
for a discussion of additional risk factors and a more complete
discussion of some of the cautionary statements noted above.
### (HOG-F)
Harley-Davidson,
Inc.
|
Condensed
Consolidated Statements of Income
|
(In thousands, except
per share amounts)
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
29,
|
|
September
30,
|
|
September
29,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Motorcycles and
Related Products revenue
|
|
$
1,068,942
|
|
$
1,123,945
|
|
$
3,698,583
|
|
$
4,013,013
|
Gross
profit
|
|
320,064
|
|
347,415
|
|
1,122,241
|
|
1,353,273
|
Selling,
administrative and engineering expense
|
|
265,464
|
|
266,921
|
|
754,479
|
|
797,323
|
Restructuring
expense
|
|
7,629
|
|
14,832
|
|
31,682
|
|
74,044
|
Operating
income from Motorcycles and Related Products
|
46,971
|
|
65,662
|
|
336,080
|
|
481,906
|
|
|
|
|
|
|
|
|
|
Financial Services
revenue
|
|
203,577
|
|
191,724
|
|
590,935
|
|
558,000
|
Financial Services
expense
|
|
130,704
|
|
107,970
|
|
383,802
|
|
330,126
|
Operating
income from Financial Services
|
|
72,873
|
|
83,754
|
|
207,133
|
|
227,874
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
119,844
|
|
149,416
|
|
543,213
|
|
709,780
|
Other income
(expense), net
|
|
3,160
|
|
644
|
|
11,857
|
|
1,509
|
Investment income
(loss)
|
|
2,041
|
|
(1,106)
|
|
11,970
|
|
2,630
|
Interest
expense
|
|
7,789
|
|
7,762
|
|
23,304
|
|
23,180
|
Income before income
taxes
|
|
117,256
|
|
141,192
|
|
543,736
|
|
690,739
|
Provision for income
taxes
|
|
30,693
|
|
27,337
|
|
133,597
|
|
159,783
|
Net income
|
|
$
86,563
|
|
$
113,855
|
|
$
410,139
|
|
$
530,956
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.55
|
|
$
0.69
|
|
$
2.59
|
|
$
3.18
|
Diluted
|
|
$
0.55
|
|
$
0.68
|
|
$
2.58
|
|
$
3.17
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
156,239
|
|
165,927
|
|
158,117
|
|
166,885
|
Diluted
|
|
156,944
|
|
166,664
|
|
158,794
|
|
167,681
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share:
|
|
$
0.375
|
|
$
0.370
|
|
$
1.125
|
|
$
1.110
|
Harley-Davidson,
Inc.
|
Reconciliation of
GAAP Amounts to Non-GAAP Amounts
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
29,
|
|
September
30,
|
|
September
29,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
NET INCOME EXCLUDING
RESTRUCTURING PLAN COSTS
AND THE IMPACT OF RECENT EU AND CHINA TARIFFS
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
86,563
|
|
$
113,855
|
|
$
410,139
|
|
$
530,956
|
Restructuring plan
costs
|
|
10,091
|
|
21,038
|
|
41,715
|
|
83,370
|
Impact of recent EU
and China tariffs
|
|
21,594
|
|
10,312
|
|
76,971
|
|
10,312
|
Tax effect of
adjustments(1)
|
|
(8,063)
|
|
(7,602)
|
|
(29,160)
|
|
(22,718)
|
Adjustments net of
tax
|
|
23,622
|
|
23,748
|
|
89,526
|
|
70,964
|
Adjusted net income
(non-GAAP)
|
|
$
110,185
|
|
$
137,603
|
|
$
499,665
|
|
$
601,920
|
|
|
|
|
|
|
|
|
|
DILUTED EPS EXCLUDING
RESTRUCTURING PLAN COSTS AND THE IMPACT OF RECENT EU AND CHINA
TARIFFS
|
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
|
$
0.55
|
|
$
0.68
|
|
$
2.58
|
|
$
3.17
|
Adjustments net of
tax, per share
|
|
0.15
|
|
0.14
|
|
0.56
|
|
0.42
|
Adjusted diluted
earnings per share (non-GAAP)
|
|
$
0.70
|
|
$
0.82
|
|
$
3.14
|
|
$
3.59
|
|
(1) The
income tax effect of adjustments has been computed using the
company's effective income tax rate
|
Harley-Davidson,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
|
|
|
September
29,
|
|
December
31,
|
|
September
30,
|
|
|
|
|
2019
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
862,381
|
|
$
1,203,766
|
|
$
926,992
|
|
|
Marketable securities
|
|
-
|
|
10,007
|
|
10,011
|
|
|
Accounts receivable, net
|
|
307,616
|
|
306,474
|
|
332,309
|
|
|
Finance receivables, net
|
|
2,210,001
|
|
2,214,424
|
|
2,116,386
|
|
|
Inventories
|
|
489,098
|
|
556,128
|
|
516,247
|
|
|
Restricted cash
|
|
79,115
|
|
49,275
|
|
36,471
|
|
|
Other current assets
|
|
140,786
|
|
144,368
|
|
151,042
|
|
|
|
|
4,088,997
|
|
4,484,442
|
|
4,089,458
|
|
|
|
|
|
|
|
|
|
|
|
Finance receivables,
net
|
|
5,305,579
|
|
5,007,507
|
|
5,187,176
|
|
|
Other long-term
assets
|
|
1,181,654
|
|
1,173,715
|
|
1,227,166
|
|
|
|
|
$10,576,230
|
|
$10,665,664
|
|
$10,503,800
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
905,941
|
|
$
885,991
|
|
$
875,799
|
|
|
Short-term debt
|
|
1,013,137
|
|
1,135,810
|
|
1,373,859
|
|
|
Current portion of long-term debt, net
|
|
1,779,673
|
|
1,575,799
|
|
1,526,156
|
|
|
|
|
3,698,751
|
|
3,597,600
|
|
3,775,814
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
4,607,041
|
|
4,887,667
|
|
4,196,517
|
|
|
Pension and
postretirement healthcare liabilities
|
171,593
|
|
202,229
|
|
166,936
|
|
|
Other long-term
liabilities
|
|
262,626
|
|
204,219
|
|
211,561
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
1,836,219
|
|
1,773,949
|
|
2,152,972
|
|
|
|
|
$10,576,230
|
|
$10,665,664
|
|
$10,503,800
|
|
|
Harley-Davidson,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
Nine months
ended
|
|
|
|
|
|
|
September
29,
|
|
September
30,
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
|
$
848,649
|
|
$
1,122,555
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
|
|
|
(121,161)
|
|
(119,845)
|
Finance
receivables, net
|
|
|
|
|
|
(445,708)
|
|
(474,465)
|
Acquisition of
business
|
|
|
|
|
|
(7,000)
|
|
-
|
Other
investing activities
|
|
|
|
|
|
22,395
|
|
(21,753)
|
Net cash used by
investing activities
|
|
|
|
|
|
(551,474)
|
|
(616,063)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of medium-term notes
|
|
|
|
|
|
546,655
|
|
1,144,018
|
Repayments of
medium-term notes
|
|
|
|
|
|
(1,350,000)
|
|
(877,488)
|
Proceeds from
securitization debt
|
|
|
|
|
|
1,021,353
|
|
-
|
Repayments of
securitization debt
|
|
|
|
|
|
(244,250)
|
|
(224,507)
|
Net (decrease)
increase in credit facilities and unsecured commercial
paper
|
|
(120,707)
|
|
102,154
|
Borrowings of
asset-backed commercial paper
|
|
|
|
|
|
177,950
|
|
120,903
|
Repayments of
asset-backed commercial paper
|
|
|
|
|
|
(240,008)
|
|
(156,258)
|
Dividends
paid
|
|
|
|
|
|
(179,409)
|
|
(186,105)
|
Repurchase of
common stock
|
|
|
|
|
|
(217,454)
|
|
(195,998)
|
Issuance of
common stock under employee stock option plans
|
|
|
|
2,180
|
|
3,157
|
Net cash used by
financing activities
|
|
|
|
|
|
(603,690)
|
|
(270,124)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
(4,110)
|
|
(12,567)
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash, cash equivalents and restricted cash
|
|
$
(310,625)
|
|
$
223,801
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash:
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
|
$
1,259,748
|
|
$
746,210
|
Net (decrease)
increase in cash, cash equivalents and restricted cash
|
|
(310,625)
|
|
223,801
|
Cash, cash
equivalents and restricted cash, end of period
|
|
|
|
$
949,123
|
|
$
970,011
|
|
|
|
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash in the Consolidated
Balance Sheet to the Consolidated Statements of Cash
Flows:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
$
862,381
|
|
$
926,992
|
Restricted
cash
|
|
|
|
|
|
79,115
|
|
36,471
|
Restricted
cash included in Other long-term assets
|
|
|
|
7,627
|
|
6,548
|
Cash, cash
equivalents and restricted cash per the Consolidated Statements of
Cash Flows
|
$
949,123
|
|
$
970,011
|
|
|
|
|
|
|
|
|
|
Adoption of New
Accounting Standards
|
|
|
|
|
|
|
|
|
On January 1, 2019,
the company adopted accounting standards update 2016-02 Leases
using the modified retrospective method. As a result, the company
recorded a right-of-use lease asset of approximately $60 million
and a corresponding lease liability.
|
Motorcycles and
Related Products Revenue
|
and Motorcycle
Shipment Data
|
(Revenue in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
29,
|
|
September
30,
|
|
September
29,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
MOTORCYCLES AND
RELATED PRODUCTS REVENUE
|
|
|
|
|
|
|
|
|
Motorcycles
|
|
$
779,344
|
|
$
821,670
|
|
$
2,871,982
|
|
$
3,144,796
|
Parts &
Accessories
|
|
203,173
|
|
212,406
|
|
584,134
|
|
612,495
|
General
Merchandise
|
|
60,334
|
|
58,266
|
|
180,379
|
|
183,520
|
Licensing
|
|
8,611
|
|
10,680
|
|
27,099
|
|
29,445
|
Other
|
|
17,480
|
|
20,923
|
|
34,989
|
|
42,757
|
|
|
$
1,068,942
|
|
$
1,123,945
|
|
$
3,698,583
|
|
$
4,013,013
|
|
|
|
|
|
|
|
|
|
MOTORCYCLE
SHIPMENTS
|
|
|
|
|
|
|
|
|
United States
|
|
25,572
|
|
26,213
|
|
101,481
|
|
108,057
|
International
|
|
20,265
|
|
22,426
|
|
72,004
|
|
77,119
|
|
|
45,837
|
|
48,639
|
|
173,485
|
|
185,176
|
|
|
|
|
|
|
|
|
|
MOTORCYCLE PRODUCT
MIX
|
|
|
|
|
|
|
|
|
Touring
|
|
19,905
|
|
22,204
|
|
75,871
|
|
84,125
|
Cruiser(1)
|
|
16,225
|
|
16,049
|
|
59,367
|
|
61,951
|
Sportster®/ Street
|
|
9,707
|
|
10,386
|
|
38,247
|
|
39,100
|
|
|
45,837
|
|
48,639
|
|
173,485
|
|
185,176
|
|
(1)
Includes Softail®, CVOTM, and
LiveWireTM
|
Worldwide Retail
Sales of Harley-Davidson Motorcycles(1)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
29,
|
|
September
30,
|
|
September
29,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
United
States
|
|
34,903
|
|
36,220
|
|
105,756
|
|
112,019
|
|
|
|
|
|
|
|
|
|
Europe(2)
|
|
9,115
|
|
9,239
|
|
32,326
|
|
34,967
|
EMEA -
Other
|
|
1,368
|
|
1,304
|
|
4,573
|
|
4,282
|
Total
EMEA
|
|
10,483
|
|
10,543
|
|
36,899
|
|
39,249
|
|
|
|
|
|
|
|
|
|
Asia
Pacific(3)
|
|
4,889
|
|
4,578
|
|
13,219
|
|
14,126
|
Asia Pacific -
Other
|
|
3,189
|
|
2,855
|
|
8,603
|
|
7,354
|
Total Asia
Pacific
|
|
8,078
|
|
7,433
|
|
21,822
|
|
21,480
|
|
|
|
|
|
|
|
|
|
Latin
America
|
|
2,498
|
|
2,577
|
|
7,255
|
|
7,652
|
Canada
|
|
2,560
|
|
2,453
|
|
7,787
|
|
8,340
|
Total
international retail sales
|
|
23,619
|
|
23,006
|
|
73,763
|
|
76,721
|
Total worldwide retail
sales
|
|
58,522
|
|
59,226
|
|
179,519
|
|
188,740
|
|
(1) 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 the company does not regularly verify the information that
its dealers supply. This information is subject to
revision.
|
|
|
|
|
|
|
|
|
|
(2) Europe data includes Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Italy,
Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland, and the United Kingdom
|
|
|
|
|
|
(3) Asia
Pacific data includes Japan, Australia, New Zealand and
Korea
|
Motorcycle
Registration Data(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
2019
|
|
2018
|
United
States(2)
|
|
|
|
|
|
213,877
|
|
222,468
|
Europe(3)
|
|
|
|
|
|
371,412
|
|
347,884
|
|
(1) Data
includes on-road 601+cc models. On-road 601+cc models include dual
purpose models, three-wheeled motorcycles and
autocycles.
|
|
|
|
|
|
|
|
|
|
(2) United
States data is derived from information provided by Motorcycle
Industry Council. This third-party data is subject to revision and
update.
|
|
|
|
|
|
|
|
|
|
(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, an independent agency. This third-party
data is subject to revision and update.
|
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SOURCE Harley-Davidson, Inc.