DMH Bank of America

Ducati Motor Holding Announces Third Quarter 2003 Results - Highest Third Quarter Unit Sales and Registrations Ever - BOLOGNA, Italy, Nov. 5 /PRNewswire-FirstCall/ -- Ducati Motor Holding S.p.A. , a leading manufacturer of high performance motorcycles, today announced financial results for the third quarter and nine months, ended September 30, 2003. For the third quarter of 2003, unit sales were 6,865, an 18.8% increase over the same period in 2002, the highest number of motorcycles ever sold by the Company in a third quarter. Revenues for the period were Euro 75.3 million, up 24.7% excluding forex effects, (or 20.5% including forex effects) over the same period in 2002. Third quarter revenues from motorcycles for the period increased 26.6% excluding forex effects, (or 22.4% including forex effects) to Euro 55.9 million and represented 74.2% of revenues. Motorcycle-related products, including spare parts, technical accessories and apparel, increased 17.7% excluding forex effects (or 13.2% including forex effects) to Euro 18.9 million over the comparable period in the previous year. Gross margin was 37.7% of revenues versus 41.4% in the period, mainly due to a negative motorcycle mix and forex effects. Sales costs represented 24.3% of sales versus 34.2% in the period last year, representing a decrease of Euro 3.1 million, as a result of the Company's strict cost controls. EBITDA was Euro 6.7 million (or Euro 5.0 million including forex effects) versus zero in the period of the previous year. In the third quarter of 2003, pre-tax loss was Euro 5.4 million versus a loss of Euro 11.1 million last year. The improvement of Euro 5.7 million was mainly due to higher EBITDA and lower financial charges. For the third quarter, unofficial Ducati worldwide registrations, a measure of retail sales, were up 10% versus the same period last year, in a market which grew 7%. In particular, increases were up in Italy 21%, the US up 19%, non-subsidiary importer countries up 13%, France up 9% and Benelux Countries up 8%. Registrations were down 3% in Germany, down 5% in the UK and down 9% in Japan. "Ducati has posted very strong results for the third quarter of 2003, confirming the improving trend during the course of the year thanks to our popular new product introductions and the effect of our savings programs," said Federico Minoli, Ducati Chairman and Chief Executive Officer. "The Multistrada, in particular, continues to break records, having sold 4,762 units in six months since its launch, and we are increasing our sales target to 5,500 units. Also, the new Monster S4R has had a great success having sold over 2,200 units in five months. Just last week in Tokyo, we unveiled prototypes of the Sport Classic dream bike, a new concept of thoroughly modern motorcycles that capture the essential beauty, timeless style and emotion of the original Ducati sport bikes of the 1970's. The PaulSmart, GT and Sport are all powered by the advanced Desmo 1000 DS engine. Depending on the market reaction and ensuing demand, we will announce a production timeline. "On the racetrack, we are very pleased with our successes as well -- official Ducati Fila racer Neil Hodgson won the riders title in the World Superbike Championship at Assen, in Holland, bringing Ducati's total to ten and underlining the extraordinary performance of our new 999 Testastretta Superbike. The MotoGP season ended in Valencia on November 2 in style, with Loris Capirossi finishing on the podium. The final standings in the Rider's Championship sees Loris and Troy Bayliss finishing in fourth and sixth places respectively. So, additionally, after an absence of 30 years, Ducati took second place in the Constructors' World Championship, bringing to a close a spectacular season," added Minoli. "What a superb result - congratulations and thanks to the riders, to their teams and of course to all our fans." For the first nine months, unofficial Ducati worldwide registrations, a measure of retail sales, were down 5% versus the period last year, with the US down 20%, the UK down 11%, Japan down 11%, France down 7%, Germany down 2%, Italy down 1%, while the Benelux Countries grew 6% and Non-subsidiary countries were up 8%. This is a notable recovery after declines of 18% and 4% in the first and second quarter of 2003, respectively. First nine months 2003 revenues of Euro 284.6 million, were down 0.7% excluding forex effects, (or down 4.8% including forex effects) versus the period in 2002. EBITDA was Euro 37.8 million excluding forex effects (or Euro 30.8 million including forex effects) versus Euro 38.8 million in the first nine months of 2002. At EBT level, there was a loss of Euro 7.0 million versus a gain of Euro 3.7 million in the 2002 period mainly due to adverse forex, restructuring and depreciation costs. "The third quarter improvement, driven by increased sales as well as reduced product and structure costs, brings us in line with our expectations for the full year of a flat top line versus year ago -- excluding forex effects -- and a positive bottom line. However, after the slow start to the year and the subsequent recovery, the outlook for 2003 remains challenging. Our ability to meet our targets will largely depend on forex non further deteriorating and the sustained growth of our relevant market," said Enrico D'Onofrio, Ducati Chief Financial Officer. The Company's net debt at September 30, 2003 was Euro 112.2 million, up versus the Euro 100.4 euro million at the same date a year earlier mainly due to lower EBITDA. The company's gearing ratio was 73% at September 30, 2003 versus 64% at the same date a year earlier. At the end of September, the Company has re-purchased 293,235 shares, equivalent to Euro 391,225 or 0.185% of its stock capital. A discussion by Ducati management of the third quarter 2003 results is available at http://www.ducati.com/ under Company and then Investor Relations, and can be accessed until mid-February 2004 under Webcast of Results at the bottom of the IR Press Release Schedule section. Founded in 1926, Ducati builds racing-inspired motorcycles characterized by unique engine features, innovative design, advanced engineering and overall technical excellence. Ducati has won twelve of the last fourteen World Superbike Championship titles and more individual victories than the competition put together. The Company produces motorcycles in four market segments which vary in their technical and design features and intended customers: Superbike, Supersport; Monster, Sport Touring and Multistrada. The Company's motorcycles are sold in more than 40 countries worldwide, with a primary focus in the Western European and North American markets. For more information about the Company, please visit our web site at http://www.ducati.com/. This press release contains statements that are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, as described in documents previously filed by the Company with CONSOB and with the U.S. Securities and Exchange Commission. Ducati Motor Holding S.p.A. and Subsidiaries Net Sales and Shipment Data Three Months Ended Three Months Ended September September September September 30, 30, 30, 30, 2003 2002 2003 2002 Net Sales (Euro in thousands, US$ in thousands) Motorcycles euro 55,923 euro 45,680 $65,161 $53,226 Spare Parts, Accessories, Apparel 18,890 16,687 22,011 19,444 Miscellaneous Other 530 172 618 200 Total net sales euro 75,343 euro 62,539 $87,790 $72,870 Ducati Units Motorcycle shipments: % Change North America 863 499 72.9% Main European market 4,025 3,696 8.9% Japan 793 764 3.8% Rest of World 1,184 820 44.4% Total 6,865 5,779 18.8% Motorcycle product mix: % Change Sport Segment (Superbike & Supersport) 1,381 2,109 (34.5%) Sport Naked 3,449 3,177 8.6% Sport Touring 393 493 (20.3%) Multistrada 1,642 0 n.s. Total 6,865 5,779 18.8% Unofficial Motorcycle Registrations: % Change North America 1,470 1,235 19.0% Main European market 6,009 5,444 10.4% Japan 869 959 (9.4%) Rest of World 1,355 1,194 13.5% Total 9,703 8,832 9.9% Ducati Motor Holding S.p.A. and Subsidiaries Net Sales and Shipment Data Nine Months Ended Nine Months Ended September September September September 30, 30, 30, 30, 2003 2002 2003 2002 Net Sales (Euro in thousands, US$ in thousands) Motorcycles euro 229,749 euro 242,067 $267,704 $282,056 Spare Parts, Accessories, Apparel 53,731 55,789 62,607 65,005 Miscellaneous Other 1,120 1,039 1,305 1,211 Total net sales euro 284,600 euro 298,895 $331,616 $348,272 Ducati Units Motorcycle shipments: % Change North America 2,917 2,825 3.3% Main European market 18,065 18,919 (4.5%) Japan 2,256 2,827 (20.2%) Rest of World 5,103 4,466 14.3% Total 28,341 29,037 (2.4%) Motorcycle product mix: % Change Sport Segment (Superbike & Supersport) 8,896 11,064 (19.6%) Sport Naked 13,257 15,331 (13.5%) Sport Touring 1,426 2,642 (46.0%) Multistrada 4,762 0 n.s. Total 28,341 29,037 (2.4%) Unofficial Motorcycle Registrations: % Change North America 3,962 4,961 (20.1%) Main European market 21,507 22,073 (2.6%) Japan 2,784 3,125 (10.9%) Rest of World 4,695 4,358 7.7% Total 32,948 34,517 (4.5%) Consolidated Statements of Operations Data (Euro in thousands, US$ in thousands, except per share and share amounts) Three Months Ended Three Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, Percent 2003 2002 2003 2002 Change Net Sales euro 75,343 euro 62,539 $87,790 $72,870 20.5% Cost of goods sold (46,975) (36,623) (54,735) (42,673) Gross Profit 28,368 25,916 33,054 30,197 9.5% Other operating revenues 4,268 2,450 4,973 2,855 SG&A expenses (27,415) (28,296) (31,944) (32,970) Other operating income/ (expense), net (117) (33) (136) (38) Depreciation & amortization (9,690) (8,888) (11,291) (10,356) Operating income/(loss) (4,586) (8,851) (5,344) (10,312) n.s. Financing expense, net (827) (2,250) (964) (2,622) Other non- operating income/ (expense), net (32) (20) (37) (23) Profit/(loss) before income taxes (5,445) (11,121) (6,345) (12,957) n.s. Shares outstanding 158,500,963 158,500,963 158,500,963 158,500,963 Percent Other Financial Data Change Motorcycles Produced (Units) 7,834 8,413 (6.9%) Motorcycles Sold (Units) 6,865 5,779 18.8% Unofficial Registrations (Units) 9,809 8,832 11.1% EBITDA 5,033 17 5,864 20 n.s. EBITDA Margin 6.7% 0.0% Note: On September 30, 2003 US$1= 0,8582 Euros Consolidated Statements of Operations Data (Euro in thousands, US$ in thousands, except per share and share amounts) Nine Months Ended Nine Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, Percent 2003 2002 2003 2002 Change Net Sales euro 284,600 euro 298,895 $331,616 $348,272 (4.8%) Cost of goods sold (184,429) (176,810) (214,897) (206,019) Gross Profit 100,171 122,085 116,719 142,253 (17.9%) Other operating revenues 16,324 7,961 19,021 9,276 SG&A expenses (85,411) (90,040) (99,521) (104,915) Other operating income (6) (1,166) (7) (1,359) Depreciation & amortization (28,119) (24,533) (32,765) (28,586) Operating income/(loss) 2,959 14,307 3,447 16,669 (79.3%) Financing expense, net (5,785) (10,618) (6,741) (12,372) Other non-operating income/ (expense), net (4,178) (20) (4,868) (23) Profit/(loss) before income taxes (7,004) 3,669 (8,162) 4,274 n.s. Shares outstanding 158,500,963 158,500,963 158,500,963 158,500,963 Percent Other Financial Data Change Motorcycles Produced (Units) 26,951 30,923 (12.8%) Motorcycles Sold (Units) 28,341 29,037 (2.4%) Unofficial Registrations (Units) 32,948 34,517 (4.5%) EBITDA 30,844 38,820 35,939 45,232 (20.5%) EBITDA Margin 10.8% 13.0% Note: On September 30, 2003 US$1= 0,8582 Euros Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Euro in thousands, except per share and share amounts) Three Months Three Months ended ended September 30, 2003 September 30, 2002 euro % euro % Current assets Cash and cash equivalents 16,866 16,606 Trade receivables, net 64,706 61,135 Inventories 108,854 111,856 Other current assets 18,858 17,617 Total current assets 209,284 48.6% 207,214 50.0% Non current assets Property, plant and equipment-net 68,779 63,082 Intangible fixed assets, net 126,804 128,759 Equity investments 12 1 Other long-term assets - Credit Link/ABS 24,818 15,000 Other long-term assets 584 646 Total non current assets 220,997 51.4% 207,488 50.0% Total assets 430,281 100.0% 414,702 100.0% Current liabilities Short-term bank borrowings 41,091 20,434 Current portion of long-term debt 4,960 2,822 Accounts payable - trade 79,472 83,773 Income and other taxes payables 4,798 5,042 Other current liabilities 17,823 17,609 Provisions for risks and charges - current portion 9,543 9,421 Total current liabilities 157,687 36.6% 139,101 33.5% Long-term liabilities Long-term debt, net of current portion 92,220 91,000 Employees' leaving entitlement 8,170 6,686 Deferred income taxes 35 35 Other long-term liabilities 15,607 17,737 Provision for risks and charges - long term portion 3,998 3,262 Total long-term liabilities 120,030 27.9% 118,720 28.6% Total liabilities 277,717 257,821 Total shareholders' equity 152,564 35.5% 156,881 37.9% Total liabilities and shareholders' equity 430,281 100% 414,702 100% Memo: Net consolidated financial position (112,194) (100,387) Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (US$ in thousands, except per share and share amounts) Three Months Three Months ended ended September 30, 2003 September 30, 2002 US$ % US$ % Current assets Cash and cash equivalents 19,652 19,349 Trade receivables, net 75,396 71,235 Inventories 126,837 130,335 Other current assets 21,973 20,527 Total current assets 243,858 48.6% 241,446 50.0% Non current assets Property, plant and equipment-net 80,141 73,503 Intangible fixed assets, net 147,752 150,030 Equity investments 14 1 Other long-term assets - Credit Link/ABS 28,918 17,478 Other long-term assets 680 753 Total non current assets 257,505 51.4% 241,765 50.0% Total assets 501,363 100.0% 483,211 100.0% Current liabilities Short-term bank borrowings 47,879 23,810 Current portion of long-term debt 5,779 3,288 Accounts payable - trade 92,601 97,612 Income and other taxes payables 5,591 5,875 Other current liabilities 20,767 20,518 Provisions for risks and charges - current portion 11,119 10,977 Total current liabilities 183,736 36.6% 162,080 33.5% Long-term liabilities Long-term debt, net of current portion 107,455 106,033 Employees' leaving entitlement 9,520 7,791 Deferred income taxes 41 41 Other long-term liabilities 18,185 20,667 Provisionfor risks and charges - long term portion 4,658 3,801 Total long-term liabilities 139,859 27.9% 138,333 28.6% Total liabilities 323,595 300,413 Total shareholders' equity 177,768 35.5% 182,798 37.9% Total liabilities and shareholders' equity 501,363 100% 483,211 100% Memo: Net consolidated financial position (130,728) (116,970) DATASOURCE: Ducati Motor Holding S.p.A. CONTACT: Christopher Spira, Director, Investor Relations and Corporate Communications of Ducati Motor Holding S.p.A., main, +39-051-6413-111, direct, +39-051-6413-222, fax, +39-0051-6413-223, Web site: http://www.ducati.com/

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