Harley-Davidson Reports Fourth Quarter and Full Year Results for 2007

Train’s note: You can get the rest of the data including their financial reports at http://money.cnn.com/news/newsfeeds/articles/prnewswire/AQF01625012008-1.htm

PR Newswire
January 25, 2008: 07:00 AM EST

MILWAUKEE, Jan. 25 /PRNewswire-FirstCall/ — Harley-Davidson, Inc. today announced its results for the fourth quarter and the year ended December 31, 2007. Revenue for the quarter was $1.39 billion compared to $1.50 billion in the year-ago quarter, a 7.7 percent decline. Net income for the quarter was $186.1 million compared to $252.4 million, down 26.3 percent versus the fourth quarter of 2006. Fourth quarter diluted earnings per share were $0.78, a 19.6 percent decrease compared to $0.97 in the fourth quarter of last year. During the fourth quarter the Company repurchased $153.3 million of its common stock.

Revenue for the full year 2007 was $5.73 billion compared to $5.80 billion in 2006, a 1.3 percent decline. For the full year, wholesale shipments of Harley-Davidson(R) motorcycles were 330,619 units, a 5.3 percent decrease compared to 2006. Diluted earnings per share were $3.74, declining 4.8 percent compared to 2006.

“Harley-Davidson managed through a weak U.S. economy during 2007,” said Jim Ziemer, Chief Executive Officer of Harley-Davidson, Inc. “As we announced in September, we reduced our wholesale motorcycle shipment plan for the fourth quarter, fulfilling our commitment to our dealers to ship fewer Harley-Davidson motorcycles than we expected our dealers worldwide to sell at retail during 2007,” said Ziemer.

“While these are challenging times in the U.S., our international dealer network delivered double digit retail sales growth in the fourth quarter and for the full year of 2007. And our customers around the world have a lot to look forward to this year with the new motorcycles we are bringing to market, the opening of the Harley-Davidson Museum, and hundreds of rides and events leading up to our 105th Anniversary Celebration in Milwaukee this summer,” he said.

For 2008, the Company once again plans to ship fewer Harley-Davidson motorcycles than it expects its worldwide dealer network to sell. The Company also expects moderate revenue growth, lower operating margin, and a diluted earnings per share growth rate of 4 to 7 percent compared to 2007. For the first quarter, it expects to ship between 68,000 and 72,000 Harley-Davidson motorcycles, which compares to 67,761 units in the first quarter of 2007.

“Looking ahead, we will continue to manage the Company to generate long-term sustainable shareholder value while protecting the brand. We expect the U.S. economy to continue to be very challenging in 2008, and we will closely monitor the retail environment and regularly assess our wholesale shipments throughout the year,” said Ziemer.

Motorcycles and Related Products Segment — Fourth Quarter Results

Revenue from Harley-Davidson motorcycles was $1.12 billion, a decrease of $105.5 million or 8.6 percent versus the same period last year. Shipments of Harley-Davidson motorcycles totaled 81,206 units, a decrease of 11,642 units or 12.5 percent compared to last year’s fourth quarter.

Revenue from Parts and Accessories (P&A), which consists of Genuine Motor Parts and Genuine Motor Accessories, totaled $165.2 million, a decrease of $14.0 million or 7.8 percent from the year-ago quarter. Revenue from General Merchandise, which consists of MotorClothes(R) apparel and collectibles, totaled $73.4 million, an increase of $2.8 million or 4.0 percent over the year-ago quarter.

Gross margin for the fourth quarter of 2007 was 35.7 percent of revenue compared to 38.0 percent for the fourth quarter last year. Fourth quarter operating margin decreased to 18.1 percent from 22.5 percent in the fourth quarter of 2006.

Motorcycle Retail Sales Data

During the fourth quarter, worldwide retail sales of Harley-Davidson motorcycles decreased 6.1 percent compared to the fourth quarter of 2006. U.S. retail sales of Harley-Davidson motorcycles decreased 14.2 percent for the quarter. The heavyweight motorcycle market in the U.S. decreased 9.0 percent for the same period.

Retail sales of Harley-Davidson motorcycles increased 17.4 percent in the Company’s international markets during the fourth quarter of 2007 compared to the fourth quarter of 2006. Fourth quarter retail sales increased 10.9 percent in Europe; Canada was up 45.9 percent; and Japan was up 4.5 percent. All other international markets combined were up 28.6 percent.

For the full year of 2007, worldwide retail sales of Harley-Davidson motorcycles decreased 1.8 percent compared to the prior year. In the U.S., Harley-Davidson dealer retail sales decreased 6.2 percent for the full year; international retail sales increased by 13.7 percent. The U.S. heavyweight motorcycle market was down 5.0 percent for the full year of 2007.

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