AMD 257 December 2020 American Motorcycle Dealer 257 Dec 2020 | Page 8

<< will pay a fourth quarter cash dividend of $ 0.02 per share , in line with its second and third quarter dividends . The dividend is payable December 18 , 2020 to the shareholders of record of the company ' s common stock as of December 4 , 2020 ." The company says it has also " maintained its strong liquidity position with $ 4.7bn in liquidity at the end of the quarter ." Net income in Q3 2020 was $ 120m , up 39 percent over prior year and the highest Q3 result since 2015 . Q3 results reflect the actions taken in the third quarter under the company ' s The Rewire effort . Q3 GAAP diluted EPS was $ 0.78 , compared to $ 0.55 in Q3 2019 . Excluding restructuring plan costs and the impact of tariffs , adjusted Q3 diluted EPS was $ 1.05 compared to $ 0.70 in Q3 2019 . Global retail motorcycle sales in the third quarter of 2020 were down

8 percent compared to the prior year , reflecting , among other things , the company ' s shift in timing of the launch of new model year motorcycles from August each year to early Q1 to better align with seasonality . Revenue from the Motorcycles and Related Products segment was down in Q3 compared to the prior year due to , among other things , the shift in model year change-over . Gross margin was flat compared to the prior year and operating margin was up during the quarter compared to Q3 2019 , primarily due to aggressive cost management in the face of the COVID-19 pandemic and actions taken under The Rewire . Financial Services segment third quarter operating income was up 25 percent due primarily to a decrease in the provision for loan losses , driven by lower actual losses at the end of Q3 versus the previous quarter .
HIGHLIGHTS AT THE END OF THE THIRD QUARTER :
• $ 250m cash savings including SG & A and capital reductions expected in 2020
• $ 115m annual savings from restructuring actions taken expected starting in 2021
• $ 3.6bn cash and cash equivalents compared to $ 862m in 2019
• $ 1.1bn of cash generated from operating activities compared to $ 849m in 2019
• Global dealer inventory down over 30 percent compared to third quarter 2019
• 2020 motorcycles selling at full MSRP ( avg . U . S . during the third quarter )
• Used Harley-Davidson prices up significantly ( U . S .)
Cash and cash equivalents were $ 3.6bn at the end of Q3 2020 , compared to $ 862m at the end of Q3 2019 . Harley-Davidson generated $ 1.1bn of cash from operating activities year-to-date 2020 compared to $ 849m year-to-date 2019 . " Given the uncertainty that remains surrounding the impact and duration of the COVID-19 pandemic , the company is not providing 2020 financial guidance ."

Serial 1 - " Powered by Harley-Davidson "

Back in the early 1990s Harley- Davidson systematically divested itself of what it then saw as its noncore operations - such as delivery vehicles , golf carts and other ' legacy ' enterprises . By 2010 it had re-grown a couple of extra limbs in the shape of Buell and MV Agusta , but CEO Keith Wandell dispensed with them at the time of the financial crisis - MV Agusta for the princely sum of around $ 4.00 , having bought it for around $ 109m barely a year earlier . Wandell had been hired as a Company Doctor , specifically to rescue Harley from impending doom , and fast forward a decade to another new CEO , this time Jochen Zeitz , and drastic surgery is again the order of day in Milwaukee . This time though , in among the ' Rewire ' highlights released alongside Harley ' s recent Q3 Fiscals , Zeitz has signalled that subsidiaries are back in fashion . Serial 1 Cycle Company is a new Utah based operation established to build on the bicycle and electric bicycle investments made in recent years as part of former CEO Matt Levatich ' s now abandoned ' More Roads ' strategic plan . As a dedicated brand , Serial 1 will debut its first eBicycles in March of 2021 . Taking its name from " Serial Number One ," the nickname for Harley-Davidson ' s oldest known motorcycle , Serial 1 will combine " Harley-Davidson ' s world-class product development capability and
leadership in two-wheel electric propulsion with the agility and innovation of a start-up brand dedicated exclusively to the eBicycle product and customer ." Aaron Frank , Brand Director for Serial 1 Cycle Company , is quoted as

" first eBicycles in March of 2021 "

saying : " When Harley-Davidson first put power to two wheels in 1903 , it changed how the world moved , forever . Inspired by the entrepreneurial vision of Harley- Davidson ' s founders , we hope to once again change how cyclists and the cycling-curious move around their world with a Serial 1 eBicycle ." Described as having been born at a " skunkworks deep inside Harley- Davidson ' s Product Development Center ," the eBicycle project " began with a small group of passionate motorcycle and bicycle enthusiasts working with a single focus to design and develop an eBicycle worthy of the Harley-Davidson name . " The decision was made to structure the eBicycle business into a new entity that could focus exclusively on
delivering an optimal eBicycle product and experience . The Serial 1 brand is led today by a team of Harley-Davidson alumni including Jason Huntsman , President ; Ben Lund , Vice President , Product Development ; Aaron Frank , Brand Director ; and Hannah Altenburg , Lead Brand Marketing Specialist . " Combining the freedom and simplicity of a bicycle with the effortless joy of electric power , Serial 1 ' s eBicycles will allow anyone to ride farther , faster and with less effort , making an eBicycle the perfect solution for urban commuting and
recreational riding ." Harley says that the global eBicycle market was estimated to be over $ 15bn in 2019 and is projected to grow at an annual rate of over 6 percent from 2020 to 2025 . " The dynamic , fast growing eBicycle space is at the forefront of a global mobility revolution ," says Frank . " The formation of Serial 1 allows Harley-Davidson to play a key role in this mobility revolution while allowing Serial 1 to focus exclusively on the eBicycle customer and deliver an unmatched riding experience rooted in freedom and adventure ." Serial 1 Cycle Company , LLC , has been established as a Delaware limited liability company to " offer premium eBicycles that are guided by intelligent , human-centered design and crafted using the most advanced bicycle technology available ." www . serial1 . com
8 AMERICAN MOTORCYCLE DEALER - DECEMBER 2020 www . AMDchampionship . com