Dave Cotteleer, newly appointed as VP U. S Market
Harley prices had started to recover, and that YTD used bike sales were up for the YTD through August and overall pricing was up for the third quarter. The company puts its market share gains down to strong demand for the new cruisers and equipping new motorcycle rentals partner EagleRider with its initial fleet of new bikes. Inventory management continues to be managed closely. The company cites considerably constrained availability in Q3, with dealer inventory down by 12,200 units vs. the prior year. Total motorcycle shipments of 41,662 for the quarter(-14.3 percent) took the YTD figure to 194,300(-11.6 percent), of which 41.4 percent(+ 0.7 percent) were Tourers, 34.8 percent were Cruisers(-0.9 percent) and 23.8 percent were Street and Sportster models(+ 0.2 percent). However, in Q3 Tourers declined in model mix terms to 35.2 percent(- 12.7 percent), with Cruisers up by + 12.7 percent to 41.5 percent of shipments. CFO John Olin said that“ Q3 shipments were down 6,949 motorcycle year on year as we
aggressively managed supply in line with demand” and that that left Harley“ within guidance range of 39,000 to 44,000 motorcycles“ for the quarter. He noted that 52.8 percent of Q3 shipments were, in fact, international and that overall the Q3 mix has been slewed to Cruisers to reflect the MY 2018 launch. The company continues to expect fullyear 2017 operating margin to be down approximately 1 percentage point compared to 2016, and 2017 capital expenditures to be $ 200 million to $ 220 million. Cash and marketable securities totaled $ 683.1 million at the end of the third quarter, compared to $ 795.3 million a year ago. During the first nine months of 2017, Harley-Davidson generated $ 949.1 million of cash from operating activities compared to $ 927.8 million for the first nine months of 2016. The company paid a cash dividend of $ 0.365 per share for the third quarter of 2017, and a cumulative total of $ 1.095 per share for the first nine months of 2017. On a discretionary basis, the company repurchased 4.5 million shares of its common stock during the third quarter of 2017 for $ 222 million. In the third quarter of 2017, there were 170.7 million weighted-average diluted common shares outstanding, compared to 179.3 million shares in the same period a year ago. At the end of the period, 10.6 million shares remained on a board-approved share repurchase authorization. Third quarter 2017 diluted EPS decreased to $ 0.40 from $ 0.64 in the third quarter of 2016. Third quarter net income was $ 68.2 million on consolidated revenue of $ 1.15 billion versus net income of $ 114.1 million on consolidated revenue of $ 1.27 billion in the third quarter of 2016. Through nine months, Harley- Davidson 2017 diluted EPS was $ 2.95, down 16.9 percent from $ 3.55 in the
Harley-Davidson Chairman and CEO Matt Levatich was one of the two Keynote speakers at the recent AIMExpo at Columbus, Ohio,( Scott Wine, CEO of Polaris, being the other) and, pointing to the investment that Harley is making to train two million new riders, called on the industry to unite to promote the two-wheel leisure option. He said that our market ' s competitors are as much the social media, content channels and games that ' Millennials ' and ' Centennials ' are exposed to on their screens, as well as any other outdoor leisure option, or, like for any other single motorcycle maker, the competitive offerings from other manufacturers. Levatich, quite rightly, pointed to the experiential opportunities of riding as being our primary USP year-ago period. Harley-Davidson 2017 net income was $ 513.4 million on consolidated revenue of $ 4.42 billion compared to nine-month 2016 net income of $ 645.0 million on consolidated revenue of $ 4.89 billion. For the first nine months, worldwide retail motorcycle sales were down 6.1 percent compared to the same period in 2016.
Kumbier appointed COO
Michelle Kumbier has been appointed Chief Operating Officer of Harley-Davidson Motor Company with“ responsibility for planning and delivering the company’ s global business results.” Effective immediately, Kumbier will have oversight of the company’ s U. S. and international markets in addition to her current responsibilities leading product and operations. Kumbier joined Harley in 1997 in operations purchasing, and has since taken on roles with increasing responsibility in purchasing, strategic planning, new business development and parts & accessories. She most recently served as Senior Vice President, Motor Company Product & Operations, leading a team of more than 4,500 employees worldwide. Domestic U. S. Managing Director Mike Kennedy and Sean Cummings, Senior VP Global Demand, have left the company.
HARLEY
BRIEFS
Rick’ s Motorcycles of Baden-Baden hosted its latest‘ Rick’ s Harley Days’ open-house weekend at the end of September. In addition to showing the new Softails, hosting ride-outs, demo rides and all the usual features of the popular annual event, Rick’ s, one of Europe’ s largest aftermarket parts and accessories manufacturers, threw open the doors of its CNC machinery equipped manufacturing halls where their noted custom bikes and wheels programs are built and made.
In Switzerland Harley took 3rd spot in motorcycle market share terms for the first nine months of 2017, selling 2,675 units( a tad down on Jan-Sept 2017) behind Yamaha and BMW, but ahead of Kawasaki, Honda, Triumph, KTM, Ducati, Suzuki, Aprilia and Indian Motorcycle( 294 units in what, in European terms, is their Head Office home market). Harley’ s top-seller there was the XL 1200 X Forty- Eight( 270 units), followed by the Breakout( 231 units).
In Austria Harley has dropped to 7th spot in motorcycle market share terms( Jan-Sept 2017, from 6th in 2016), selling 923 units YTD; their top-seller there was the XL 1200 X, followed by the XL 1200 X, FLHXS and FXDB.
In an Australian total market that is down by-7.8 percent( 73,141 units) for the period January to September 2017, Harley are in fourth spot in market share terms behind Honda, Yamaha and Kawasaki, having sold 6,526 units YTD for an 8.9 % share. However, in the road bike market( the largest motorcycle sector in Australia, worth 40.5 percent of the overall market there / 29,625 units YTD- net of scooters, small cc bikes and off-road units etc), Harley is top dog, ahead of Honda and Yamaha; its topseller in Australia is the FXSB, followed by the XG500.
The sectors of the Brammo electric vehicle business that were not bought by Polaris five years ago, which includes the‘ Empulse RR’ e- bike of IOM and Pikes Peak derring do fame, has been bought by Diesel engine manufacturer Cummins. What has this to do with Harley? Cummins’ CEO and Chairman Tom Lineberger is a non-executive Director on the board of Harley-Davidson. With ex- CEO Keith Wandell still engaged to work his magic at previously struggling battery maker Exide, are we witnessing the emergence of a Bar & Shield‘ E-Nostra’ as the production of Project Livewire( hopefully) draws ever nearer? www. AMDchampionship. com AMERICAN MOTORCYCLE DEALER- NOVEMBER 2017 7