American Motorcycle Dealer AMD 232 November 2018 | Page 9

network - the hub of our customer
experience,” said Levatich.
As Harley-Davidson continues to build
the next generation of riders globally,
the company increased its reach and
Q3 domestic
601+ cc
market -9.8%
impact through the third quarter and
delivered a wide range of results
including 260,000 visitors to 115th
anniversary celebrations in Milwaukee
and Prague, 43 million social video
views and over 200 million media
impressions from #FindYourFreedom
content, and expanded access to
Harley-Davidson through an Amazon
storefront, new international dealers
and new urban apparel stores in Asia.
To further improve its manufacturing
operations and cost structure, in the
first quarter of 2018 the company
commenced its multi-year
www.AMDchampionship.com
manufacturing optimization initiative
anchored by the consolidation of its
motorcycle assembly plant in Kansas
City, Mo. into its plant in York, Pa. The
company has reduced the cost outlook
for this initiative and now expects to
incur restructuring and other
consolidation costs of $155 million to
$185 million compared to the previous
expectation of $170 million to $200
million through 2019. The company
continues to expect capital investment
of approximately $75 million through
2019 and ongoing annual cash
savings of $65 million to $75 million
after 2020. In the third quarter of
2018, costs related to the
manufacturing optimization were
$21.0 million and year-to-date were
$83.4 million.
In other results the operating income
of the company’s Financial Services
segment increased +8.7 percent in the
third quarter compared to 2017.
Harley-Davidson’s year-to-date
effective tax rate was 23.1 percent
compared to 33.2 percent in 2017,
primarily due to the favorable impact
of the 2017 tax cuts.
Cash and marketable securities were
$937.0 million at the end of the third
quarter 2018 compared to $683.1
million in 2017. Through September,
Harley-Davidson generated $1.12
billion of cash from operating activities
“On a discretionary basis, Harley-Davidson repurchased 1.9 million shares of
its common stock during the third quarter for $84.5 million”
in 2018 compared to $949.1 million in
2017. The company paid a cash
dividend of $0.37 per share for the
third quarter, and a cumulative total of
U.S retail sales
-13.3 percent
for 50.9% share
$1.11 per share for the first nine
months of 2018.
For the full year 2018, the company
says it continues to expect motorcycle
shipments to be approximately
231,000 to 236,000 motorcycles. In
the fourth quarter, the company
expects to ship approximately 45,800
to 50,800 motorcycles and for
motorcycles segment operating
margin as a percent of revenue to be
approximately 9 to 10 percent; capital
expenditures of $230 million to $250
million are expected, including
approximately $50 million to support
manufacturing
optimization
(compared to its previous expectation
of $250 million to $270 million).
AMERICAN MOTORCYCLE DEALER - NOVEMBER 2018
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