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HARLEY-DAVIDSON REPORTS RECORD FOURTH QUARTERAND 17th CONSECUTIVE RECORD YEAR– Milwaukee, Wis., January 21, 2003 — Harley-Davidson, Inc. (NYSE: HDI) today announced record revenue and earnings for its fourth quarter and year ended December 31, 2002. Revenue for the quarter was $1.03 billion compared with $905.9 million in the year-ago quarter, a 13.3 percent increase. Net income for the quarter was $150.9 million, an increase of 27.5 percent over the year ago quarter. Fourth quarter diluted earnings per share (EPS) were 49 cents, a 25.6 percent increase compared with last year’s 39 cents. Revenue for the full year was $4.1 billion, compared with $3.4 billion in 2001, a 20.1 percent increase. Net income for the year was $580.2 million, a 32.5 percent increase versus last year’s $437.7 million, while diluted EPS for the full year were $1.90, a 32.9 percent increase compared with $1.43 in 2001.
“The year 2002 was our 17th consecutive year of record revenue and net income,” said Jeffrey L. Bleustein, chairman and chief executive officer of Harley-Davidson, Inc. “Worldwide retail sales of Harley-Davidson? motorcycles were strong in 2002 with 15.9 percent unit growth over the prior year. Strong demand for our products gives us confidence in maintaining our production goal of 289,000 Harley-Davidson motorcycles for 2003.”
“We believe that the excitement surrounding our 100th Anniversary celebration combined with the strength of the underlying fundamentals of our motorcycle business are helping us continue to grow – even in the face of a weak global economy. We are fulfilling the dreams of many new customers as we welcome them into the Harley-Davidson family,” said Bleustein.
Motorcycles and Related Products Segment – Fourth Quarter Results
Revenue from Harley-Davidson motorcycles was $820.3 million, an increase of $86.1 million or 11.7 percent over the same period last year. Fourth quarter shipments of Harley-Davidson motorcycles totaled 65,970 units. The Company had four fewer workdays in the fourth quarter of 2002 compared with 2001, yet shipped 2,435 more units, or 3.8 percent more than the same period last year.
Revenue from Parts and Accessories (P&A), which consists of Genuine Motor Parts and Genuine Motor Accessories, totaled $129.9 million, an increase of $18.5 million, or 16.6 percent over the year-ago quarter. Revenue from General Merchandise, which consists of MotorClothes? apparel and collectibles, totaled $54.8 million, an increase of $7.3 million or 15.4 percent. Revenue from 100th Anniversary P&A products was $12.7 million and revenue from General Merchandise associated with the 100th Anniversary was $12.5 million. “We are very pleased with sales of our 100th Anniversary products, but we realize that not all of these were incremental because some substitution from standard offerings to commemorative anniversary products did occur,” said Bleustein.
Fourth quarter gross margin was 36.1 percent of revenue, up from 34.5 percent last year. Gross margin improved primarily due to wholesale motorcycle price increases, favorable product mix and foreign exchange effects.
Fourth quarter operating margin for the Motorcycles and Related Products Segment was 20.7 percent of revenue, which was better than last year’s fourth quarter operating margin of 18.6 percent. The increase in operating margin was driven primarily by the increase in gross margin.
Retail Sales Data
Harley-Davidson retail motorcycle sales for the year grew in the U.S. (18.3 percent), Europe (7.6 percent) and Japan (5.9 percent) compared to the same period last year.
Financial Services Segment – Fourth Quarter Results
Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of Harley-Davidson, Inc., reported fourth quarter operating income of $25.4 million, up $8.4 million or 49 percent compared to the year-ago quarter.
The subsidiary benefited from the increase in Harley-Davidson’s U.S. motorcycle sales, growing acceptance of its consumer financing program and decreased cost of funds due to lower market interest rates.
Twelve Month Results
For the fiscal year ended 2002, total Harley-Davidson motorcycle shipments were 263,653 units compared with 234,461 units in 2001, a 12.5 percent increase. Harley-Davidson motorcycle revenue was $3.16 billion, an increase of $489.7 million or 18.3 percent.
P&A revenue totaled $629.2 million, a 23.5 percent increase, while General Merchandise revenue totaled $231.5 million, a 41.2 percent increase compared with 2001.
On a longer-term basis, the Company expects the growth rate for P&A revenues to be slightly higher than the Harley-Davidson motorcycle unit growth rate. The General Merchandise growth rate is expected to be lower than the motorcycle unit growth rate over the long term.
Full year operating income for HDFS was $104.2 million, an increase of $43.0 million or 70.1 percent compared to 2001. The Company expects 2003 HDFS operating income to grow approximately 20 percent over 2002 performance.
CYRIL HUZE SPIKELIGHTS–What says more chopper than a spike shape? The style will take you back, but the 2-function filament bulb or strong L.E.D. these lights are housing is hardly yesterday’s news. These lights will turn heads well before you make turns.
Three designs: Mini, Hardcore or Visor style. Spikelight Mini (3″ x 1 1/4″) is offered with a 2-function bulb. Spikelight Hardcore (3 1/2″ x 1 1/2″) and Spikelight Visor (4 1/4″ x 1 1/2″) are offered with a 2-function bulb or a strong 2-functon L.E.D. with standard red or amber lens. All lights are high gloss polishing billet aluminum. Optional lens colors in blue or clear. Wiring included.
Cyril Huze FastDates.com Calendar AngelJoanna Krupa on Star Search Tonight–“Hi Everyone! I’ll will be on Star Search tonight Thursday 23rd!Please watch and let me know what you think! You can vote The show airs at 7pm Central, and 8pm East and West Coast on CBS. “ Love, Joanna Krupa is one of the beautiful new FastDates.com calendar Angels, together with Chandi Mason and Janelle Perzina (Miss Minnesota) who just finished shooting and will be featured in all the upcoming new 2004 FastDates.com Calendars premiering July 1st. The complete story and pictures of Joanna, Chandi and Janelle now online at the world’s premier Pinup and Motorsports calendar website STELLA AWARD–Mr. Truman apparently didn’t notice there was someone at the wheel of the car when he was trying to steal his neighbor’s hub caps. BIKERNET BABE ESCAPES TO OREGON–She’s wanted at the headquarters for a number of infractions including taking a major source of sex away from the gang, starving the staff due to a lack of killer sandwiches and soups and forcing the staff to quit drinking by taking all the booze with her. If she is spotted, snatch her, duck tape her securely, throw her in a motorcycle crate and ship her UPS over-night to the headquarters. Make sure she has a case of Jack in her possession or forget it. BIKERNET DOCTOR’S VISIT–An 86 year old man walked into a crowded doctor’s office. As he approached thedesk, the receptionist said, “Yes sir, what are you seeing the doctor fortoday?” “There’s something wrong with my penis,” he replied. The receptionist became irritated and said, “You shouldn’t come into a crowdedoffice and say things like that.” “Why not? You asked me what was wrong and I told you,” he said. The receptionist replied, “You’ve obviously caused some embarrassment in thisroom full of people. You should have said there is something wrong with yourear or something and then discussed the problem further with the doctor inprivate.” The man walked out, waited several minutes and then re-entered.The receptionist smiled smugly and asked, “Yes?” “There’s something wrong with my ear,” he stated.The receptionist nodded approvingly and smiled, knowing he had taken heradvice. “And what is wrong with your ear, sir?” “I can’t piss out of it,” the man replied.The doctor’s office erupted in laughter. –from CARLR STURGIS RIP-OFF–Well I just received the rally rental agreement for the hotel in Spearfish that I’ve stayed at for the last few years. Watch out for the biggest rip of the rally. Rates are going through the roof and frankly I for one am tired of being taken advantage of financially. The letter also mentioned that this is the 100th Anniversary of Harley Classic, (go figure, Harley Davidson doesn’t put on the Sturgis Rally, they do their event in Milwaukee 3 weeks later). The rate at the Travelodge (old Best Western) seems to think that raising their price from $140.00 a night for a double room (during the rally) to $270.00 a night is acceptable! A single room will now be $250.00 a night. In the past they had no minimum night stay (we stayed 5), now it is mandatory 7 nights regardless. Keeping in mind these motels usually charge $30 to $40 at any other time. What’s next $50 a night to camp? In my opinion, there are a lot of other places to ride to with nice roads, that aren’t congested and accident free, and not price gouging. I normally don’t get on a soap box about this stuff, but it’s high time we all reevaluate what these folks in Sturgis are charging bikers to come and visit their area. I for one, for the first time in 17 years am going to boycott the rally this year. –Patty I’M INNOCENT–I swear, Jose is the quilty one. The Blonde and I have got along splendidly. Next week is the Cincy dealer show and I’ve been invited to write an article for American Rider on what’s new. I’ll bring home reports. The new dual-carbed Panhead report should be up three days ago. Something about our webmaster who is waiting for an exhaust system. He’s holding out. I’ve got a new Victory Vegas in the garage, http://www.victory-usa.com/victory.asp. Helluva nice ride and comfortable. It’s packs 92 inches of power that is still pulling above 90 mph. I’m impressed. I’ve got a deadline looming for Horse, the 26th chapter of Chance and a story from the past. Seems everyone I speak to is overwhelmed with projects. I say we have a Jack and relax. The Superbowl will rock on Sunday. In the meantime ride hard. –Bandit
Tel: 561-392-5557
Joanna
