Issue link: https://read.dmtmag.com/i/787665
26 nMarch 2017n www.thunderpress.net THUNDER PRESS HARLEY-DAVIDSON REPORTS FOURTH QUARTER, FULL-YEAR 2016 RESULTS International sales rise while U.S. drops Market share grows both at home and abroad MILWAUKEE, JAN. 31—Harley- Davidson, Inc. (NYSE:HOG) fourth quarter 2016 diluted EPS increased 22.7 percent to $0.27 compared to $0.22 in the same period of 2015. In the fourth quarter of 2016, net income was $47.2 million on consolidated revenue of $1.11 billion versus net income of $42.2 million on consoli- dated revenue of $1.18 billion in the year-ago period. Full-year 2016 diluted EPS increased 3.8 percent to $3.83 compared to diluted EPS of $3.69 in 2015. Full-year net income was $692.2 million on consolidated revenue of $6.0 billion versus net income of $752.2 million on consolidated reve- nue of $6.0 billion a year ago. "The global competitive environ- ment remains intense, but our 2016 results demonstrate that our increased investments to drive demand and bring impactful new products to mar- ket are working," said Matt Levatich, president and chief executive offi - cer, Harley-Davidson, Inc. "We are energized by our resolve to compete and win in the U.S. and in major international markets. Our market share performance gives us great confi dence in the strength of our long-term strategy." For the full-year 2016, world- wide Harley-Davidson retail motor- cycle sales were down 1.6 percent compared to 2015. U.S. retail sales decreased 3.9 percent, partially offset by international growth of 2.3 percent. During 2016, the company reported its best-ever retail sales results in Asia Pacifi c and EMEA. In the 601+cc motorcycle market, the company grew its number one market share position in the U.S. and grew market share in Europe. The company added 40 new dealer points interna- tionally and reported that U.S. dealers trained more than 65,000 new riders through the Harley-Davidson Riding Academy. The company also launched its model year 2017 lineup of motor- cycles, featuring the new, highly-ac- claimed Milwaukee-Eight engine, and upgraded suspension, on all new Touring motorcycles. "Our long-term strategy is all about growing ridership in the U.S., growing reach and impact interna- tionally, and growing share and profi t in every market we serve," stated Levatich. "Our goal over the next 10 years is to build the next generation of Harley-Davidson riders worldwide." Income Tax Rate For 2016, Harley-Davidson's effective tax rate was 32.4 percent compared to 34.6 percent the prior year. The lower effective tax rate is attributed to the successful closure of various tax audits in 2016. Other Results Cash and marketable securities amounted to $765.5 million at the end of 2016, compared to $767.4 million at the end of 2015. Harley- Davidson generated $1.17 billion of cash from operating activities in 2016 compared to $1.10 billion in 2015. On a discretionary basis, the company repurchased 1.7 million shares of its common stock during the fourth quar- ter of 2016 at a cost of $91.0 million. In 2016, Harley-Davidson repur- chased 9.7 million shares of its com- mon stock at a cost of $459.1 million. In the fourth quarter of 2016, there were 177.6 million weighted-average diluted common shares outstanding. At the end of 2016, 19.3 million shares remained on a board-approved share repurchase authorization. Guidance For 2017, Harley-Davidson antic- ipates full-year motorcycle shipments to be fl at to down modestly in com- parison to 2016. In the fi rst quarter of 2017, Harley-Davidson expects to ship approximately 66,000 to 71,000 motorcycles. Harley-Davidson expects full- year 2017 operating and gross mar- gin as a percent of revenue to be approximately in line with 2016 and its full-year effective tax rate to be approximately 34.5 percent. The company anticipates 2017 capital expenditures of $200 million to $220 million. —Press release %% 04$.55 04$.22 .%/: /4/$436 /46$02. &1%7: /$035 /$033 .%0: /.$0.1 7$447 3%3: 0$415 1$.60 &/2%2: 7$5./ //$/51 &/1%0: 5$67/ 5$467 0%4: 23$616 21$065 3%7: 6$526 6$565 &.%2: 10$667 10$036 0%.: 0.$311 0.$6/1 &/%1: 76$41/ 74$165 0%1: " 24$4/. 24$635 &.%3: 04.$067 042$405 &/%4: #'( 20$2/2 26$/27 &//%7: 040$00/ 044$160 &/%4: ! # +463$.25 +53/$161 &6%6: +2$/00$//1 +2$/05$517 &.%/: ) +/47$223 +/47$5.5 &.%0: +620$415 +640$423 &0%1: +50$7/7 +57$134 &6%/: +062$361 +070$1/. &0%4: 1.%5: 1/%7: &/%0 13%/: 14%6: &/%5 +7$05/ +4$146 23%4: +551$2.4 +653$27. &//%5: /%.: .%4: .%2 /2%5: /4%3: &/%6 ! +/55$355 +/51$343 0%1: +503$.60 +464$436 3%4: +4.$/17 +4.$635 &/%0: +053$31. +06.$0.3 &/%5: In the fourth quarter, worldwide retail sales of new Harley-Davidson motor- cycles declined 0.5 percent versus the prior year behind modest declines in some international markets partially offset by slight growth in the U.S. Harley-Davidson Retail Motorcycle Sales Motorcycles and Related Products Segment Results Financial Services Segment Results Financial services operating income fell 1.2 percent in the fourth quarter com- pared to the year ago period. Fourth quarter revenue from motorcycles and related products was down versus the prior year behind fewer motorcycle shipments. Operating margin as a percent of revenue increased in the quarter compared to the same period in 2015, resulting from lower SG&A.