A sad farewell to Buell and MV Agusta

[wacko]

Not sure if this is the correct place but here

goes..

 

Retail Harley-Davidson Motorcycle Sales Decline Moderates from 2nd Quarter

Operating Loss at Finance Unit Impacts Profit

Strategy Focuses on Extending Harley-Davidson Brand, Emphasizes Productivity and Strengthening Core Business

 

Company to Discontinue Buell Product Line, Divest MV Agusta

 

MILWAUKEE, October, 15, 2009 – Harley-Davidson, Inc. (NYSE:HOG) announced decreased revenue, net income and earnings per share for the third quarter of 2009 compared to the year-ago period, while reporting a moderation in the decline of retail new Harley-Davidson motorcycle sales compared to the second quarter.

 

Worldwide retail sales of new Harley-Davidson® motorcycles declined 21.3 percent in the third quarter compared to last year’s third quarter, an improvement from the 30.1 percent decline in this year’s second quarter. An 84.1 percent decline in net income and an 84.5 percent decline in diluted earnings per share from the year-ago quarter reflected lower motorcycle shipments and the effects of the economy on retail and wholesale loan performance at Harley-Davidson Financial Services.

 

Harley-Davidson also unveiled major elements of its go-forward business strategy to drive growth through a single-minded focus of efforts and resources on the unique strengths of the Harley-Davidson brand, and to enhance productivity and profitability through continuous improvement. As approved yesterday by Harley-Davidson’s Board of Directors, the Company will discontinue its Buell product line and divest its MV Agusta unit as part of this strategy.

 

“While the environment remains challenging for us, we are mildly encouraged by the moderation in the decline of dealer retail Harley-Davidson motorcycle sales,” said Keith Wandell, Chief Executive Officer of Harley-Davidson, Inc. “And moving forward, our strategy is designed to strengthen Harley-Davidson for long-term growth and deliver results through increased focus.

 

“As our announcement regarding Buell and MV Agusta indicates, we are moving with the speed and decisiveness required to bring our business strategy to life,” said Wandell. “The fact is we must focus both our effort and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to sustained, meaningful, long-term growth.”

 

Third Quarter and Nine-Month Results

 

Net income for the third quarter was $26.5 million, compared to $166.5 million in the third quarter of 2008, on revenue of $1.12 billion, compared to $1.42 billion in the year-ago period. Diluted earnings per share were $0.11 for the third quarter of 2009 and $0.71 in the year-ago period.

 

Through nine months, Harley-Davidson, Inc. reported net income of $163.6 million, down 71.6 percent and diluted earnings per share of $0.70, down 71.4 percent from the year-ago period. Revenue through nine months was $3.57 billion, down 17.1 percent from the same period last year.

[wacko]

“Delivering Results Through Focus” Strategy

 

A key element of the Company’s go-forward strategy is to focus on extending the Harley-Davidson brand by leveraging unique Harley-Davidson strengths. The strategy focuses company resources on Harley-Davidson products and experiences, global expansion, demographic outreach and commitment to core customers. In addition, the Company will continue to expand its initiatives to enhance profitability through continuous improvement in manufacturing, product development and business operations.

 

“We are refocusing our business with the expectation that we can provide growth that is both profitable and sustainable over the long term,” said Wandell. “We believe we can create a bright long-term future for our stakeholders through a single-minded focus on the Harley-Davidson brand.”

 

The Company said it would share additional details about the strategy during its investor conference call today.

 

Details of Buell and MV Agusta Actions

 

The Company will discontinue production of Buell motorcycles. Remaining inventories of Buell motorcycles, accessories and apparel, while they last, will continue to be sold through authorized dealerships. Warranty coverage will continue as normal for Buell motorcycles and the Company will provide replacement parts and service through dealerships.

 

The decision will result in a reduction over time of about 80 hourly production positions and about 100 salaried positions at Buell. Employment will end for a majority of Buell employees Dec. 18, 2009.

 

Harley-Davidson, Inc. expects to incur approximately $125 million in one-time costs related to the discontinuation of the Buell product line. The Company expects to incur approximately $115 million of that amount this year.

 

Relative to MV Agusta, the Company will immediately commence efforts to sell the business, which is based in Varese, Italy.

 

In the third quarter, Harley-Davidson, Inc. recorded a one-time fixed-asset impairment charge of $14.2 million related to Buell and a goodwill impairment charge of $18.9 million related to MV Agusta.

 

“Buell and MV Agusta are great companies, with proud brands, high-quality exciting products and passionate enthusiasm for the motorcycle business. Buell has introduced many innovative advancements in motorcycle design and technology over the years and MV Agusta is known in Europe for its premium, high-performance sport motorcycles. However, our strategy to focus on the Harley-Davidson brand reflects the fact that we believe our investments in that brand are a better utilization of overall company resources,” said Wandell.

[wacko]

Motorcycles and Related Products Segment

 

Third Quarter. Revenue from Harley-Davidson motorcycles during the third quarter of 2009 was $803.3 million, down 22.1 percent compared to the year-ago period. The Company shipped 54,236 Harley-Davidson motorcycles to dealers and distributors worldwide, down 27.4 percent from the third quarter of 2008 but in line with previous guidance of 52,000 to 57,000 units. Revenue from Parts and Accessories totaled $221.8 million during the quarter, down 14.4 percent and revenue from General Merchandise was $70.7 million during the quarter, down 15.9 percent compared to the year-ago period. Gross margin was 33.1 percent of revenue for the quarter compared to 34.0 percent in the year-ago quarter. Operating margin was 9.5 percent compared to 16.4 percent in the third quarter of 2008. Operating margin was affected largely by lower gross margin, restructuring charges and impairment charges.

 

Nine Months. Through nine months, revenue from Harley-Davidson motorcycles was $2.62 billion compared to $3.23 billion in 2008 on shipments of 187,085 Harley-Davidson motorcycles, compared to 226,898 motorcycles in 2008. Revenue from Parts and Accessories totaled $623.1 million during the first nine months, down 11.8 percent and revenue from General Merchandise was $215.5 million during the nine-month period, down 12.0 percent compared to the year-ago period. Gross margin was 34.6 percent and operating margin was 14.1 percent, compared to 35.4 percent and 18.9 percent respectively in the year-ago period.

 

Retail Motorcycle Sales. During the third quarter, retail sales of Harley-Davidson motorcycles decreased 21.3 percent worldwide, 24.3 percent in the U.S. and 13.1 percent in international markets, compared to the prior-year quarter. Industry-wide U.S. retail heavyweight (651cc+) motorcycle sales declined 35.9 percent during the quarter, compared to the year-ago period.

 

For 2009 compared to 2008 through nine months, retail sales of Harley-Davidson motorcycles decreased 22.9 percent worldwide, 25.5 percent in the U.S. and 16.5 percent in international markets. Industry-wide U.S. retail heavyweight motorcycle sales declined 38.7 percent year to date in 2009, compared to 2008.

[wacko]

Company Background

 

Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell), MV Agusta and Harley-Davidson Financial Services (HDFS). Harley-Davidson Motor Company produces heavyweight custom, touring and cruiser motorcycles. Buell produces American sport performance motorcycles. MV Agusta produces premium, high-performance sport motorcycles sold under the MV Agusta® brand and lightweight sport motorcycles sold under the Cagiva® brand. HDFS provides wholesale and retail financing and insurance programs primarily to Harley-Davidson and Buell dealers and customers.

[wacko]

BUELL OFFICIALS THANK CUSTOMERS, DEALERS AND EMPLOYEES FOR UNFORGETTABLE RIDE

 

EAST TROY, Wis. (Oct. 15, 2009) – Buell Motorcycle Company officials thanked the company’s customers, employees and dealers for an unforgettable ride, following today’s announcement by Harley-Davidson, Inc. that it will discontinue the Buell® product line as part of Harley-Davidson’s go-forward business strategy. The new long-term strategy aims to drive Company growth through a focus of efforts and resources on the Harley-Davidson® brand.

 

“I want to personally thank all our past and present Buell employees, dealers and suppliers for their efforts. I also want to thank Buell motorcycle owners for their support and passion for the brand,” said Buell Motorcycle Company President Jon Flickinger.

 

Flickinger said a limited number of new Buell motorcycles remain available for sale through authorized dealerships and production will wind down by October 30. He also stressed that Harley-Davidson will provide replacement parts and service through dealerships and that warranty coverage will continue as normal for Buell motorcycles.

 

“I will always be proud of what we have accomplished. It is a testimony to what a small group of passionate and inspired people can do, and with brilliant innovations, we’ve produced some of the best-handling bikes of all time,” said Buell Chairman and Chief Technical Officer Erik Buell. “I personally look forward to exploring how I can continue to work with Harley-Davidson to bring advanced product technology to riders.

 

“I have also had the great fortune to meet and get to know many Buell riders over the years, and they are an amazing and interesting group of free thinkers,” Buell said. “May you ride with pride into the future. And may your roads ahead be as adventuresome and rewarding as mine have been for the last 26 years.”

 

A wholly owned subsidiary of Harley-Davidson, Inc. since 1998, Buell Motorcycle Company was founded in 1983 by Erik Buell and produced more than 135,000 motorcycles. Over the past 26 years, Buell motorcycles won numerous design accolades and awards, and countless races and championships around the world, including the AMA Pro Daytona SportBike championship in 2009.

[wacko]

Harley-Davidson Unveils New Single-Brand Strategy, Announcing Plans to Divest MV Agusta

 

VARESE, Italy, Oct. 15 /PRNewswire/ -- Harley-Davidson, Inc. (NYSE:HOG) today announced its third quarter financial results and unveiled key elements of its go-forward business strategy to drive growth through a single-minded focus on the unique strengths of the Harley-Davidson® brand. As part of this strategy, the Company will divest its MV Agusta unit and also discontinue the Buell® product line.

 

 

"Our objective in acquiring MV Agusta last year was primarily to expand our presence in Europe, and was a recognition of MV Agusta's proud legacy. While growth in Europe and other global markets remains highly important to us, we believe that focusing our efforts on the Harley-Davidson brand is the optimal path to sustainable growth," said Matt Levatich, President and Chief Operating Officer of Harley-Davidson Motor Company.

 

 

"This decision was not made lightly. MV Agusta is a great company with a proud heritage and brand, high-quality exciting products, and a passionate team with whom we have achieved a great deal over the past 14 months," Mr. Levatich added.

 

 

Harley-Davidson acquired the privately held Italian motorcycle maker MV Agusta in August 2008 and key achievements since then have included the reinstating of production at the Company's Varese factory and the re-starting of product development - leading to the recent unveiling of the re-engineered Brutale to great accolades from dealers and customers alike.

 

 

"With a streamlined business and such an exciting product pipeline we sincerely believe that MV Agusta is well positioned for the future," said Mr. Levatich.

 

 

Harley-Davidson will now begin actively looking for a buyer for MV Agusta to continue along the development of the brand as an outstanding manufacturer of premium, Italian performance motorcycles.

 

 

Link to Harley-Davidson, Inc. third-quarter earnings announcement, including information related to

 

 

MV Agusta: http://www.harley-davidson.com

 

 

Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell), MV Agusta and Harley-Davidson Financial Services (HDFS). Harley-Davidson Motor Company produces heavyweight custom, touring and cruiser motorcycles. Buell produces American sport performance motorcycles. MV Agusta produces premium, high-performance sport motorcycles sold under the MV Agusta® brand and lightweight sport motorcycles sold under the Cagiva® brand. HDFS provides wholesale and retail financing and insurance programs primarily to Harley-Davidson and Buell dealers and customers.

 

 

Forward-Looking Statements

 

 

Harley-Davidson, Inc. intends that certain matters discussed in this release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes," "anticipates," "expects," "plans," or "estimates" or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets, guidance or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

[wacko]

what a long post..

sad to see these legends go..

MV sure produce nice bikes...

[piggyback1974]

see how many bikes they can sell in a period compare to the japanese bikes.making a bike that much expensive is way out of reach for the masses.how to have business marketing?

[CoolieND]

MV Agusta is not being shut down, at least, that's not the plan. HD's looking to sell the business/marquee. Never really seemed like a good fit for MV to be owned by HD anyway.

[Constipated Face]

HD sells a lifestyle, but MV sells bikes. Bad fit.

[GuiNNeSS]

Whilst the HD company may have moved forward a bit in terms of using relatively superior parts and systems from foreign companies; generally the majority of yanky bikers have not accepted that motorcycle technology has moved ahead since the 1960's and still feel it is worth spending $40000 on 650lbs of low performance scrap iron just to be able to hide their dull executive lives behind a ton of image merchandise.

 

Now the company is feeling the pinch because these very executives are losing their jobs and not spending as much. Just see the number of Hardly Driveablesons being put up for sale in ebay and even our own forum.

 

MV on the other hand has produced some of the most emotive motorcycle models in history. Think back to the the first time you saw the F4, more recently the Tamburini (.sp). Road bikes of note include the MV Brutale, from which inspired many lookalikes like the current GSR. It is a shame MV has been passed along so many hands.