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HarleyDavidson Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 4, 2011 04:26PM
HarleyDavidson Inc. (HOG) filed Quarterly Report for the period ended 2011-03-27.
Highlight of Business Operations:
The Companys 2011 first quarter income from continuing operations was $119.3 million, or $0.51 per share, compared to income from continuing operations of $68.7 million, or $0.29 per share in the first quarter of 2010. Worldwide retail sales of new Harley-Davidson motorcycles grew 3.5% in the first quarter of 2011, compared to last years first quarter, led by strength in Europe. In the U.S., retail sales decreased 0.5% due to macroeconomic conditions and price competition from competitor discounting and strong values on used Harley-Davidson motorcycles.
Also on April 19, 2011, the Company announced that it now expects 2011 gross margin to be between 33.5% and 35.0%, versus previous guidance of 34.0% to 35.0%, as a direct result of the anticipated supply chain interruption. The Company continues to expect full-year capital expenditures of between $210 million and $230 million, including $60 million to $75 million to support restructuring activities. The Company anticipates it will have the ability to fund all capital expenditures in 2011 with cash flows generated by operations. The Company reiterated on April 19, 2011 that it expects the full year 2011 effective income tax rate to be approximately 35% for continuing operations.
During the three months ended March 27, 2011, the Company incurred $23.0 million in restructuring expense related to its combined restructuring plan activities. This is in addition to $387.8 million in restructuring and impairment expense incurred since its restructuring activities were initiated in 2009. The Company expects total costs for 2011, 2010 and 2009 restructuring plan activities to result in one-time restructuring and impairment expenses of $510 million to $525 million from 2009 through 2012 of which approximately 30% are expected to be non-cash. In 2011, the Company expects to incur restructuring expenses of $95 million to $105 million. The Company anticipates annual ongoing total savings from restructuring of approximately $305 million to $325 million upon completion of all announced restructuring activities. In the near-term, the Company has realized or estimates that it will realize savings from these restructuring activities, measured against 2008, as follows:
Interest expense for the first quarter of 2011 includes $11.4 million related to the Companys senior unsecured notes, compared to $22.5 million in the first quarter of 2010. The decrease in interest expense on the senior unsecured notes is due to the Companys repurchase of $297.0 million of the $600.0 million senior unsecured notes during the fourth quarter of 2010.
Stocks Discussed: HOG,