HarleyDavidson Inc. Reports Operating Results (10-Q)
Harleydavidson Inc. has a market cap of $7.37 billion; its shares were traded at around $31.52 with a P/E ratio of 61.8 and P/S ratio of 1.7. The dividend yield of Harleydavidson Inc. stocks is 1.3%. Harleydavidson Inc. had an annual average earning growth of 3.5% over the past 10 years.HOG is in the portfolios of Bill Nygren of Oak Mark Fund, Chris Davis of Davis Selected Advisers, Sarah Ketterer of CAUSEWAY CAPITAL MANAGEMENT LLC, Brian Rogers of T Rowe Price Equity Income Fund, Mark Hillman of Hillman Capital Management, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, John Buckingham of Al Frank Asset Management, Inc., David Dreman of Dreman Value Management, Jeremy Grantham of GMO LLC, Kenneth Fisher of Fisher Asset Management, LLC, Charles Brandes of Brandes Investment.
Highlight of Business Operations: During the first quarter of 2010, the Company incurred $48.2 million in restructuring and impairment expense related to these activities. This is in addition to $224.3 million in restructuring and impairment expense incurred in 2009. The Company expects total costs for these restructuring activities to result in one-time restructuring and impairment expenses of $430 million to $460 million from 2009 through 2012 of which approximately 30% are expected to be non-cash. In 2010, the Company expects to incur restructuring expenses of $175 million to $195 million. The Company anticipates annual ongoing total savings from restructuring of approximately $240 million to $260 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 spending, as follows:
The Companys efforts to sell MV are progressing and the Company is currently in discussions with potential buyers. During the first quarter of 2010, the Company incurred a $35.4 million loss from discontinued operations, which was comprised of operating losses and a fair value adjustment of $28.6 million, net of taxes.
On April 20, 2010, the Company reiterated that it expects gross margin to be between 32.0% and 33.5% for the full year of 2010. In addition, on April 20, 2010, the Company confirmed its expected capital expenditures for 2010 of approximately $235 million to $255 million including approximately $95 million to $110 million for capital expenditures made in connection with its restructuring activities in 2010. The Company anticipates it will have the ability to fund all capital expenditures in 2010 with internally generated funds.
Interest expense for the first quarter of 2010 includes $22.5 million related to those senior unsecured notes, compared to $8.0 million in the first quarter of 2009. Prior to the end of the first quarter of 2009, the Company transferred the full proceeds from the issuance of the notes to HDFS in order to fund HDFS operations. As HDFS diversified its debt structure through a combination of actions during 2009, its funding profile improved. During the fourth quarter of 2009, HDFS transferred the full proceeds back to the Company. As a result, interest expense for 2009 includes interest on the notes only during the periods when the full proceeds were held at HDMC. Interest expense for the periods during which the proceeds were held by HDFS is included in financial services interest expense.
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