UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________________ to ______________
Commission File Number 1-9183
Harley-Davidson, Inc.
(Exact name of registrant as specified in its Charter)
Wisconsin 39-1382325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3700 West Juneau Avenue, Milwaukee, Wisconsin 53208
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (414) 342-4680
None
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock Outstanding as of August 2, 1996 75,551,273 Shares
<PAGE>
HARLEY-DAVIDSON, INC.
Form 10-Q Index
For the Quarter Ended June 30, 1996
Page
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Income 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-13
Part II. Other Information
Item 1. Legal Proceedings 14
Item 4. Submission of Items to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit Index 16
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Harley-Davidson, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three months ended Six months ended
June 30, June 25, June 30, June 25,
1996 1995 1996 1995
Sales $392,804 $355,631 $763,855 $650,517
Cost of goods sold 267,943 245,890 523,217 450,385
-------- ------- ------- -------
Gross profit 124,861 109,741 240,638 200,132
Operating income from
financial services 1,990 1,001 3,722 1,652
Selling, administrative and
engineering expenses (63,742) (57,339) (127,226) (109,124)
-------- -------- -------- --------
Income from operations 63,109 53,403 117,134 92,660
Interest income (expense) -
net 835 (281) 430 58
Other income (expense) - net (532) (868) (1,781) (2,831)
-------- -------- -------- --------
Income from continuing
operations before provision
for income taxes 63,412 52,254 115,783 89,887
Provision for income taxes 23,464 19,061 42,841 32,879
-------- -------- -------- --------
Income from continuing
operations 39,948 33,193 72,942 57,008
Gain from discontinued
operations, net of tax - 189 - 4
------- ------- ------- -------
Net income $ 39,948 $ 33,382 $ 72,942 $ 57,012
======= ======= ======= =======
Weighted average common
shares outstanding 75,475 74,751 75,294 75,379
====== ====== ====== ======
Net income per common share:
Income from continuing
operations $0.53 $0.45 $0.97 $0.76
Gain from discontinued
operations, net of tax - - - -
----- ----- ----- -----
Net income $0.53 $0.45 $0.97 $0.76
===== ===== ===== =====
Cash dividends per share $0.05 $0.04 $0.10 $0.08
===== ===== ===== =====
<PAGE>
Harley-Davidson, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
ASSETS
June 30, Dec. 31, June 25,
1996 1995 1995
(Unaudited) (Unaudited)
Current assets:
Cash and cash equivalents $ 96,273 $ 31,462 $ 64,595
Accounts receivable, net 159,256 134,210 161,390
Inventories (Note 2) 80,316 84,427 83,485
Notes receivable 10,689 - -
Other current assets 29,715 30,591 24,393
Net assets from discontinued
operations 15,752 56,548 36,481
------- ------- -------
Total current assets 392,001 337,238 370,344
Finance receivables, net 251,542 213,444 -
Property, plant and equipment,
net 308,186 284,775 229,325
Goodwill 42,029 43,256 -
Other assets 84,512 66,949 68,865
Net assets from discontinued
operations 26,105 55,008 56,044
--------- --------- --------
$1,104,375 $1,000,670 $724,578
========= ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 1,006 $ 2,327 $ 7,892
Current maturities of
long-term debt 191 364 225
Accounts payable 96,565 102,563 63,247
Accrued expenses and other 137,988 127,956 110,187
------- ------- -------
Total current liabilities 235,750 233,210 181,551
Finance debt 180,089 164,330 -
Postretirement health care
benefits 64,514 63,570 61,960
Other long-term liabilities 51,006 44,991 33,670
Contingencies (Note 5)
Total shareholders' equity 573,016 494,569 447,397
--------- --------- -------
$1,104,375 $1,000,670 $724,578
========= ========= =======
<PAGE>
Harley-Davidson, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six months ended
June 30, June 25,
1996 1995
Cash flows from operating activities:
Net income $ 72,942 $57,012
Depreciation and amortization 25,668 19,237
Long-term employee benefits 2,168 2,768
Other-net 3,145 (9)
Net change in discontinued operations 11,103 17,077
Net change in other current assets
and current liabilities (23,735) (20,185)
------- -------
Net cash provided by operating activities 91,291 75,900
Cash flows from investing activities:
Purchase of property and equipment (47,542) (34,470)
Finance receivables acquired or
originated (548,530) -
Finance receivables collected/sold 517,590 -
Proceeds from disposition of
discontinued segment 24,661 -
Net change in discontinued operations (1,207) (4,498)
Other - net (13,956) 1,979
------- --------
Net cash used in investing activities (68,984) (36,989)
Cash flows from financing activities:
Reduction of long-term debt (173) (233)
Net increase (decrease) in notes
payable (1,321) 6,806
Net increase in finance debt 15,759 -
Dividends paid (7,806) (6,068)
Stock repurchases - (39,972)
Issuance of stock under employee
stock and option plans 14,592 1,485
Net change in discontinued operations 21,453 5,782
-------- -------
Net cash provided by (used in)
financing activities 42,504 (32,200)
-------- -------
Net increase in cash and cash equivalents 64,811 6,711
Cash and cash equivalents:
At beginning of period 31,462 57,884
-------- -------
At end of period $ 96,273 $64,595
======== =======
<PAGE>
HARLEY-DAVIDSON, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation and Use of Estimates
The condensed interim consolidated financial statements included herein
have been prepared by Harley-Davidson, Inc. (the "Company") without audit.
Certain information and footnote disclosures normally included in complete
financial statements have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission and generally
accepted accounting principles for interim financial information. However,
the foregoing statements contain all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of Company
management, necessary to present fairly the consolidated financial
position as of June 30, 1996 and June 25, 1995, and the results of
operations for the three- and six-month periods then ended. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1995.
The operations of Holiday Rambler are classified as discontinued
operations. As such, certain prior-year balances have been reclassified
in order to conform to current-year presentation.
On November 14, 1995, the Company acquired substantially all of the common
stock and common stock equivalents of Eaglemark Financial Services, Inc.
(Eaglemark) that it did not already own. The Company has included the
results of operations of Eaglemark in its statement of operations for the
six months ended June 25, 1995 as though it had been acquired at the
beginning of the year and deducted the preacquisition earnings as part of
non-operating expense. Prior to December 31, 1995, the Company accounted
for its investment in Eaglemark using the equity method. The carrying
value of its investment in Eaglemark was approximately $9.8 million and is
included in other assets at June 25, 1995.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Note 2 - Inventories
The Company values its inventories at the lower of cost, principally using
the last-in, first-out (LIFO) method, or market. Inventories consist of
the following (in thousands):
June 30, Dec. 31, June 25,
1996 1995 1995
Components at the lower of cost,
first-in, first-out (FIFO),
or market:
Raw material & work-in-process $ 28,458 $ 32,284 $ 27,696
Finished goods 18,492 19,290 24,497
Parts & accessories 54,195 52,182 50,180
-------- ------- -------
101,145 103,756 102,373
Excess of FIFO over LIFO 20,829 19,329 18,888
-------- ------- -------
Inventories as reflected in
the accompanying condensed
consolidated balance sheets $ 80,316 $ 84,427 $ 83,485
======= ======= =======
Note 3 - Capital Stock
The Company has continuing authorization from its Board of Directors to
repurchase up to 4 million shares of the Company's outstanding common
stock. During the first quarter of 1995, the Company repurchased
1,650,000 shares of its common stock with cash on hand and short-term
borrowings.
Note 4 - Supplemental noncash investing activities
On March 6, 1996, the Company sold substantially all of the assets of its
Holiday Rambler Recreational Vehicles Division to Monaco Coach Corporation
("Monaco"). Total consideration consisted of approximately $23 million in
cash, $3 million in preferred stock of Monaco, a $12 million note from a
Monaco subsidiary guaranteed by Monaco and assumption by Monaco of certain
liabilities of the acquired operations in the approximate amount of $47
million.
Note 5 - Contingencies
The Company is involved with government agencies in various environmental
matters, including a matter involving soil and groundwater contamination
at its York, Pennsylvania facility (the Facility). The Facility was
formerly used by the U.S. Navy and AMF (the predecessor corporation of
Minstar). The Company purchased the Facility from AMF in 1981. Although
the Company is not certain as to the extent of the environmental
contamination at the Facility, it is working with the Pennsylvania
Department of Environmental Resources in undertaking certain investigation
and remediation activities. In March 1995, the Company entered into a
settlement agreement (the Agreement) with the Navy. The Agreement calls
for the Navy and the Company to contribute amounts into a trust equal to
53% and 47%, respectively, of future costs associated with investigation
and remediation activities at the Facility (response costs). The trust
will administer the payment of the future response costs at the Facility
as covered by the Agreement. In addition, in March 1991 the Company
entered into a settlement agreement with Minstar related to certain
indemnification obligations assumed by Minstar in connection with the
Company's purchase of the Facility. Pursuant to this settlement, Minstar
is obligated to reimburse the Company for a portion of its response costs
at the Facility. Although substantial uncertainty exists concerning the
nature and scope of the environmental remediation that will ultimately be
required at the Facility, based on preliminary information currently
available to the Company and taking into account the Company's settlement
agreement with the Navy and the settlement agreement with Minstar, the
Company estimates that it will incur approximately $5 million of net
additional response costs at the Facility. The Company has established
reserves for this amount. The Company's estimate of additional response
costs is based on reports of environmental consultants retained by the
Company, the actual costs incurred to date and the estimated costs to
complete the necessary investigation and remediation activities. Response
costs are expected to be incurred over a period of approximately 10 years.
The reserves established by the Company have not been reduced by potential
insurance recoveries and are not discounted. The Company has put certain
of its insurance carriers on notice that it intends to make claims
relating to the environmental contamination at the Facility. However, the
Company is currently unable to determine the probable amount of recovery
available, if any, under insurance policies.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Three Months Ended June 30, 1996
Compared to the Three Months Ended June 25, 1995
For the quarter ended June 30, 1996, consolidated net sales totaled $392.8
million, a $37.2 million or 10.5% increase over the same period last year.
Net income and earnings per share for 1996 were $39.9 million and $.53 on
75.5 million shares outstanding versus $33.4 million and $.45 on 74.8
million shares outstanding in 1995, increases of 19.7% and 17.8%,
respectively. All 1995 financial data have been restated to reflect the
classification of the Company's Transportation Vehicles segment to that of
a discontinued operation, as announced on January 22, 1996. Certain 1995
balances have also been reclassified to reflect the acquisition of
substantially all of the remainder of Eaglemark Financial Services. All
Harley-Davidson, Inc. sales are generated by the Motorcycles and Related
Products ("Motorcycles") segment.
Motorcycle Unit Shipments and Net Sales
For the Three-Month Periods Ended June 30, 1996 and June 25, 1995
Incr
1996 1995 (Decr) %
Motorcycle units (excluding
Buell) 30,852 28,167 2,685 9.5%
Net sales (in millions):
Motorcycles (excluding
Buell) $305.2 $274.8 $30.4 11.1%
Motorcycle Parts and
Accessories 77.8 75.1 2.7 3.6
Other 9.8 5.7 4.1 71.9
Total Motorcycles and
Related Products $392.8 $355.6 $37.2 10.5%
The Motorcycles segment reported record second quarter net sales primarily
driven by a 9.5% increase in motorcycle unit shipments. The increase in
motorcycle unit shipments over the second quarter of 1995 was due to
higher average daily production rates. During the second quarter of 1996,
motorcycle production averaged 485 units per day versus 430 units per day
in the same period last year. The Company announced that it expects daily
motorcycle production to average approximately 490 units per day for the
third quarter.
Second quarter 1996 revenue from the Company's foreign subsidiaries was
negatively impacted by the strengthening of the U.S. dollar, resulting in
motorcycle and Parts and Accessories revenue decreases totaling
approximately $7.3 million and $1.1 million, respectively, from the year-
ago quarter. The potential negative effect on earnings was largely offset
by the favorable impact of foreign exchange rates on foreign subsidiary
operating expenses and foreign currency hedging programs.
Sales of Buell motorcycles (which are distributed through select Harley-
Davidson dealers) increased to $8.1 million in 1996 as compared to $4.1
million in 1995. (Included in "Other" in the above table.)
Parts and Accessories revenue of $77.8 million was up only $2.7 million or
$3.6% compared to the second quarter of 1995. The combined sales of
Genuine Motor Parts and Genuine Motor Accessories totaled $59.3 million, a
$3.8 million or 6.8% increase compared to last year; however, MotorClothes
clothing and collectibles sales of $18.5 million were down $1.1 million or
5.4%. The Company anticipates that overall Parts and Accessories revenue
growth for 1996 will approximate the growth rate in motorcycle unit
shipments. The Company expects 1996 MotorClothes clothing and
collectibles sales to be down from 1995. Some changes are being
introduced in the third quarter at the annual dealer meeting to spur the
MotorClothes clothing and collectibles business. These include altered
product offerings and price points as well as increased retail promotions.
Gross Profit
Gross profit increased $15.1 million, or 13.8%, compared to the second
quarter of 1995 primarily due to an increase in motorcycle volume. The
gross profit margin was 31.8% in 1996 as compared with 30.9% in 1995. The
increase in the gross profit percentage was due primarily to a shift in
mix from the entry level Sportster models to the higher-margin custom
models and from MotorClothes clothing and collectibles to Genuine Motor
Accessories.
Operating Expenses
For the Three-Month Periods Ended June 30, 1996 and June 25, 1995
(Dollars in Millions)
Incr
1996 1995 (Decr) %
Motorcycles and Related
Products $61.7 $56.0 $5.7 10.2%
Corporate 2.0 1.3 .7 52.4
Total operating
expenses $63.7 $57.3 $6.4 11.1%
Operating expenses increased $6.4 million, or 11.1%, compared to the
second quarter of 1995. The increase was largely related to increased
motorcycle volumes and increases in engineering and advertising and
promotion expenses when compared to the same period last year.
Operating income from financial services
The operating income of the Financial Services (Eaglemark Financial
Services) segment was $2.0 million and $1.0 million in 1996 and 1995,
respectively. This increase was primarily due to increased wholesale and
retail origination volume and corresponding increases in outstanding
wholesale and retail receivables.
Consolidated income taxes
The Company's effective income tax rate for the second quarter of 1996
approximated 37.0% compared to 36.5% during the second quarter of 1995.
Results of Operations for the Six Months Ended June 30, 1996
Compared to the Six Months Ended June 25, 1995
For the six month period ended June 30, 1996, the Company recorded net
sales of $763.9 million, a $113.4 million or 17.4% increase over the same
period last year. Net income and earnings per share were $72.9 million
and $.97 on 75.3 million shares outstanding versus $57.0 million and $.76
on 75.4 million shares, increases of 27.9% and 27.6%, respectively. All
1995 financial data have been restated to reflect the reclassification of
the Company's Transportation Vehicles segment to that of a discontinued
operation. Certain 1995 balances have also been reclassified to reflect
the acquisition of substantially all of the remainder of Eaglemark
Financial Services.
Motorcycle Unit Shipments and Net Sales
For the Six-Month Periods Ended June 30, 1996 and June 25, 1995
Incr
1996 1995 (Decr) %
Motorcycle units
(excluding Buell) 60,923 51,818 9,105 17.6%
Net sales (in millions):
Motorcycles (excluding
Buell) $602.2 $499.6 $102.6 20.5%
Motorcycle Parts and
Accessories 145.9 140.6 5.3 3.8
Other 15.8 10.3 5.5 53.4
Total Motorcycles
and Related Products $763.9 $650.5 $113.4 17.4%
The 17.4% increase in revenue was primarily attributable to additional
motorcycle unit shipments as worldwide demand for the Company's
motorcycles continues to exceed supply. The most recent information
available (through May) indicates a U.S. heavyweight (751cc+) market share
of 54.3% compared to 54.4% for the same period in 1995. European data
(through May) shows the Company with a 9.0% share of the heavyweight
market, down from 10.0% for the same period in 1995.
Sales of Buell motorcycles (which are distributed to select Harley-
Davidson dealers) contributed approximately $5 million of additional
revenues in the first six months of 1996 as compared to the same period in
1995. (Included in "Other" in the above table.)
Overall, net sales of the Parts and Accessories business increased 3.8%
compared to the first six months of 1995. The combination of Genuine
Motor Parts and Genuine Motor Accessories increased $12.6 million or 13.4%
while MotorClothes clothing and collectibles was down $7.3 million or
16.0%.
Gross Profit
Gross profit for the first six months of 1996 totaled $240.6 million, an
increase of $40.5 million (20.2%) over the same period in 1995. The gross
profit percentage was 31.5% in 1996 as compared with 30.8% for the first
six months of 1995. A shift in mix away from the lower-margin Sportster
models to the higher-margin custom models and from MotorClothes clothing
and collectibles to Genuine Motor Parts and Genuine Motor Accessories
contributed to the increase.
Operating Expenses
For the Six-Month Periods Ended June 30, 1996 and June 25, 1995
(Dollars in Millions)
Incr
1996 1995 (Decr) %
Motorcycles and Related
Products $122.7 $105.9 $16.8 15.9%
Corporate 4.5 3.2 1.3 40.9
Total operating expenses $127.2 $109.1 $18.1 16.6%
Operating expenses of $127.2 million for the first six months of 1996
increased $18.1 million (16.6%) compared to the first six months of 1995.
The increase was largely related to increased motorcycle volumes, as well
as increases in warranty, engineering and information systems expenses.
Operating income from financial services
The operating income of the Financial Services segment was $3.7 million
and $1.7 million in 1996 and 1995, respectively. This increase was
primarily due to increased wholesale and retail origination volume and
corresponding increases in outstanding wholesale and retail receivables.
Consolidated income taxes
The Company's effective income tax rate approximated 37.0% in the first
six months of 1996 compared to 36.6% in the same period in 1995.
Environmental
The Company's policy is to comply with all applicable environmental laws
and regulations, and the Company has a compliance program in place to
monitor, and report on, environmental issues. The Company has reached
settlement agreements with its former parent (Minstar, successor to AMF
Incorporated) and the U.S. Navy regarding groundwater remediation at the
Company's manufacturing facility in York, Pennsylvania and currently
estimates that it will incur approximately $5 million of net additional
costs related to the remediation effort. The Company has established
reserves for this amount. See Note 5 of the notes to condensed
consolidated financial statements.
Recurring costs associated with managing hazardous substances and
pollution in on-going operations are not material.
The Company regularly invests in equipment to support and improve its
various manufacturing processes. While the Company considers environmental
matters in capital expenditure decisions, and while some capital
expenditures also act to improve environmental compliance, only a small
portion of the Company's annual capital expenditures relate to equipment
which has the sole purpose of meeting environmental compliance
obligations. The Company anticipates that capital expenditures for
equipment used to limit hazardous substances/pollutants during 1996 will
approximate $1 million. The Company does not expect that these
expenditures related to environmental matters will have a material effect
on future operating results or cash flows.
Liquidity and Capital Resources as of June 30, 1996
The Company generated $91.3 million of cash from operating activities
during the first six months of 1996 compared to $75.9 million in the same
period in 1995. Net income contributed $15.9 million of the increase in
cash from operating activities. The Motorcycles segment's receivable
balances increased 18.7% compared to December 31, 1995 as a result of
motorcycle volume increases, the annual shutdown during the last week of
December and heavy shipments in the last two weeks of June reflecting the
end of the 1996 model year. The results of discontinued operations,
including the sale of the Recreational Vehicles Division, had a positive
impact on total cash flows of approximately $56 million. This was
partially offset by the Financial Services segment's activity which
negatively impacted cash flow by approximately $15 million.
Capital expenditures amounted to $47.5 million and $34.5 million during
the first six months of 1996 and 1995, respectively. The Company is
pursuing a long-term manufacturing strategy to increase its motorcycle
production capacity with a goal of having the capacity to manufacture in
excess of 200,000 units per year by 2003. The strategy includes expansion
in and near the Company's existing facilities and construction of a new
manufacturing facility in Kansas City, Missouri. During the second
quarter, the Company signed an agreement to purchase a manufacturing
facility in Menomonee Falls, Wisconsin to expand its powertrain
operations; broke ground on the manufacturing facility in Kansas City;
began construction of a 250,000 square foot Distribution Center in
Franklin, Wisconsin; and announced a 15,000 square foot expansion of its
fiberglass facility in Tomahawk, Wisconsin.
The following are forward looking statements: Due in part to this long-
term manufacturing strategy, the Company anticipates 1996 capital
expenditures will approximate $180-$200 million, and the Company currently
estimates that 1997 capital expenditures will be in the range of $180-$200
million and 1998 capital expenditures will be in the range of $120-$140
million. The Company currently estimates it will have the capacity to
produce at least 118,000 motorcycles in 1996, 125,000-130,000 units in
1997 and 145,000-150,000 units in 1998. The Company anticipates it will
have the ability to fund all capital expenditures with internally
generated funds and short-term financing.
The Company's ability to reach these production capacity levels will
depend upon, among other factors, the Company's ability to (i) continue to
realize efficiencies in the utilization of existing facilities through
implementation of innovative manufacturing techniques and other means,
(ii) implement additions and changes to existing facilities and (iii)
construct the new manufacturing facility such that it will be operational
in 1998. However, there is no assurance that the Company will continue to
find means to realize additional efficiencies. In addition, the Company
could experience delays in making additions and changes to existing
facilities and/or constructing the new manufacturing facility as a result
of risks normally associated with the construction and operation of new
manufacturing facilities, including unanticipated problems in
construction, delays in the delivery of machinery and equipment or
difficulties in making such machinery and equipment operational, work
stoppages, difficulties with suppliers, natural causes or other factors.
These risks, potential delays and uncertainties regarding the actual costs
of the measures the Company intends to take to implement its strategy
could also impact adversely the capital expenditure estimates referred to
above. Moreover, there is no assurance that the Company will have the
ability to sell all of the motorcycles it has the capacity to produce.
The Company (excluding Eaglemark) currently has nominal levels of long-
term debt and has available lines of credit of approximately $49 million,
of which approximately $44 million remained available at June 30, 1996.
Eaglemark finances its business, without guarantees from the Company,
through commercial paper, through revolving credit facilities and by
securitizing its retail installment loans. Eaglemark issues short-term
commercial paper secured by either wholesale or retail motorcycle finance
receivables with maximum issuance available of $225 million of which
$103.2 million was outstanding at June 30, 1996. Maturities of commercial
paper issued range from 1 to 60 days. Eaglemark has in place an $80
million revolving credit facility to fund primarily the United States and
Canadian retail loan originations of which approximately $76.9 million was
outstanding at June 30, 1996. Borrowings under the facility are secured
by, and limited to a percentage of, eligible receivables ranging from 75%
to 95% of the outstanding loan balances. During the second quarter,
Eaglemark securitized and sold approximately $79.9 million of its retail
installment loans to investors with limited recourse, with servicing
rights being retained by Eaglemark. The Company expects the future growth
of Eaglemark will be financed from additional capital contributions from
the Company and a continuation of its programs of commercial paper and
securitizations.
The Company has continuing authorization from its Board of Directors to
repurchase up to 4 million shares of the Company's outstanding common
stock. During the first quarter of 1995, the Company repurchased
1,650,000 shares of its common stock with cash on hand and short-term
borrowings of $40 million.
The Company's Board of Directors declared two cash dividends during the
first six months of 1996 including, most recently, a $.05 per share cash
dividend declared on May 4, 1996 payable June 24, 1996 to shareholders of
record June 14.
<PAGE>
Part II - OTHER INFORMATION
HARLEY-DAVIDSON, INC.
FORM 10-Q
June 30, 1996
Item 1. Legal Proceedings
The Company is involved with government agencies in various environmental
matters, including a matter involving soil and groundwater contamination
at its York, Pennsylvania facility.
See footnote 5 to the accompanying condensed consolidated financial
statements for additional information on the above proceedings.
Item 4. Submission of Items to a Vote of Security Holders
(a) The Company's Annual Meeting of Shareholders was held on May
4, 1996.
(b) At the Company's Annual Meeting of Shareholders, the
following directors were elected for terms expiring in 1999
by the vote indicated:
Shares
Shares Voted Withholding
in Favor of Authority
Richard J. Hermon-Taylor 65,300,497 685,053
Sara L. Levinson 65,593,636 391,914
Richard F. Teerlink 65,577,909 407,641
(c) Matters other than election of directors, brought for vote
at the Company's Annual Meeting of Shareholders, passed by
the vote indicated.
Shares Voted
For Against Abstained
Ratification of Ernst & Young LLP
as the Company's independent auditors 65,673,649 119,629 192,272
There were no broker non-votes with respect to the foregoing
matters.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule for June 30, 1996
27.2 Restated Financial Data Schedule for June 25, 1995
(b) Reports on Form 8-K
None
<PAGE>
Part II - Other Information
HARLEY-DAVIDSON, INC.
Form 10-Q
June 30, 1996
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
HARLEY-DAVIDSON, INC.
Date: 8/7/96 by: /s/ James L. Ziemer
James L. Ziemer
Vice President and Chief Financial
Officer (Principal Financial
Officer)
8/7/96 by: /s/ James M. Brostowitz
James M. Brostowitz
Vice President, Controller
(Principal Accounting Officer) and
Treasurer
<PAGE>
Exhibit Index
Exhibit No. Description Page
27.1 Financial Data Schedule for June 30, 1996 17
27.2 Restated Financial Data Schedule for June 25, 1995 18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF HARLEY-
DAVIDSON, INC. AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 96,273
<SECURITIES> 0
<RECEIVABLES> 160,844
<ALLOWANCES> 1,588
<INVENTORY> 80,316
<CURRENT-ASSETS> 392,001
<PP&E> 582,122
<DEPRECIATION> 273,936
<TOTAL-ASSETS> 1,104,375
<CURRENT-LIABILITIES> 235,750
<BONDS> 0
0
0
<COMMON> 780
<OTHER-SE> 572,236
<TOTAL-LIABILITY-AND-EQUITY> 1,104,375
<SALES> 763,855
<TOTAL-REVENUES> 763,855
<CGS> 523,217
<TOTAL-COSTS> 523,217
<OTHER-EXPENSES> 1,781
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (430)
<INCOME-PRETAX> 115,783
<INCOME-TAX> 42,841
<INCOME-CONTINUING> 72,942
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72,942
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE RESTATED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF
HARLEY-DAVIDSON, INC. AS OF AND FOR THE SIX MONTHS ENDED JUNE 25,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-25-1995
<CASH> 64,595
<SECURITIES> 0
<RECEIVABLES> 163,283
<ALLOWANCES> 1,893
<INVENTORY> 83,485
<CURRENT-ASSETS> 370,344
<PP&E> 461,056
<DEPRECIATION> 231,731
<TOTAL-ASSETS> 724,578
<CURRENT-LIABILITIES> 181,551
<BONDS> 0
0
0
<COMMON> 772
<OTHER-SE> 446,625
<TOTAL-LIABILITY-AND-EQUITY> 724,578
<SALES> 650,517
<TOTAL-REVENUES> 650,517
<CGS> 450,385
<TOTAL-COSTS> 450,385
<OTHER-EXPENSES> 2,831
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (58)
<INCOME-PRETAX> 89,887
<INCOME-TAX> 32,879
<INCOME-CONTINUING> 57,008
<DISCONTINUED> 4
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,012
<EPS-PRIMARY> .76
<EPS-DILUTED> .76
</TABLE>
