Harley Running on Fumes: Fool by Numbers (HOG)

Harley Running on Fumes: Fool by Numbers

On Jan. 25, motorcycle maven Harley-Davidson (NYSE: HOG ) released earnings for the 2007 fiscal year -- a period ended Dec. 31, 2007.

Harley burned a lot of cash over the last year while unsold inventory piled up in its warehouses. The fickle aspirational consumer strikes again.
Double-digit sales growth abroad wasn't enough to erase a weak American market. The domestic market is vital to these biker boys; nearly 80% of Harley's sales happen at home, year after year.
Management is fighting to keep shareholders happy with a glad-handed buyback plan, but with the cash reserve running low, it's becoming an uphill battle. And borrowing money on a corporate scale ain't as easy as it used to be, thanks to the ongoing credit crunch in Wall Street's banking district.

(Figures in millions, except per-share data.)

Income Statement Highlights

	FY 2007	FY 2006	Change
Sales	$5,727	$5,801	(1.3%)
Net Profit	$934	$1,043	(10.5%)
EPS	$3.74	$3.93	(4.8%)
Diluted Shares	249.9	265.3	(5.8%)

Get back to basics with the income statement.

Margin Checkup

	FY 2007	FY 2006	Change*
Gross	36.9%	38.5%	(1.6)
Operating	24.9%	27.5%	(2.6)
Net	16.3%	18.0%	(1.7)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	FY 2007	FY 2006	Change
Cash + ST Invest.	$405	$897	(54.8%)
Accounts Rec.	$181	$143	26.7%
Inventory	$350	$288	21.5%

Liabilities	FY 2007	FY 2006	Change
Accts Payable & Accrued Liabilities	$785	$763	2.9%
Long-Term Debt	$0	$0	N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

	FY 2007	FY 2006	Change
Cash From Ops.	$798	$762	4.8%
Capital Expenditures	$242	$220	10.3%
Free Cash Flow	$556	$542	2.6%

Free cash flow is a Fool's best friend.

Competitive Context

	Market Cap	Trailing P/E Ratio	CAPS Rating (out of 5)
Honda Motor (NYSE: HMC )	$55,579	8.6	****
BMW Group	$35,368	8.5	***
Harley-Davidson	$9,687	9.75	**
Yamaha Motor	$5,808	7.7	-
Polaris Industries (NYSE: PII )	$1,356	13.0	**

Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no position in any company mentioned, nor did he own a motorcycle. Or a chopper. Zed's dead, baby, and Fool rules are here.

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