On Jan. 25, motorcycle maven Harley-Davidson
- 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 Margin |
36.9% |
38.5% |
(1.6) |
Operating Margin |
24.9% |
27.5% |
(2.6) |
Net Margin |
16.3% |
18.0% |
(1.7) |
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 |
$55,579 |
8.6 |
**** |
BMW Group |
$35,368 |
8.5 |
*** |
Harley-Davidson |
$9,687 |
9.75 |
** |
Yamaha Motor |
$5,808 |
7.7 |
- |
Polaris Industries |
$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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