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 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 (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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