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Posts Tagged ‘CEO Keith Wandell’

Project LiveWire

Project LiveWire

It might make a good chapter in his memoir:  Harley-Davidson’s Matt Levatch:  “My Biggest Mistake.”

I’m talking about Project LiveWire and pivoting the motor company faster toward electric motorcycles.

As I previously posted, Mr. Levatch was “selected” to run the company after Keith Wandell retired.  A year after Harley-Davidson debuted the prototype for its LiveWire battery-powered motorcycle, Mr. Levatch states it will be much longer before the company’s new e-motorcycle will hit the market.  When pressed, Mr. Levatch narrowed down the possibility of an e-motorcycle launch sometime between 2018 and 2020.  Really?

Battery recharges seem to be the culprit.

LiveWire-FrontThat low-pitched whine we hear isn’t the aluminum-bodied prototypes in the wind.  Rather, it’s the ringing of cash registers at Zero Motorcycles and Polaris Industries who plans to release an e-motorcycle later this year.

Is it time for Matt and Musk to meet?  You know, that “Project Tiger” (the local code name for the Tesla battery factory east of Reno, NV) is on track and continues to move forward.  Mr. Musk might have some battery IP to provide Harley-Davidson.

Until they launch LiveWire, we can check it out in the action on the big screen. The latest Marvel blockbuster, called Avengers #27 or is that Age of Ultron, which features a prototype version of the electric bike driven by actress Scarlett Johanssen’s character Black Widow.

Photos courtesy of H-D.

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HD Stock ChartI missed this a few days ago, but imagine that the first quarter results at Harley-Davidson were like eating a bag of those Krinkle Cut™ Salt & Pepper chips… a great taste with a satisfying crunch!

Yeah, I have a weakness for the hyper-engineered, overly marketed, addiction-creating potato chips.  But, I’ve digressed.

Q1’14 Financials:  Harley-Davidson reported its first-quarter 2014 retail sales in the U.S. were not as high as expected — in large part because of the brutal winter season that gripped the eastern two-thirds of the country and the absence of the Road Glide models.  Still, sales increased 3 percent in the first quarter of 2014 and the motor company maintained a 56 percent market share in the U.S.

On April 22, Harley reported it sold 57,415 motorcycles worldwide in the first quarter of 2014, a 5.8 percent increase over the same quarter last year. The increase helped boost the company’s total revenue by 10 percent, with earnings up 22 percent.  Most of that growth came from international sales as dealers sold 21,685 motorcycles, an increase of 10.9 percent compared with the first quarter of 2013. Sales in the U.S. increased by 3 percent over the same period last year.

The company had net income of $265.9 million, or $1.21 a share, for the quarter which was up from net income of $224.1 million, or 99 cents a share, in first quarter 2013.  Harley-Davidson said it expects to ship between 279,000 and 284,000 motorcycles in 2014, which would be an increase of between 7 and 9 percent from 2013.  It was noted in the financial call that the absence of the Road Glide models continues to impact the company’s bottom line which in the first quarter of 2013, sales of the Road Glides represented 10 percent of its sales.

Keith Wandell, Harley-Davidson’s CEO, chairman and president, said in a press release that “Our dealers had a solid quarter of retail motorcycle sales.”  He went on to say, “Sales in the Asia Pacific region were up strongly, and we are encouraged by the continued growth of new Harley-Davidson motorcycle sales in Europe. We’re also excited to be entering the heart of the retail selling season in the U.S., having achieved first-quarter retail growth of 3.0% in the midst of a long, cold winter.

After the earnings report was released, the company stock (HOG) went from $68 per share at close to establishing a new 52-week high of $71.99 per share.

Then there was some additional investment buzz from stock analyst’s and then with impeccable timing on April 29th, Mr. Wandell sold 45,308 shares of the company’s stock.  The stock was sold at an average price of $73.45, for a total value over $3.3 million.  The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link.

But wait, there’s more…

HBO Films

HBO Films

Loan Payback:  H-D announced that it paid off the $303 million, high-interest rate loan from Warren Buffett’s, Berkshire Hathaway Inc. during the quarter, funds that were used for Harley’s financing company.

You might recall that during the stock market crash of 2008, Harley’s finance subsidiary was unable to loan money to customers because the capital markets had shut down and liquidity was running low.  You may have read the book or watched the “Too Big To Fail” television drama film on HBO?  The money/loan helped Harley-Davidson continue financing motorcycles through its financing company, but the loan came with a hefty 15 percent interest rate.  It was a bridge that H-D desperately needed and Berkshire Hathaway was the only company from which Harley could borrow money without giving up its equity.

Harley-Davidson-Softail-Breakout-2013FXSB Recall:  The only dark cloud in all this good news hoopla was the motorcycle recall on 2013-14 FXSB and FXSBSE models manufactured from March 20, 2012, through March 10, 2014, to identify and fix a problem with the fuel level sensor signal.  The NHTSA Campaign Number is 14V185000 and effects approximately 9,100 motorcycles.

It turns out that suspension variances may affect the gas tank mounting angle, causing the fuel level sensor to read inaccurately. “The gauge inaccuracy may cause the motorcycle to run out of fuel unexpectedly, possibly even before the Low Fuel Warning lamp illuminates,” the recall stated. This would cause the motorcycle to stall, increasing the risk of a crash.  Harley-Davidson will notify owners, and dealers will update the software to recalibrate the fuel level sensor signal, free of charge.

Sometimes it’s hard to rise above in our country, because the haters are lined up to tear you down.  But, I want to say congrats to Harley-Davidson!  I’ve got a mental image that the senior leadership team is doing celebratory high-fives, along with a Wandell victory dance or a watching Mark-Hans Richer air-guitar somersault on the board room table.

Photo’s courtesy of Google Finance, H-D and HBO Films.

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2013 Harley-Davidson Road Glide

2013 Harley-Davidson Road Glide

Harley-Davidson Inc. reported it’s Q4’13 financials today posting a 9.7% year-over-year rise in earnings to 34 cents per share from 31 cents in the year-ago quarter.  The year-over-year increase was due to higher revenues and lower operating expenses in the Motorcycles segment.

Revenues improved 1.7% to $1.19 billion and operating income rose 5.1% to $122 million from $116.1 million in the fourth quarter of 2012.  Net income increased 6.8% to $75.4 million from $70.6 million a year ago.

For the 2013 full year results revenues increased 5.7% to $5.9 billion from $5.58 billion in 2012 and net income increased to $734 million from $623.9 million a year ago.

Harley-Davidson shipped 46,618 motorcycles to dealers and distributors worldwide during the 4th quarter which was down 0.95% from 47,067 motorcycles in the fourth quarter of 2012.   In the U.S., shipments improved 6.3% from the year-ago quarter to 27,387 units and commands roughly 50% share of the U.S. market,

Keith Wandell, chairman, president and chief executive officer of Harley-Davidson called the year “outstanding.”

So were there any other highlights?

Well yes… John A. Olin – Chief Financial Officer and Senior Vice President stated, “As we anticipated, U.S. retail sales growth in the fourth quarter slowed from the third quarter’s growth rate, behind 2 key drivers…”   “The second was the impact of the absence of the popular Road Glide models in the 2014 model year.  When you look at Q4 of 2012, the Road Glide represented 9% of that volume, and that Road Glide customers are incredibly loyal to that motorcycle. And that’s probably the biggest impact that we had on our 2013 retail sales in the fourth quarter.”

Mr. Olin also talked about a “fatten the tail” strategy.

Huh?

I’m not 100% sure of the context, but simply put, a financial fat tail describes a rare and extreme event.  On one end of the spectrum, are products like Project RUSHMORE that encourage trade-up at a high revenue and at a very high margin, and typically are aimed at H-D’s core customer. But, Rushmore is selling extremely well with outreach customers. And in addition, the Street Glide is the #1 selling bike to women, young adults, African-American and Hispanic’s.

Suffice to say that the Road Glide was a huge part of H-D sales and it’s no longer there.  Yet, the quarter was great!  Congrats to the H-D team.

Photo courtesy of The Bike Exchange

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Gold top 10 winnerIt’s that time of year when folks are getting ready to ring in the New Year and its customary to provide a Top 10 list.

I decided to pull together a nostalgic list of some of the more ridiculous Harley-Davidson executive quotes.  There are some doozies and it makes a person wonder if they were cocktail chatter or actually written down and prepped by the PR team.  Honestly, it was difficult to narrow it down to just ten, but here they are: 

  1. “I would be really upset if you felt our strategy was about “meeting the nicest people on a Harley” because I can tell you that ain’t the strategy…” Harley CMO Mark-Hans Richer (Source: HERE)
  2. “These new bikes are leaner, yet still have a mean streak – they’re the real deal, made of real steel.” Harley CMO Mark-Hans Richer (Source: HERE)
  3. Little did we know we were doing a cross-promotion with God.” Harley CMO Mark-Hans Richer (Source: HERE)
  4. “‘Come Together’ is not merely a song in our [advert] spot – it’s an anthem for our relationship with our fans.” Harley CMO Mark-Hans Richer (Source: HERE)
  5. “We don’t do trend bikes, or fashion-statement motorcycles. We try to make something that will last forever.” **Brian Nelson, lead stylist on Project RUSHMORE  (Source: HERE)
  6. “I couldn’t care less if I ever wore a tie again.” Harley Chairman of the Board, president and CEO Keith Wandell  (Source: HERE)
  7. “None of us get up every morning and want to make people’s lives miserable and see people lose their jobs. If you think that’s the case, I apologize.”  Harley Chairman of the Board, president and CEO Keith Wandell  (Source: HERE)
  8. “We can’t survive on our core customers alone.” Harley Chairman of the Board, president and CEO Keith Wandell (Source: HERE)
  9. “The safety of our customers is our highest priority,” Harley General Manager of Motorcycle New Product Delivery Tony Wilcox (Source: HERE)
  10. “We think it’s a dichotomy” Harley Chairman of the Board, president and CEO Keith Wandell (Source: HERE)

There it is.  Do you have any memorable quotes to add to the list?

**Note: Mr. Nelson (#5) is not a company executive.

Photo courtesy of Sam Churchill.

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