-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Cego08isQKHNmSD61w36jJMqgStHeCdfzD1wLbP1wg+O5nKARQB00Wl3owNvxMYR Phetmtwg0Atan5iRg2kIAA== 0000897069-94-000107.txt : 19941110 0000897069-94-000107.hdr.sgml : 19941110 ACCESSION NUMBER: 0000897069-94-000107 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940925 FILED AS OF DATE: 19941109 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARLEY DAVIDSON INC CENTRAL INDEX KEY: 0000793952 STANDARD INDUSTRIAL CLASSIFICATION: 3751 IRS NUMBER: 391382325 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09183 FILM NUMBER: 94558309 BUSINESS ADDRESS: STREET 1: 3700 W JUNEAU AVE CITY: MILWAUKEE STATE: WI ZIP: 53208 BUSINESS PHONE: 4143424680 10-Q 1 HARLEY-DAVIDSON FORM 10-Q 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 September 25, 1994 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 1-10793 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) (414) 342-4680 (Registrant's telephone number, including area code) 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 November 1, 1994: 76,294,901 Shares Page 1 of 27 Pages Exhibit index is on page 17 HARLEY-DAVIDSON, INC. Form 10-Q Index For the Quarter Ended September 25, 1994 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 8-14 Part II. Other Information Item 1. Legal Proceedings 15 Item 6. Exhibits and Reports on Form 8-K 15 Signatures 16 Exhibit Index 17 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 Nine months ended Sept. 25, Sept. 26, Sept 25, Sept 26, 1994 1993 1994 1993 Sales $384,026 $284,376 $1,129,103 $888,339 Cost of goods sold 277,514 208,201 818,943 645,856 -------- --------- --------- ------- Gross profit 106,512 76,175 310,160 242,483 Selling, administrative and engineering expenses 68,745 48,320 190,638 149,393 ------- ------- ------- ------- Income from operations 37,767 27,855 119,522 93,090 Interest expense - net 137 (73) (230) (815) Other expense - net 61 (696) 2,021 (6) ------- -------- ------- ------- Income from operations before provision for income taxes, extraordinary item, and accounting changes 37,965 27,086 121,313 92,269 Provision for income taxes 14,192 10,661 42,106 36,908 ------- -------- -------- -------- Income before accounting changes 23,773 16,425 79,207 55,361 Cumulative effect of accounting changes: Postretirement benefits other than pensions, net of tax - - - (32,124) Income taxes - - - 1,796 ------- -------- --------- -------- Net income $ 23,773 $ 16,425 $ 79,207 $ 25,033 ======= ======= ========= ======== Weighted average common shares outstanding, assuming no dilution 76,249 75,936 76,160 75,884 Earnings per common share, assuming no dilution: Income before cumulative effect of accounting changes $0.31 $0.22 $1.04 $0.73 Cumulative effect of accounting changes: Post-retirement benefits, net of tax - - - (0.42) Income taxes - - - 0.02 ------ ------ ------ ------ Net income $0.31 $0.22 $1.04 $0.33 ====== ====== ====== ====== Cash dividends per share $0.04 $0.03 $0.10 $0.06 ====== ====== ====== ======
Harley-Davidson, Inc. Condensed Consolidated Balance Sheets (In thousands)
ASSETS Sept. 25, Dec. 31, Sept. 26, 1994 1993 1993 (Unaudited) (Unaudited) Current assets: Cash and cash equivalents $ 63,293 $ 77,709 $ 49,836 Accounts receivable, net of allowance for doubtful accounts 156,754 86,031 110,059 Inventories (Note 2) 159,473 140,151 138,293 Deferred income taxes 20,296 20,296 18,105 Prepaid expenses 8,261 9,571 8,879 -------- --------- --------- Total current assets 408,077 333,758 325,172 Property, plant and equipment, net 228,339 205,768 190,390 Deferred income taxes 16,276 11,676 10,306 Goodwill - - 54,318 Other assets 43,393 32,083 31,534 --------- --------- --------- $696,085 $583,285 $611,720 ========= ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable 15,103 20,580 $ 13,450 Current maturities of long-term debt 433 789 497 Accounts payable 64,083 56,350 64,320 Accrued expenses and other liabilities 133,015 113,043 104,847 ------- -------- -------- Total current liabilities 212,634 190,762 183,114 Postretirement benefits 58,985 54,999 53,953 Other long-term liabilities 22,230 12,612 12,129 Contingencies (Note 3) Stockholders' equity: Common stock 771 385 385 Additional paid-in capital 141,565 137,150 134,545 Retained earnings 260,997 189,410 228,603 Cumulative foreign currency translation ajustment 1,500 186 1,453 ------- -------- -------- 404,833 327,131 364,986 Less treasury stock, at cost (1,581) (1,583) (1,584) Unearned compensation (1,016) (636) (878) -------- -------- -------- Total stockholders' equity 402,236 324,912 362,524 -------- -------- --------- $696,085 $583,285 $611,720 ======== ======== ======== Condensed from audited financial statements.
Harley-Davidson, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine months ended Sept. 25, Sept. 26, 1994 1993 Cash flows from operating activities: Net income $79,207 $25,033 Depreciation and amortization 26,846 25,974 Long-term employee benefits 5,661 55,717 Deferred income taxes (4,600) (22,333) Other 162 454 Change in current assets and current liabilities: Accounts receivable (70,723) (16,881) Inventory (19,322) (36,122) Prepaid expenses 1,310 738 Accounts payable and accrued liabilities 27,705 16,871 ------- ------- Net cash provided by operating activities 46,246 49,451 Cash flows from investing activities: Purchase of property and equipment (49,090) (30,712) Investments in joint ventures 0 (10,350) Other - net (3,076) 169 ------- -------- Net cash used in investing activities (52,166) (40,893) Cash flows from financing activities: Reductions of long-term debt (328) (1,017) Net decrease in notes payable (5,477) (2,483) Dividends paid (7,620) (2,280) Issuance of stock under employee stock plans 4,929 2,936 ------- ------ Net cash used in by financing activities (8,496) (2,844) ------- ------ Net increase (decrease) in cash and cash equivalents (14,416) 5,714 Cash and cash equivalents: At beginning of period 77,709 44,122 ------- ------- At end of period $63,293 $49,836 ======= ======= HARLEY-DAVIDSON, INC. Notes to Condensed Consolidated Financial Statements (In thousands, except share amounts) Note 1 - Basis of Presentation ------------------------------ The condensed interim consolidated financial statements included herein have been prepared by Harley-Davidson, Inc. (the Company) without audit. 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 September 25, 1994 and September 26, 1993, and the results of operations for the three and nine month periods then ended. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. 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, 1993. On August 17, 1994, The Company's Board of Directors declared a two-for- one stock split effected in the form of a 100 percent stock dividend to shareholders of record on August 29, 1994, payable on September 12, 1994. Stock options agreements, have been adjusted to reflect the split. An amount equal to the par value of the shares issued has been transferred from additional paid-in capital to the common stock account. All references to number of shares, except shares authorized, have been adjusted to reflect the stock split on a retroactive basis. Note 2 - Inventories -------------------- The Company values its inventories at the lower of cost, using the last-in, first-out (LIFO) method, or market. Inventories consist of the following: Sept. 25, Dec. 31, Sept. 26, 1994 1993 1993 Components at the lower of cost, first-in, first-out, (FIFO), or market: Raw material & work-in-process $ 60,910 $ 54,155 $ 58,474 Finished goods 68,607 66,865 59,112 Parts & accessories 49,069 35,366 36,763 ------- ------- ------- 178,586 156,386 154,349 Excess of FIFO over LIFO 19,113 16,235 16,056 ------- -------- -------- Inventories as reflected in the accompanying condensed consolidated balance sheets $159,473 $140,151 $138,293 ======= ======= ======= Note 3 - 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. The Company is currently pursuing cost recovery litigation against the Navy and believes that the Navy, by virtue of its ownership and operation of the Facility, will ultimately be responsible for a substantial portion of the environmental remediation costs at the Facility. 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 investigation and remediation 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 estimate of the probable liability of the Navy, and the settlement agreement with Minstar, the Company estimates that it will incur approximately $4 million of additional remediation and related costs at the Facility. The Company has established reserves for this amount. The Company has also 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. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations for the Three Months Ended September 25, 1994 Compared to the Three Months Ended September 26, 1993 Motorcycle Units and Consolidated Net Sales For the Three Month Periods Ended September 25, 1994 and September 26, 1993 Incr 1994 1993 (Decr) % Motorcycle units 22,503 17,963 4,540 25.3% Net sales (in millions): Motorcycles $213.6 $161.7 $51.9 32.1% Motorcycle Parts and Accessories 78.3 59.1 19.2 32.5 Total Motorcycles and Related Products 291.9 220.8 71.1 32.2 Recreational Vehicles 68.0 43.7 24.3 55.5 Commercial Vehicles 20.8 16.8 4.0 24.0 Other 3.3 3.1 .2 7.0 Total Transportation Vehicles 92.1 63.6 28.5 44.9 Harley-Davidson, Inc. Consolidated Net Sales $384.0 $284.4 $99.6 35.0% The Company reported third quarter consolidated net sales of $384.0 million, a $99.6 million (35.0%) increase over the same quarter in 1993. Both the Motorcycles and Related Products segment (the Motorcycle segment) and the Transportation Vehicles segment contributed to the increase. The Motorcycle segment's third quarter net sales increased 32.2% on approximately 32% increases in both motorcycle unit and parts and accessories sales. Motorcycle unit shipments increased 25.3% over the same quarter in 1993, primarily as the result of a higher production rate during the third quarter of 1994 ( 380 units-per-day) compared to the third quarter of 1993 (365 units-per-day). The third quarter of 1994 also benefitted from three additional work days, compared to the same quarter in 1993. The Motorcycle division recently announced that it would increase its daily production rate to 395 motorcycle units per day early in the fourth quarter. Although scheduled daily motorcycle production rates are ahead of plan, this does not necessarily indicate that the Company is significantly ahead of its plan to attain a daily production rate of 425 units per day (100,000 units per year) sometime in 1996. The Parts and Accessories division recorded a 32.5% increase in net sales during the third quarter of 1994 compared to the same quarter in 1993. A portion of the increase reflects an improvement in the timing of shipments, over the prior year, for orders received in July at the Motorcycle segment's annual dealer show. The Transportation Vehicles segment recorded 1994 third quarter net sales of $92.1 million, a $28.5 million (44.8%) increase over the same period during 1993. The Recreational Vehicles division generated $24.3 million of the change primarily through volume increases. Higher priced "Class A" (motorized) units comprised a majority of the increase. The Company continues to be pleased with the performance of the Recreational Vehicles division, but remains cautious pending customer reaction to the 1995 models introduced at the Recreational Vehicles division's dealer meeting at the end of August. The 1995 model introductions represent the largest new model launch in recent history.The manufacturing phase-in of the new models began in July and runs through November. Accordingly, many of the new models were not available for shipment until the end of the third quarter or early in the fourth quarter. The Commercial Vehicles division recorded third quarter net sales of $20.8 million, a $4.0 million (24.0%) increase over the third quarter of 1993. The division was awarded two large contracts during the third quarter totaling $17.6 million. Production under these contracts is expected to occur during the first and second quarters of 1995. Consolidated Gross Profit For the Three Month Periods Ended September 25, 1994 and September 26, 1993 (Dollars in Millions) Gross Gross Profit Profit Dollars Dollars Percent Percent 1994 1993 Change 1994 1993 Motorcycles and Related Products $90.3 $66.7 $23.6 30.9% 30.2% Transportation Vehicles 16.2 9.5 6.7 17.6 14.9 Consolidated Harley- Davidson, Inc. $106.5 $76.2 $30.3 27.7% 26.8% The Company recorded consolidated third quarter gross profit of $106.5 million, a $30.3 million (39.8%) increase. The Motorcycle segment contributed $23.6 million to the third quarter increase in consolidated gross profit related primarily to volume increases in motorcycle unit shipments and parts and accessories business. The Transportation Vehicles segment recorded a $6.7 million improvement in gross profit during the third quarter of 1994 compared to the same quarter in 1993. The Recreational Vehicles division was responsible for a majority of this improvement, which relates primarily to volume increases. Third quarter volume increases occurred primarily in the motorized Class A products resulting in a favorable shift in product mix (away from lower margin towable products). Consolidated Operating Expenses For the Three Month Periods Ended September 25, 1994 and September 26, 1993 (Dollars in Millions) Dollars Dollars Percent 1994 1993 Change Change Motorcycles and Related Products $52.5 $35.5 $17.0 47.8% Transportation Vehicles 14.1 11.6 2.5 21.4 Corporate 2.1 1.2 0.9 79.9 Consolidated Harley- Davidson, Inc. $68.7 $48.3 $20.4 42.3% Consolidated operating expenses increased $20.4 million (42.3%) over the third quarter of 1993, primarily in the Motorcycle segment. Increases in the Motorcycle segment were primarily volume related. Specific areas of increase beyond general volume related spending included product warranty and liability, variable compensation, MotorClothes advertising costs, and the VR Racing (road racing) program. The Transportation Vehicles segment recorded a $2.5 million (21.4%) increase in operating expenses during the third quarter of 1994 compared to the third quarter of 1993. The primary area of increase was selling and promotional programs. 1994 third quarter operating expense benefitted from the elimination of goodwill amortization ($.7 million during the third quarter of 1993) that resulted from the goodwill write-down recorded by the Company during the fourth quarter of 1993. Results of Operations for the Nine Months Ended September 25, 1994 Compared to the Nine Months Ended September 26, 1993 Motorcycle Units and Consolidated Net Sales For the Nine Month Periods Ended September 25, 1994 and September 26, 1993 Incr 1994 1993 (Decr) % Motorcycle units 70,565 60,416 10,149 16.8% Net sales (in millions): Motorcycles $655.1 $535.2 $119.9 22.4% Motorcycle Parts and Accessories 192.3 147.8 44.5 30.1 Total Motorcycles and Related Products 847.4 683.0 164.4 24.1 Recreational Vehicles 202.2 140.9 61.3 43.4 Commercial Vehicles 69.9 55.0 14.9 27.2 Other 9.6 9.4 0.2 2.2 Total Transportation Vehicles 281.7 205.3 76.4 37.2 Harley-Davidson, Inc. Consolidated Net Sales $1,129.1 $888.3 $240.8 27.1% The Company reported record nine month consolidated net sales results of $1.1 billion compared to $888.3 million during the same period in 1993. The Motorcycle segment and the Transportation Vehicles segment both contributed to the net sales improvement. The Motorcycle segment recorded net sales of $847.4 million during the first nine months of 1994 compared to $683.0 million during the same period in 1993. Worldwide demand for the Company's motorcycles continues to outweigh supply. Dealer inventories of motorcycles in most major markets remain virtually non-existent. The most recent information available (through August) indicates a U.S. heavyweight (751+cc) market share of 53.7% compared to 56.1% for the same period in 1993. The decrease in market share is attributable to the Motorcycle division's capacity constraints in a growing market. As mentioned earlier, the Motorcycle division increased its daily motorcycle unit production rate to 395 units early in the fourth quarter of 1994. Including this most recent increase, the Motorcycle division has increased its daily motorcycle production rate by over 40% since the beginning of 1992. Parts and accessories net sales also exhibited strong growth during the first three quarters of 1994. Overall, net sales of parts and accessories increased 30.1% compared to the first nine months of 1993. The MotorClothes products continue to be the fastest growing portion of the parts and accessories' product lines, currently comprising approximately 35% of parts and accessories net sales. The Transportation Vehicles segment recorded net sales of $281.7 million during the first nine months of 1994, an increase of $76.4 million (37.2%) compared to the first nine months of 1993. The Recreational Vehicles division generated the majority of the increase, primarily through volume increases. The most recent Class A market share information available (through July) indicates that industry registrations have increased 21.3% compared to registrations of the Recreational Vehicles division's products which are up 43.8% during the same period. Most of the volume increases were generated by the division's lower-end Class A Endeavor and Vacationer models. The division has not seen the same result in its towable product registrations, which are up 14.5% for the first seven months of 1994, compared to industry registrations, which are up 19.9%. The Commercial Vehicles division generated net sales of $69.9 million during the first three quarters of 1994, a $14.9 million (27.2%) increase over the same period in 1993. The division benefitted from a 9.1% volume increase and a shift in mix toward higher priced walk-in units. Consolidated Gross Profit For the Nine Month Periods Ended September 25, 1994 and September 26, 1993 (Dollars in Millions) Gross Gross Profit Profit Dollars Dollars Percent Percent 1994 1993 Change 1994 1993 Motorcycles and Related Products $260.7 $209.7 $51.0 30.8% 30.7% Transportation Vehicles 49.4 32.8 16.6 17.6 16.0 Consolidated Harley- Davidson, Inc. $310.1 $242.5 $67.6 27.5% 27.3% The Company recorded consolidated gross profit of $310.1 million during the first nine months of 1994, an increase of $67.6 million (27.9%). The Motorcycle segment reported a $51.0 million (24.3%) increase for the period. The segment's gross profit percentage remained virtually unchanged at 30.8% for the period compared to the first nine months of 1993. This margin stability occurred despite weather related overtime during the first quarter of 1994 and additional costs throughout all of 1994 associated with the reorganizations and enhancements of the Motorcycle segment's manufacturing facilities. The reorganizations and enhancements are part of the Company's three year manufacturing strategy announced during the third quarter of 1993. The Transportation Vehicles segment recorded gross profit of $49.4 million during the first six months of 1994, an increase of $16.6 million (50.8%) compared to the first nine months of 1993. The Recreational Vehicles division generated the majority of the increase, primarily through volume increases. The Commercial Vehicles division benefitted from an increase in volume and a shift in mix toward higher-margin walk-in units. Consolidated Operating Expenses For the Nine Month Periods Ended September 25, 1994 and September 26, 1993 (Dollars in Millions) Dollars Dollars Percent 1994 1993 Change Change Motorcycles and Related Products $140.8 $109.4 $31.4 28.7% Transportation Vehicles 42.4 35.2 7.2 20.5 Corporate 7.4 4.8 2.6 55.8 Consolidated Harley- Davidson, Inc. $190.6 $149.4 $41.2 27.6% Consolidated Operating expenses of $190.6 million for the first nine months of 1994 increased $41.2 million (27.6%) compared to the first nine months of 1993. The Motorcycle segment generated the majority of the increase. The Motorcycle segment recorded a $31.4 million (28.7%) increase in operating expenses related primarily to volume increases. Other areas of increase include product warranty, product liability and the VR Racing (road racing) program. The Transportation Vehicles segment increase was generally the result of additional research and development and promotional programs. The Recreational Vehicles division has been investing in research and development and has added engineering expertise to its workforce in an effort to update its current product lines. 1994 operating expense benefitted from the elimination of approximately $2 million of goodwill amortization related to the write-off of goodwill in the fourth quarter of 1993. Consolidated income taxes -------------------------- The Company's 1994 tax provision includes a one-time benefit of $4.6 million related to the legal reorganization of the Transportation Vehicles segment which resulted in an effective tax rate for the first nine months of 1994 of 34.7%. Excluding this benefit, the Company's effective tax rate would have been approximately 38.5% compared to 40% for all of 1993. Environmental ------------- The Company's policy is to comply with applicable environmental laws and regulations. The Company has a compliance program in place to monitor, and report on, environmental issues. The Company is currently involved with its former parent (Minstar) and the U.S. Navy in cost recovery litigation surrounding the remediation of the Company's manufacturing facility in York, PA. The Company currently estimates that it will be responsible for approximately $4 million related to the remediation of the York facility. The Company has established reserves for this amount (refer to footnote 3 to the accompanying 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 environmental compliance. The Company anticipates that capital expenditures for equipment used to limit hazardous substances/ pollutants during 1994 will approximate $2 million. Harley-Davidson, Inc. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources as of September 25, 1994 Liquidity and Capital Resources as of September 25, 1994 -------------------------------------------------------- The Company generated $46.2 million of cash from operating activities during the first nine months of 1994 compared to $49.5 million during the same period in 1993. Cash flow from higher earnings during the first nine months of 1994 was largely offset by a net increase in working capital items, primarily accounts receivable. A majority of the increase in accounts receivable is the result of typical shipping patterns during the year. Accounts receivable as of the end of the third quarter of 1994 increased approximately 42% over the balance at the close of the third quarter of 1993. This increase is the result of a 27% increase in consolidated revenues and additional foreign receivables which generally have longer terms. Additionally, during August, 1994, the Motorcycle segment discontinued the practice of granting a 2% cash discount on domestic parts and accessories sales. This change has resulted in the slower collection of domestic parts and accessories balances. Investing activities utilized approximately $52.2 million during the first nine months of 1994, compared to $40.9 million for the same period in 1993. Capital expenditures amounted to $49.1 million and $30.7 million during the first nine months of 1994 and 1993, respectively. The Company anticipates 1994 capital expenditures will approximate $75-85 million. The Company anticipates funding these expenditures with internally generated funds. The Company believes that available cash, cash flow from operations and existing lines of credit will be sufficient to meet its normal operating requirements. The Company's Board of Directors declared three cash dividends during the first nine months of 1994 including, most recently, a $.08 ($.04 on a post-split basis) cash dividend declared on August 17, 1994, paid September 12, 1994 to shareholders of record on August 29. Part II - OTHER INFORMATION HARLEY-DAVIDSON, INC. FORM 10-Q September 25, 1994 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 motorcycle production facility (the Facility). The Facility was formerly used by the U.S. Navy and AMF (the predecessor corporation of Minstar Corporation), from whom the Company was purchased in 1981. The Company has been investigating environmental contamination at certain areas of the Facility in conjunction with the Pennsylvania Department of Environmental Resources and believes it will be required to investigate further and remediate contamination at these areas, and possibly at other areas, of the Facility. Although considerable uncertainty remains over the nature and scope of environmental remediation that will ultimately be required at the Facility, based on the information currently available to the Company, the Company does not believe its potential liability relating to this matter will have a material effect on the Company's financial condition. In addition, the Company has continued to litigate against the Navy and Minstar/AMF over the extent of their liability to the Company for this matter. While ultimate shares of responsibility have not yet been established, the Company believes that the Navy and Minstar/AMF will be liable for a substantial portion of the on-going investigation and future cleanup of the Facility. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3.1 Bylaws of the Registrant 27 Financial Data Schedules (b) Reports on Form 8-K None Part II - Other Information HARLEY-DAVIDSON, INC. Form 10-Q September 25, 1994 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: November 8, 1994 /s/ James L. Ziemer James L. Ziemer Vice President and Chief Financial Officer (Principal Financial Officer) November 8, 1994 /s/ James M. Brostowitz James M. Brostowitz Vice President, Controller (Principal Accounting Officer) and Treasurer Exhibit Index Exhibit No. Description Page 3 Bylaws of the Registrant 18- 27 Financial Data Schedules ____ EX-3 2 HARLEY-DAVIDSON EXHIBIT 3/BYLAWS BY-LAWS OF HARLEY-DAVIDSON, INC. (a Wisconsin corporation) (as amended through August 17, 1994) ARTICLE I. SHAREHOLDERS 1.01. Annual Meeting. The annual meeting of the shareholders of the corporation (the "Annual Meeting") shall be held at such time and date as may be fixed by or under the authority of the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may properly come before the Annual Meeting. If the election of directors shall not be held on the day fixed as herein provided for any Annual Meeting, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders (a "Special Meeting") as soon thereafter as conveniently may be. In fixing a meeting date for any Annual Meeting, the Board of Directors may consider such factors as it deems relevant within the good faith exercise of its business judgment. 1.02. Special Meetings. (a) A Special Meeting may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the entire Board of Directors and shall be called by the Board of Directors upon the demand, in accordance with this Section 1.02, of the holders of record of shares representing at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the Special Meeting. (b) In order that the corporation may determine the shareholders entitled to demand a Special Meeting, the Board of Directors may fix a record date to determine the shareholders entitled to make such a demand (the "Demand Record Date"). The Demand Record Date shall not precede the date upon which the resolution fixing the Demand Record Date is adopted by the Board of Directors and shall not be more than 10 days after the date upon which the resolution fixing the Demand Record Date is adopted by the Board of Directors. Any shareholder of record seeking to have shareholders demand a Special Meeting shall, by sending written notice to the Secretary of the corporation by hand or by certified or registered mail, return receipt requested, request the Board of Directors to fix a Demand Record Date. The Board of Directors shall promptly, but in all events within 10 days after the date on which a valid request to fix a Demand Record Date is received, adopt a resolution fixing the Demand Record Date and shall make a public announcement of such Demand Record Date. If no Demand Record Date has been fixed by the Board of Directors within 10 days after the date on which such request is received by the Secretary, the Demand Record Date shall be the 10th day after the first day on which a valid written request to set a Demand Record Date is received by the Secretary. To be valid, such written request shall set forth the purpose or purposes for which the Special Meeting is to be held, shall be signed by one or more shareholders of record (or their duly authorized proxies or other representatives), shall bear the date of signature of each such shareholder (or proxy or other representative) and shall set forth all information about each such shareholder and about the beneficial owner or owners, if any, on whose behalf the request is made that would be required to be set forth in a shareholder's notice described in Article IX of the Restated Articles of Incorporation. (c) In order for a shareholder or shareholders to demand a Special Meeting, a written demand or demands for a Special Meeting by the holders of record as of the Demand Record Date of shares representing at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the Special Meeting must be delivered to the corporation. To be valid, each written demand by a shareholder for a Special Meeting shall set forth the specific purpose or purposes for which the Special Meeting is to be held (which purpose or purposes shall be limited to the purpose or purposes set forth in the written request to set a Demand Record Date received by the corporation pursuant to paragraph (b) of this Section 1.02), shall be signed by one or more persons who as of the Demand Record Date are shareholders of record (or their duly authorized proxies or other representatives), shall bear the date of signature of each such shareholder (or proxy or other representative), and shall set forth the name and address, as they appear in the corporation's books, of each shareholder signing such demand and the class or series and number of shares of the corporation which are owned of record and beneficially by each such shareholder, shall be sent to the Secretary by hand or by certified or registered mail, return receipt requested, and shall be received by the Secretary within 70 days after the Demand Record Date. (d) The corporation shall not be required to call a Special Meeting upon shareholder demand unless, in addition to the documents required by paragraph (c) of this Section 1.02, the Secretary receives a written agreement signed by each Soliciting Shareholder (as defined herein), pursuant to which each Soliciting Shareholder, jointly and severally, agrees to pay the corporation's costs of holding the Special Meeting, including the costs of preparing and mailing proxy materials for the corporation's own solicitation, provided that if each of the resolutions introduced by any Soliciting Shareholder at such meeting is adopted, and each of the individuals nominated by or on behalf of any Soliciting Shareholder for election as director at such meeting is elected, then the Soliciting Shareholders shall not be required to pay such costs. For purposes of this paragraph (d), the following terms shall have the meanings set forth below: (i) "Affiliate" shall have the meaning assigned to such term in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (ii) "Participant" shall have the meaning assigned to such term in Rule 14a-11 promulgated under the Exchange Act. (iii) "Person" shall mean any individual, firm, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity. (iv) "Proxy" shall have the meaning assigned to such term in Rule 14a-1 promulgated under the Exchange Act. (v) "Solicitation" shall have the meaning assigned to such term in Rule 14a-11 promulgated under the Exchange Act. (vi) "Soliciting Shareholder" shall mean, with respect to any Special Meeting demanded by a shareholder or shareholders, any of the following Persons: (A) if the number of shareholders signing the demand or demands for a meeting delivered to the corporation pursuant to paragraph (c) of this Section 1.02 is 10 or fewer, each shareholder signing any such demand; (B) if the number of shareholders signing the demand or demands for a meeting delivered to the corporation pursuant to paragraph (c) of this Section 1.02 is more than 10, each Person who either (I) was a Participant in any Solicitation of such demand or demands or (II) at the time of the delivery to the corporation of the documents described in paragraph (c) of this Section 1.02, had engaged or intended to engage in any Solicitation of Proxies for use at such Special Meeting (other than a Solicitation of Proxies on behalf of the corporation); or (C) any Affiliate of a Soliciting Shareholder, if a majority of the directors then in office determine, reasonably and in good faith, that such Affiliate should be required to sign the written notice described in paragraph (c) of this Section 1.02 and/or the written agreement described in this paragraph (d) in order to prevent the purposes of this Section 1.02 from being evaded. (e) Except as provided in the following sentence, any Special Meeting shall be held at such hour and day as may be designated by the Board of Directors. In the case of any Special Meeting called by the Board of Directors upon the demand of shareholders (a "Demand Special Meeting"), the date of the Demand Special Meeting shall be not more than 70 days after the Meeting Record Date (as defined in Section 1.05 of these by-laws); provided that in the event that the directors then in office fail to designate an hour and date for a Demand Special Meeting within 10 days after the date that valid written demands for such meeting by the holders of record as of the Demand Record Date of shares representing at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the Special Meeting are delivered to the corporation (the "Delivery Date"), then such meeting shall be held at 2:00 pm. (local time) on the 100th day after the Delivery Date or, if such 100th day is not a Business Day (as defined below), on the first preceding Business Day. In fixing a meeting date for any Special Meeting, the Board of Directors may consider such factors as it deems relevant within the good faith exercise of its business judgment, including, without limitation, the nature of the action proposed to be taken, the facts and circumstances surrounding any demand for such meeting, and any plan of the Board of Directors to call an Annual Meeting or a Special Meeting. (f) The corporation may engage independent inspectors of elections to act as an agent of the corporation for the purpose of promptly performing a ministerial review of the validity of any purported written demand or demands for a Special Meeting received by the Secretary. For the purpose of permitting the inspectors to perform such review, no purported demand shall be deemed to have been delivered to the corporation until the earlier of (i) 5 Business Days following receipt by the Secretary of such purported demand and (ii) such date as the independent inspectors certify to the corporation that the valid demands received by the Secretary represent at least 10% of all the votes entitled to be cast on each issue proposed to be considered at the Special Meeting. Nothing contained in this paragraph shall in any way be construed to limit the ability of the Board of Directors or any shareholder to contest the validity of any demand, whether during or after such 5 Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto). (g) For purposes of these by-laws, "Business Day" shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of Wisconsin are authorized or obligated by law or executive order to close. 1.03. Place of Meeting. The Board of Directors may designate any place, either within or without the State of Wisconsin, as the place of meeting for any Annual Meeting or for any Special Meeting, or for any postponement thereof. Any meeting may be adjourned to reconvene at any place designated by vote of the Board of Directors. 1.04. Notice of Meeting. Written notice stating the place, day and hour of any Annual Meeting or Special Meeting shall be delivered not less than 10 (unless a longer period is required by law) nor more than 70 days before the date of such meeting. In the event of any Demand Special Meeting, such notice of meeting shall be sent not more than 30 days after the Delivery Date. Unless otherwise required by the law, a notice of an Annual Meeting need not include a description of the purpose for which the meeting is called. In the case of any Special Meeting, (a) the notice of meeting shall describe any business that the Board of Directors shall have theretofore determined to bring before the meeting and (b) in the case of a Demand Special Meeting, the notice of meeting shall describe any business set forth in the statement of purpose of the demands received by the corporation in accordance with Section 1.02 of these by-laws. 1.05. Fixing of Record Date. The Board of Directors may fix in advance a date not less than 10 days and not more than 70 days prior to the date of any Annual Meeting or Special Meeting as the record date for the determination of shareholders entitled to notice of, or to vote at, such meeting (the "Meeting Record Date"). In the case of any Demand Special Meeting, (i) the Meeting Record Date shall be not later than the 30th day after the Delivery Date and (ii) if the Board of Directors fails to fix the Meeting Record Date within 30 days after the Delivery Date, then the close of business on such 30th day shall be the Meeting Record Date. The shareholders of record on the Meeting Record Date shall be the shareholders entitled to notice of and to vote at the meeting. 1.06. Adjournment. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present. 1.07. No Nominee Procedures. The corporation has not established, and nothing in these by-laws shall be deemed to establish, any procedure by which a beneficial owner of the corporation's shares that are registered in the name of a nominee is recognized by the corporation as the shareholder under Section 180.0723 of the Wisconsin Business Corporation Law. ARTICLE II. BOARD OF DIRECTORS 2.01. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. 2.02. Special Meetings. Special meetings of the Board of Directors may be held at any time upon the call of the Chief Executive Officer and shall be called by the Chief Executive Officer or Secretary if directed by the Board of Directors. 2.03. Quorum. Except as otherwise provided by law or by the Restated Articles of Incorporation or these by-laws, one-half of the number of directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but a majority of the directors present (though less than such quorum) may adjourn the meeting from time to time without further notice. 2.04. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by law, the Restated Articles of Incorporation, these by-laws or any contract or agreement to which the corporation is a party. 2.05. Committees. There may be an Executive Committee. There shall be an Audit Committee composed of independent directors. There shall be a Compensation Committee composed of independent directors. The Board of Directors by resolution adopted by the affirmative vote of a majority of the number of directors then in office may create one or more additional committees. Each committee shall have two or more members who shall, unless otherwise provided by the Board of Directors, serve at the plessure of the Board of Directors. Except as otherwise provided by law, each committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise such power and authority as the Board of Directors shall specify. 2.06. Telephonic Meetings. Except as herein provided and notwithstanding any place set forth in the notice of the meeting or these by-laws, members of the Board of Directors (and any committee thereof) may participate in regular or special meetings by, or through the use of, any means of communication by which all participants may simultaneously hear each other, such as by conference telephone. 2.07. Retirement. Notwithstanding that directors are elected for a three year term, a director shall automatically cease to be a director of the corporation effective upon the commencement of the Annual Meeting immediately following such director's seventieth (70th) birthday. Each director, other than a director who is serving or has served as the Chief Executive Officer of the corporation, whose position of principal employment, occupation or affiliation changes substantially, and each director who develops a conflict of interest with the corporation as a result of changes in the business of the corporation, such director's personal interests or such director's principal employer, after his or her most recent election to the Board of Directors shall submit his or her resignation as a director of the corporation promptly following such change, and the Board of Directors (without such director present if the Board of Directors so chooses) shall consider whether to accept such resignation in the interests of the corporation. A director who has submitted his or her resignation shall not be entitled to vote upon the acceptance or rejection of such resignation by the Board of Directors. Resignations pursuant to this bylaw shall be effective immediately upon acceptance by the Board of Directors or such later date as determined by the Board of Directors. ARTICLE III. OFFICERS 3.01. Officers. The principal officers of the corporation shall be a Chief Executive Officer, a President, one or more Vice-Presidents, a Secretary and a Treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. The Board of Directors may also authorize any duly appointed officer to appoint one or more officers or assistant officers. All officers shall have the usual powers and shall have the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer may be suspended by the Chief Executive Officer or President with or without cause. 3.02. Removal. The Board of Directors may remove any officer and, unless restricted by the Board of Directors or these by-laws, an officer may remove any officer or assistant officer appointed by that officer, at any time, with or without cause. ARTICLE IV. GENERAL PROVISIONS 4.01. Notices. Whenever any statute, the Restated Articles of Incorporation or these by-laws requires notice to be given to any director or shareholder, such notice may be given in writing by mail, addressed to such director or shareholder at his address as it appears on the records of the corporation, with postage thereon prepaid. Any such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to directors may also be given by telegram. 4.02. Fiscal Year. The fiscal year of the corporation shall be fixed by the Board of Directors. ARTICLE V. INDEMNIFICATION 5.01. Provision of Indemnification. The corporation shall, to the fullest extent permitted or required by Sections 180.0850 to 180.0859, inclusive, of the Wisconsin Business Corporation Law, including any amendments thereto (but in the case of any such amendment, only to the extent such amendment permits or requires the corporation to provide broader indemnification rights than prior to such amendment), indemnify its Directors and Officers against any and all Liabilities, and advance any and all reasonable Expenses, incurred thereby in any Proceedings to which any such Director or Officer is a Party because he or she is or was a Director or Officer of the corporation. The corporation shall also indemnify an employee who is not a Director or Officer, to the extent that the employee has been successful on the merits or otherwise in defense of a Proceeding, for all Expenses incurred in the Proceeding if the employee was a Party because he or she is or was an employee of the corporation. The rights to indemnification granted hereunder shall not be deemed exclusive of any other rights to indemnification against Liabilities or the advancement of Expenses which a Director, Officer or employee may be entitled under any written agreement, Board of Directors resolution, vote of shareholders, the Wisconsin Business Corporation Law or otherwise. The corporation may, but shall not be required to, supplement the foregoing rights to indemnification against Liabilities and advancement of Expenses under this Section 5.01 by the purchase of insurance on behalf of any one or more of such Directors, Officers or employees, whether or not the corporation would be obligated to indemnify or advance Expenses to such Director, Officer or employee under this Section 5.01. All capitalized terms used in this Section 5.01 and not otherwise defined herein shall have the meaning set forth in Section 180.0850 of the Wisconsin Business Corporation Law. EX-27 3 HARLEY-DAVIDSON EXHIBIT 27/FDS
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF HARLEY-DAVIDSON, INC. AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 25, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1994 JAN-01-1994 SEP-25-1994 63,293 0 158,254 (1,500) 159,473 408,077 459,793 (231,454) 696,085 212,634 0 771 0 0 401,465 696,085 1,129,103 1,129,103 818,943 818,943 190,638 0 230 121,313 42,106 79,207 0 0 0 79,207 1.04 1.04
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