MILWAUKEE — Harley-Davidson Inc. reported decreased net income and revenue for the second quarter of 2009 compared to the year-ago period. Net income dropped from $222.8 million in the year-ago quarter to $19.8 million, while revenue fell from $1.57 million in the year-ago period to $1.15 billion.
For the first six months of 2009, revenue totaled $2.44 billion, a 15.1 percent decrease from the year-ago period. Net income was $137.1 million, compared to $410.4 million in the first half of 2008.
The motorcycle manufacturer said net income was primarily affected by the planned 27.6 percent reduction in motorcycle shipments compared to the year-ago period and by two non-cash charges related to Harley-Davidson Financial Services (HDFS): a $72.7 million credit loss provision for a one-time reclassification of motorcycle loan receivables; and a one-time $28.4 million charge to write off the total goodwill associated with the 1995 purchase of HDFS.
The manufacturer said it will continue to focus on the funding needs of HDFS and balance the long- and short-term debt needs of the finance company. Harley-Davidson also said it provided liquidity for anticipated HDFS lending activities through the end of this year and into 2010.
HDFS recorded an operating loss of $62.1 million for the second quarter, compared to operating income of $37.1 million in the year-ago quarter. In addition to the effects of the finance receivables reclassification, HDFS recorded $15.0 million in writedowns on retained securitization interests due to expected higher credit losses compared to a $6.3 million write-down in the year ago period. For the first half of 2009, HDFS reported an operating loss of $50.9 million, compared to operating income of $72.1 million for the prior-year period.
Worldwide retail unit sales of new Harley-Davidson motorcycles were down 30.1 percent compared to the year-ago quarter. Retail new Harley-Davidson motorcycle sales in the U.S. were down 35.1 percent and declined 18.2 percent in international markets compared to last year's second quarter. Industry-wide retail sales of heavyweight motorcycles in the U.S. declined 48.1 percent for the same period.
"While the underlying fundamentals of the Harley-Davidson brand remain strong and our dealers' retail motorcycle sales declined less than our competitors, it is obviously a very tough environment for us right now, given the continued weak consumer spending in the overall economy for discretionary purchases," said Harley-Davidson Inc. President and CEO Keith Wandell.
With the decline in retail motorcycle sales, the manufacturer lowered its 2009 worldwide shipment expectations by 25 to 30 percent for Harley-Davidson motorcycles. As a result of the lowered shipment volume, the company will reduce its workforce by about 1,000 hourly and salaried positions, which includes reductions at HDFS. Earlier this year, the manufacturer made cuts to its hourly and salaried workforce.