Harley Davidson Company Overview

Harley-Davidson Incorporated has become a legendary company known for producing quality motorcycles with style. The company designs, manufactures, and sells new and classic models of motorcycles, including bikes for sport, distance, and leisure. They also offer customers options to customize and personalize their bike. In addition to retail, Harley-Davidson, Inc. provides financial services to their customers, making their motorcycles more affordable. Harley-Davidson Motor Company was founded in 1903 by childhood friends William S. Harley and Arthur Davidson. Davidson's brothers, Walter and William A., joined the company a few years later. Based in Milwaukee, Wisconsin, the innovative company quickly made a reputation for itself, winning contests and races across America. Harley-Davidson's Bar and Shield logo debuted in 1910, and two years later the company made its first international sale to Japan. The U.S. Military purchased nearly twenty thousand Harley-Davidson motorcycles for use in WWI. By 1920, Harley-Davidson was the largest motorcycle manufacturer in the world. Military production again increased during WWII, and Harley-Davidson won an award of excellence for wartime production in 1943.

The company's competition, Hendee, went out of business in 1953, leaving Harley-Davidson as the only U.S. motorcycle producer. The 1960's marked the beginning of a European division known as Aermacchi Harley-Davidson. The company also started to produce its own fiberglass components under the new Tomahawk Division in 1963. Production and assembly operations were upgraded in 1973, when a new plant in York Pennsylvania was opened. Harley-Davidson introduced Materials As Needed in 1982, resulting in lower costs and higher quality. The largest factory sponsored motorcycle club, Harley Owners Group, was started in 1983 and membership now exceeds five hundred thousand. Harley-Davidson Motor Company was listed on the American Stock Exchange in 1986 and the New York Stock Exchange in 1987. Harley-Davidson bought a minority interest in Buell Motorcycle Company in 1993, expanding their variety of sport oriented models. New plants were built in several locations in the United States and several existing plants were expanded throughout the '90s and early 2000's. Harley-Davidson Motor Company has a long and rich history of excellence and modernism.Harley-Davidson Motorcycle Company has prominent markets in the United States, Europe, Japan, and Canada. Jim Ziemer is the president and CEO of Harley-Davidson, Inc.

Management provides many reasons for the growth in revenues and net income in 2005. A 3.7% increase in units shipped in 2005 boosted overall sales. The new lineup of 2006 models also encouraged new customers. Revenue was positively impacted by changing wholesale prices and foreign exchange rates, despite an increase in raw material costs. Operating income from financial services also saw growth because of higher interest and securitization income. While trends are improving overall, the growth rates for Parts and Accessories, Harley-Davidson motorcycle units and Financial Services are expected to exceed the rates for general merchandise and wholesale shipments.

Management believes that wider availability of their motorcycles will promote new independent dealers and retail buyers. Other strategies for growth include increasing efficiency, effectively managing costs, implementing smooth procedures for changes in capacity and production, bettering products and services, creating new marketing and advertising campaigns, preparing for further adjustments in foreign exchange rates, interest rates, commodity prices, and fuel prices, acquiring talented employees, and ensuring the quality of all products. Harley-Davidson Motor Company recognizes its potential for lawsuits and other claims relating to the environment, their products, their shareholders, their employees, and other matters. The Company rigorously analyzes these cases and, whenever possible, predicts the likelihood of unfavorable judgments, resulting in possible loss. Because of current trends, the Company will continue to closely monitor raw material prices in 2006. Harley-Davidson Motor Company also identifies concerns for work stoppages, natural disasters, terrorism, and economic conditions. Moreover, relations with and capability of independent dealers directly affect the health of Harley-Davidson. Harley-Davidson is also concerned about further changes in foreign exchange rates and interest rates. To prevent loss, the Company selectively uses derivative financial instruments and foreign currency

Ernst & Young LLP is Harley-Davidson's external auditor. The two reports provided by these auditors were a Report on Internal Control and a Report of Financial Statements. Ernst and Young LLP gave an unqualified opinion on both of these reports. An unqualified opinion is the best type of report a company can receive from auditors. This means that Harley-Davidson's internal control over financial reporting is effective, the 2005 financial statements are reasonably free of material misstatement, and that Harley-Davidson's financial reporting is in accordance with generally accepted accounting principles. It can thus be concluded that Harley-Davidson's 2005 Annual Report is a reliable source for the condition of the company.

Harley-Davidson Incorporated is a safe investment because of continuous effective performance. Earnings per share have been increasing annually as well as growth within the entire company. While the majority of financing is coming from debt, the difference between the return on equity and debt to assets ratios is continually decreasing. This concludes that Harley-Davidson is shifting their financing from debt to equity which is beneficial. The inventory turnover stays consistent which shows that they are producing at a reasonable level. Due to the increase on the return on assets ratio, we can conclude that they are utilizing their assets efficiently. After careful analysis, FTC suggests that Harley-Davidson is a good stock to invest in.