Posts Tagged ‘buell’

ATK Bets on Harley Dealers for Bike Sales

May 31, 2010

33,000 Bikes Would Be Sold Exclusively Through Harley Stores

Frank White has been working to put together a manufacturing partner with his ATK Motorcycles off-road company for the better part of a year, and it looks as though he’s finally done it. Last week, ATK announced it signed a $100 million manufacturing deal with S&T Motors Co., Ltd., to produce 33,000 motorcycles over the next four years.

The pact calls for S&T to produce the motorcycles at its Korean facilities next year and then begin assembling them at the ATK facility near Salt Lake City after that. S&T Motors is a Korean manufacturer that began developing and selling ATVs, scooters and motorcycles in 1978. Today, it sells powersports equipment under the Hyosung brand around the world, and it expects to generate annual sales in 2011 of $US 300 million, according to its website. It employs about 350 persons. Here is more information on S&T Motors. Make sure you go to the English language page.

Its U.S. distributor, Hyosung Motors, is based in Norcross, Georgia. More information on Hyosung Motors can be found here.

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Harley Stock Fever Cools

March 18, 2010

Who is Kohlberg Kravis Roberts & Co. (KKR)?

Investors continued to trade Harley-Davidson (NYSE: HOG) stock in heavier volume than normal on St. Patrick’s Day, but the activity was down sharply from Tuesday’s very heavy activity.

HOG shares were off .17 Tuesday from Wednesday’s close of 28.35 on volume of 4,4558,600 shares, down from Wednesday’s huge volume of 18.4 million. Average daily trading volume over the last three months is 3.6 million shares.

Tuesday’s heavy trading pushed the stock up 1.85 or 7%, but it failed to break the 52-week high of 30.00. The 52-week low is 11.20.

Today’s mid-day trading was in the 28.40 range.

The feeding frenzy was started by rumors that Harley was going to be purchased by Kohlberg Kravis Roberts & Co. (KKR), a huge New York-based private equity firm that specializes in leveraged buyouts (LBO). The international firm, founded in 1976, has more than $50 billion under management and reports it has completed more than $400 billion worth of LBOs.

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Harley Sale Rumors Flying

March 16, 2010

Is Harley-Davidson about to be sold? Could be, because anything is for sale at the right price, but so far the talk is nothing but rumors, and at least one respected securities analyst doesn’t think it’s going to happen.

“In our opinion, any such buyout is highly unlikely ” says Tim Conder of Wells Fargo Securities. “We believe the new management team is highly focused on executing the restructuring of the company. If anything is potentially developing near-term, we believe it could be the company forging a joint venture or fee type of arrangement with a depository institution partner as it relates to HDFS.”

However, HOG shares rose more than 5% to $28.02 today on unsubstantiated rumors the motorcycle maker is the target of a leveraged buyout.

Private-equity firm Kohlberg Kravis Roberts was named as a possible buyer. Officials from KKR and Harley both declined to comment on the rumor.

Trading was three times the normal volume in Harley shares as investors looked for a bargain.

Harley reported a loss of $218.7 million in the fourth quarter. And its new management team has moved aggressively to make changes at the American icon motorcycle company, including dumping two of its motorcycle operations, Buell and MV Agusta. JD

Contact me with story ideas or news tips at 952/893-6976 or jdelmont@dealernews.com.

Investors In Powersports Stocks Enjoyed 2009

December 31, 2009

Harley, Polaris, Arctic Cat Post Hefty Gains

Investors who placed bets on the powersports industry last year at this time— and held steady for the ride through the year— have reason to celebrate tonight. I checked the performance of three of the leading powersports stocks this year—Harley-Davidson (HOG), Polaris Industries (PII), and Arctic Cat (ACAT) and each of them outperformed the Dow Jones Industrial Average (DJIA) by a wide margin in two cases and matching it in the last one.

It wasn’t a smooth ride, however, and it took a firm hand to stay in the game through the sharp downtown in the first quarter.  For example, while the Dow lost 13% in value during the first two months of 2008, Polaris lost 25%, Harley  dropped 21%, and Arctic Cat slipped 20%.

For the year, though, the Dow climbed 1,772 points from 8,776 on Dec. 31, 2008, to 10,548 at the close yesterday. That’s a 20% jump. During the last 52 weeks, the Dow ranged from a low of 6,440 to a high of 10,605.

Polaris, the Minneapolis-based manufacturer of ATVs, UTVs, motorcycles, snowmobiles and electric vehicles, posted the biggest dollar gain during the last year of the three companies I looked at. Polaris common moved from $28.65 on Dec. 31, 2008, to $43 at the close yesterday. That’s a gain of $14.35, or 50.1% over the year. Its 52-week performance ranged from $14.53 to a high of $49.74.

If you would have purchased 1,000 shares of Polaris common stock one year ago, your investment would have gained $28,650, not considering quarterly dividends nor any sales commissions. Now, wouldn’t that provide a nice party tonight.

Securities analysts who follow the Polaris stock like the management team lead by new CEO Scott Wine, and Bennett Morgan, president and COO, and a long-time Polaris executive. When talking about Polaris, investors also talk about its ability to quickly bring new products to market, its efficient operations that emphasize cost controls, and its growing ability to control inventories at the dealer level through its Max Velocity Program (MVP) which allows dealers increased ordering flexibility.

Harley-Davidson gained $8.53, or 50.3%, climbing from $16.97 at the close on Dec. 31, 2008, to $25.50 at yesterday’s close. Harley investors had perhaps the toughest time waiting calmly for gains on the HOG stock as the company reworked its operations in several major steps.

One move with immediate and long-term implications was  the new contract it won with workers at its York, PA, plant that  permits the company to cut loose nearly half the 2,000 employee York work force and move ahead with major physical improvements in the plant. The plant modernization will be aided by a stimulus package from the state of Pennsylvania. Harley said at one point that it was considering relocating the operation to Kentucky.

In its second big reorganizational move, Harley dumped its MVAgusta operation and it closed its Buell sport bike business.

During the 2009 52-week period, Harley stock ranged from a low of $7.99 to a high of $30.00

Arctic Cat common stock is played at a much lower level than either Polaris or Harley, but it, too, posted a nice gain of 20% during the period Dec. 31,  2008, to Dec. 30, 2009. It climbed $4.16 for the year, moving from $4.79 in December 2008 to $8.95 yesterday.

Cat had a tough year, partly because of its dependence on snowmobiles and partly because of the loss of Gander Mountain, its high visibility outdoors retail chain based in Minneapolis. Gander had been carrying Arctic’s ATV and SXS lineup in its major stores. Arctic stock ranged from a low of $2.40 to a high of $9.27 during the last 52 weeks.

Okay, so now you’re probably waiting for my forecast on the performance of these stocks in 2010. Sorry, I don’t have one. After reporting on publicly traded stock for more than 40 years, I’ve come up with one basic rule: Stock market performance doesn’t always reflect corporate performance, especially when you try to tie it to a specific quarter or other reporting period. I don’t have a clue how these three stocks, or the Dow, for that matter, might perform over the next four quarters. And if I did know,  I wouldn’t give that information away; I would charge a lot of money for it. Isn’t that what investment advisors do?

Happy New Year and good luck with your investment decisions. I hope your powersports stocks perform well for you in 2010 as these three stocks did in 2009. JD

Contact me with news tips and story ideas at
976/893-6876 or joe@powersportsupdate.com

Last in Line: The Final Buell Rolls out of East Troy

November 12, 2009

The last Buell

Just got this pic and paragraph from the PR flacks at Harley-Davidson. Strange that they’d wait two weeks to send it out, but at least they’re recognizing the moment. First the PR bit and then a comment.

Last Buell Motorcycle Built

On October 30, a Buell Lightning XB12Scg rolled off the company’s East Troy, Wis. assembly line, the last of the 136,923 motorcycles built in the company’s 26 years of operation. Parent Harley-Davidson announced on October 15 that the Buell lineup of motorcycles would be discontinued effective December 18, 2009. Buell motorcycles will continue to be sold through existing dealers until inventory is depleted.

I feel fortunate to have had the chance to ride a handful of Buells. The XB12s is probably on my Top 5 favorite motorcycles list  (I’d also put the Ulysses on there too, but I rode the first model year version that had a bad steering lock issues) as it was a thoroughly fun bike to ride. Wicked and torquey and rumbly … there was no mistaking that you were sitting on a Harley. I also truly appreciate Erik Buell and visionary people like him. The motorcycle industry is filled with the most clever, entrepreneurial and just plain smart people that I’ve ever met or been around. They are tinkerers and engineers and machinists and admen and marketeers and sales people, all full of swagger and spark. Erik is at the top of that list. 

So, yeah, this picture and the accompanying paragraph leave me a bit sad.

Blogs Abuzz About H-D’s Buell Decision

October 15, 2009

Buell_logoHarley-Davidson has carved a lot of pork, and jobs, during the past year, and now the move to end production of the Buell line and sell off its recently-purchased MV Agusta business has people buzzing anew about the way the Motor Co. has chosen to streamline its operation.

Here are some thoughts gleamed from a surf through some of the social networking sites:

Gutted that Harley has pulled the plug on Buell Motorcycles. After all of Erik’s struggles and hard work developing improved product, he deserves better than that. – Kevin

No matter what you think of HD or Buell product, you have to respect Erik Buell’s independent and creative thinking. Sorry to see you go Buell. – Glenn

Victims of Hope and Change? – Robert

I feel for all those who have been laid off … but I keep thinking there is more to come from Buell. – Greg

Buell gone; MV on the block!? Whats next? Price drops on Fatboys and baggers? – Jeffery

Why didn’t they dump their latest European acquisition instead of wiping out more American jobs? As an American manufacturer, it sickens me to see HD become just another company making a profit at any cost. – Chris

A day of mourning for American Sportbikers … regardless of what you ride. Buell, you will be greatly missed! – Brittany

I am truly bummed about Buell going under. I wasn’t a die hard Buell fan but it was nice to see a company like that succeed. – Aaron

It seems that we have let another American Motorcycle Company go by the way side my friends, and what a shame! – Patrick

Learn more about H-D’s decision by clicking HERE.

Harley to Dump Buell, MV Agusta — 9 mos. Earnings Down 71%

October 15, 2009

Harley-Davidson announced its third-quarter results today and BOY do things look ugly.hd

earnings down 71 percent

U.S. retail motorcycle sales down 24.3 percent

To discontinue production of Buell motorcycles.

Remaining inventories of Buell motorcycles, accessories and apparel, while they last, will continue to be sold through authorized dealerships. Warranty coverage will continue as normal for Buell motorcycles and the Company will provide replacement parts and service through dealerships.

Company to immediately begin plans to sell MV Agusta.

More to come later today on www.dealernews.com from Guido Ebert, who is sitting in on third quarter conference call.