Given with the backdrop of a popular motorcycle show in New York, no one expected to hear anything good from Harley-Davidson's review of its financial performance for 2009.

The Milwaukee motorcycle company rode through a year of a tough economy, production reorganization and shedding brands.

So there were no surprises when Keith Wandell, Harley-Davidson, Inc. President and Chief Executive Officer announced the motorcycle manufacturers first annual loss in 16 years.

“Our full-year 2009 results were affected by the difficult economy, as well as the planned actions we took that resulted in restructuring charges of $224 million. We believe these actions are critical to restoring greater profitability and long-term growth to Harley-Davidson,” Wandell said, “We are confident we have made the right decisions for our future, and we are executing our strategy with focused intensity.”

Between the costs of restructuring, exiting the Buell product line and discontinuing operations with the MV Agusta brand, Harley-Davidson reported a full-year net loss of $55.1 million, or $0.24 per share, and a fourth-quarter net loss of $218.7 million, or $0.94 per share.

"These results were not surprising because they were the direct result of the economic climate and the decisive actions we took throughout the year," Harley CEO Keith Wandell said in a conference call with investment analysts.

Many of the items, such as Buell and MV Agusta were taken against fourth quarter numbers but compounding the increased costs were slow sales, plunging revenues 40% to $764.5 million in the fourth quarter. Overall though, revenue only fell 23% with  annual revenue $4.29 billion in 2009 compared to $5.58 billion in 2008.

Revenues from motorcycle sales fell 45.6% for the Milwaukee manufacturer in the final financial quarter shipping 35,938 Harley-Davidson motorcycles to dealers and distributors worldwide. While the number of units fell 53.1% compared to the same quarter in 2008, the 35,938 Harley-Davidson motorcycles was in line with previous guidance of 35,000 to 40,000 units.

On an annual basis, revenues from motorcycle sales fell from $4.24 billion in 2008 to $3.17 billion, shipping 80,456 fewer units than the year before.
Parts and Accessories, the division that appeared to have the ability to print money in better times saw reduced revenues of $767.3 million in 2009, down 10.7 percent, with General Merchandise falling a similar 10.1 percent bringing in $282.2 million of revenues.

And according to Wandell, 2010 doesn't look much better.

“We believe 2010 will continue to be a challenging year,” he noted.

Aside from the challenges the major organizational changes made to the company's bottom line, the worlds most famous motorcycle brand was rolling with tough two-wheeled market. Harley Davidson's performance on the showroom floor wasn't too far from the national and worldwide trends.

During the fourth quarter, retail sales of Harley-Davidson motorcycles decreased 21.4 percent worldwide, 27.9 percent in the U.S. and 10.3 percent in international markets, compared to the prior-year quarter. But this was in the market of industry-wide U.S. retail heavyweight (651cc+) motorcycle sales declining 20.9 percent during the quarter, compared to the year-ago period.

For the full year 2009 compared to 2008, retail sales of Harley-Davidson motorcycles decreased 22.7 percent worldwide, 25.8 percent in the U.S. and 15.4 percent in international markets, while industry-wide U.S. retail heavyweight motorcycle sales declined 36.7 percent in 2009, compared to 2008.

To fight the shrinking markets, Harley-Davidson is striving to become a smaller manufacturer with eye on international markets to boost its bottom line. Earlier this month excitement HOG-style rode across India as the company announced dealerships and a line-up of twelve models to be sold in a country dominated by motorcycle users.

Harley-Davidson's CEO (pictured right) admitted the company was behind its competitors with taking advantage of foreign markets. However, the move into India has brought rumors of the brand that ahs built its reputation on the quality of American manufacturing looking to having factories in other countries.

But even as the company takes steps to expand across various oceans, in the United States its distribution chain is getting smaller. Harley-Davidson saw 28 independently owned dealerships closed in 2009 with another 15 dealers expected to close in the next three months. At the heart of the matter, the U.S. motorcycle market will likely take more than a year to rebound fully, if it ever does, amid a pullback in discretionary spending, according to Wandell.

Whatever road the motorcycle market takes, officials at Harley-Davidson are hoping the turbulent year 2009 brought will leave them better prepared.

"We believe the short-term pain that Harley-Davidson is going through is worth the longer-term gain that we expect. We have confidence that we are doing the right things to manage our business prudently and effectively," Wandell said.

“When the restructuring is completed, we will have completely changed the face of how we build motorcycles in York and we expect significantly greater manufacturing flexibility and significant annual cost savings from a more efficient operation. It is a tribute to our employees at York that they understood we could not continue on the course we were on, and they worked with us to find a better way,” Keith Wandell added.