Copyright 2004, Roadracing World Publishing, Inc.

FIRST PERSON/OPINION

Via e-mail:

I am writing in the hopes that with the combined influence of Roadracing World and its loyal readership, something can be done about the horrendous conditions at my local track here in upstate New York.

Last Sunday morning, with the long-awaited return of the warm weather, I gleefully pulled on my racing leathers and headed out to my local track, a 54-turn, 14 mile road course not far from my house.

The conditions were abysmal. I’d hoped that the owners would use the winter to improve the track conditions. Sadly, that has not been the case.

To begin with, I have to say that I’ve ridden plenty of tracks in this country and I’ve yet to see another one with oncoming traffic. Cars and trucks speeding past, honking, skidding, giving me the finger – I can’t tell you what that does to your line selection.

What was once my favorite part of the track, a fast left-right-left chicane leading onto a long right hand high-speed sweeper, is now inexplicably home to a brand-new strip mall.

That’s just plain dangerous.

Adding insult to probable injury, track officials (without rider input, mind you) have determined that the increased traffic from the new Chuck E. Cheese necessitated a stoplight right at the end of the chicane. One red light and you can kiss pole position goodbye.

Is it any wonder they’re holding GP’s in Qatar?

There was a dead squirrel in Turn 13, an oil spill in Turn 27, a deer crossed in front of me in the middle of the 110-mph back straight, and right at the end of a flying lap, an old lady in a Subaru backed right out onto the track at Turn 47 where she lives with her husband who mows the lawn every Sunday and sprays grass clippings all over the racing line. The track is no place for those kinds of obscenities, Lady.

To make matters worse, there were no cornerworkers to be found and the only ambulance I saw arrived a full 15 minutes after I T-boned a back-marker minivan full of church-goers at the end of the front straight.

Wasted a brand new set of slicks, too, goddamn it.

Shalom Auslander
West Hurley, New York

From a press release issued by Infineon Raceway:

Kawasaki, Hayden Brothers Ready to Roll in Sonoma

SONOMA, Calif. (IMMEDIATE RELEASE) – Kawasaki has jumped to the top of the pack in the AMA’s Pro Honda Oils Supersport class in 2004, thanks in large part to two brothers from the small town of Owensboro, Ky.

Tommy Hayden has certainly been the catalyst, leading the points chase after the first two events of the season in Daytona and Fontana, while younger brother Roger sits in third place. The Haydens will certainly be the riders to watch in Pro Honda Oils Supersport when the AMA visits Infineon Raceway for the Kawasaki AMA Superbike Showdown, presented by Cycle Gear, April 30-May 2, featuring Sunday’s Supercuts Superbike Challenge.

“It’s great to race with Tommy but we’ve been racing together for as long as I can remember,” said Roger. “Things are going pretty good right now and I hope we can keep it up.”

Tommy began the season with a third-place finish at Daytona, and followed that up with a victory in Fontana on April 4, leading wire-to-wire on his Kawasaki. He’ll enter the Sonoma Valley on a definite high, having won the Repsol Superstock main event at Infineon Raceway in 2003. Tommy tested at the twisting 12-turn, 2.2-mile Sonoma Valley road course twice in the off-season and feels ready.

“They’ve made some changes with runoff at Turns 1 and 6 and they’re going to help,” Tommy said. “This should be a good track for Kawasaki.”

For Roger, it will be his first competitive event for Kawasaki at Infineon Raceway. He missed last year’s race weekend with a broken wrist. “Our tests went real good in Sonoma and I’m hoping to show that I can ride with everyone. We’ll see what happens,” Hayden said.

The Haydens are pulling double-duty this year, also competing in the Repsol Superstock Series. Tommy sits in fifth place after two events, with Roger occupying seventh place. The fast start to the season bodes well for both Tommy and Roger, whose brother Nicky Hayden is a former AMA Chevrolet Superbike champion and currently rides for Honda on the MotoGP circuit.

From a press release issued by Harley-Davidson:

HARLEY-DAVIDSON ROARS INTO ITS SECOND CENTURY WITH ANOTHER RECORD QUARTER

Milwaukee, Wis., April 14, 2004 — Harley-Davidson, Inc. (NYSE: HDI) today announced record revenue and earnings for its first quarter ended March 28, 2004. Revenue for the quarter was $1.17 billion compared with $1.11 billion in the year-ago quarter, a 4.7 percent increase. First quarter diluted earnings per share (EPS) was 68 cents, an 11.5 percent increase compared with last year’s 61 cents.

“Harley-Davidson’s first quarter performance clearly demonstrates that the Company is on track to deliver both the short and long-term performance objectives which we established earlier this year,” said Jeffrey L. Bleustein, chairman and chief executive officer of Harley-Davidson, Inc.

“By almost any measure, we are off to a very strong start in 2004 continuing the momentum of our 100th Anniversary. We delivered solid financial performance this quarter, and our U.S. dealer network posted the highest first quarter retail sales for Harley-Davidson motorcycles in its history -13 percent ahead of last year. In addition, we achieved our first quarter motorcycle production target, setting the pace to reach our goal of 317,000 Harley-Davidson motorcycles by year-end.”

“The Company’s continuing strong performance supports our longer-range objectives to satisfy demand for 400,000 Harley-Davidson motorcycles in 2007 and to deliver an annual earnings growth rate in the mid-teens. Harley-Davidson’s Board of Directors demonstrated their confidence in our stated direction by approving the repurchase of 7.8 million shares of stock during the quarter,” said Bleustein.

Motorcycles and Related Products Segment

First quarter revenue from Harley-Davidson motorcycles was $919 million, an increase of 4.8 percent over the first quarter last year. Shipments of Harley-Davidson motorcycles totaled 74,090, up 3,482 units or 4.9 percent over last year.

First quarter revenue from Parts and Accessories (P&A), which consists of Genuine Motor Parts and Genuine Motor Accessories, totaled $169 million, a 5.8 percent increase over the year-ago quarter. When revenue from 100th Anniversary P&A products sold during the first quarter of 2003 is excluded, P&A revenue would have been up 15.9 percent. For the longer term, the Company expects P&A revenue to grow at a rate slightly faster than the motorcycle unit growth rate.

General Merchandise, which consists of MotorClothes® apparel and collectibles, had first quarter revenue of $54 million, down 3.7 percent over the same period last year. When revenue from 100th Anniversary General Merchandise products shipped in the first quarter of 2003 is excluded, General Merchandise revenue would have been up 12.7 percent. For the longer term, the Company expects General Merchandise to grow at a rate lower than the motorcycle unit growth rate.

First quarter gross margin for the Motorcycles and Related Products Segment was 37.8 percent of revenue compared to 36.2 percent in the first quarter of last year. First quarter gross margin was favorably impacted primarily by foreign currency exchange rates and to a lesser extent by operating efficiencies. Consistent with the higher gross margin, operating margin increased from 21.5 percent in 2003 to 22.9 percent in 2004.

Motorcycle Retail Sales Data

Harley-Davidson retail motorcycle sales for the quarter were up 11.6 percent worldwide driven by strong performance in the U.S. which was up 13.0 percent. Data is listed in the accompanying tables.

Financial Services Segment

Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of Harley-Davidson, Inc., reported operating income of $50 million, up $7 million compared to the year-ago quarter, or 16.0 percent. The subsidiary continued to experience strong customer acceptance of its finance and insurance products.

HDFS sold $625 million in retail motorcycle loans during the quarter and recorded a gain of $25.2 million. This compares with a gain of $26.4 million on $550 million of loans securitized during the first quarter of 2003. The gain as a percentage of loans sold is within management’s expectations of 3 to 4 percent in the current interest rate environment.

Annualized credit losses on a managed portfolio basis decreased during the quarter from 0.84 percent in 2003 to 0.77 percent in 2004.

For the longer term, the Company expects the HDFS operating income growth rate to be slightly higher than the Company’s motorcycle unit growth rate.

Cash Flow

Operations generated cash of more than $350 million during the quarter. The Company invested $31 million in capital expenditures, paid a dividend of $24 million and repurchased 7.8 million shares of its common stock for a total cost of $404 million.

Company Background

Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company, Buell Motorcycle Company and Harley-Davidson Financial Services. Harley-Davidson Motor Company, the only major U.S.-based motorcycle manufacturer, produces heavyweight motorcycles and offers a complete line of motorcycle parts, accessories, apparel, and general merchandise. Buell Motorcycle Company produces sport motorcycles. Harley-Davidson Financial Services provides wholesale and retail financing and insurance programs to Harley-Davidson dealers and customers.

Forward-Looking Statements

The Company intends that certain matters discussed in this release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company “believes,” “anticipates,” “expects” or “estimates” or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

The Company’s ability to meet the targets and expectations noted depends upon, among other factors, the Company’s ability to (i) continue to realize production efficiencies at its production facilities through the implementation of innovative manufacturing techniques and other means, (ii) successfully implement production capacity increases in its facilities, (iii) successfully introduce new products and services, (iv) avoid unexpected P&A /general merchandise supplier backorders, (v) sell all of the Harley-Davidson motorcycles it plans to produce, (vi) continue to develop the capacity of its distributor and dealer network, (vii) avoid unexpected changes in the regulatory environment for its products, (viii) successfully adjust to foreign currency exchange rate fluctuations, (ix) successfully adjust to interest rate fluctuations, and (x) successfully manage changes in the credit quality of HDFS’s loan portfolio.

In addition, the Company could experience delays in the operation of manufacturing facilities as a result of work stoppages, difficulty with suppliers, natural causes, terrorism or other factors. Risk factors are also disclosed in documents previously filed by the Company with the Securities and Exchange Commission.

From a press release issued by Foggy Petronas Racing:

Favourable FPR factors thrown into the Misano mixer

Carl Fogarty and his Foggy PETRONAS Racing riders Troy Corser and Chris Walker are this weekend aiming to capitalise on a range of favourable factors in order to maintain the promise of the team’s early races in the Superbike World Championship.

The third round of the championship, the San Marino round, is staged at the Autodromo di Misano circuit, a few miles inland from the Adriatic coastal resort of Rimini. This event has previously been held in the heat of the Italian summer and the switch to a cooler time of year is expected to aid engine performance before a new stage of development is available for the FP1 at the fourth round next month.

The circuit characteristics, along with Troy’s record of two wins in 2000 and six seconds, plus two pole positions, are also likely to help the FPR team sustain a positive start to the season which has seen Chris make the podium in Valencia and Troy achieve a creditable fifth in Australia.

Carl said: “This is a circuit where Troy has been quite strong over the years, so I am hoping for a similar result to the first two rounds of this season. It’s a circuit that I struggled at for a while until my double win in 1999 and hopefully Chris can learn from Troy here. It would be great if we could stay around the top six at this round before we see improvements to the engine for the fourth round at Monza.

“A good lap here is all about carrying corner speed onto the back straight so the track should suit our bike more than some others. There are a few bends where you just have to hang in there for a while so achieving a good set-up on the bike, and finding a good tyre, will be very important. The fact that the San Marion round is being held earlier this year might also help us as we still have a few cooling problems and last year the heat was searing.”

Troy said: “I have always gone well at Misano and it might be fairly cold, and even a bit wet at this time of year, which should help our engine at its current stage of development. I was seventh and tenth last year so hopefully I can improve on those results. I was only 11 seconds off first place in the second race at Phillip Island, the closest we have ever been. It was also good to finish in front of Haga in Australia, a guy who has already won a race this year, and I will be hoping for similar consistency from the engine this weekend as in that race. The lap times have been fairly close on Pirellis so everyone might be trying that bit harder, which is why everybody has been caught out once or twice.”

Chris said: “I am looking forward to the weekend. It’s always a good, fun race meeting and the spectators will be back after a couple of the quieter rounds. I think the FP1 should work well at Misano as it is not the fastest track in the world and the run into the back straight is a gradual build up through four left-hand corners, rather than from the type of slow corner where we have been struggling.”

Circuit information: Misano, Italy

Best lap: Troy Bayliss, 1:33.525 (Superpole, 2002)
Lap record (race): Troy Bayliss 1:34.913 (2002)
Pole position: Left
Circuit length: 4.060km
Corners: 4 left, 4 right
Corner radius: 28m maximum, 74m minimum
Maximum slope: 1.5 per cent

Points (after 2 of 11 rounds)

Riders: 1 – Toseland 61; 2 – Chili 56; 3 – McCoy 55; 4 – Vermeulen 55; 5 Haga 43; 6 Borciani 43; 7 Walker (Foggy PETRONAS Racing) 39; 8 Martin (DFX) 29; 12 – Corser (Foggy PETRONAS Racing) 19

Manufacturers: 1 – Ducati 100; 2 – Honda 55; 3 – PETRONAS 42; 4 – Kawasaki 27; 5 – Suzuki 18; 6 – Yamaha 13.

From a press release issued by KTM:

KTM – ONGOING STABILITY AND GROWTH:
MY1 2003/04

Mattighofen: In spite of difficult market conditions and the weakness of the dollar, the KTM GROUP was able to achieve a 5% increase in sales volume in comparison with the previous year’s excellent first mid-year.

Sales revenues in Europe were very favourable. An increase of 11% was noted here. The Australian market grew by 30% whereas in the USA/Canada, even allowing for the adjusted exchange rate, a decrease in sales revenues of 4% was noted.

In spite of the dollar’s decline (-18% compared to the previous year), the previous year’s result only slightly decreased by 0.9 million EURO, or 6% after taxes due to existing foreign exchange safeguards. With an operating margin of 7.2% KTM is one of the most profitable companies in the motorcycle industry.

The development of equity capital was also favourable, it showed an increase of +24% compared to the balance sheet cutoff date of 8/31/03. The number of company employees continues to grow and currently encompasses 1,575 (of these 1,154 are employed in Austria).

From a press release issued by former AMA Grand National Champion Mike Kidd, who served as a Vice President of Clear Channel Entertainment — Motor Sports in charge of the now-defunct dirt track program as well as the Arenacross program:

This is to inform you I have resigned my position at Clear Channel Entertainment – Motor Sports. A great opportunity within the motorcycle industry has presented itself for me which will be announced shortly.

It has been an honor to work with a truly outstanding company like Clear Channel Entertainment for the past seven years.

I can currently be reached at 817/825-7081 or [email protected]

Copyright 2004, Roadracing World Publishing, Inc.

FIRST PERSON/OPINION

Via e-mail:

In my layman’s opinion, it seems the single biggest problem with professional motorcycle road racing in this country is that there is just no money in it for competitors. It’s a debit sport. A privateer could win an AMA Supersport race and not make enough prize money to even cover his basic travel and lodging. The manufacturer contingency money helps, but even that is not enough to make much of a dent in a good race program. Besides, contingency money has no show appeal. All pro single combat competitions must have a meaningful prize to galvanize fans.

Such poor economics relegates the sport to hobby status. By that I mean, most promising riders depend on benefactors to finance their efforts, and benefactors are typically just spending entertainment dollars. There is no future in that. Unless one is employed by a commercial effort, it is impossible for even a top competitor (rider or tuner) to make a living in road racing for very long.

Maybe the sport should to take a page from the past and provide riders with a share of the gate. It would constitute reallocating event revenue, but it’s a proven method of building a meaningful show. NASCAR shares part of their TV revenue with their drivers, and individual promoters provide a significant purse derived from their individual gates. That way, whatever fortunes their sport earns, competitors participate proportionately. All parties end up working to grow the show. While professional motorcycle road racing will not likely support a six figure prize for a win, a lowly $2k for winning a Supersport National is an embarrassment to the notion of being a professional event. It says a lot about the value of the sport to a lot of people. Something has to change in that area to gain any status, let alone make it feasible for few talented souls to commit to it full-time.

Along that line, I think the new AMA class format is constructive for the longer run. The racing needs to be among machines that drive the most potential revenue for the most commercial stakeholders. Stakeholders include motorcycle and component manufacturers, service providers, race promoters, track owners, media, and of course, the privateers who make up most of the show. In today’s world, that pretty much leaves 600 and 1000cc sport bikes as the only viable racing platforms. In its simplicity, I think that’s a good thing.

My guess is that AMA Pro Racing is hopeful of further simplifying it by herding the factory teams into the two Superbike classes (SBK and FX); thereby providing privateer teams a chance to prosper in the other two. SBK and FX offer manufacturers the best place to showcase their production motorcycles at the highest level of development, and these teams should have the budget and desire to compete there. Meanwhile, the two real production classes provide privateer teams with lower cost racing and a chance to win financial support for their efforts. From a strategic perspective, I like the new AMA format a lot.

While the ‘herding’ of factory riders to the right grids didn’t materialize this season, I think they will gather there eventually. Manufacturers get no value from their racing unless they compete against each other in the most challenging forum. The notion of having a million dollar rider beat up on a guy with a 12 foot Haulmark and EZ-up is preposterous. Worse…what if he doesn’t! Perhaps the grid quality problems in 2004 have more to do with product availability among Yamaha and Kawasaki then anything else. Regarding Formula Extreme, maybe it’s just the name. The whole motorcycle world knows what Supersport means. Few know what FX is. In any event, I think Yamaha and Kawasaki do not want to remain outliers in Superstock, and I hope they all jump into FX with Honda for their middleweight battle. In my notion of a perfect world, I’d like to see Supersport preserved for factory satellite teams and the best of the privateers. The class has legacy commercial value for front runners, and might be a good place to jump start the economics for non-factory contenders right now.

If there is a glimmer of promise for privateers (and therefore, the sport), I think it’s in the new TV coverage. Every professional sport needs TV to be financially viable, and motorcycle road racing seems to be getting its chance. With SpeedTV and OLN dabbling in it, maybe the programming gets some dependable traction. The compactness of the new AMA format certainly makes it more efficient to cover, and likely enhances programming to boot. If privateers can get some of that TV time, they’ve got something significant to sell to big consumer brands, and for very short money.

As an example; in the first two rounds, Team Prieto Racing got tremendous TV exposure through the remarkable performances of Mike Barnes and Geoff May. The coverage they got on TV was worth many thousands of dollars to any consumer brand that spends big for TV exposure. In a way, their coverage was ‘lost revenue’ because nobody was there to benefit that could. If Prieto can make a strong case for similar TV coverage in the future, they’ll probably have buyers. Of course, one might argue that the coverage they got only happened because the factory grids were thin. That may or may not be true, but my point is that if a team has TV coverage to sell, I think they will get cash buyers.

In summary, I think the problem with grids is directly related to economics. I say carve out some gate money for racers, and work hard to get them a shot at TV revenue. It works for the NCAA.

Bob Holcomb
Lincoln, Massachusetts


(Bob Holcomb is a motorcycle racing enthusiast with a son participating in F-USA and club races.)

From a press release:

Interactive Live Webcam Interviews on SBK Website

Visitors to www.worldsbk.com, the official website of the Superbike World Championship, will be able to put their own questions live to the stars participating in the next round of the Championship scheduled to take place at Misano, San Marino. FGSPORT has appointed FIDOWEB as its official Internet partner. Fidoweb will provide live interviews, exclusive web cameras, video highlights and video IRC chat facilities through the interactive interface on the Championship website. These will take place at the rounds in Misano 17th and 18th April, Monza 15th and 16th May and Imola 25th and 26th September.

A minimum of three cameras will show live images from the circuits and give visitors the opportunity to ask the stars of World Superbike their own questions. Via a chat line, visitors to the site can put their personal questions as the stars are being interviewed. Those chosen will be answered live. Various interviews are planned with many of the Championship’s leading riders including James Toseland, Regis Laconi, Noriyuki Haga, Chris Vermeulen, Garry McCoy and Pierfrancesco Chili. Other chances to put questions to team personnel will take place over the two days. In most cases the interviews will take place in English and Italian.

SBK Marketing Manager, Robert Wicks, said: “The website forms a very integral part of how we communicate with the Championship’s millions of fans all over the world. This new initiative is certain to enhance their experience and draw them even closer to the sport.”

Fidoweb specializes in Internet broadcast techniques and will be using the latest digital equipment and satellite links to ensure that everybody with internet access is able to take full advantage of this unique free service. FGSport will study the level of interest and, if it proves as successful as is anticipated, the company plans to expand the service to all events in 2005.

From a press release issued by Repsol Honda:


South Africa opens the door to the most expected world championship

The first of 16 rounds of the 2004 Motorcycle World Championship will take place next weekend at the South African circuit of Welkom. As every season, the winter has been much too long and all riders, teams and fans are looking forward to the first race of the season.

With the switch of the reigning World Champion Valentino Rossi to Yamaha, the Repsol Honda Team will make its debut with a new formation after the arrival of Alex Barros as new teammate to Nicky Hayden. Barros, who had a difficult season last year in Yamaha, a season full of injuries and crashes, gets back onto the bike with which he managed a superb end of the season in 2002. After a slow but positive recovery of the shoulder he got injured in 2003, the Brazilian rider gets back to Honda, this time within the Repsol Honda Team and with the firm objective of fighting for the 2004 title. His teammate Nicky Hayden will face his second season and, as his results during winter have shown, he will be aiming to everything this season, which is just about to start. Hayden, who this year won’t have the burden to race on circuits he doesn’t know, has had an impressive progression since he arrived at the World Championship last year. With two podiums and the final fifth overall position in the last Championship, the young North American rider from Kentucky has set the title as his aim for 2004.

Nicky Hayden
“I’m so excited about this season and can’t wait to go racing now. The winter testing has been good and I think we’re in real good shape for the season. The 2004 RC211V is awesome, by far the trickest bike I’ve ever ridden. I feel now I’m riding much nearer the limit where as last season was really a learning year. Now I know the tracks; I feel very comfortable with the team and I know the competition. It’s going to be super competitive this year as no one has really stood out in testing. That’s what is so great about GP. The best riders in the world on the best bikes every other Sunday. Sure going to be a good show.”

Alex Barros
“In all the years I’ve been racing I can really say that I have never felt as positive as do now at the start of this very exciting year. I have a strong team, a fantastic bike and a real opportunity this season. Back in February when I first ride the RC211V we make a plan to get to the first GP in good shape after the surgery I have to my shoulder over the winter. So in Sepang, Phillip Island and in Spain we learn a lot about the bike and my condition comes better and now we are ready to race. It will be a long season and very close. All points will be very important at the end. We are ready now!.”

GP venue: Phakisa Freeway
Brought about through an initiative of the South African government in early 1998, the Phakisa Freeway in Welkom is one of the newest race circuits on the World Championship calendar. Phakisa means “hurry up” in Sotho, the local language, and that’s the way it was built: in a hurry. The first National race event was held a mere 6 months after the work had started and the entire facility was completed in time for the 1999 Motorcycle Grand Prix, five months later. Designed in conjunction with officials of the FIM (Fédération Internationale de Motocyclisme), the Phakisa Freeway is considered as one of the safest circuits of the calendar.

With 5 left and 9 right-hand corners and relatively short straights, the top speed on the 4242 m of this track, is usually slower than on most of the tracks. This circumstance is compensated by the altitude (1350 m above sea level), which reduces around 20% of the engines’ power turning the races into a question of skill rather than horsepower. The layout includes a classic racetrack and an oval for car racing. Being a fast track with some of the most challenging corners of the calendar, turn this race into one of the most exciting events of the year.