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Monday, 27 July 2015


Polaris sales revenue up 11 percent to $1.124 Bn in second quarter

POLARIS Industries Inc. has reported record second quarter net income of $100.9 million for the quarter ended June 30, 2015, an increase of four percent from the prior year’s second quarter net income of $96.9 million. 

Earnings per share were a record $1.49 per diluted share for the second quarter of 2015 compared to $1.42 per diluted share for the second quarter of 2014.
Polaris say their second quarter results included additional manufacturing costs and inefficiencies approximating $9.0 million, as the Company worked to scale-up production and add capacity to the paint system at the Company’s motorcycle facility in Spirit Lake, Iowa. 

Sales for the second quarter 2015 totaled a record $1,124.3 million, an increase of 11 percent over last year’s second quarter sales of $1,014.0 million.
“In addition to reporting record second quarter sales and earnings, there are numerous positive undertones to our results this quarter. Motorcycle demand, notably including Slingshot, remains exceptionally high", stated Scott Wine, Polaris’ Chairman and Chief Executive Officer.
"Our Asia Pacific/Latin America business continues to grow, and we are encouraged by the favorable response to the Multix launch in India last month. Between ongoing improvements in our inventory management systems and North American retail sales growing 11 percent, dealer inventory growth moderately decelerated in the second quarter.

Scott Wine, President & CEO of Polaris Industries

“However, earnings were dampened by significant cost pressures and delayed shipments related to continued difficulties with our new motorcycle paint system in Spirit Lake, Iowa. We pulled out all the stops to increase throughput in an effort to meet the growing demand for our Indian, Victory and Slingshot customers, accepting the substantial costs commensurate with that push.
"Although production still cannot keep pace with demand, we are confident in our plans to further increase our motorcycle throughput in the second half of the year, and as such, are maintaining and narrowing full year guidance for sales and earnings per share.
“In spite of the short-term headwinds we are facing, both external and of our own making, I am confident this strong and talented Polaris team can continue to deliver industry-leading returns for our shareholders.”
For the full year 2015, the Company is narrowing its earnings guidance range to $7.32 to $7.42 per diluted share, an increase of 10 to 12 percent over full year 2014 earnings of $6.65 per diluted share. Full year 2015 sales are now expected to grow in the range of 10 to 12 percent when compared to 2014, narrowed slightly from previously issued sales guidance.

Motorcycle sales increased 57 percent to $162.1 million for the second quarter of 2015 compared to same period last year, due to continued strong demand for Indian motorcycles and the new Slingshot roadster. Victory, Indian Motorcycle and Slingshot North American retail sales increased over 80 percent during the second quarter of 2015 driven by Indian Motorcycle and Slingshot retail sales, while North American industry midsize and heavyweight motorcycle retail sales were flat compared with the second quarter of 2014.
Demand for the Indian Scout, Roadmaster and the new Indian Dark Horse drove an over 100 percent increase in retail sales for Indian Motorcycle during the quarter. Victory retail sales in the second quarter of 2015 were lower than the prior year largely due to poor product availability of the new Victory Magnum and Magnum X-1, a result of the paint capacity constraints in the Spirit Lake facility.
Slingshot retail sales continued to perform well ahead of expectations as consumer appeal for the new 3-wheeled roadster remained high. Polaris has increased production to meet the ongoing strong consumer demand for Slingshot.
International sales to customers outside of North America totaled $162.9 million for the second quarter of 2015, down four percent from the same period in 2014, driven by weak currencies.
The EMEA region’s sales declined 12 percent in the 2015 second quarter, partially offset by a 32 percent increase in Latin American sales and a 15 percent increase in sales in the Asia/Pacific region.
Gross profit increased five percent to $319.4 million in the second quarter of 2015, compared to $304.9 million in the second quarter of 2014. As a percentage of sales, gross profit margin declined 166 basis points to 28.4 percent of sales for the second quarter of 2015, compared to 30.1 percent of sales for the same period last year.
As expected, currency movements from a year ago, primarily the Canadian dollar, along with higher sales promotion costs negatively impacted gross margins during the second quarter of 2015. However, gross margins were further pressured by approximately $9.0 million of incremental costs associated with the Company’s efforts to correct manufacturing inefficiencies and add capacity to the paint system at the Spirit Lake motorcycle facility. These increased costs were partially offset by lower product costs and lower commodity costs.
Operating expenses grew five percent to $173.0 million or 15.4 percent of sales for second quarter of 2015, compared to $164.1 million or 16.2 percent of sales for the second quarter of 2014. Ongoing research and development investments and higher long-term incentive compensation expenses were largely offset by operating expense leverage from prior year’s infrastructure investments.

S&S Cycle

S&S boosts purse for this year's Sturgis Pro Dragster Class

In addition to its recently announced decision to relocate its Sturgis Rally presence from downtown Sturgis to Black Hills Harley-Davidson, S&S Cycle also has a considerable presence at the Sturgis Dragway, where it is Class Sponsor in collaboration with the Black Hills Drag Racing Association (BHDRA) at the 2015 Sturgis Motorcycle Rally Drag Races.

With this being the 75th annual event, S&S has agreed to boost the Pro Dragster class payouts to $1,500.00 plus a $300.00 gift card to win, $1,000.00 plus a $300.00 gift card for 2nd and a $450.00 gift card for the 2 runner ups. In addition, S&S Cycle will be hosting demo rides at Sturgis Dragway on Thursday, August 6, 2015 during the Rally.

S&S Cycle Racing Manager Justin Bramstedt said, “S&S Cycle has history of supporting and supplying products for v-twin drag racing since 1958. The Pro Dragster class demonstrates the tried and true S&S Super “D” carburetor, a product which has been around since 1983, and has paved the way for many S&S performance products all the way to today’s complete S&S engines.”

J&P Cycles

New venue proves a success for J&P Cycles Open House Rally

A new venue 10 miles up the road from the J&P Cycles headquarters, outside Anamosa, Iowa, proved to be a good move according to customer feedback at the company's annual Open House Rally, held June 27-28 at the Jones County Fairgrounds, Monticello, Iowa.

Rain on Sunday dampened attendance, but just under 20,000 motorcycle enthusiasts attended the event overall, including some from as far afield as California, Florida, Massachusetts, New York and West Virginia. 

Those in attendance experienced a weekend full of motorcycle-themed fun, with free live music both days. Attendees were in awe of Cowboy Kenny’s Steel Rodeo Tour on both days and were able to enjoy free lunch provided by Allstate Insurance.
Plus, customers were able to "see some of the hottest new products in the motorcycle industry with more than 100 vendors on site, including Kuryakyn, Mustang, Vance & Hines, Performance Machine and Progressive Suspension, and many more."
The J&P Cycles Open House Rally started as a small Customer Appreciation Day held by co-founders John and Jill Parham to thank their customers for their business throughout the year. Now, as the world’s largest aftermarket retailer of parts and accessories for Harley-Davidson and V-Twin Cruiser motorcycles, the event is a full blown rally, and, outside of Sturgis, is one of the only places in the Midwest to see this many motorcycle manufacturers in one area.

“The new, larger location this year was a huge hit! After years of ongoing growing pains, it was nice to have room to spread out and have the ability to host concerts,” said J&P Cycles General Manager Zach Parham (and son of co-founders John and Jill Parham). “Overall, this was a phenomenal event – thank you to all who attended.”
Just over $33,000 was raised for local non-profit causes. A silent auction held on Saturday and Sunday raised just over $6,000 for the National Motorcycle Museum. Next year’s event is scheduled for June 25-26, 2016 at the Jones County Fairgrounds.

Bagger Nation

New bodywork options from Bagger Nation

BAGGER Nation, the custom Touring bike parts brand established by Paul Yaffe, has expanded the bodywork options it is able to offer with the introduction of its new Razorback tank and Thicky steel fenders for oversized wheel applications.

The Razorback tank is a mod-free 6.5 gallon bolt-in replacement

The Razorback is the latest addition to the custom gas tank range offered by Bagger Nation and features a stretched look and wings that flow into the bike’s side covers. The 6.5-gallon capacity tank is a bolt-on replacement that requires no modification to the bike but does require a custom Le Pera seat that is also available from Bagger Nation. Designed to fit ’10-’16 Touring models, the Razorback is supplied complete with steel dash, chrome pop-up cap, rubber dash trim and hardware.

'Thicky' steel fenders for oversized wheel applications

The new 'Thicky' front fenders by Bagger Nation are being offered in 21in, 23in and 26in wheel sizes and for stock applications. The steel, one-piece fenders are drawn from 14-gauge steel and are supplied pre-drilled. Finished in E-Coat, they ship complete with satin finished spacers, with chrome or black spacers as an upgrade option.  



Big bore cylinder and piston kits

DELKRON is launching a new upgrade kit with their Twin Cam "Touring Elite" big bore cylinder kits.

Manufactured specifically for heavier bikes like Baggers, which run hotter and see much higher mileage use. The cylinders feature larger than stock fins and a 4.500” o.d. steel liner.
Delkron have included a Wiseco developed, armor plated, moly coated piston with 1/16” top, 1/16” second and 3/16” heavy duty ring pack. Currently these are offered in 113”, 124” and 131” configurations.



Kappa leather bags for custom bikes

ITALIAN manufacturer Kappa makes all types of fabric motorcycle bags, but has now branched out to include a buffalo leatherr line for custom bikes.


The bags include the saddlebags CU500 and the small CU503 bag for the motorcycle fork. The saddlebags have an aerodynamic rhomboid shape, are sold in pairs and have a clasp made of two metal buckles. Inner capacity of every bag is 15 litres, and the bags are fastened by a wide adjustable band, which passes under or over the saddle.

The small bag has a cylinder shape and inner capacity of 3.5 litres, perfect to take smaller objects. The closure is also by double clasp, with a metal buckle and decorated with rivets. Two further straps allow to fix the bag to the handlebars or the upper part of the motorcycle fork.

KAPPA S.r.l.

Klock Werks

KlipHanger variable position bars

KLOCK Werks designed its KlipHanger handlebars in recognition of the fact that no two riders are the same. They feature machined ‘Klamps’ that allow the control/grip portion to be positioned exactly where riders want their wrists to be. 

“Our KlipHanger handlebar design blends clip-on race technology with a taller bar. The Klamps allow the control/grip portions of the handlebar to be adjusted in several directions, allowing the ultimate in personal adjustability and ride comfort. Multiple size offerings accommodate a large range of preferred riding positions,” stated Brian Klock, President of Klock Werks. 

Klock Werks supplies the KlipHanger handlebars complete with chrome hardware, polished billet aluminum dome bar end caps, and complete installation instructions are included for most H-D, Victory, and Indian motorcycles.


Matrix Brakes

Lug drive metal Matrix brake rotors

MATRIX Brakes, manufactured by ISO 9001:2008 certified engineering business REL Inc., offers a range of high performance brake rotors and pads for Harley-Davidsons.
The company has been producing rotors for seven years, beginning with the button drive and now gaining popularity with a lug drive, which is said to be easy to assemble and has less fasteners.

Matrix rotors are made of lightweight, wear-resistant aluminum composite, claimed to be 60 percent lighter than steel. The company says that "it will stay cool through the braking event and never wear out," and offer a lifetime guarantee for all rotors.
They are available in standard Harley sizes 11.5in, 11.8in and 13in as well as 320mm. Matrix brakes exceed DOT stopping distance requirements. The company says that they are "continually testing new pad compounds for different applications."
Matrix is offering the rotors with different colors for the friction rings, carrier styles, carrier colors and button options through Lyndall, Netherlands based international distributor Zodiac, and direct from its own website.


TC Bros. Choppers

TC Bros. riser-less handlebars

TC BROS. Choppers line of aftermarket handlebar options in 1in diameter include a selection of bars that are designed to be directly to the upper triple tree on Harley-Davidsons with removable risers that are 3.5in center to center spacing. The handlebars feature uprights that are internally threaded to accept standard 1/2-13 tpi mounting bolts. 


Slant Z

The line-up of direct-mount handlebars begins with the TIG welded Whiskey ‘bars, which have 30-degree forward sweep in the uprights to make the bars sit perpendicular to the ground on most Harley models with stock rake front ends.
Also designed for riser-less mounting are the Rabbit handlebars, which have been designed to bolt directly to the stock 1/2in diameter holes in the top of the triple tree. Inspired by ‘70s Choppers, the Rabbit bars have 10in of pullback and an 18in overall width. 



Riser-less options from TC Bros. continue with the Bootlegger bars, again designed to fit the stock upper triple tree. This handlebar has 9.5in rise and a 25in overall width.
The final riser-less design offered by TC Bros. is its BMX handlebar that has 8in of rise and features dual cross-bars.


Drag Bar

TC Bros. Choppers’ entire range of handlebars is available dimpled for ’82-onward H-D hand controls, or smooth for pre-’82 and custom applications, and finished in the choice of satin black powder coat finish or chrome plate. 


Wednesday, 22 July 2015


Tough second quarter, but Harley is still forecasting increased unit shipments for 2015

HARLEY-DAVIDSON is continuing to forecast increased unit shipments for 2015 as a whole despite the fact that Q2 and year-to-date unit sales, unit shipments, net income, consolidated income, operating income/margin, and EPS are all down.

Its latest financial filings state that the company "continues to expect to ship 276,000 to 281,000 motorcycles to dealers and distributors worldwide in 2015, an approximate 2 to 4 percent increase from 2014" and that " revenue, earnings and motorcycle shipments" for the second quarter were "in line with [April revised] company expectations."

This optimism is despite a second quarter decline of -1.4 percent in worldwide sales (88,931 units sold against 90,218 in the second quarter of 2014) and a 0.75 percent drop in the United States (57,790 units against 58,225 in Q2 of 2014).

In international markets, dealers sold 31,141 new Harley-Davidson motorcycles during the second quarter compared to 31,993 motorcycles in the year-ago period, with sales up 16.6 percent in the Asia Pacific region and down -8.9 percent in Harley's most important Middle East & Africa (EMEA) export market, -2.6 percent in the Latin America region and -9.9 percent in Canada.

Operating income from motorcycles and related products decreased -19.6 percent to $380.6 million during the quarter compared to operating income of $473.3 million in the year-ago period, due primarily to lower motorcycle shipments and unfavorable foreign currency exchange rates.

For the first six months of the year Harley report worldwide sales down by -1.4 percent at 145,592 units from 147,633 for the first six months of 2014; with domestic US sales -0.7 percent and -7.7 percent in their EMEA region.

The picture is worse in shipment terms; Harley say they are off by - 4.7 percent for the year-to-date worldwide (164,761 motorcycles in the first half of 2015) which, despite apparent evidence of some momentum pointing to improvement as the second quarter wore on, makes their apparent third quarter and 2015 full-year confidence surprising.

Second-quarter revenue from motorcycles decreased -11.6 percent to $1.31 billion compared to revenue of $1.48 billion in the year-ago period. The company shipped 85,172 motorcycles to dealers and distributors worldwide during the quarter compared to shipments of 92,217 motorcycles in the year-ago period, which it says is also in line with its April revised guidance. 

"shipments down -4.7 percent"

Despite having been revised down once this year already, that guidance still suggests that third quarter shipments will be between 54,000 and 59,000 units, compared to 50,670 in the third quarter of 2014.

Flying solo with the financial media for the first time, and fronting up to the investor community (one that is caught between performance anxiety and the potential of the impending share buy-back), for the first time in his capacity as President & CEO, Matt Levatich is quoted as saying "in the face of a tough competitive environment, driven mostly by currency and greater competitive activity, we are leveraging our many strengths and meeting the challenge head on.

"Our actions during the quarter have had a positive impact. We are encouraged by the momentum at retail as the quarter progressed, both in the U.S. and internationally.

"We are confident in the strength of our business and the strategies we have in place to maintain our industry leadership and grow our business over the long term. Our singular focus on the customer through unrivalled products, unique experiences and our expanding dealer network is the bedrock we are building on to continue to grow our reach and impact with customers across the globe." 

Revenue from motorcycle parts and accessories was $256.8 million during the quarter, down 5.4 percent, and revenue from general merchandise, which includes MotorClothes apparel and accessories, was $77.5 million, up 1.5 percent compared to the year-ago period.

Through six months, net income was $569.7 million on consolidated revenue of $3.50 billion compared to six-month 2014 net income of $620.1 million on consolidated revenue of $3.73 billion. Six-month 2015 diluted earnings per share were $2.71, down 3.9 percent from EPS of $2.82 in the year-ago period.

Gross margin was 39.2 percent in the second quarter of 2015 compared to 39.5 percent in the second quarter of 2014. Second-quarter operating margin for the motorcycles segment was 23.1 percent compared to operating margin of 25.8 percent in last year's second quarter.

Six-month revenue from motorcycles was down 8.0 percent to $2.56 billion, revenue from parts and accessories decreased 6.2 percent to $440.7 million and revenue from general merchandise increased 2.5 percent to $143.9 million compared to the first six months of 2014. Gross margin through six months was 39.1 percent, and operating margin was 23.0 percent compared to 38.6 percent and 24.1 percent respectively in the year-ago period.

Second-quarter 2015 diluted earnings per share were $1.44 compared to EPS of $1.62 in the year-ago period.

Second-quarter net income was $299.8 million on consolidated revenue of $1.82 billion compared to net income of $354.2 million on consolidated revenue of $2.00 billion in the year-ago period.

Operating income from financial services was $81.9 million in the second quarter of 2015, a 10.0 percent increase compared to operating income of $74.4 million in last year's second quarter. Second quarter financial services results are said to reflect higher net interest income.

Through six months, operating income from financial services was $146.6 million compared to operating income of $137.6 million through six months of 2014. The company previously indicated it expected operating income from financial services to be down modestly in 2015, but now expects operating income to be up modestly compared to the prior year.

The company continues to expect a full-year 2015 operating margin of approximately 18 percent to 19 percent for the motorcycles segment. The company also continues to expect 2015 capital expenditures of $240 million to $260 million.

On a discretionary basis, the company repurchased 2.8 million shares of Harley-Davidson, Inc. common stock during the second quarter of 2015 at a cost of $164.8 million. In the second quarter of 2015, there were approximately 208.6 million weighted-average diluted common shares outstanding, compared to approximately 219.2 million shares in the year-ago quarter.

As reported in AMD Magazine last month, on June 17, 2015, the company disclosed that its Board of Directors authorized the company to repurchase up to an additional 15.0 million shares of its common stock and, significantly, to do so with no dollar limit.

This repurchase authorization is in addition to the share repurchases that the Board authorized in February 2014, pursuant to which the company was authorized to repurchase up to 20.0 million shares of its common stock with no dollar limit.

The company also disclosed that it intends to incur long-term debt in the third quarter of 2015 in the amount of $750 million and to use the proceeds to repurchase common stock through the remainder of 2015.

These repurchases will be in addition to already planned repurchases, which were expected to be in line with repurchases made in the second half of 2014.  However, the company now expects the combined effects of the additional indebtedness and share repurchases to be only slightly accretive to earnings per share in 2015, with the full effect on earnings per share beginning in 2016.

At the end of the second quarter, 31.0 million shares remained on board-approved share-repurchase authorizations.

Darwin Motorcycles

Darwin kit bike program

DARWIN Motorcycles has used its Brass Balls Cycles brand to launch a kit bike division. The company is now making its Brass Balls Cycles bike kits available in five separate and customizable budgets. 

“Through our years of building low volume production, custom award-winning Bobbers and Choppers, we’ve learned which parts have the superior engineering, fit and finish needed to build high quality, safe and hassle-free customs,” said Dar Holdsworth, Chief Designer and CEO of Darwin Motorcycles.
The five-phase kit program starts with a complete roller package of frame, wheels and tires, handlebars and front end options and upgrades which include the baseline model and also have the possibility to add additional components to build an individually specified Bobber or Chopper.

"We are excited to take a leading role in helping customers worldwide build and ride quality American motorcycles. We've used our years of experience building high quality, world class bikes to create a bike kit system that allows customers to custom configure a bike kit unique to their own personal style.
"Uniquely our kit program means a customer doesn't have to buy everything all at once, but allows existing components to be integrated. If they have a powertrain, for example, they could skip that phase and just get what they need,” said Holdsworth, "and we are honored to offer a $500 discount to active duty US military members and veterans on the complete kits."

Barracuda Custom Accessories

Fork Cap covers for Victory models

AVAILABLE in chrome plated and satin black powdercoat finishes, this fork cap cover set from Barracuda Custom Accessories of St Paul, Minnesota, is designed to "cover up the plain satin aluminum factory fork covers on Victory Cross Country, Cross Roads and Hardball models," says President Steven McParland.
He says it is "a simple and easy way to clean up the top triple tree and a very easy install." Machined to exact tolerances from 6061-T6 billet aluminum, they are plated in either a true chrome finish or a tough satin black powdercoat. Both styles are a mod-free direct fit. 

Barracuda was one of the first Victory-specific parts businesses to spot what is now considered to be a fast growing aftermarket custom parts opportunity.

McParland is a Victory owner and rider and says "we started in early 2007 and have surveyed the Victory riders for what they want in accessories. Ideas from owners like us have fuelled the fire for the products that we are making." McParland designs and manufactures all Barracuda products on site.


Custom Chrome International

Chassis and handling options

CUSTOM CHROME has added Paughco’s Custom FXR-style frames for Touring model drivelines. 

The new frames are designed to accept all ‘93-‘11 Evo or Twin Cam Touring model drivelines with the oil tank located under the transmission, and they have FXR-style mounts for the gas tank, side covers, seat and battery. 

A special sheet metal plate covers the area where the oil tank would normally fit. Designed for forward controls, they have a three-point mount on the left side that will accept a forward shifter bracket, and conventional kickstand mounting bracket options include either stock or wide 180/200 tire fitment. The swingarms, pivots shafts and axle kits are sold separately.

Also seen here is a Santee brand rigid frame for use with ’04-onward rubber mounted Sportster engines. The frames will work with a tire up to 150mm with either chain or belt final drive. It has 30 degrees of rake and no additional stretch in the back and down tubes.

Front fork preload adjusters from Burly (for use on ’88-onward and 91-onward Dyna models) are said to be easily installed, with the aluminum adjusters offering 20mm of preload, available in black or machined finish.

Also in the program are Progressive Suspension’s High Performance cartridge fork kits for Dyna front ends. The kits feature an asymmetrical design that places a preload adjuster over a progressive rate spring in one leg and an aluminum bodied, sealed cartridge damper in the other. Once installed on ’06 and later Dyna models, the kits are claimed to reduce brake dive, and improve front end stability, cornering and bottoming control.

Also designed to improve bike stability, the RevTech chassis stabilizer for Touring models utilizes a swingarm pivot anchor on FLH and FLT ’93-’08 to increase riders’ cornering confidence by reducing frame-flex.


CV Performance

Premium accelerator pump diaphragm

CV Performance, a company which specializes in tuning and improving H-D carburetion, now has a premium accelerator pump diaphragm for Harley carbs. It is a direct replacement for the stock diaphragm, and replaces worn or cracked diaphragms on Harley CV and Harley Keihin butterfly carburetors, as well as S&S Super E and G carbs.

The new diaphragm is claimed to provide greater resistance to the mild fuel additives found in pump gas and as a result should outlast many standard diaphragms, especially when ethanol enhanced fuel is used on an occasional basis. The company also states that replacing an old or worn diaphragm will make an improvement in the bike's performance.
The premium accelerator pump diaphragm is a replacement for H-D part number #27361-76A, and is compatible with all stock carburetors from ‘81-‘06 on Harley Big Twin Evo, Twin Cam and Sportster models, and all S&S Super E and G carburetors.



Mikuni American Corp

Mikuni HSR45-5 Easy Kit

MIKUNI offers its HSR45 carburetor as a performance upgrade 'Easy Kit' for Harley-Davidson Big Twins and other American V-twin engines upgraded with modified exhausts, cam kits, performance ignition, performance heads or big bore kits.

The HSR45 is said to provide a significant increase in the amount of fuel mixture flowed compared to Mikuni’s own HSR42 carburetor, which is designed for use on stock and lightly modified engines. 

Included in the Mikuni HSR45-5 ‘Easy Kit’ is a 45mm HSR carburetor and stock air box adapter.
Easy Kit applications include H-D ‘99 to present Twin Cam, and ‘90 – ‘99 Big Twin Evolution models and the kit can be used with the H-D Screamin’ Eagle high flow manifold.


Top Down Products

Top Down axle covers and spinners

TOP Down Products has announced the expansion of its axle cover line with the range now being made available for the rear axle on H-D models as well as the front. The variety of covers, in designs that range from simple caps to spikes, include a contrast cut finish option to complement contrast cut wheels. 

As a direct result of a client’s request Top Down has turned a one-off design into a full product line. An extension of its axle cover options, Top Down’s Shredder Series axle spinners are engineered to automatically spin with the power of the wind as the bike is ridden. The company’s universal axle kits allow the spinners to mount to any model Harley-Davidson front or rear axle.