Polaris Industries Reports First Quarter 2010 Results

UTV Industry News

Wednesday, April 21, 2010
Polaris Industries Reports First Quarter 2010 Results

Performance Driven by Retail Sales Growth and Market Share Gains in Off-Road Vehicles, Victory and International and Improved Gross Margins
First Quarter Highlights:

Sales grew 16% to $361.7 million from last year’s first quarter
Net income increased 127% to $0.59 per diluted share, representing a first quarter record for Polaris
Gross margin percentage for the first quarter 2010 increased 170 basis points to 26.2% due to lower product cost, higher selling prices and favorable currency movements
Raising guidance for full year 2010 earnings to a range of $3.48 to $3.60 per diluted share, a 14% to 18% increase over full year 2009 on expected full year 2010 sales growth of 8 % to 11%
The Polaris Board of Directors has approved the regular quarterly cash dividend of $0.40 per share payable May 17, 2010 to shareholders of record as of May 3, 2010
MINNEAPOLIS-- Polaris Industries Inc. (NYSE: PII) today reported record first quarter net income of $19.8 million, or $0.59 per diluted share for the quarter ended March 31, 2010. By comparison, 2009 first quarter net income was $8.5 million, or $0.26 per diluted share, which included an $0.18 per diluted share non-cash impairment charge on the Company’s investment in KTM. Sales for the first quarter 2010 totaled $361.7 million, an increase of 16 percent from last year’s first quarter sales of $312.0 million.
“Our first quarter results demonstrate that the investments we made throughout the economic downturn have prepared us well to accelerate growth in 2010. Our first quarter sales and earnings growth exceeded our expectations driven by solid execution of our long-term strategy, which includes successfully developing and marketing innovative new products and improving operational efficiencies across our business,” commented Scott Wine, Polaris’ Chief Executive Officer. “Total Company retail sales to consumers in North America grew nine percent during the first quarter, as we saw strong demand for our Off-Road vehicles and Victory motorcycles. Our international sales to customers outside of North America grew 41 percent in the quarter, with surprising strength in Europe and several developing markets. Polaris achieved strong market share improvements in ORV and Victory Motorcycles as our retail sales performance was notably stronger than overall industry retail sales, which remained weak through most of the first quarter.”
Wine continued, “Profitable growth is an important objective for Polaris, and we leveraged operational excellence to ensure that margin expansion accompanied our strong 16 percent organic growth in the quarter. The gross margin expansion realized during the quarter was the result of a number of operational initiatives including the utilization of our world-class engineering team to reduce product costs and our Max Velocity Program, which is enabling us to work with our dealers to drive retail sales and market share growth more efficiently.”
Wine concluded, “While we still have concerns about the strength of the economic recovery and our core powersports industry, I am confident in the ability of this Polaris team to capitalize on our investments in the development of innovative, high quality products, our international expansion efforts and the many exciting new market adjacencies that we are pursuing. We fully expect to deliver consistent long-term, sustainable growth and profitability for all stakeholders.”
2010 Business Outlook
Based on Polaris’ performance during the 2010 first quarter and expectations for the remainder of the year, the Company is increasing its full year sales and earnings guidance for 2010. The Company now expects full year 2010 earnings to be in the range of $3.48 to $3.60 per diluted share, an increase of between 14 and 18 percent when compared to earnings of $3.05 per diluted share for the full year 2009. Sales for the full year 2010 are now expected to grow in the range of 8 to 11 percent. For the second quarter of 2010, the Company expects total sales to increase in the range of 14 to 17 percent primarily due to continued strength in ORV, Victory motorcycles and international retail sales to consumers. Second quarter 2010 earnings are expected to be in the range of $0.63 to $0.67 per diluted share, an increase of 19 to 26 percent, compared to earnings of $0.53 per diluted share for the second quarter of 2009.

Off-Road vehicles (“ORV’) sales during the first quarter 2010, which includes sales of both core ATVs (all-terrain vehicles) and RANGER side-by-side vehicles, increased 16 percent from the first quarter 2009. This increase reflects significant market share gains for both ATVs and side-by-sides driven by new product offerings including the recently introduced RANGER RZR 4, the Company’s first 4-seat sport side-by-side. The Company’s increase in ORV retail sales and market share also benefited from the success of its go-to-market business model called Max Velocity Program (“MVP”), which is currently in place with approximately 50 percent of the North American ORV dealer volume. North American retail sales to consumers for ORVs increased nearly 20 percent for the 2010 first quarter from the first quarter last year, with side-by-side vehicle retail sales increasing significantly while core ATV retail sales were about flat. Retail sales trends improved sequentially each month during the first quarter of 2010. North American dealer inventories of ORVs were down significantly during the 2010 first quarter, declining 34 percent when compared to 2009 first quarter levels. Sales of ORV to customers outside of North America increased over 40 percent in the first quarter 2010 when compared to the first quarter 2009, due to market share gains in both ATVs and side-by-side vehicles, positive mix benefit as more higher priced side-by-side vehicles were sold, higher selling prices and positive currency benefit from the weaker US dollar.

Man I really hate to see Yama loose their dominance in market share but you gotta step back up to the plate.

nocerisdave wrote:: Man I really hate to see Yama loose their dominance in market share but you gotta step back up to the plate.

I hear ya Dave. I just dont think it's going to happen for awhile, if ever. I think Yamaha will give up the sport side of the UTV market to Polaris and Can-Am.

i agree yank ,yammie will be the john deere gator and honda big red competition !!

Well, I have said the sport market is much bigger then we thought. Polaris is on top of it.

Also, I think they are doing very well with the utility side. The Ranger XP is showing up more and more. How many guys have bought one on this site compared to the Rhino. People are looking for more power and Polaris is giving them what they want. Ask RedNeckRanger, Pate, Glockfan and PWM.

I bet Yamaha will be winning it within the next few years.....give them time! You guys get too impatient! Eat

They are not gonna let Polaris just run over them for years in a row, the'll have a new machine out.....give it time!

smith700 wrote:: I bet Yamaha will be winning it within the next few years.....give them time! You guys get too impatient!
They are not gonna let Polaris just run over them for years in a row, the'll have a new machine out.....give it time!

Smith, I wish you were right. However, I have one word....... Honda Sad

» Friday, January 28, 2011... Polaris Reports Record 2010 Fourth Quarter and Full Year Results
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