Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q2 2009 Earnings Presentation
22 slides from Polaris's earnings presentation, Jul 16, 2009
Slide 1: Polaris Industries Inc. Second Quarter 2009 Earnings Results
Polaris Industries Inc. Second Quarter 2009 Earnings Results July 16, 2009
Slide 2: Safe Harbor
Safe Harbor Today's presentation includes statements which should be considered forward-looking for the purposes of the private securities reform act of 1995. Additional information concerning these factors that may influence results can be found in our 2008 annual report and 2008 Form 10-K, which a
Slide 3: Second Quarter 2009 Results
2008 2009 Sales 0.55 0.26 0 Second Quarter 2009 Results Challenging economic environment continued in Q2 Results exceeded Company expectations Balance sheet remains strong 2008 2009 Sales 388.7 312 0 Diluted EPS $0.72 $0.53 - -26% $455.7 $345.9 - -24% Total Company Sales ($ in millions)
Slide 4: Neighborhood Vehicle Market
Neighborhood Vehicle Market Neig other Q2 2009 0.1 0.9 Neighborhood Vehicles People Transport, Light Duty, Golf Cars Off-Road Technical Applications On-Road Product Innovation New & growing customer base Expanding migration to warmer weather Growing demand for low emission vehicles Underserved Marke
Slide 5: Polaris Breeze Electric Vehicle
Best Electric Vehicle for Golfing, Riding & Carrying Light Cargo MyChoice(tm) rear seat easily converts in 60 seconds NEW! Polaris Breeze(tm) Driver and Passenger Seat Belts Low and High Beams Turn Signals Adjustable Drivers Seat Premium Wheels Comfort Ride Suspension Technology
Slide 6: Second Quarter 2009 Sales
ORV Snow Victory PG&A Sales 455.7 366.5 367.9 355 345.9 345.9 89.2 1.4 12.9 9.1 Total Company Sales ($ in millions) $455.7 $-88.6 $1.4 $-12.9 $-9.7 $345.9 Q2 2008 Total Company Q2 2009 Total Company Second Quarter 2009 Sales % Change in Total Company Sales Geographic Sales United States Canada Other
Slide 7: Second Quarter 2009 Earnings
Second Quarter 2009 Earnings Gross profit margin percentage improved 40 basis points Operating expenses (in dollars) decreased 17% from Q2 2008 Income tax provision rate of 34.4% favorable to Q2 2008 Net Income as a Percent of Sales Net Income 2008 2009 Sales 19.1 8.5 0 $24.4 $17.5 - -28% 2008 Gross
Slide 8: North American Retail Sales
North American Retail Sales 0% Polaris N.A. retail sales decreased in line with expectations Approximately flat with Q1 2009; it appears we have reached the bottom Core ATV decline is greater than side-by-sides International retail sales decline similar to N.A.
Slide 9: North American Dealer Inventory Levels and Dealer Health
North American Dealer Inventory Levels Receivable Balance - U.S. Dealers ($ in millions) North American Dealer Count Dealer Health Down 8% from Q2 2008 Down 10% from Q1 2009 Victory ? 24% from Q2 2008 Expect further declines by 2009 year end Down 5% from Q2 2008 Down 12% from Q1 2009 Losses remain w
Slide 10: Operational Excellence
Operational Excellence Full Year 2009 gross margin guidance = increase up to 130 bpts - (unchanged) Factory Inventory down 21% to Q2 2008 - expect to be lower year-over-year throughout 2009 Cost reduction/avoidance initiatives producing results Supply chain lead times reduced by another 13%+ Expandi
Slide 11: Off-Road Vehicle Division
Off-Road Vehicle Division Q2 2008 Q2 2009 Side-by-Sides 0.54 0.58 ATVs 0.46 0.42 Full Year 2009 Sales Guidance: -21% to -25% (Narrowed range) North American ORV industry retail declined in Q2, as expected ATVs down 30 percent range Side-by-sides down mid-teens percent (estimate) Gained ORV share aga
Slide 12: Snowmobile Division
Snowmobile Division $6.0 +23% $7.4 Polaris Revenue ($000's) Full Year 2009 Sales Guidance: -15% to -20% (Narrowed range) Second quarter is off season for snowmobile retail sales and riding Dealer inventory at appropriate levels The new progressive rate rear suspension RUSH(tm) to begin shipping in Q
Slide 13: On-Road Division - Victory Motorcycles
On-Road Division - Victory Motorcycles Full Year 2009 Sales Guidance: -40% to -50% Victory retail sales weaker along with Industry Production cuts made to reflect slower sales reality Additional resources allocated to assist the Victory business and dealers New On-Road Division established Includes
Slide 14: PG&A Division
PG&A Division $76.0 - -13% $66.3 Polaris Revenue ($000's) Full Year 2009 Sales Guidance: -13% to -17% (lowered) Revenue impacted by decline in wholegood retail sales Remains highest gross margin business - expect gross margin expansion in 2009 Expect to outperform wholegood sales in 2009 Q2 2009 PG&
Slide 15: International Division
Europe ME/Africa Latin America Asia Aus/NZ East 0.73 0.07 0.07 0.01 0.12 International Division ORV Victory Snow PGA East 0.76 0.04 0.03 0.17 Polaris Revenue ($000's) Q2 2009 Revenue by Geography Q2 2009 Revenue by Business Unit $83.8 - -30% $58.7 Full Year 2009 Sales Guidance: -15% to -20% (narrowe
Slide 16: Financial Services Income
Financial Services Income Q2 2008 Q2 2009 Retail Financing 1.2 0.3 Wholesale Credit 3.3 3.1 Other Activities 0.7 0.6 Q4 2008 Q4 2008 Q1 2009 Q1 2009 Q2 2009 Q2 2009 Sales 0.53 0 0.44 0 0.48 0.31 0.31 0.33 Financial Services Income by Category Retail Portfolio HSBC, GE and Sheffield Combined Penetrat
Slide 17: Gross Profit Margin Percentage Trends
Gross Profit Margin Percentage Trends Flexible variable cost structure and timely execution drives gross margin expansion
Slide 18: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share data) YTD June 2009 +/- YTD June 2008 Full Year / Year End 2009 Guidance Total Debt - ending $250.0 -$11.0 Similar to 2008 Net Debt - ending (debt less cash balances) $220.0 -$19.1 Improved from 2008 Credit Facility (expires Decembe
Slide 19: 2009 Full Year Guidance
2009 Full Year Guidance Product Line Sales Off-Road Vehicles Down 21% to 25% Snowmobiles Down 15% to 20% Victory Motorcycles Down 40% to 50% PG&A Down 13% to 17% Total Company Sales Down 20% to 25% Gross Margins Up to 130 bpts improvement Operating expenses Down significantly in dollars but up as a
Slide 20: Third Quarter 2009 Guidance
Third Quarter 2009 Guidance Weak Industry retail sales expected to continue in Q3 2009 Adjustments made to production for Victory MY 2010 Commodity cost and expense reduction will continue to help offset weak demand Total Company Sales (in millions) Diluted EPS 2008 2009 Sales 580.3 404.7 75 $580.3
Slide 21: Priorities for 2nd Half 2009
Priorities for 2nd Half 2009 Great Dealer Show - New Product Introductions Execute Order Solicitation Expand MVP Drive Victory Improvements Stay on Strategy Polaris: Unmatched Innovation & Execution
Slide 22: Thank you. Q & A
Polaris Industries Inc. Thank you. Q & A