Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q1 2009 Earnings Presentation
20 slides from Polaris's earnings presentation, Apr 16, 2009
Slide 1: Polaris Industries Inc. First Quarter 2009 Earnings Results
Polaris Industries Inc. First Quarter 2009 Earnings Results April 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: First Quarter 2009 Results
2008 2009 Sales 0.55 0.26 0 First Quarter 2009 Results Results in line with Company expectations Balance sheet remains strong Q1 EPS includes $0.18 per share impairment charge - KTM Investment 2008 2009 Sales 388.7 312 0 Diluted EPS $0.55 $0.26 - -53% $388.7 $312.0 - -20% Total Company Sales ($ in m
Slide 4: First Quarter 2009 Sales
ORV Snow Victory PG&A Sales 388.7 339.6 338.3 324.8 312 312 49.1 1.3 13.5 12.8 Total Company Sales ($ in millions) $388.7 $-49.1 $-1.3 $-13.5 $-12.8 $312.0 Q1 2008 Total Company Q1 2009 Total Company First Quarter 2009 Sales % Change in Total Company Sales Geographic Sales United States Canada Other
Slide 5: First Quarter 2009 Earnings
First Quarter 2009 Earnings Gross profit margin percentage improved 180 basis points $9.0 million pre-tax, non-cash impairment charge taken KTM investment fair value reduced Operating income before financial services down 23% relatively proportionate to sales decline Financial Services income decrea
Slide 6: North American Retail Sales
North American Retail Sales 0% North America retail sales for Polaris deteriorated further in Q1 as expected International also declined in Q1 Core ATV decline is greater than side-by-sides
Slide 7: North American Dealer Inventory Levels
North American Dealer Inventory Levels Receivable Balance - U.S. Dealers ($ in millions) North American Dealer Count Dealer Health Down 7% from Q1 2008 Down 8% from Q4 2008 Expected to decline further throughout 2009 MVP progressing well Down 2% from Q1 2008 Down 8% from Q4 2008 Losses remain well l
Slide 8: Operational Excellence
Operational Excellence Full Year 2009 gross margin guidance = increase up to 130 bpts - unchanged Commodity cost significantly lower in 2009 Factory Inventory improving (down 12%) - expect to be lower year-over-year throughout 2009 Lean expansion continues Cost reduction/avoidance initiatives in pla
Slide 9: Off-Road Vehicle Division
Off-Road Vehicle Division $264.5M - -19% $215.5M Full Year 2009 Sales Guidance: -17% to - 25% (unchanged) New Sportsman XP & Ranger continues to sell well Sportsman 850 XP EFI named "2009 ATV of the Year" in U.S. & Europe Gained ORV share in Q1 2009 North American ORV Industry retail declined in Q1
Slide 10: Snowmobile Division
Snowmobile Division $9.4M - -13% $8.2M Polaris Revenue ($000's) - -12% N.A. Snowmobile Industry Sales Full Year 2009 Sales Guidance: -10% to - 20% (unchanged) #2 in N.A. market share for season ending March 31, 2009 New RUSH(tm) model well received - - Industry's only progressive rate rear suspensio
Slide 11: Victory Division
Victory Division $27.3M Polaris Revenue ($000's) N.A. Motorcycle Industry 1400cc+ - -49% $13.8M Full Year 2009 Sales Guidance: -25% to -40% (unchanged) Expect N.A. Industry >1400cc to be down 15% to 25% for Calendar 2009 Dealer inventory down 24% at Q1 2009 Aggressive supply reduction to improve dea
Slide 12: PG&A Division
PG&A Division $87.4M - -15% $74.5M Polaris Revenue ($000's) Full Year 2009 Sales Guidance: -9% to -13% (unchanged) Revenue impacted by decline in wholegood sales Highest gross margin business - expect gross margin percentage expansion in 2009 Expect to outperform WG sales in '09 Q1 2009 PG&A Revenue
Slide 13: International Division
Europe ME/Africa Latin America Asia Aus/NZ East 41 4 3.1 0.5 5 International Division ORV Victory Snow PGA East 33.1 2.4 6.5 11.4 Polaris Revenue ($000's) Q1 2009 Revenue by Geography Q1 2009 Revenue by Business Unit Full Year 2009 Sales Guidance: -10% to -20% (unchanged) Gaining share in ORV in the
Slide 14: Adjacencies
Adjacencies Military Solid quarter New customer penetration continues New customer quote activity and order backlog up significantly Global expansion / after sale support Bobcat Strategic Alliance #1 ORV manufacturer / #1 Compact construction manufacturer Technology sharing Co-development and supply
Slide 15: Financial Services Income
Financial Services Income FY 2009 Guidance: down about 50% of 2008 (unchanged) Q1 2009 Wholesale credit income similar to Q1 2008 Retail credit income down significantly again in Q1 2009 - as expected Sheffield quickly adding volume since February 2009 Q1 2008 Q1 2009 Retail Financing 3.3 0.3 Wholes
Slide 16: Gross Profit Margin Percentage Trends
Gross Profit Margin Percentage Trends Flexible variable cost structure and timely execution drives gross margin expansion
Slide 17: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share data) Q1 2009 +/- Q1 2008 Full Year / Year End 2009 Guidance Total Debt - ending $244.0 -$16.0 Similar to 2008 Net Debt - ending (debt less cash balances) $226.1 -$16.3 Improved from 2008 Credit Facility (expires December 2011) $450
Slide 18: 2009 Full Year Guidance
2009 Full Year Guidance Product Line Sales Off-Road Vehicles Down 17% to 25% Snowmobiles Down 10% to 20% Victory Motorcycles Down 25% to 40% PG&A Down 9% to 13% Total Company Sales Down 15% to 23% Gross Margins Up to 130 bpts improvement Operating expenses Down significantly in dollars but up as a p
Slide 19: Second Quarter 2009 Guidance
Second Quarter 2009 Guidance Weak Industry retail sales expected to continue in Q2 2009 Cuts made for end of model year 2009 production for ORV and Victory Commodity cost and expense reduction will help offset weak demand Total Company Sales (in millions) Diluted EPS 2008 2009 Sales 455.7 300 50 $45
Slide 20: Thank you. Q & A
Polaris Industries Inc. Thank you. Q & A