Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q2 2011 Earnings Presentation
23 slides from Polaris's earnings presentation, Jul 19, 2011
Slide 1: Second Quarter 2011 Earnings Results
Second Quarter 2011 Earnings Results July 19, 2011
Slide 2: Safe Harbor
2 Safe Harbor Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2011 sales, shipments, net income, cash flow, and manufacturing realignment transition costs and savings, are forward-looking sta
Slide 3: Scott Wine, CEO
Scott Wine CEO Second Quarter 2011 Earnings Results July 19, 2011
Slide 4: Q2 2011 Sales and Net Income
4 Q2 2011 Sales and Net Income Q2 Sales ($ in millions) Q2 Net Income ($ in millions) $430.9 Up 41% $607.9 $25.6 Up 90% $48.7 Q2 2010 Q2 2011 Q2 2010 Q2 2011 Record 2nd Quarter Sales and Net Income 2nd Quarter Earnings per Share were up 83% over Q2 2010, to a record $1.37 Gross Margins improved 300
Slide 5: Full Year 2011 Guidance
5 Full Year 2011 Guidance Total Company Sales (in millions) Diluted EPS $1,991 Up 25% to 28% $2,490 to $2,540 2010 Actual 2011 Guidance $4.28 Up 39% to 41% $5.93 to $6.05 2010 Actual 2011 Guidance Retail sales growth continues to outpace the industry International, Military, and Bobcat businesses ac
Slide 6: Strategic Progress Continues
6 Strategic Progress Continues… 3-5 Year Strategic Initiatives Q2 YTD 2011 Progress Grow Sales $3 Billion by 2014 $1.6 Billion $3.0 Billion 2009 2014 Expand Net Income Margins >8% of sales by 2014 6.5% >8.0% 2009 2014 Best in Powersports PLUS 5-8% organic growth Growth Through Adjacencies $100 - 300
Slide 7: Bennett Morgan, President & COO
Bennett Morgan President & COO Second Quarter 2011 Earnings Results July 19, 2011
Slide 8: Dealer Inventory
8 Dealer Inventory North American Polaris Dealer Inventory Levels Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Units 2006 Actual 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual N.A. retail sales up 19% in Q2 – accelerating demand N.A. dealer inventory down 1% from Q2 2010 and down 8%
Slide 9: Off-Road Vehicle Division
9 Off‐Road Vehicle Division Polaris Sales (millions) N.A. ORV Industry ATV SXS ATV SXS ATV SXS ATV SXS $342.1 +41% $482.3 Q2 2010 Q2 2011 +35% $1,376.4 + Mid-twenties % FY 2010 FY 2011 Guidance Down low to mid-single digits Down low to mid-single digits Q2 Industry Estimate FY 2011 Projection Q2 201
Slide 10: Adjacencies
10 Adjacencies Military Bobcat Strategic Alliance Q2 sales up significantly Gaining traction in International markets with military products Received 200 unit contract from Israeli defense Exploring various technology opportunities Additional resources added to division to accelerate growth Q2 sales
Slide 11: On-Road Division – Victory / LEV
11 On‐Road Division – Victory / LEV Polaris Sales (millions) N.A. Motorcycle Industry 1400cc+ $15.5 +99% $30.9 Q2 2010 Q2 2011 +55% $81.6 +60% - 65% FY 2010 FY 2011 guidance Up mid-single digits Up modestly (increased) Q2 2011 FY 2011 Projection Q2 2011 Summary Global Victory retail accelerated – st
Slide 12: PG&A
12 PG&A Polaris Sales (millions) Q2 2011 PG&A Growth by Product Line Q2 2011 PG&A Revenue by Product Category $71.4 +23% $87.9 Q2 2010 Q2 2011 +10% $344.3 + mid teens % FY 2010 FY 2011 guidance ORV Snow On-Road Other +21% +33% +21% +43% Parts 50% Accessories 48% Apparel 2% Aus/NZ 13% Q2 2011 Summary
Slide 13: International Division
13 International Division Polaris Sales (millions) Q2 2011 Revenue by Geography Q2 2011 Revenue by Business $77.5 +35% $104.2 Q2 2010 Q2 2011 +21% $305.9 Up 20% to 25% FY 2010 FY 2011 guidance Europe 70% ME / Africa 9% Latin America 8% Asia 1% Aus/NZ 12% Off-Road Vehicles 77% On-Road Vehicles 7% PG&
Slide 14: Manufacturing Realignment
14 Manufacturing Realignment Goal: 3 Manufacturing Centers of Excellence in Roseau, Spirit Lake and Monterrey Monterrey building is complete on-time and on budget; production ramp-up continues Cost of project in line with plan Monterrey ORV shipments began in Q2 – on time, high quality Operational E
Slide 15: Operational Excellence – Q2 2011 Margins
15 Operational Excellence – Q2 2011 Margins Gross Margins Net Income as a Percent of Sales 26.2% 29.2% +300 bpts Q2 2010 Q2 2011 5.9% +3.0% -0.2% +0.4% -1.1% 8.0% Q2 2010 Gross Margin Operating Expense Other Non-Operating Expense Income Taxes/Other Q2 2011 Gross margins continue to improve driven by
Slide 16: Mike Malone, V.P. Finance & CFO
Mike Malone V.P. Finance & CFO Second Quarter 2011 Earnings Results July 19, 2011
Slide 17: 2011 Full Year Revised Guidance
17 2011 Full Year Revised Guidance METRIC GUIDANCE Product Line Sales - Off-Road Vehicles Up mid-twenties % (increased) - Snowmobiles Up about 40% (increased) - On-Road Vehicles Up 60% to 65% (increased) - PG&A Up mid-teens % (increased) - International Up 20% to 25% (increased) Total Company Sales
Slide 18: Gross Profit Margin Percentage Trends
18 Gross Profit Margin Percentage Trends Actual Q2 2010 Actual Q2 2011 Full Year Guidance 2011 Prior Period 24.1% 26.2% 26.6% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix Manufacturing realignment, net Warranty costs To
Slide 19: Manufacturing Realignment Remains on Plan
19 Manufacturing Realignment Cost Charged to P&L (in millions) Capital Expenditures (in millions) Savings (in millions) $3 $12 - $14 $20 $24 - $26 Q2 2011 Actual FY 2011 Guidance FY 2012 Estimate Project To-Date Estimated Total Capital $8 $23 - $25 $23 $35 Q2 2011 Actual FY 2011 Guidance FY 2012 Est
Slide 20: Balance Sheet and Liquidity Profile
20 Balance Sheet and Liquidity Profile $ In millions (except per share and interest rate data) YTD 2011 Fav (Unfav) 2010 2011 Full Year Guidance Cash $262.2 $95.9 Increase from 2010 Long Term Debt $100.0 $100.0 $100 private placement at 4.4% fixed rate Credit Facility (expires December 2011) $250.0
Slide 21: Scott Wine, CEO
Scott Wine CEO Second Quarter 2011 Earnings Results July 19, 2011
Slide 22: Excellent First Half 2011
22 Excellent First Half 2011 Powersports momentum continues Ranger and RZR performance remains strong Snow share gains and order increases translating into significant sales and profit growth Victory: North American retail sales and global growth plans on track Manufacturing realignment remains on p
Slide 23: Thank you. Q & A
23 Polaris Industries Inc. Thank you. Q & A July 2011