Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Shareholder Meeting (April 2003)
45 slides from Polaris's shareholder meeting presentation, Apr 30, 2003
Slide 1: Polaris Industries Inc. Annual Shareholders Meeting
Polaris Industries Inc. Annual Shareholders Meeting Thursday, April 24, 2003
Slide 2: Greg Palen, Chairman
Greg Palen Chairman Annual Shareholders Meeting Thursday, April 24, 2003
Slide 3: Polaris Industries Inc. Annual Shareholders Meeting
Polaris Industries Inc. Annual Shareholders Meeting Thursday, April 24, 2003
Slide 4: Thomas C. Tiller, President and CEO
Thomas C. Tiller President and CEO Annual Shareholders Meeting Thursday, April 24, 2003
Slide 5: 2002 Was Another Good Year for Polaris in a Tough Environment
2002 Was Another Good Year for Polaris in a Tough Environment 1998 1999 2000 2001 2002 East 1153 1296 1393 1488 1521 1998 1999 2000 2001 2002 East 2.72 3.07 3.5 3.88 4.39 1998 1999 2000 2001 2002 East 71 76 83 91 104 Polaris Industries Inc. 2002 Year: 1998 Sales: $1.521 Billion Up 2% Earnings Per Sh
Slide 6: Balance Sheet and Cash Flow Remain Solid
Balance Sheet and Cash Flow Remain SOLID 1998 1999 2000 2001 2002 East 107 115 127 147 168 1998 1999 2000 2001 2002 East 0.12 0.19 0.19 0.07 0.06 1998 1999 2000 2001 2002 East 0.44 0.47 0.44 0.41 0.4 1998 1999 2000 2001 2002 Cash Flow Provided Up 14% in 2002 ($ in millions) Debt to Total Capital Low
Slide 7: Continuously Investing in the Company
Continuously Investing in the Company 1998 1999 2000 2001 2002 East 28.4 31.3 32.4 35.7 45.6 1998 1999 2000 2001 2002 East 61.5 65 63.1 54 56.6 2000 2001 2002 Research & Development Increased 28% in 2002 ($ in millions) Capital Expenditures ($ in millions) Major Expenditures in 2002: Completion of R
Slide 8: Consistently Increasing Dividends
Consistently Increasing Dividends Dividend increased 11% in 2003 to $1.24 per share 1996 1997 1998 1999 2000 2001 2002 2003 East 0.6 0.64 0.72 0.8 0.88 1 1.12 1.24 1998 1999 2000 2001 2002 1996 1997 2003* P O L A R I S I N D U S T R I E S I N C. * Estimated
Slide 9: Committed to Returning Excess Cash to Shareholders
We Remain Committed to Returning Excess Cash to Shareholders Repurchased $76 Million of Polaris Stock in 2002 (1.2 million shares) 1996 1997 1998 1999 2000 2001 2002 East 0.5 1.5 1.1 1.5 1.2 1.1 1.2 1998 1999 2000 2001 2002 1996 1997 1996 1997 1998 1999 2000 2001 2002 East 14 40 38 52 40 49 76 1998
Slide 10: 2002 - A Year of Uncertainties
2002 - A Year of Uncertainties Soft economy Pending war in Iraq Low consumer confidence Increased environmental regulations Weather - lack of snow Corporate scandals P O L A R I S I N D U S T R I E S I N C. 2003 - Starting out with more of the same?
Slide 11: 2002 Results in Summary
2002 Results in Summary 21st consecutive year of earnings per share growth 20 consecutive quarters of increased sales and earnings Introduced the largest number of new products in the Company's history Quality is getting better Distribution is improving Delivered 2002 results the same way as always
Slide 12: A Solid Investment - Total Return to Investors
A Solid Investment - Total Return to Investors P O L A R I S I N D U S T R I E S I N C. All returns include reinvestment of dividends
Slide 13: Reasons Why We Like the ATV Business
A T V s Reasons Why We Like the ATV Business
Slide 14: ATVs: We sell more ATVs than any other product
A T V s Reasons Why We Like the Business 1. We sell more ATVs than any other product with plenty of room to grow 2000 2001 2002 East 827 827 938 2000 2001 2002 2000 2001 2002 East 775 874 939 2000 2001 2002 Polaris Sales (dollars in millions) Worldwide Industry (units in thousands) (excludes RANGER
Slide 15: ATVs: Gaining momentum outside our traditional stronghold
A T V s Reasons Why We Like the Business 2. We are gaining momentum outside our traditional stronghold Sport East 21 72 Sport 21% (Predator competes in this market segment)
Slide 16: ATVs: New buyers continue to enter the market
A T V s Reasons Why We Like the Business 3. New buyers continue to enter the market About 40% of ATV Buyers are First-Time Buyers ATV Customer Demographics Male Age: 43 Married Average income: $57,000 Half live in rural counties Youth Recreat Sport East 7 72 21 72% Recreation/ Utility 21% Sport 7% Y
Slide 17: ATVs: Sales have ridden out bumps in the economy
A T V s Reasons Why We Like the Business 4. ATV sales have historically ridden out bumps in the economy 92 93 94 95 96 97 98 99 00 01 02 CCI 80 82 102 99 114 134 128 140 128 94 82 Dollars 100 150 225 375 425 450 650 750 820 820 950 Units 210 250 300 350 390 410 510 650 775 850 950 CCI Dollars Units
Slide 18: ATVs: The RANGER continues to gain market share
A T V s Reasons Why We Like the Business 5. The RANGER continues to gain market share 2003: Accelerate new product introduction, improve quality, gain share RANGER unit retail sales up 114% in 2002
Slide 19: Reasons Why Victory is Taking Off
Reasons Why Victory is Taking Off V I C T O R Y M O T O R C Y L E S
Slide 20: Victory: The U.S. motorcycle market is big and growing
Reasons Why Victory is Taking Off 1. The U.S. motorcycle market is big and growing 2000 2001 2002 East 18 19 34 2000 2001 2002 2000 2001 2002 East 303 354 399 2000 2001 2002 Polaris Sales ($ in millions) Cruisers and Touring Cruisers (units in thousands) V I C T O R Y M O T O R C Y L E S
Slide 21: Victory: Vegas opens up a new segment
V I C T O R Y M O T O R C Y L E S Reasons Why Victory is Taking Off 3. The Victory Vegas opens up a new segment for Victory that is 27% of the premium cruiser and touring cruiser market Classic Touring hard Touring soft Low-rider Custom East 27 20 15 11 27 27% Custom Cruiser** 27% Classic Cruiser 20
Slide 22: Victory: New custom order program
V I C T O R Y M O T O R C Y L E S Reasons Why Victory is Taking Off 4. Introduced a new custom order program - the first in the industry 2003: Continue to gain market share and brand awareness, improve quality, add models
Slide 23: Reasons to Keep the Faith in Snowmobiles
Reasons to Keep the Faith in Snowmobiles S N O W M O B I L E S
Slide 24: Snowmobiles: Strong brand, #1 in quality
S N O W M O B I L E S Reasons to Keep the Faith in Snowmobiles 1. Strong brand #1 in quality (warranty costs down) 2000 2001 2002 East 302 373 293 2000 2001 2002 2000 2001 2002 2003 East 213 209 206 186 2000 2001 2002 Polaris Sales ($ in millions) Worldwide Industry (units in thousands) Season ended
Slide 25: Snowmobiles: Experience and environmental regulations
S N O W M O B I L E S Reasons to Keep the Faith in Snowmobiles 2. 49 years of snowmobile experience - we have been here before 3. On top of environmental regulations +30% reduction in Model Year 2006 +50% reduction in Model Year 2012 Product plan supports meeting or exceeding EPA goals
Slide 26: Snowmobiles: Engineering innovation is key
S N O W M O B I L E S Reasons to Keep the Faith in Snowmobiles 4. Engineering innovation is key 2003: Control dealer inventory, remain #1 in quality Continue to bring new product innovation to market Vertical Escape SwitchBack RMK Pro X2
Slide 27: Reasons We Believe the Personal Watercraft Business Will Rebound
Reasons We Believe the Personal Watercraft Business Will Rebound P E R S O N A L W A T E R C R A F T P E R S O N A L W A T E R C R A F T
Slide 28: PWC: Industry sales decline has slowed
Reasons We Believe the Personal Watercraft Business Will Rebound 1. PWC industry sales decline has slowed P E R S O N A L W A T E R C R A F T 2000 2001 2002 East 66 60 53 2000 2001 2002 2000 2001 2002 East 131 122 120 2000 2001 2002 Polaris Sales (dollars in millions) Worldwide Industry (units in th
Slide 29: PWC: Regulatory outlook is improving
Reasons We Believe the Personal Watercraft Business Will Rebound 2. Regulatory outlook is improving P E R S O N A L W A T E R C R A F T Issues regarding PWC use are being resolved Clarity on EPA emissions regulations Cleaner engines - meeting California's low emissions standard and beating EPA 2006
Slide 30: PWC: New engines and new buyers are changing the sport
Reasons We Believe the Personal Watercraft Business Will Rebound 3. New engines and new buyers are changing the sport P E R S O N A L W A T E R C R A F T 94 95 96 97 98 99 00 01 02 1 Pass 7 5 4 4 3 2 1 1 1 2 Pass 75 63 57 56 50 44 38 32 23 3 Pass 19 34 42 43 50 55 60 65 73 4 Pass 3 2 2 2 02 1 Passen
Slide 31: PWC: Polaris innovation continues
Reasons We Believe the Personal Watercraft Business Will Rebound 4. Polaris innovation continues P E R S O N A L W A T E R C R A F T MSX Line EX2100 Sport Boat 2003: Successfully introduce MSX platform, new four-stroke technology, improve quality
Slide 32: Reasons PG&A is Our #3 Revenue Producer
Reasons PG&A is Our #3 Revenue Producer P A R T S, G A R M E N T S a n d A C C E S S O R I E S
Slide 33: PG&A: Over 40,000 items available
Reasons PG&A is Our #3 Revenue Producer 1. Over 40,000 items available for our core products 2000 2001 2002 East 180 209 203 2000 2001 2002 Polaris Sales (dollars in millions) P A R T S, G A R M E N T S a n d A C C E S S O R I E S
Slide 34: PG&A: Personalizing The Way Out is increasing
Reasons PG&A is Our #3 Revenue Producer 2. Personalizing "The Way Out" is increasing P A R T S, G A R M E N T S a n d A C C E S S O R I E S
Slide 35: PG&A: Big opportunity for future sales
Reasons PG&A is Our #3 Revenue Producer 3. Over 2 million Polaris machines generate a big opportunity for future PG&A sales P A R T S, G A R M E N T S, a n d A C C E S S O R I E S Dealer Loyalty Program Targeted mailing Product knowledge Appropriate mix of PG&A inventory Point-of-purchase displays S
Slide 36: Quality and Productivity are Key in a Slow Economy
Quality and Productivity are Key in a Slow Economic Environment Made significant strides in product quality in 2002 Plant defects down 42% Supplier defects down 29% Problems per vehicle produced down 16% (weighted average basis) Productivity continues to get better 1998 1999 2000 2001 2002 East 376
Slide 37: Financial Services - Growth Opportunity
Financial Services - Growth Opportunity Generated $14.6 million in income in 2002 High return on investment 23% in 2002 Portfolio losses are within industry norms Retail penetration rate continues to increase 23% in 2002, up from 17% in 2001 Credit worthiness has not been compromised Delinquency and
Slide 38: Opportunity to Improve Distribution
Opportunity to Improve Distribution To grow the Company, we must help our dealers to improve Build dealer profitability Leverage Polaris' competitive advantages P O L A R I S I N D U S T R I E S I N C.
Slide 39: Opportunity to Improve Distribution (continued)
Opportunity to Improve Distribution (continued) Increase market/brand awareness for Polaris Better utilization of co-op advertising Partnering with over 20 partners/licensee's (i.e., Dodge dealerships. Cabela's) Train dealers in product knowledge, financial services, store operations, etc. Greater p
Slide 40: Corporate Governance
Corporate Governance All current members for Audit, Compensation and Corporate Governance, and Nomination Committee are independent Our Board of Directors have a passion for our business and are actively involved All directors ride Polaris products Directors share their outstanding and broad experie
Slide 41: Expectations for 2003
Expectations for 2003 First Quarter 2003 results: Reported record sales and earnings 20th consecutive quarter of increasing sales and earnings EPS up 12 percent on 5 percent sales growth All business units grew sales except personal watercraft International operations grew 85 percent in the first qu
Slide 42: In Summary - The Roadmap
In Summary - The Roadmap Keep driving innovation - deliver a higher percentage of great new products New Polaris Development Process is key Maintain strong positions in ATVs and snowmobiles Continue to drive quality improvement as #1 internal objective Continue improvements in PWC and Victory busine
Slide 43: Thank You!
Polaris Industries Inc. Annual Shareholders Meeting Thursday, April 24, 2003 Thank You!
Slide 44: Polaris Industries Inc. Disclosure Statement
1995 Private Securities Reform Act Polaris Industries Inc. Disclosure Statement Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Reform Act of 1995. We caution you that actual results co
Slide 45: Polaris Industries Inc. Annual Shareholders Meeting
Polaris Industries Inc. Annual Shareholders Meeting Thursday, April 24, 2003
Polaris Industries — Shareholder Meeting (April 2003) on 6ix