Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Shareholder Meeting (April 2004)
37 slides from Polaris's shareholder meeting presentation, Apr 22, 2004
Slide 1: Polaris Industries Inc. Annual Shareholders Meeting
POLARIS INDUSTRIES INC. Annual Shareholders Meeting Thursday, April 22, 2004
Slide 2: Gregory R. Palen, Chairman of the Board
GREGORY R. PALEN Chairman of the Board
Slide 3: Polaris Industries Inc. Annual Shareholders Meeting
POLARIS INDUSTRIES INC. Annual Shareholders Meeting Thursday, April 22, 2004
Slide 4: Thomas C. Tiller, President and CEO
THOMAS C. TILLER President and CEO
Slide 5: 2003 - Another Record Year
2003 - Another Record Year 22 Consecutive Years of Earnings Growth Total company sales up 6% - record $1.6 billion ATVs up 11% Victory motorcycles up 70% Parts, garments and accessories up 10% International operations up 57% Financial services up 61% Snowmobiles PWC ATVs PG&A Victory 14 3 65 14 4 AT
Slide 6: 2003 - Another Record Year: Margins, EPS, Returns
2003 - Another Record Year 22 Consecutive Years of Earnings Growth Gross margins improved 60 basis points to 22.4% Earnings per share increased 12% to $2.46 per share Yield to investors increased 54% Dow Jones Nasdaq Russell 2000 S&P 500 Polaris Dow Jones Nasdaq Russell 2000 S&P 500 Polaris East 0.2
Slide 7: 2004 - A Golden Year for Polaris
2004 - A GOLDEN YEAR FOR POLARIS 50 Years of Providing Quality Products to Our Customers 1954 - The Legend Begins Hetteen brothers and David Johnson build the first snowmobile 1954 - 2003 Diversified the business over the years Snowmobiles - 1956 ATVs - 1985 Personal Watercraft - 1991 International
Slide 8: Consistent Financial Performance: Sales and EPS
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Guidance 512 805 1079 1157 1009 1153 1296 1393 1487.6 1521.3 1605.9 1605.9 80 Ten Year CAGR: 12% Consistent Financial Performance 5-8% range Dollars (in millions) $805 $1,079 $1,517 $1,009 $1,153 $1,296 $1,393 $1,488 $1,521 $1,606 1994 1995
Slide 9: Consistent Financial Performance: Debt and Return on Equity
Consistent Financial Performance Debt to Total Capital Ratio 1994-2003 Ample Credit Capacity 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0.41 0.43 0.42 0.45 0.4 0.44 0.47 0.44 0.41 0.4 0.37 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Slide 10: Consistent Financial Performance: Cash Flow
Ten Year CAGR: 11% Consistent Financial Performance 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 59 87 89 95 97 107 115 127 147 168 171 (Dollars in Millions) *Before Changes in Current Operating Items and Deferred Taxes Note: A reconciliation of the Company's calculation of cash flow provi
Slide 11: Cash Flow Used to Fund Capital, Buybacks, Dividends
1996 1997 1998 1999 2000 2001 2002 2003 2004 YTD East 1 3 2.2 3 2.4 2.2 2.4 2.4 0.5 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Consistent Financial Performance Cash Flow Used to Fund... Capital Investments Shares Repurchased Through March 31st, 2004 the company has repurchased 19.1 million of
Slide 12: What Makes Polaris an Attractive Investment?
We have had a good run over past 5 years - however, we think the best is yet to come. What makes Polaris an attractive investment? (in millions) 1998* 2003 5 Year Compounded Annual Growth Rate Sales $1,152.8 $1,605.9 6.9% Net Income 70.6 110.9 9.5% Shares Outstanding (Average) 51.9 45.1 (2.8)% Earni
Slide 13: Market Outlook: ATVs
ATVs Motorcycles* Snow-mobiles PWC 2004 Guidance 2004 Guidance 6 6 1 0.7 1043 1043 52 52 North 45.9 46.9 45 43.9 1999 2000 2001 2002 2003 650 775 861 982 1041 Market Outlook ATVs ATV Sales Year 2003: 6% growth In Millions Opportunities/Risk 1. Opportunities: Capitalize on Sportsman line (Best Sellin
Slide 14: Market Outlook: Victory Motorcycles
ATVs Motorcycles* Snow-mobiles PWC 2004 Guidance 2004 Guidance 6 6 1 0.7 1043 1043 52 52 North 45.9 46.9 45 43.9 Market Outlook Victory Victory Sales Opportunities/Risk 1. Opportunities: Continue to improve Victory dealerships Margin expansion opportunity as volume grows Maintain momentum of brand a
Slide 15: Market Outlook: Snowmobiles
1999 2000 2001 2002 2003 2004 Guidance East 313 302 373 293 229 229 44 North 45.9 46.9 45 43.9 1998 1999 2000 2001 2002 2003 2004 255.9 233 213 213 206 187 181 ATVs Motorcycles* Snow-mobiles PWC 2004 Guidance 2004 Guidance 6 6 1 0.7 1043 1043 52 52 North 45.9 46.9 45 43.9 Market Outlook Snowmobiles
Slide 16: Market Outlook: Personal Watercraft
1999 2000 2001 2002 2003 134 120 102 99 99 ATVs Motorcycles* Snow-mobiles PWC 2004 Guidance 2004 Guidance 6 6 1 0.7 1043 1043 52 52 North 45.9 46.9 45 43.9 Market Outlook Personal Watercraft Personal Watercraft Sales Opportunities/Risk 1. Opportunities: Successful launch MSX 110hp and 150hp four str
Slide 17: Market Outlook: Parts, Garments & Accessories
Snowmobiles PWC ATVs PG&A Motorcycles 43 51 6 7 4 1999 2000 2001 2002 2003 2004 Guidance 2004 Guidance East 158 180 209 203 223 223 54 13 3 North 45.9 46.9 45 43.9 Opportunities/Risk 1. Opportunities: Improve dealer merchandising of PG&A Accelerate product innovation Continue to build the "Pure Pola
Slide 18: Financial Services
Financial Services Opportunities/Risk 1. Opportunities: Increase penetration rate Expand extended service contracts and insurance Continue to educate dealer base on profit potential of financial services 2. Risks: Consumer confidence declines Rapidly rising interest rates would slow growth 2001 2002
Slide 19: Market Outlook: International Business
1999 2000 2001 2002 2003 2004 Guidance East 68 86 89 98 154 183 10 North 45.9 46.9 45 43.9 Market Outlook International Business Opportunities/Risk 1. Opportunities: Execute On road Quadricycle opportunity Dealer direct opportunities in additional markets Improve overall dealer base 2. Risks: Curren
Slide 20: Product Innovation - A Polaris Strategic Advantage
Product Innovation - A Polaris Strategic Advantage
Slide 21: ATV Product Innovation
ATV Product Innovation 2003 2004 Polaris Unique Feature Predator Pro(tm) steering Zero bump steer and anti-dive Smooth front suspension ATP Dumping Cargo box 3 traction options (Turf, 2x4, 4x4) with the new Versatrac system Twice the storage of most ATVs (up to 530 lbs) Sportsman 700 EFI Easy Starts
Slide 22: Victory Motorcycles Product Innovation
Victory Motorcycles Product Innovation (Cruiser of the Year 2003) 2003 2004 Polaris Unique Feature Vegas/Kingpin Powerful, 92 cubic inch Freedom V-Twin with standard electronic fuel injection Overhead cam with four values per cylinder Aluminum swing arm with rising -rate linkage rear suspension for
Slide 23: Snowmobiles Product Innovation
Snowmobiles Product Innovation 2004 Polaris Unique Feature 900 Fusion Rider Select Steering Superior seat design New Liberty Cleanfire(tm) 900 engine New IQ(tm) front suspension Accu-Trak(tm) 2 Skis 900 RMK Rider Select Steering Superior seat design New Liberty Cleanfire(tm) 900 engine New IQ(tm) fr
Slide 24: PWC Product Innovation
PWC Product Innovation 2003 2004 Polaris Unique Feature MSX 140 2-stroke; 110 & 150 4-strokes 140hp Polaris marine 2-stroke direct injection engine 110hp or 150hp turbo charged 4- stroke engine PLANET sound reduction moderates exhaust sound pressure Over 33 gallons of cargo space Modified-V progress
Slide 25: Parts Garments & Accessories
Parts Garments & Accessories Glacier Plow System: Mount plate attaches with 4 to 8 bolts Drive up, drive off Electric lift options Improved plow sales by 40% Quick Release Attachment System Simple turning block system Cargo box attaches in seconds Improved cargo box sales by +30% 14" Cast Aluminum W
Slide 26: Quality and Productivity are Key to Continued Growth & Profitability
Quality and Productivity are Key to Continued Growth & Profitability Productivity continues to get better 9% reduction in Sportsman product cost in last two years Sales per employee ($ in thousands) Polaris sales per employee is nearly twice the industry average Gross Margin Percentage 1999 2000 200
Slide 27: Future Research and Development Center - Wyoming, Minnesota
Future Research and Development Center - Wyoming, Minnesota Remain a technology leader in the industry Consolidate R&D personnel into two locations Wyoming, Minnesota Roseau, Minnesota Planning for future growth of the Company Expect completion by mid- 2005 Roseau Wyoming
Slide 28: Brand Loyalty - "The Way Out"
Brand Loyalty - "The Way Out" Not just Machines - a Lifestyle Clubs Victory Riders Association Events Rallys Snow Tours ATV Adventure Tours Open Houses Complimentary Polaris magazine subscriptions Escape! Victory magazine Website Over 11 million visits to Polaris website in 2003 Pure Polaris PG&A Mo
Slide 29: Improve the Dealer Network
Improve the Dealer Network To grow the Company, we must help our dealers improve Build dealer profitability Leverage Polaris' competitive advantages Assist dealer showroom expansion through Capital Assistance Program Manage dealer inventory Provide training to dealers via Web-based interactive modul
Slide 30: Expectations for 2004
Expectations for 2004 Year End 2003 results: Reported record sales and earnings 23rd consecutive quarter of increasing sales and earnings EPS up 12% on 6 % sales growth ATVs, Motorcycles, PG&A, International and Financial Services grew Higher gross margins contributed to the improvement in earnings
Slide 31: In Summary - The Roadmap
In Summary - The Roadmap Keep driving innovation - deliver a higher percentage of great new products Maintain strong positions in ATVs and snowmobiles Continue to drive quality improvement as #1 internal objective Continue improvements in PWC and Victory business units Expand Financial Services and
Slide 32: 2004 - A Golden Year: 50th Anniversary Celebration Schedule
2004 - A GOLDEN YEAR FOR POLARIS 50th Anniversary Celebration Schedule of Events February 2004 Stanley Cup moved from Hockey Hall of Fame in Eveleth, MN to NHL All-Star Game in St. Paul, MN on the back of a Frontier snowmobile Way Out Women Rule: 80 women participated in international relay to raise
Slide 33: 1995 Private Securities Reform Act 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 34: Polaris Industries Inc. Annual Shareholders Meeting
POLARIS INDUSTRIES INC. Annual Shareholders Meeting Thursday, April 22, 2004
Slide 35: Questions?
POLARIS INDUSTRIES INC. Questions?
Slide 36: Thank You for Coming!
POLARIS INDUSTRIES INC. Annual Shareholders Meeting Thank You for Coming!
Slide 37: Appendix: Regulation G Reconciliation
Appendix Regulation G Reconciliation Regulation G Reconciliation Regulation G Reconciliation
Polaris Industries — Shareholder Meeting (April 2004) on 6ix