Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Raymond James Institutional Investors Conference 2004
28 slides from Polaris's conference presentation, Mar 2, 2004
Slide 1: Raymond James Institutional Investors Conference
Raymond James Institutional Investors Conference March 2, 2004
Slide 2: Polaris at a glance
Polaris at a glance: Founded in 1954 Manufacturer of a diversified mix of high- quality, high-performance motorized products for recreational and utility use Manufacturing and distribution facilities located in Minnesota, Wisconsin, Iowa and South Dakota Highly productive non-union workforce - 3,400
Slide 3: Products (% of 2003 Sales) and Strengths/Opportunities
Products (% of 2003 Sales) Strengths/Opportunities Strong Business Foundation $1.0 Billion business Growth opportunities going forward Maintain leadership position Generate cash $300-500MM long-term opportunity Superior product features Minimum investment Upside only Highest margin product ATV's 65%
Slide 4: A Consistent Track Record: Sales 1993-2003
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: 12.0% A Consistent Track Record... Sales 1993-2003 5-8% range
Slide 5: Earnings Per Share 1993-2003
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Guidance 0.61 0.99 1.1 1.12 1.23 1.36 1.54 1.75 1.94 2.19 2.46 2.46 0.31 Ten Year CAGR: 15% Earnings Per Share 1993-2003 (diluted) $2.65 - $2.77 8-13% Increase 23 consecutive quarters of increased sales and earnings 22 consecutive years of
Slide 6: Cash Flow 1993-2003
Ten Year CAGR: 11% Cash Flow* 1993-2003 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 provided to the m
Slide 7: Return on Shareholders Equity 1993-2003
Return on Shareholders Equity 1993-2003 Significantly Above Industry Average 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
Slide 8: Debt to Total Capital Ratio 1993-2003
Debt to Total Capital Ratio 1993-2003 Ample Credit Capacity 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0 0 0.25 0.18 0.13 0.12 0.19 0.19 0.07 0.06 0.05
Slide 9: Dividends (per share)
Dividends (per share) 1996 1997 1998 1999 2000 2001 2002 2003 2004* 0.3 0.32 0.36 0.4 0.44 0.5 0.56 0.62 0.92 +48% * On January 22, 2004, the Polaris Industries Inc. Board of Directors voted to raise the 2004 quarterly dividend 48% to $0.23 per quarter Note: Shares and earnings per share data have n
Slide 10: Share Repurchases
1996 1997 1998 1999 2000 2001 2002 2003 East 1 3 2.2 3 2.4 2.2 2.4 2.4 Cumulatively to date have repurchased 18.6 million of 23.0 million authorized for a total of $382 million. Share Repurchases 1996 1997 1998 1999 2000 2001 2002 2003 East 14 40 38 52 40 49 76 73 In Millions In Millions In dollars
Slide 11: The Past Five Years have been Good...
The Past Five Years have been Good... The Past Five Years have been Good... .......The Next Five Years Could Be Better One Year Total Return December 31, 2002 - December 31, 2003 Five Year Total Return December 31, 1998 - December 31, 2003 December 31, 2003 December 31, 2003 December 31, 2003 Decemb
Slide 12: Why Polaris? - Investment Appeals
Why Polaris? - Investment Appeals Superior financial track record 22 consecutive years of earnings per share growth 23 consecutive quarters of increasing sales and earnings Consistent generator of cash flow Strong balance sheet - debt to equity at 5% at year end 2003 High return on equity averaging
Slide 13: Polaris ATV Outlook
1999 2000 2001 2002 2003 650 775 861 982 1041 Worldwide ATV Industry Growth Year 2003: 6% growth 1999 2000 2001 2002 2003 2004 Guidance 734 827 827 938 1043 1043 52 In Millions Polaris ATV Outlook Waves of new product news - 80%+ new and more in development Product ride and handling leadership in ev
Slide 14: ATV Product Innovation
u ATVs u ATVs u ATVs Product Innovation Predator RANGER TM (Taskmaster) All-Terrain Pickup (ATP) Named "ATV of the Year" by ATV Magazine Sportsman 700 EFI Like... MV (Military Version) MV (Military Version)
Slide 15: Victory Outlook
1999 2000 2001 2002 2003 Cruisers 184 220 259 308 344 Touring 65.2 80.2 90 107 143 All Motorcycles 340 420 432 514 560 Motorcycle Industry Growth Year 2003 growth for cruisers and touring combined was 5% Victory Outlook Drive brand awareness "The Victory Challenge" rides Advertising, shows/events Co
Slide 16: Victory Vegas, Kingpin and Touring Cruiser market segments
The Victory Vegas, Kingpin and Touring Cruiser participate in segments that are 89% of the premium cruiser and touring cruiser market 27% Classic Cruiser1 27% Custom Cruiser 2 20% Touring Cruiser (Hard) 3 15% Touring Cruiser (Soft) 4 11% Low-Rider Cruiser Premium Cruiser Current Market Breakdown Veg
Slide 17: Polaris Snowmobile Outlook
1998 1999 2000 2001 2002 2003 255.9 233 213 213 206 187 Worldwide Snowmobile Industry Growth Season-end March 31 Polaris Snowmobile Outlook Continue strong brand loyalty Great team that knows the business Reduce dealer inventory Solid business - in great shape when it snows Introduce new snowmobile
Slide 18: Engineering Innovation is Key
Engineering Innovation is Key 2004: Continue to control dealer inventory, successfully introduce new snowmobiles Continue to bring new product innovation to market Fusion 900 RMK 900 RMK 900 RMK 900 RMK The all new 2005 Fusion
Slide 19: Polaris PWC Strengths/Outlook
1999 2000 2001 2002 2003 2004 Guidance East 52 66 60 53 54 54 3 1999 2000 2001 2002 2003 134 120 102 99 99 Worldwide PWC Industry Growth Legislative and regulatory concerns Polaris PWC Strengths/Outlook Successfully introduce MSX 4-stroke Grow revenue / profits Continue to drive quality improvements
Slide 20: Polaris innovation continues
Polaris innovation continues continues continues continues MSX 140 2-Stroke 2004: Successfully introduce MSX platform, new four-stroke technology MSX 150 4-Stroke 2003 Polaris MSX 140 named "Watercraft of the Year" by Watercraft World"
Slide 21: Polaris PG&A Outlook
Polaris PG&A Outlook Accelerate product innovation Improve overall product and service quality Continue cost reductions Continue to train dealers on selling PG&A 3 Year CAGR: 15% 1999 2000 2001 2002 2003 2004 Guidance East 158 180 209 203 223 223 13 Snowmobiles PWC ATVs PG&A Motorcycles 26 4 59 7 4
Slide 22: Quality and Productivity are Key
Quality and Productivity are Key in a Slow-to- Recover Economic Environment Productivity continues to get better 9% reduction in Sportsman product cost in last two years 1999 2000 2001 2002 2003 East 386 391 419 434 475 1999 2000 2001 2002 2003 Sales per employee ($ in thousands) Polaris sales per e
Slide 23: Financial Services - Growth Opportunity
Financial Services - Growth Opportunity Generated $23.6 million in income in 2003 High return on investment 33% in 2003 Portfolio losses are within industry norms Retail penetration rate continues to increase 32% at December 31, 2003; 23% in 2002, up from 17% in 2001 Credit worthiness has not been c
Slide 24: 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 Assist dealer showroom expansion through Capital Assistance Program Utilize holdback program to reward better dealers.
Slide 25: 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 26: 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 27: 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 28: Appendix: Regulation G Reconciliation
Appendix Regulation G Reconciliation Regulation G Reconciliation Regulation G Reconciliation
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