Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (November 2004)
26 slides from Polaris's investor presentation, Nov 5, 2004
Slide 1: Polaris. The Way Out.
POLARIS. The Way Out.
Slide 2: Polaris at a glance
Polaris at a glance: 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 strong Product i
Slide 3: 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 4: Strong Business Foundation: Percentage of Sales by Product Line
Strong Business Foundation Percentage of Sales by Product line Percent of 2003 Sales from Continuing Operations
Slide 5: Consistent Financial Performance: Sales and EPS
Ten Year CAGR: 13% Consistent Financial Performance 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Guidance 512 692.5 909 985 947.8 1105.7 1244.8 1327 1427.4 1468.2 1552.4 1552.4 170 11-13% range Dollars (in millions) Ten Year CAGR: 16% Net Income Per Share from Continuing Operations 19
Slide 6: Consistent Financial Performance: Cash Flow
Ten Year CAGR: 11% Consistent Financial Performance 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 59 84 86 88 89 101 111 123 144 166 169 (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 7: Cash Flow Used to Fund Capex, Repurchases, 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 1.1 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 for Continuing Operations Shares Repurchased Through September 30, 2004 the Company has
Slide 8: Marine Business Exit
Marine Business Exit Effective September 2, 2004 Reason for decision Declining PWC market from peak industry-wide sales of 225,000 units in 1996 to about 120,000 units today Polaris sales peaked at $171 million in 1996 and steadily declined over the subsequent years In 2003, sales by Polaris marine
Slide 9: 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 1998, Polaris entered into a settlement agreement related to a trade secret infringement claim brought by Injection Research Specialists, Inc. The one- time provisi
Slide 10: ATVs Market Outlook
ATVs Motorcycles* Snowmobiles 2004 Guidance 2004 Guidance 6 6 1 1043 1043 52 52 North 45.9 46.9 45 Market Outlook ATVs 1999 2000 2001 2002 2003 650 775 861 982 1041 ATV Sales Year 2003: 6% growth In Millions Opportunities/Risks 1. Opportunities: Capitalize on Sportsman line (Best Selling ATV line in
Slide 11: Victory Motorcycles Market Outlook
ATVs Motorcycles* Snowmobiles 2004 Guidance 2004 Guidance 6 6 1 1043 1043 52 52 North 45.9 46.9 45 Market Outlook Victory Victory Sales Opportunities/Risk 1. Opportunities: Expand product line with new Hammer and 8-Ball models Continue to improve Victory dealerships Expand margin as volume grows Mai
Slide 12: Snowmobiles Market Outlook
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* Snowmobiles 2004 Guidance 2004 Guidance 6 6 1 1043 1043 52 52 North 45.9 46.9 45 Market Outlook Snowmobiles Snowmobile Sal
Slide 13: PG&A Market Outlook
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/Risks 1. Opportunities: Improve dealer merchandising of PG&A Accelerate product innovation with "Lock and Ride" products C
Slide 14: 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 15: International Business
1999 2000 2001 2002 2003 2004 Guidance East 68 74 83 90 141 141 16 North 45.9 46.9 45 43.9 Market Outlook International Business Opportunities/Risks 1. Opportunities: Execute on-road Quadricycle opportunity Dealer direct opportunities in additional markets Improve overall dealer base 2. Risks: Curre
Slide 16: ATV Product Innovation
ATV Product Innovation ATV Product Innovation Polaris Unique Features 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) "Turf" mode unlocks rear differential for less damage to soft terrain Exclusive On-Demand All-W
Slide 17: Victory Motorcycles Product Innovation
Victory Motorcycles Product Innovation (Cruiser of the Year 2003) 2003 2004 Polaris Unique Features Vegas/Kingpin Powerful, 92 cubic inch Freedom V-Twin with standard electronic fuel injection Overhead cam with four valves per cylinder Aluminum swing arm with rising -rate linkage rear suspension for
Slide 18: Snowmobiles Product Innovation
Snowmobiles Product Innovation 2005 Polaris Unique Features 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) f
Slide 19: 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% Lock & Ride System: Add or remove a cargo box, windshield or gun scabbard in seconds Warn winch designed to integrate with the factory install
Slide 20: Productivity continues to get better
Productivity continues to get better 11% reduction in Sportsman product cost in last three years Sales per employee from continuing operations ($ in thousands) Gross Margin Percentage* 1999 2000 2001 2002 2003 2003 2004 Guidance East 375 376 405 422 464 154 229 44 North 45.9 46.9 45 43.9 $375 2000 2
Slide 21: Future Research and Development Center
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 Supports future growth of the Company On-site field proving grounds Expect completion by mid- 2005 Roseau Wyoming
Slide 22: 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 23: Expectations for 2004
Expectations for 2004* * All numbers reflect continuing operations and exclude the impact of the disposition of the marine business in the third quarter 2004.
Slide 24: The Goals
The Goals . . . . Grow to $3 billion in sales by 2009 Expand net margins to 9% Build a dominant brand with industry-leading product quality and distribution Achieved by . . . . Growth Initiatives A leaner, stronger, more profitable dealer network:. 1500 - 1700 in North America. A bigger, stronger Vi
Slide 25: 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 26: Appendix: Regulation G Reconciliation
Appendix Regulation G Reconciliation 53
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