Sales for the first quarter of 2017 increased 17% to $1,153.8
million; adjusted sales increased 18% to $1,158.9 million
Polaris N.A. retail sales performance exceeded Company expectations
in the first quarter; ORV market share stabilizing; Indian Motorcycle®
market share gains continued during the quarter
First quarter 2017 reported net loss was $0.05 per diluted
share; adjusted net income for the same period was $0.75 per diluted
share, slightly ahead of expectations
Total dealer inventory was down 8% year-over-year; ORV dealer
inventory was down 9%
Polaris reiterated its full year 2017 outlook with adjusted net
income expected to be in the range of $4.25 to $4.50 per diluted share
with adjusted sales for the full year 2017 expected in the range of up
10% to 13%
Note: the results and guidance in this release, including the highlights
above, include references to non-GAAP operating measures, which are
identified by the word “adjusted” preceding the measure. A
reconciliation of GAAP to non-GAAP measures can be found at the end of
this release.
MINNEAPOLIS--(BUSINESS WIRE)--
Polaris Industries Inc. (NYSE: PII) today reported first quarter 2017
sales of $1,153.8 million, up 17 percent, from $983.0 million for the
first quarter of 2016. Adjusted sales, which excludes the impact from
Victory Motorcycles® net sales for the first quarter of 2017,
were $1,158.9 million compared to $983.0 million in the prior year
period. The Company reported a first quarter 2017 net loss of $2.9
million, or $0.05 per diluted share, compared with net income of $46.9
million, or $0.71 per diluted share, for the 2016 first quarter. The
reported net loss included costs related to the wind down of Victory
Motorcycles and certain TAP integration and inventory step up costs
taken in the first quarter. Adjusted net income for the quarter ended
March 31, 2017, excluding these costs, was $48.3 million, or $0.75 per
diluted share.
“While we reported an expected net loss for the quarter, adjusted
earnings were slightly ahead of our expectations. We saw continued
strong performance from Indian Motorcycle and our ORV business improved
its performance in the face of heavy competitive activity and a sluggish
powersports environment. Overall, our dealer channel remains healthy
with inventories down eight percent, and we continue to diligently work
to enhance our dealer engagement,” commented Scott Wine, Chairman and
Chief Executive Officer of Polaris Industries.
Wine continued, “We have made significant investments in people,
processes and technology to support prevention, identification and
remediation of safety and quality issues and we are identifying them
earlier and reacting more quickly. The safety of our riders and vehicles
is our number one priority, and we will continue to develop the
processes required to deliver best-in-class performance in this area.
Further, we are aggressively investing in the development of innovative
products that will further solidify Polaris’ position as the leader in
powersports. Our first quarter results reflect our commitment to quickly
and sustainably improve our strategic and tactical execution, continue
enhancing overall safety and quality, and building superior products for
our customers.”
Off-Road Vehicle (“ORV”) and Snowmobile
segment sales, including their respective PG&A related sales, were
$724.1 million for the first quarter of 2017, compared with $708.1
million for the first quarter for the prior year representing a two
percent increase, year-over-year. PG&A sales for ORV and Snowmobiles
combined, increased 13 percent in the 2017 first quarter compared to
last year. Gross profit increased three percent to $213.0 million, or
29.4 percent of sales, in the first quarter of 2017, compared to $206.0
million, or 29.1 percent of sales, in the first quarter of 2016. Gross
profit percentage increased primarily due to product mix.
ORV wholegood sales for the first quarter of 2017 were
approximately flat as the Company began shipping at more normalized
rates. Polaris North American ORV unit retail sales for the first
quarter of 2017 were down mid-single digits percent from the 2016 first
quarter, which included consumer purchases for side-by-side vehicles
down low-single digits percent and ATV retail sales down low-double
digits percent. The North American ORV industry was down mid-single
digits percent compared to the first quarter last year. ORV dealer
inventory was down nine percent in the 2017 first quarter compared to
the same period last year.
Snowmobile wholegood sales in the first quarter of 2017 decreased
three percent due to timing of shipments during the quarter. While the
snow season did not meet our expectations, dealer inventory finished
below last year and we received a strong reception to our all-new model
year 2018 Polaris® TITAN™, the industry’s most capable
extreme crossover snowmobile.
Motorcycle segment sales,
including its PG&A related sales in the first quarter of 2017, was
$120.3 million, a decrease of 35 percent compared to $185.3 million
reported in the first quarter of 2016 which included $46.3 million of
Victory Motorcycles wholegood, accessory and apparel sales. Indian
Motorcycle wholegood sales increased in the first quarter driven by
strong retail sales, offset by lower Slingshot® sales which
were negatively impacted by low availability of salable product due to
quality holds during the quarter. Gross profit for the first quarter of
2017 was a negative $19.9 million compared to positive $27.3 million in
the first quarter of 2016. Adjusted for the Victory wind down costs of
$38.6 million, motorcycle gross profit was a positive $18.7 million,
down from the first quarter last year due to product mix and lower
Slingshot volume.
North American consumer retail demand for the Polaris motorcycle
segment, including Indian Motorcycle and Slingshot, was down mid-single
digits percent during the 2017 first quarter, while the overall
motorcycle industry retail sales, 900cc and above, was down mid-single
digits percent in the 2017 first quarter. Indian Motorcycle retail sales
increased low double-digits percent and continued to gain market share,
partly driven by sales of the Company's new highly customizable,
split-screen Ride Command™ touchscreen infotainment system available on
Indian Chieftain® and Roadmaster® models.
Additionally, during the quarter, the Company added its 10th model to
the line-up with the introduction of the Roadmaster Classic with genuine
leather saddlebags and trunk, giving it distinctive vintage styling.
Slingshot retail sales were down significantly due to low product
availability and a more difficult comparable as the Company released its
top of the line Slingshot SLR model in the first quarter last year.
Global Adjacent Markets segment
sales along with its PG&A related sales, increased 24 percent to $91.6
million in the 2017 first quarter compared to $74.1 million in the 2016
first quarter. Gross profit increased 38 percent to $28.1 million, or
30.7 percent of sales, in the first quarter of 2017, compared to $20.4
million, or 27.5 percent of sales, in the first quarter of 2016. Sales
and gross profit were up primarily due to increased sales in the
Company’s Government and Defense business in the 2017 first quarter
which more than doubled from the previous year's quarter sales. Work and
Transportation group wholegood sales were up 12 percent during the first
quarter of 2017 primarily due to increased Aixam® sales and a
full quarter of Taylor-Dunn® sales compared to last year.
Aftermarket segment sales which
includes Transamerican Auto Parts ("TAP"), along with the Company's
other aftermarket brands of Klim®, Kolpin®, Pro
Armor®, Trail Tech and 509®, increased
significantly to $217.8 million in the 2017 first quarter compared to
$15.5 million in the 2016 first quarter. TAP added $202.0 million of
sales in the first quarter of 2017. Gross profit increased significantly
to $41.6 million, or 19.1 percent of sales in first quarter of 2017,
compared to $4.7 million, or 30.3 percent of sales, in the first quarter
of 2016. Adjusted for the TAP acquisition step-up adjustment,
Aftermarket gross profit was $54.5 million, or 25.0 percent of sales.
Sales and gross profit dollars were up primarily due to the addition of
TAP acquired in the fourth quarter of 2016.
Supplemental Data:
Parts, Garments, and Accessories (“PG&A”) sales,
excluding Aftermarket segment sales, increased 13 percent for the
2017 first quarter. The increase was primarily driven by higher ORV and
Global Adjacent Markets related PG&A sales during the quarter.
International sales to customers outside of North America
totaled $166.2 million for the first quarter of 2017, including PG&A, up
two percent, from the same period in 2016.
Gross profit decreased two percent to $242.5 million for the
first quarter of 2017 from $247.6 million in the first quarter of 2016.
As a percentage of sales, reported gross profit margin was 21.0 percent
compared with 25.2 percent of sales for the first quarter of 2016. Gross
profit for the first quarter of 2017 includes the negative impact of
$38.6 million of Victory wind down costs and $12.9 million in purchase
accounting adjustments related to the TAP acquisition. Excluding these
items, adjusted gross profit was $294.0 million, or 25.4 percent of
sales. Gross margins on an adjusted basis improved slightly due to
product cost reduction efforts generated through lean initiatives and
favorable product mix offsetting increased warranty and promotional
costs incurred during the quarter.
Operating expenses increased 27 percent for the first quarter of
2017 to $241.8 million from $189.9 million, including $6.0 million in
Victory wind down costs and $3.3 million of TAP integration expenses.
Excluding these costs, operating expenses increased primarily due to the
addition of operating expenses from TAP, as well as more normalized
variable compensation expenses and increased research and development
expenses for ongoing product refinement and innovation.
Income from financial services was $20.4 million for the first
quarter of 2017, up five percent compared with $19.5 million for the
first quarter of 2016. The increase is attributable to higher income
generated from the sale of extended service contracts.
Non-operating other expense, net, was $11.6 million for
the first quarter of 2017, including $13.0 million in impairment charges
on an investment related to the Victory wind down, versus $0.1 million
in the first quarter of 2016. Excluding the impairment charge, the
remaining change primarily relates to foreign currency exchange rate
movements and the corresponding effects on foreign currency transactions
related to the Company’s foreign subsidiaries.
The provision for income taxes for the first quarter of 2017 was
$2.6 million, compared with $25.3 million for the first quarter of 2016.
The reduction in the provision for income taxes is due to lower pretax
income offset by certain non-deductible costs related to the Victory
motorcycle wind down, incurred in the first quarter 2017.
Financial Position and Cash Flow
Net cash provided by operating activities was $50.9 million for the
quarter ended March 31, 2017, compared to $139.0 million for the same
period in 2016. The significant decrease in net cash provided by
operating activities for the 2017 period was due to the net loss
reported in the first quarter 2017 as well as the timing of warranty and
other accrued expense payments and higher factory inventory ahead of the
seasonally high spring retail selling season. Total debt for the
quarter, including capital lease obligations and notes payable, was
$1,177.7 million. The Company’s debt-to-total capital ratio was 58
percent at March 31, 2017, compared to 36 percent a year ago. Cash and
cash equivalents were $137.5 million at March 31, 2017, down from $145.8
million for the same period in 2016.
Share Buyback Activity
During the first quarter 2017, the Company repurchased and retired
256,000 shares of its common stock for $21.8 million. As of March 31,
2017, the Company has authorization from its Board of Directors to
repurchase up to an additional 7.2 million shares of Polaris stock.
2017 Business Outlook
The Company guidance range for the full year 2017 remains unchanged from
previously issued guidance. The Company continues to expect adjusted net
income to be in the range of $4.25 to $4.50 per diluted share, compared
with adjusted net income of $3.48 per diluted share for 2016. Full year
2017 adjusted sales are anticipated to increase in the range of 10
percent to 13 percent over 2016 sales of $4,516.6 million, also
unchanged from previously issued guidance.
Wind down of Victory Motorcycles
Polaris announced on January 9, 2017 its intention to wind down its
Victory Motorcycles operations. The decision is expected to improve the
long-term profitability of Polaris and its global motorcycle business,
while materially improving the Company’s competitive position in the
industry. The Company will record costs associated with supporting
Victory dealers in selling their remaining inventory, the disposal of
factory inventory, tooling, and other physical assets, and the
cancellation of various supplier arrangements. These costs will be
recorded in the 2017 income statement in respective sales, gross profit
and operating expense beginning in the first quarter of 2017. These
costs are excluded from Polaris’ 2017 sales and earnings guidance on a
non-GAAP basis.
Use of Non-GAAP Financial Information
This press release and our related earnings call contains certain
non-GAAP financial measures, consisting of “adjusted sales, gross
profits, operating expenses, other expense, net income and net income
per diluted share” as measures of our operating performance. Management
believes these measures may be useful in performing meaningful
comparisons of past and present operating results, to understand the
performance of its ongoing operations and how management views the
business. Reconciliations of adjusted non-GAAP measures to reported GAAP
measures are included in the financial schedules contained in this press
release. These measures, however, should not be construed as an
alternative to any other measure of performance determined in accordance
with GAAP.
Fourth Quarter and Full Year Conference Call and Webcast Presentation
Today at 9:00 AM (CT) Polaris Industries Inc. will host a conference
call and webcast to discuss the 2017 first quarter results released this
morning. The call will be hosted by Scott Wine, Chairman and CEO; Ken
Pucel, Executive Vice President - Operations, Engineering and Lean; and
Mike Speetzen, Executive Vice President - Finance and CFO. A slide
presentation and link to the webcast will be posted on the Polaris
Investor Relations website at http://ir.polaris.com.
To listen to the conference call by phone, dial 877-706-7543 in the U.S.
and Canada, or 478-219-0273 internationally. The Conference ID is #
45015868.
A replay of the conference call will be available approximately two
hours after the call for a one-week period by accessing the same link on
our website, or by dialing 855-859-2056 in the U.S. and Canada, or
404-537-3406 internationally.
About Polaris
Polaris Industries Inc. (NYSE: PII) is a global powersports leader with
annual 2016 sales of $4.5 billion. Polaris fuels the passion of riders,
workers and outdoor enthusiasts with our RANGER®, RZR®
and POLARIS GENERAL™ side-by-side off-road vehicles; our SPORTSMAN®
and POLARIS ACE® all-terrain off-road vehicles; VICTORY®
and INDIAN MOTORCYCLE® mid-size and heavyweight motorcycles;
SLINGSHOT® moto-roadsters; and Polaris RMK®, INDY®,
SWITCHBACK® and RUSH® snowmobiles. Polaris
enhances the riding experience with parts, garments and accessories sold
under multiple recognizable brands, and has a growing presence globally
in adjacent markets with products including military and commercial
off-road vehicles, quadricycles, and electric vehicles. www.polaris.com
Except for historical information contained herein, the matters set
forth in this news release, including management’s expectations
regarding 2017 future sales, shipments, net income, and net income per
share, and operational initiatives are forward-looking statements that
involve certain risks and uncertainties that could cause actual results
to differ materially from those forward-looking statements. Potential
risks and uncertainties include such factors as the Company’s ability to
successfully implement its manufacturing operations expansion
initiatives, product offerings, promotional activities and pricing
strategies by competitors; economic conditions that impact consumer
spending; acquisition integration costs; product recalls, warranty
expenses; impact of changes in Polaris stock price on incentive
compensation plan costs; foreign currency exchange rate fluctuations;
environmental and product safety regulatory activity; effects of
weather; commodity costs; uninsured product liability claims;
uncertainty in the retail and wholesale credit markets; performance of
affiliate partners; changes in tax policy and overall economic
conditions, including inflation, consumer confidence and spending and
relationships with dealers and suppliers. Investors are also
directed to consider other risks and uncertainties discussed in
documents filed by the Company with the Securities and Exchange
Commission. The Company does not undertake any duty to any person
to provide updates to its forward-looking statements.
(summarized financial data follows)
|
|
|
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In Thousands, Except Per Share Data)
(Unaudited)
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2017
|
|
2016
|
|
Sales
|
|
$
|
1,153,782
|
|
|
$
|
982,996
|
|
Cost of sales
|
|
911,291
|
|
|
735,418
|
|
Gross profit
|
|
242,491
|
|
|
247,578
|
|
Operating expenses:
|
|
|
|
|
|
Selling and marketing
|
|
114,313
|
|
|
77,241
|
|
Research and development
|
|
52,005
|
|
|
43,109
|
|
General and administrative
|
|
75,514
|
|
|
69,580
|
|
Total operating expenses
|
|
241,832
|
|
|
189,930
|
|
Income from financial services
|
|
20,430
|
|
|
19,496
|
|
Operating income
|
|
21,089
|
|
|
77,144
|
|
Non-operating expense:
|
|
|
|
|
|
Interest expense
|
|
7,914
|
|
|
2,865
|
|
Equity in loss of other affiliates
|
|
1,900
|
|
|
2,058
|
|
Other expense, net
|
|
11,608
|
|
|
81
|
|
Income (loss) before income taxes
|
|
(333
|
)
|
|
72,140
|
|
Provision for income taxes
|
|
2,578
|
|
|
25,251
|
|
Net income (loss)
|
|
$
|
(2,911
|
)
|
|
$
|
46,889
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
Basic
|
|
$
|
(0.05
|
)
|
|
$
|
0.72
|
|
Diluted
|
|
$
|
(0.05
|
)
|
|
$
|
0.71
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
Basic
|
|
63,128
|
|
|
65,046
|
|
Diluted
|
|
64,133
|
|
|
65,982
|
|
|
|
POLARIS INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Data)
(Unaudited)
|
|
|
|
|
|
March 31, 2017
|
|
March 31, 2016
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
137,494
|
|
|
$
|
145,763
|
|
Trade receivables, net
|
|
176,277
|
|
|
124,553
|
|
Inventories, net
|
|
800,611
|
|
|
710,004
|
|
Prepaid expenses and other
|
|
81,193
|
|
|
68,224
|
|
Income taxes receivable
|
|
54,902
|
|
|
28,126
|
|
Total current assets
|
|
1,250,477
|
|
|
1,076,670
|
|
Property and equipment, net
|
|
729,063
|
|
|
675,164
|
|
Investment in finance affiliate
|
|
87,398
|
|
|
99,910
|
|
Deferred tax assets
|
|
185,887
|
|
|
165,862
|
|
Goodwill and other intangible assets, net
|
|
786,574
|
|
|
278,483
|
|
Other long-term assets
|
|
96,600
|
|
|
83,684
|
|
Total assets
|
|
$
|
3,135,999
|
|
|
$
|
2,379,773
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Current portion of debt, capital lease obligations and notes payable
|
|
$
|
2,888
|
|
|
$
|
4,895
|
|
Accounts payable
|
|
348,016
|
|
|
293,512
|
|
Accrued expenses:
|
|
|
|
|
|
Compensation
|
|
72,915
|
|
|
60,168
|
|
Warranties
|
|
109,852
|
|
|
67,207
|
|
Sales promotions and incentives
|
|
179,587
|
|
|
147,204
|
|
Dealer holdback
|
|
104,905
|
|
|
111,480
|
|
Other
|
|
165,890
|
|
|
99,802
|
|
Income taxes payable
|
|
2,332
|
|
|
9,985
|
|
Total current liabilities
|
|
986,385
|
|
|
794,253
|
|
Long term income taxes payable
|
|
26,559
|
|
|
25,150
|
|
Capital lease obligations
|
|
17,525
|
|
|
20,010
|
|
Long-term debt
|
|
1,157,328
|
|
|
507,499
|
|
Deferred tax liabilities
|
|
9,086
|
|
|
13,728
|
|
Other long-term liabilities
|
|
94,021
|
|
|
76,076
|
|
Total liabilities
|
|
$
|
2,290,904
|
|
|
$
|
1,436,716
|
|
Deferred compensation
|
|
9,249
|
|
|
12,190
|
|
Shareholders’ equity:
|
|
|
|
|
|
Total shareholders’ equity
|
|
835,846
|
|
|
930,867
|
|
Total liabilities and shareholders’ equity
|
|
$
|
3,135,999
|
|
|
$
|
2,379,773
|
|
|
|
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, Except Per Share Data)
(Unaudited)
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2017
|
|
2016
|
|
Operating Activities:
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(2,911
|
)
|
|
$
|
46,889
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
44,538
|
|
|
37,894
|
|
|
Noncash compensation
|
|
12,336
|
|
|
15,506
|
|
|
Noncash income from financial services
|
|
(7,088
|
)
|
|
(7,403
|
)
|
|
Deferred income taxes
|
|
2,565
|
|
|
915
|
|
|
Impairment charges
|
|
18,760
|
|
|
—
|
|
|
Other, net
|
|
1,900
|
|
|
2,058
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Trade receivables
|
|
1,372
|
|
|
34,197
|
|
|
Inventories
|
|
(48,949
|
)
|
|
14,371
|
|
|
Accounts payable
|
|
73,091
|
|
|
(9,936
|
)
|
|
Accrued expenses
|
|
(47,184
|
)
|
|
(31,834
|
)
|
|
Income taxes payable/receivable
|
|
(3,801
|
)
|
|
21,304
|
|
|
Prepaid expenses and others, net
|
|
6,287
|
|
|
15,047
|
|
|
Net cash provided by operating activities
|
|
50,916
|
|
|
139,008
|
|
|
Investing Activities:
|
|
|
|
|
|
Purchase of property and equipment
|
|
(38,391
|
)
|
|
(54,833
|
)
|
|
Investment in finance affiliate, net
|
|
13,699
|
|
|
6,566
|
|
|
Investment in other affiliates
|
|
(1,694
|
)
|
|
(4,408
|
)
|
|
Acquisition and disposal of businesses, net of cash acquired
|
|
1,644
|
|
|
(54,830
|
)
|
|
Net cash used for investing activities
|
|
(24,742
|
)
|
|
(107,505
|
)
|
|
Financing Activities:
|
|
|
|
|
|
Borrowings under debt arrangements / capital lease obligations
|
|
478,248
|
|
|
570,832
|
|
|
Repayments under debt arrangements / capital lease obligations
|
|
(444,386
|
)
|
|
(504,450
|
)
|
|
Repurchase and retirement of common shares
|
|
(21,807
|
)
|
|
(84,949
|
)
|
|
Cash dividends to shareholders
|
|
(36,384
|
)
|
|
(35,430
|
)
|
|
Proceeds from stock issuances under employee plans
|
|
4,321
|
|
|
8,987
|
|
|
Net cash used for financing activities
|
|
(20,008
|
)
|
|
(45,010
|
)
|
|
Impact of currency exchange rates on cash balances
|
|
4,003
|
|
|
3,921
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
10,169
|
|
|
(9,586
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
127,325
|
|
|
155,349
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
137,494
|
|
|
$
|
145,763
|
|
|
|
|
POLARIS INDUSTRIES INC.
RECONCILIATION OF GAAP "REPORTED" TO NON-GAAP "ADJUSTED" RESULTS
(In Thousands, Except Per Share Data)
(Unaudited)
|
|
|
|
Reported GAAP Measures
|
|
Q1 2017 Adjustments(3)
|
|
Adjusted Measures
|
|
|
|
Q1 2017
|
|
Q1 2016
|
|
% Change
|
|
Victory
Wind Down(1)
|
|
TAP(2)
|
|
Total
|
|
Q1 2017
|
|
Q1 2016
|
|
% Change
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORV/Snowmobiles
|
|
$
|
724,103
|
|
|
$
|
708,103
|
|
|
2
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
724,103
|
|
|
$
|
708,103
|
|
|
2
|
%
|
|
Motorcycles
|
|
120,289
|
|
|
185,267
|
|
|
(35
|
)%
|
|
$
|
5,104
|
|
|
—
|
|
|
$
|
5,104
|
|
|
125,393
|
|
|
185,267
|
|
|
(32
|
)%
|
|
Global Adjacent Markets
|
|
91,555
|
|
|
74,109
|
|
|
24
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91,555
|
|
|
74,109
|
|
|
24
|
%
|
|
Aftermarket
|
|
217,835
|
|
|
15,517
|
|
|
1,304
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
217,835
|
|
|
15,517
|
|
|
1,304
|
%
|
|
Total sales
|
|
1,153,782
|
|
|
982,996
|
|
|
17
|
%
|
|
5,104
|
|
|
—
|
|
|
5,104
|
|
|
1,158,886
|
|
|
982,996
|
|
|
18
|
%
|
|
Gross profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORV/Snowmobiles
|
|
212,959
|
|
|
205,987
|
|
|
3
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
212,959
|
|
|
205,987
|
|
|
3
|
%
|
|
% of sales
|
|
29.4
|
%
|
|
29.1
|
%
|
|
+32 bps
|
|
|
|
|
|
|
|
29.4
|
%
|
|
29.1
|
%
|
|
+32 bps
|
|
Motorcycles
|
|
(19,881
|
)
|
|
27,259
|
|
|
(173
|
)%
|
|
38,563
|
|
|
—
|
|
|
38,563
|
|
|
18,682
|
|
|
27,259
|
|
|
(31
|
)%
|
|
% of sales
|
|
(16.5
|
)%
|
|
14.7
|
%
|
|
-3,124 bps
|
|
|
|
|
|
|
|
14.9
|
%
|
|
14.7
|
%
|
|
+19 bps
|
|
Global Adjacent Markets
|
|
28,098
|
|
|
20,383
|
|
|
38
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,098
|
|
|
20,383
|
|
|
38
|
%
|
|
% of sales
|
|
30.7
|
%
|
|
27.5
|
%
|
|
+319 bps
|
|
|
|
|
|
|
|
30.7
|
%
|
|
27.5
|
%
|
|
+319 bps
|
|
Aftermarket
|
|
41,564
|
|
|
4,699
|
|
|
785
|
%
|
|
—
|
|
|
12,897
|
|
|
12,897
|
|
|
54,461
|
|
|
4,699
|
|
|
1,059
|
%
|
|
% of sales
|
|
19.1
|
%
|
|
30.3
|
%
|
|
-1,120 bps
|
|
|
|
|
|
|
|
25.0
|
%
|
|
30.3
|
%
|
|
-528 bps
|
|
Corporate
|
|
(20,249
|
)
|
|
(10,750
|
)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,249
|
)
|
|
(10,750
|
)
|
|
|
|
Total gross profit
|
|
242,491
|
|
|
247,578
|
|
|
(2
|
)%
|
|
38,563
|
|
|
12,897
|
|
|
51,460
|
|
|
293,951
|
|
|
247,578
|
|
|
19
|
%
|
|
Gross profit %
|
|
21.0
|
%
|
|
25.2
|
%
|
|
(417) bps
|
|
|
|
|
|
|
|
25.4
|
%
|
|
25.2
|
%
|
|
+17 bps
|
|
Operating expenses
|
|
241,832
|
|
|
189,930
|
|
|
27
|
%
|
|
(6,017
|
)
|
|
(3,303
|
)
|
|
(9,320
|
)
|
|
232,512
|
|
|
189,930
|
|
|
22
|
%
|
|
Other expense, net
|
|
11,608
|
|
|
81
|
|
|
NM
|
|
(13,000
|
)
|
|
—
|
|
|
(13,000
|
)
|
|
(1,392
|
)
|
|
81
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(2,911
|
)
|
|
$
|
46,889
|
|
|
(106
|
)%
|
|
$
|
41,021
|
|
|
$
|
10,183
|
|
|
$
|
51,204
|
|
|
$
|
48,293
|
|
|
$
|
46,889
|
|
|
3
|
%
|
|
Diluted EPS
|
|
$
|
(0.05
|
)
|
|
$
|
0.71
|
|
|
(107
|
)%
|
|
$
|
0.64
|
|
|
$
|
0.16
|
|
|
$
|
0.80
|
|
|
$
|
0.75
|
|
|
$
|
0.71
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents adjustments for the wind down of Victory
Motorcycles, including wholegoods, accessories and apparel
|
|
(2) Represents adjustments for a TAP acquisition
inventory step-up and TAP integration expenses
|
|
(3) The Company used its estimated statutory tax rate of
37.1% for the non-GAAP adjustments, except for the non-deductible
items
|
2016 Reclassified Results: 2016 sales and gross profit results
for ORV/Snowmobiles, Motorcycles and Aftermarket are reclassified for
the new Aftermarket reporting segment.
2017 Adjusted Guidance: 2017 guidance excludes the pre-tax effect
of TAP inventory step-up purchase accounting of approx. $15 million,
acquisition integration costs of approx. $15 million, manufacturing
network realignment costs of approx. $10-$15 million and the impacts
associated with the Victory wind down which is estimated to be in the
range of $70 to $90 million in 2017. 2017 adjusted sales guidance
excludes any Victory wholegood, accessories and apparel sales and
corresponding promotional costs as the Company is in the process of
exiting the brand. The Company has not provided reconciliations of
guidance for adjusted diluted net income per share, in reliance on the
unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of
Regulation S-K. The Company is unable, without unreasonable efforts, to
forecast certain items required to develop meaningful comparable GAAP
financial measures. These items include costs associated with the
Victory wind down that are difficult to predict in advance in order to
include in a GAAP estimate.
Click
here to subscribe to Mobile Alerts for Polaris Industries Inc.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170425005524/en/
Source: Polaris Industries Inc.