American Motorcycle Dealer AMD 224 March 2018 - Page 10

Polaris reports +18% sales for 4Q at record $1,431 million olaris Industries Inc. reported record fourth quarter 2017 sales of $1,431 million, up +18 percent from $1,218 million for the fourth quarter of 2016. Indian Motorcycles massively outperformed the motorcycle industry, building on its existing momentum with a flood of product news and a very successful year on the race track. Motorcycle segment sales, including PG&A, totaled $103 million, a decrease of two percent compared to $104 million reported in the fourth quarter of 2016, which included $25 million of Victory Motorcycle wholegood, accessory and apparel sales. Indian Motorcycles’ wholegood sales increased in the high-single digit percent range in the fourth quarter, while Slingshot sales more than doubled. Gross profit from the sector for the fourth quarter of 2017 was $5 million compared to $1 million in the fourth quarter of 2016. Adjusted for the Victory Motorcycles wind-down costs of $3 million, motorcycle gross profit was $8 million, up from the fourth quarter last year due to higher sales volume for both Indian Motorcycles and Slingshot. North American consumer retail demand for the Polaris motorcycle segment, including Indian Motorcycle and Slingshot, increased about +30 percent during the 2017 fourth quarter. Indian Motorcycle retail sales increased about +17 percent, with both heavyweight and mid-sized P 10 motorcycles increasing at similar mid- teens percent levels. Indian Motorcycle continued to gain “significant market share for the 2017 fourth quarter and full year on a year- over-year basis. Slingshot’s retail sales were up significantly due to improved product availability compared to the fourth quarter last year. Motorcycle industry retail sales, 900cc and above, were down high-single digits percent in the 2017 fourth quarter.” Off-Road Vehicle (“ORV”) and Snowmobile segment sales, including their respective PG&A related sales, were $994 million for the fourth quarter of 2017, up 13 percent over $881 million for the fourth quarter of 2016, driven primarily by improved side-by-side shipments. PG&A sales for ORV and Snowmobiles combined increased nine percent in the 2017 fourth quarter compared to the fourth quarter last year. International sales to customers outside of North America, including PG&A, totaled $211 million for the fourth quarter of 2017, up 18 percent, from the same period in 2016. In the fourth quarter, sales in EMEA grew low-twenties percent, Asia Pacific increased high-single digits percent, and Latin America sales rose mid- teens percent. At a corporate level gross profit increased 18 percent to $368 million Polaris CEO Scott Wine: “I am proud of the Polaris team and excited to see their dedication and hard work pay off as we returned the company to sustainable profitable growth in 2017" for the fourth quarter of 2017 from $313 million in the fourth quarter of 2016. As a percentage of sales, reported gross profit margin was 25.7 percent of sales for the fourth quarter of both 2017 and 2016. Gross profit for the fourth quarter of 2017 includes the negative impact of $3 million of Victory Motorcycles wind-down costs and $2 million of realignment costs. FOURTH QUARTER CONSOLIDATED CORPORATE SUMMARY THREE MONTHS ENDED DECEMBER 31 NINE MONTHS ENDED DECEMBER 31 in thousands US $ Sales Cost of sales Gross profit 2017 1,431,049 1,063,237 367,812 2016 1,217,789 905,017 312,772 2017 5,428,477 4,103,826 1,324,651 2016 4,516,629 3,411,006 1,105,623 Operating expenses: Selling and marketing Research and development General and administrative Total operating expenses Income from financial services Operating income 116,319 62,412 85,198 263,929 18,595 122,478 97,423 48,870 87,039 233,332 19,303 98,743 471,805 238,299 331,196 1,041,300 76,306 359,657 342,235 185,126 306,4423 833,803 78,458 350,278 Net income 31,475 62,581 172,492 212,948 AMERICAN MOTORCYCLE DEALER - MARCH 2018