American Motorcycle Dealer AMD 236 March 2019 | Page 64

Indian Up Overall In 4Q:
BRIEFS Slingshot, Heavyweights
Down; Middleweights Up
NEWS
Harley recorded a 6th place
market share in Germany for
2018 at 10.09%, selling 10,929
units there for a +19.52%
increase in share over 2017. Its
top seller was the Street Bob
(882 units), the 28th most
popular motorcycle in Germany
last year, followed by the Fat
Bob 114 (35th), XL 1200X (39th)
and Breakout 114 (42nd).
Indian Motorcycle recorded a
creditable 12th place in market share
terms in Germany in 2018, selling
1,080 units for a 1.00% market
share - its highest to date and
+63.39% over its 2017
performance.
Harley scored 5th place in
market share terms in Austria in
2018, selling 1,079 units for a
7.73% share, up 14.18% over its
2017 performance. Market
leader in Austria was KTM, in its
home market, followed by
BMW, Honda and Yamaha -
meaning Harley is
outperforming some significant
players in a market that was
worth 13,965 new motorcycle
registrations in 2017 (+8.79%).
Meanwhile, in Switzerland Harley
scored fourth place in market share
terms in 2018, taking 10.98% of the
market, selling 2,694 units (which
was actually down 183 units/-
6.13%) over 2017. The Swiss market
was worth 24,544 new motorcycle
registrations in 2018 (down from
26,910 units in 2017) with Yamaha
the ‘Top Dog’ at 17.74% share,
followed by BMW and Honda.
Harley has confirmed that it will
build its European models at
the factory it commissioned in
Q3 in Thailand. Further
expansion of the initial build is
already taking place.
Polaris has reported their 4Q and 2018
full year fiscals, with adjusted sales for
the fourth quarter of 2018 increased
by +14% to $1,627 million.
Full year 2018 reported net income
was $5.24 per diluted share, up
+95%; adjusted net income for the
same period was $6.56 per diluted
share, up +29%, which was near the
high-end of previously issued
guidance.
Reported and adjusted sales for the
full year of 2018 increased +12% to
$6,079 million and $6,083 million,
respectively. North American retail
sales increased +6% for the quarter
compared to last year; ORV North
American retail sales were up low
single digits, driven by side-by-side
vehicle sales.
Motorcycle segment sales, including
PG&A, totaled $87 million, down 15
percent compared to the fourth
quarter of 2017. Indian sales increased
slightly, but were more than offset by
the decline in Slingshot sales.
North American consumer retail sales
for the Polaris motorcycle segment,
including both Indian Motorcycle and
Slingshot, decreased high-teens
during the 2018 fourth quarter. Indian
Motorcycle retail sales decreased low
double-digits, but their ‘middleweight’
models were up by low single digits.
Slingshot's retail sales were down
substantially during the quarter.
Motorcycle industry retail sales, 900 cc
and above, were down low double-
digits percent in the 2018 fourth
quarter. Indian Motorcycle gained
market share for the 2018 fourth
quarter on a year-over-year basis.
Gross motorcycle segment profit for
the fourth quarter of 2018 was $2
million compared to $5 million in the
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands US $)
Three months ended December 31 Six months ended December 31
2018 2017 2018
Sales
Cost of sales
Gross profit 1,627,120
1,235,847
391,273 1,431,049
1,063,237
367,812 6,078,540 5,428,477
4,577,340 4,103,826
1,501,200 1,324,651
Operating expenses:
Selling and marketing
Research and development
General and administrative
Total operating expenses
Income from financial services
Operating income
Net income 122,278
61,941
87,557
271,776
23,313
138,869
142,810 116,319
62,412
85,198
263,929
18,595
116,908
122,478 491,773
259,682
349,763
1,101,218
87,430
344,602
487,412
471,805
238,299
331,196
1,041,300
76,306
237,179
359,657
$0.49 $5.24
$2.69
Diluted Net income per share: $1.47
Scott Wine, CEO said that Polaris
had been able to “adapt and
execute our strategy to account for
tariffs and other external pressures”
fourth quarter of 2017. Adjusted for
the Victory wind-down costs for both
2018 and 2017 fourth quarters,
motorcycle gross profit was $2 million
in the 2018 fourth quarter compared
to $8 million for the 2017 fourth
quarter. The decrease in gross profit
2017
was the result of negative product mix,
along with tariff costs and higher
logistics and commodity costs.
Scott Wine, Chairman and Chief
Executive Officer of Polaris Industries
Inc., said that “between sales growth
in almost all of our segments,
improved operational efficiencies and
a lower tax rate, we more than offset
macroeconomic and tariff headwinds,
generating a +29 percent increase in
earnings per share. Growth and
market share gains in Off Road
Vehicles, and the acquisition of Boat
Holdings, further expanded our
position as the global leader in
powersports and established Polaris as
a leader in the attractive, profitable
and growing pontoon market.
“We are encouraged by our growth
prospects for 2019 and beyond, but
keenly aware of, and prepared for, the
challenges and uncertainties
presented by global trade and
economic complications.”