International Dealer News IDN 144 August/September 2018 - Page 23

THE AMERICAN REPORT Polaris reports 2018 second quarter results Minneapolis based Polaris Industries, owner of Indian Motorcycle and the market-leading ATV, SxS and snowmobile manufacturer, reported Q2 sales of +10% to $1,503 million; net income +47% at $1.43 per diluted share; north American retail sales of +6% for the quarter; and north American ORV (ATV and SxS) retail up mid-single digits % with market share gains for both. Taking into account improved volume expectations and the acquisition of Boat Holdings, LLC (its first venture into the marine sector), Polaris increased full year 2018 sales guidance to be up between 11 and 12% and adjusted its full year earnings per share expectations downwards to allow for the absorption of an estimated additional $40 million of tariff and related commodity cost increases for 2018. Motorcycle segment sales, including PG&A, totalled $171 million, down by -13 percent compared to $198 million reported in the second quarter of 2017 due to a weak domestic U.S. motorcycle industry and timing of shipments for Indian motorcycles year- over-year; Slingshot sales were also down. Segment gross profit was up at $25 million, but down when adjusted for Victory wind-down costs. North American Indian Motorcycle retail sales increased mid-single digit percent; Slingshot's retail sales were down mid-single digit. Domestic U.S. motorcycle industry retail sales of 900 cc and above were down mid-single digit percent in the 2018 second quarter, meaning Indian gained share in a declining market. International sales, including PG&A, were +7% at $204 million due to foreign exchange movements and “strong sales in the company's EMEA business for ORV and motorcycles”. Scott Wine, Chairman and Chief Executive Officer of Polaris Industries CONSOLIDATED STATEMENTS OF INCOME (LOSS) (in thousands US $) Three months ended June 30 Six months ended June 30 2018 2017 2018 Sales Cost of sales Gross profit 1,502,532 1,117,356 385,176 1,364,920 1,014,534 350,386 2,800,005 2,518,702 2,091,348 1,925,825 708,657 592,877 Operating expenses: Selling and marketing Research and development General and administrative Total operating expenses Income from financial services Operating income Net income 122,859 68,330 92,874 284,063 21,344 122,457 92,540 118,531 60,753 91,063 270,347 19,143 99,182 62,041 240,566 133,560 171,567 545,693 42,769 205,733 148,254 232,844 112,758 166,577 512,179 39,573 120,271 59,130 $0.97 $2.28 $0.92 Diluted Net income per share: $1.43 Scott Wine, Chairman and Chief Executive Officer of Polaris, stated that “consumer sentiment and dealer traffic improved throughout the Quarter, building momentum, which will help offset the rising risk of tariffs in the second half” 2017 Inc, stated: “I am very pleased with the Polaris team and the strong execution they delivered across the business during the second Quarter. With solid retail growth and market share gains in both our Off-Road Vehicle business and Indian Motorcycle, we are clearly reaping the benefits of our safety and quality investments, new product innovations and improved delivery performance. Consumer sentiment and dealer traffic improved throughout the Quarter, building momentum, which will help offset the rising risk of tariffs in the second half”.