Edit note: Learn more about Polaris in the Fall 2012 issue's Perspectives Feature on the UTV Market Perspectives on UTVs: Bad Boy Mowers, Bobcat, Kubota, Polaris
Polaris Industries Inc. (NYSE: PII) reported record third quarter net income of $1.33 per diluted share for the quarter ended September 30, 2012, up 40 percent from the prior year’s third quarter net income of $0.95 per diluted share. Reported net income was $94.3 million for the 2012 third quarter, up 39 percent from the previous third quarter net income of $67.6 million. Sales for the third quarter 2012 totaled a record $879.9 million, an increase of 21 percent over last year’s third quarter sales of $729.9 million.
Scott Wine, Polaris' Chief Executive Officer, commented, "We began the third quarter with significant momentum, and thanks to broad based consumer demand and market share gains for our RANGER® and RZR® side-by-side vehicles, we positioned the company for a strong finish to the year. This Polaris team again demonstrated the power of our combined focus on product innovation and execution by driving a greater than ten percent increase in Polaris North American unit retail sales in the third quarter. The growth in retail sales along with increased market share drove double digit sales growth in each of our product lines during the quarter. The innovation goes beyond just products – our Retail Flow Management pull process for motorcycles and enhanced MVP process for ORV has dramatically improved product availability and delivery for our dealers. Our ongoing operational excellence initiatives helped to ensure this growth was even more profitable, as the manufacturing realignment, along with numerous cost management programs, led to significant gross profit and net income margin improvements over the prior year period. These strong earnings enabled us to continue strategically spending in support of future growth across our portfolio."
"Looking forward, we are very encouraged by the strong dealer and consumer reception to our new industry leading model year 2013 products. Our evolving and expanding product line-up reflects our continued focus on innovation as well as our sustained commitment to profitable growth. With three outstanding quarters behind us and the demonstrated ability of our team to identify and execute on new growth opportunities, 2012 is shaping up to be another record year for Polaris. Though we remain vigilant regarding economic developments and their impact on our customers, we are confident in our strategic direction and implementation and are raising our full year 2012 sales and earnings projections."
2012 Business Outlook
The Company is increasing its previously issued sales and earnings guidance and now expects full year 2012 earnings in the range of $4.32 to $4.37 per diluted share, an increase of 35 to 37 percent over full year 2011 earnings of $3.20 per diluted share. Full year 2012 sales are now expected to grow in the range of 19 to 20 percent from 2011.
Third Quarter Highlights:
• Net income increased 39% to $94.3 million, or $1.33 per diluted share, with salesescalating 21% to $879.9 million, settingthird quarter sales and earnings records.
• All product lines experienced double digit percentage sales increases during the 2012 third quarter, as North American retail unit sales climbed more than 10% on strong, enduring SxS and Victory Motorcycle demand
• Gross profit margins expanded 120 basis points to 29.5% driven by product cost reduction efforts, higher selling prices and manufacturing realignment savings
• Raising guidance for full year 2012 earnings to a range of $4.32 to $4.37 per diluted share, up 35% to 37% over 2011 based on expected full year 2012 sales growth of 19% to 20%.