Polaris Industries Inc. says net income for its first quarter ended March 31, 2005, was $19.1 million, up 12% compared to 2004 first quarter net income of $17.1 million.
Polaris ceased manufacturing marine products on September 2, 2004. As a result, the marine products division's financial results were reported separately as discontinued operations. The company's first quarter 2005 loss from discontinued operations was $0.3 million, net of tax, or less than $0.01 per diluted share, compared to a loss of $2.8 million, net of tax, or $0.06 per diluted share in the first quarter 2004.
Reported net income for the first quarter 2005, including both continuing and discontinued operations, was $18.8 million, or $0.42 per diluted share compared to $14.3 million, or $0.32 per diluted share in the first quarter of 2004.
The company says higher sales volume compared to last year's first quarter along with lower operating expenses, as a percent of sales, contributed to the first quarter 2005 earnings increase. Sales from continuing operations for the first quarter 2005 totaled $358.3 million, up 9% from last year's first quarter sales from continuing operations of $329.0 million.
Polaris says first quarter ATV sales increased 12% over the first quarter 2004; sales of Victory motorcycles increased 12%; and Parts, Garments, and Accessories sales increased 8%. Income from financial services increased 5% to $8.5 million, up from $8.1 million in the first quarter 2004.
One set back came in snowmobile sales. Polaris says sled sales decreased to $7.2 million for the first quarter 2005 compared to the prior year's first quarter sales of $13.3 million. Explaining the huge drop, Polaris said sled sales in last year's first quarter were higher than normal due to increased late season dealer demand resulting from better snowfall in January through March of 2004. The company said snowfall in the first quarter of 2005 was below normal across many of the regions in the snowbelt of North America, causing dealer inventories of snowmobiles to be at higher levels at the end of the riding season compared to last years levels.
Polaris' first quarter gross profit increased 9% to $84.5 million for the first quarter of 2005 compared to $77.5 million for the first quarter of 2004. Gross profit, as a percentage of sales, was 23.6% for the first quarter 2005, flat with the first quarter of 2004
For the full year 2005, Polaris' previously issued earnings per share from continuing operations guidance remains unchanged and is expected to be in the range of $3.28 to $3.42 per diluted share, an 8% to 13% increase over the full year 2004 results of $3.04 diluted per share.
"There are challenges that lie ahead of us including ongoing pressure from increasing product costs, particularly steel and transportation and the continued lack of good snowfall which is negatively impacting our snowmobile business,” said Tom Tiller, Chief Executive Officer of Polaris. “However, we have a plan to mitigate these challenges as the year progresses. We are confident that we will continue to experience strong growth in our Ranger utility vehicles and our international business. Additionally, our motorcycle business continues to show improvement across the board, particularly in brand awareness, product quality and its dealer network."
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