Minnesota-based Polaris Industries weathered a tough fourth quarter to report record sales and income in 2005.
Polaris' net income for its fourth quarter ended December 31, 2005, was $43.9 million, or $1.03 a share, down 8 percent from $47.7 million, or $1.05 a share, in the year-earlier quarter. Fourth quarter sales were $526.1 million, down two percent from $539 million during the previous fourth quarter.
“As expected, operating conditions in the fourth quarter of 2005 remained challenging,” Polaris Chief Executive Officer Tom Tiller said in a prepared statement. “In response to these challenges, our team made a number of timely adjustments that enabled us to produce another record.”
For the full year ended December 31, 2005, Polaris reported record net income of $144.3 million, or $3.29 per diluted share, up eight percent compared to $136.8 million or $3.04 per diluted share for the year ended December 31, 2004. Sales for the full year also hit a record, finishing at $1.869 billion, up 5 percent compared to sales of $1.773 billion in 2004.
Full year 2005 sales of ATVs increased seven percent compared to sales in 2004 and snowmobile sales decreased 11 percent. However, PG&A sales were up nine percent and full year 2005 Victory motorcycle sales increased 34 percent, totaling $99.5 million.
North American all-terrain-vehicle retail sales for the industry are expected to remain soft in 2006, commodity costs are expected to remain high, and dealer and factory inventories remain above desired levels, Tiller said.
Tiller pointed to several moves the company made in 2005 that could lead to more record earnings:
- The introduction of several new ATVs, RANGERs and Victory motorcycles;
- The announcement of a partnership with KTM Power Sports AG (KTM), an Austrian-based motorcycle manufacturer with a strong international presence;
- The modification of Polaris' retail credit relationship with HSBC Bank, which contributed to improved earnings and cash flow in addition to removing all credit and funding risk.
Copyright 2006 Powersports Business