Polaris reports record sales, income in 2005

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 Dec. 31, 2005, was $43.9 million, or $1.03 a share, down 8% from $47.7 million, or $1.05 a share, in the year-earlier quarter. Fourth quarter sales were $526.1 million, down 2% 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 Dec. 31, 2005, Polaris reported record net income of $144.3 million, or $3.29 per diluted share, up 8% compared to $136.8 million or $3.04 per diluted share for the year ended Dec. 31, 2004. Sales for the full year also hit a record, finishing at $1.869 billion, up 5% compared to sales of $1.773 billion in 2004.
Full year 2005 sales of ATVs increased 7% compared to sales in 2004 and snowmobile sales decreased 11%. However, PG&A sales were up 9% and full year 2005 Victory motorcycle sales increased 34%, 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

  • 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.
    Polaris: 11% Increase in Cash Dividend
    The Board of Directors of Polaris Industries Inc. has approved an 11% increase in the regular quarterly cash dividend effective with the 2006 first quarter dividend. The first quarter dividend of $.31 will be payable on Feb. 15 to shareholders of record at the close of business on Feb. 1.
    “This increase represents the 11th consecutive year of increasing the dividend and demonstrates the company’s consistently strong financial performance over the years,” Tiller said. “We remain confident in the future growth of our business and cash flows and, as we have done in the past, we will continue to return a portion of the cash flow generated by the company to our shareholders in the form of cash dividends and share repurchases, balanced against other strategic options.” psb

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