MINNEAPOLIS, Minn - Polaris today reported record first-quarter net income of $75.5 million, or $1.07 per diluted share, an increase of 26 percent compared with the first quarter of 2012. Net sales for the first quarter totaled $745.9 million, an increase of 11 percent.
“While Off-Road Vehicles (ORVs) and motorcycles faced challenging 2012 comparisons, we were again able to outpace the industry and increase market share in both product lines,” said Scott Wine, Polaris chairman and CEO. “Our snowmobile business also generated strong retail sales and market share growth during the first quarter.”
Wine commented on Polaris’ acquisition earlier this month of Aixam Mega, a French maker of on-road quadricycles. “Two key tenets of Polaris’ long-term strategy are growing globally and growing through adjacencies,” he said. “Aixam Mega broadens our product line portfolio, complements our GEM and Goupil businesses, boosts our European distribution network, and enhances our competitive advantage in small vehicles.”
Polaris finalized the location of its new European factory, which will be located in Opole, Poland. “This facility will add much-needed ORV capacity and serve our European markets with locally designed and manufactured products,” Wine said. “We expect to break ground during this year’s second quarter, and the facility should be operational by the fall of 2014.”
During the quarter, Polaris also launched the Polaris Brutus and Bobcat utility vehicles, codeveloped with Bobcat. “We are pleased with the vehicles’ performance, and the initial market reaction from dealers and customers has been positive,” Wine said. “Shipments to both the Bobcat and Polaris’ new commercial channels will begin in April.”
Wine concluded with cautious optimism. “Not unexpectedly, we saw a degree of timidity in some customer segments that corresponded with the payroll tax increases that took effect at the start of the year,” he said. “We remain cautious of the economic risks in both North America and Europe, but believe our strong team and commercial plans, along with our near-term product pipeline, headed by the new Indian motorcycle, will enhance growth in the second half of 2013. With our solid start to the year, we feel confident in raising our 2013 full year sales and earnings guidance.”
Off-Road Vehicle sales increased 7 percent from the first quarter 2012 to $541.3 million. Polaris said this increase reflects continued market share gains driven by new product offerings, including the Ranger XP 900 and Ranger 800 midsize utility vehicles. Polaris’ North American ORV unit retail sales were up by a single-digit percentage from a percentage increase in the mid-20s in the first quarter last year. Retail sales for side-by-sides continued to grow during the quarter, but ATVs experienced a slight decline in retail sales in the first quarter compared to a percentage increase in the double digits in the 2012 first quarter.
Both ATVs and side-by-side vehicles continued to gain market share in North America during the first quarter. Polaris ORV dealer inventory was up 26 percent in the 2013 first quarter compared to a year ago, reflecting the continued focus on increasing availability in both established and new market segments in addition to preparing for the spring selling season.
Polaris estimates North American industry ORV retail sales in the first quarter declined by a single-digit percentage, with core ATV industry retail sales down by a percentage in the double digits during the quarter primarily attributable to unseasonably warm weather in 2012 and a late start to the spring in 2013. Sales of ORVs outside of North America decreased 2 percent in the first quarter when compared to the first quarter 2012, primarily due to weaker industry conditions in Australia and Europe. (Continued.)