Polaris Preps for Better Results in Second Half

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Polaris Industries no longer has the momentum it enjoyed for the past decade. Sales of traditional ATVs remain stagnant, with dealers doing what they can to stave off inventory. The snowmobile market — upon which the company was founded — has nearly dried up. And the parts, garments and accessories business is feeling related effects.

Still, with sales holding steady, earnings that increased during the first half of the year, shrinking inventories and some new products awaiting launch, company officials are optimistic.

"Overall, we are pleased with the progress we have made to date in 2007," says Tom Tiller, chief executive officer of Polaris. "ATV dealer inventory levels continue to transition to acceptable levels, and we have successfully launched two significant new products, the Victory Vision and Ranger RZR.

"We recognize that there is still a lot of work ahead of us, but we are energized by the positive momentum we created in the first half of the year and expect these successes to drive results in the second half of the year," Tiller says.

Polaris sales totaled $376.9 million for the second quarter ending June 30, a decrease of 2 percent from last year's second quarter sales of $384.3 million. The OEM's net income for April–June was $22.9 million, or $0.62 per diluted share, up from $22.7 million, or $0.53 per diluted share during second quarter 2006.

The numbers aren't great, but according to Tiller, they reflect the OEM's efforts to successfully execute its 2007 business plan.

For the remainder of the year, Polaris expects sales in the third quarter to increase for the first time in the past eight quarters — in the range of up 6 percent to 9 percent as a result of growth in Victory motorcycles and the Ranger side-by-side vehicle business. Full-year sales growth is expected to be in the range from 3 percent to 5 percent.

"Our market share gains in the first half of 2007, increased sales of higher margin products and strong demand on new product introductions give us confidence," Tiller says.