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Polaris Reports Record Second Quarter 2012 Results; EPS Increased 44% To $0.98 With Sales Growth Of 24%

Stocks in this article: PII

Information about the complete line of Polaris products, apparel and vehicles accessories are available from authorized Polaris dealers or anytime at www.polarisindustries.com.

Except for historical information contained herein, the matters set forth in this news release, including management’s expectations regarding 2012 sales, shipments, net income, net income per share, manufacturing realignment transition costs and savings in logistical and production costs, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks and uncertainties include such factors as the Company’s ability to successfully implement its manufacturing operations realignment initiatives, product offerings, promotional activities and pricing strategies by competitors; acquisition integration costs; warranty expenses; impact of changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; environmental and product safety regulatory activity; effects of weather; commodity costs; uninsured product liability claims; uncertainty in the retail and wholesale credit markets; changes in tax policy and overall economic conditions, including inflation, consumer confidence and spending and relationships with dealers and suppliers. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. The Company does not undertake any duty to any person to provide updates to its forward-looking statements.

(summarized financial data follows)

 

POLARIS INDUSTRIES INC.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data)

(Unaudited)

   

 

For Three Months Ended June 30,

For Six Months Ended June 30,

 

2012

   

2011

 

2012

     

2011

 
Sales $ 755,446 $ 607,921 $ 1,429,196 $ 1,145,119
Cost of sales   538,697   430,317   1,017,484     815,680  
Gross profit 216,749 177,604 411,712 329,439
Operating expenses
Selling and marketing 50,555 43,453 95,688 80,666
Research and development 31,216 25,499 61,682 48,498
General and administrative   32,759   37,257   67,759     64,583  
Total operating expenses 114,530 106,209 225,129 193,747
 
Income from financial services   8,215   5,526   15,398     10,812  
Operating income 110,434 76,921 201,981 146,504
 
Non-operating expense (income):
Interest expense 1,466 985 2,978 1,496
Other expense (income), net   210   1,642   (2,367 )   (1,559 )
Income before income taxes 108,758 74,294 201,370 146,567
 
Provision for income taxes   38,935   25,565   71,469     50,528  
Net Income $ 69,823 $ 48,729   129,901   $ 96,039  
 
Basic net income per share $ 1.01 $ 0.71

$

1.89

 

$

1.40

 
Diluted net income per share $ 0.98 $ 0.68 $ 1.83   $ 1.35  
Weighted average shares outstanding:
 
Basic 68,954 68,811 68,795 68,674
Diluted 71,161 71,215 70,993 70,939
 

POLARIS INDUSTRIES INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

   

Subject to Reclassification

 

June 30, 2012

 

June 30, 2011

Assets

Current Assets:
Cash and cash equivalents $ 289,294 $ 262,174
Trade receivables, net 134,876 136,903
Inventories, net 357,960 286,137
Prepaid expenses and other 46,706 28,622
Income taxes receivable 9,164 13,400
Deferred income taxes   78,765   70,060
Total current assets 916,765 797,296
 
Property and equipment, net 223,777 193,071
Investment in finance affiliate 41,692 35,567
Investment in other affiliates 5,000 975
Deferred tax assets 12,738 3,475
Goodwill and intangible assets, net   76,379   60,878

Total Assets

$ 1,276,351 $ 1,091,262
 

Liabilities and Shareholders’ Equity

Current Liabilities:
Current portion of capitalized lease obligations $ 2,630 -
Accounts payable 192,113 $ 148,208
Accrued expenses:
Compensation 123,168 138,490
Warranties 38,685 31,862
Sales promotions and incentives 79,955 74,869
Dealer holdback 71,998 67,508
Other 82,194 70,429
Income taxes payable   1,873   2,271
Total current liabilities 592,616 533,637
 
Long term income taxes payable 8,437 6,184
Capital lease obligations 4,959 -
Long-term debt   100,000   100,000
Total liabilities   706,012   639,821
 
Shareholders’ Equity:
Total shareholders’ equity   570,339   451,441

Total Liabilities and Shareholders’ Equity

$ 1,276,351 $ 1,091,262
 

POLARIS INDUSTRIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

Subject to Reclassification

  For Six Months

 

Ended June 30,

 

2012

 

2011

 
Operating Activities:
Net income $ 129,901 $ 96,039

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 32,677 34,995
Noncash compensation 18,338 9,673
Noncash income from financial services (1,599 ) (2,272 )
Noncash loss from other affiliates - 34
Deferred income taxes (3,228 ) (7,026 )
Tax effect of share-based compensation exercises (10,450 ) (9,894 )
Changes in current operating items:
Trade receivables (20,014 ) (43,894 )
Inventories (60,668 ) (38,919 )
Accounts payable 45,622 32,954
Accrued expenses (69,436 ) 1,814
Income taxes payable/receivable 27,797 (3,133 )
Prepaid expenses and others, net   (10,567 )   (8,599 )
Net cash provided by operating activities 78,373 61,772
 
Investing Activities:
Purchase of property and equipment (41,591 ) (40,601 )
Investment in finance affiliate, net 2,158 3,873
Acquisition of businesses, net of cash acquired   (383 )   (27,960 )
Net cash used for investing activities (39,816 ) (64,688 )
 
Financing Activities:
Borrowings under credit agreement/capital lease obligations 1,968 100,000
Repayments under credit agreement/capital lease obligations (1,422 ) (200,000 )
Repurchase and retirement of common shares (48,634 ) (32,856 )
Cash dividends to shareholders (50,749 ) (30,675 )
Tax effect of proceeds from share-based compensation exercises 10,450 9,894
Proceeds from stock issuances under employee plans   14,690     23,083  
 
Net cash used for financing activities   (73,697 )   (130,554 )
 
Impact of currency translation on cash balances   (902 )   1,717  
 
Net decrease in cash and cash equivalents (36,042 ) (131,753 )
 
Cash and cash equivalents at beginning of period   325,336     393,927  
 
Cash and cash equivalents at end of period $ 289,294   $ 262,174  




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