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Polaris Industries' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: PII

Buoyed by the strength of the off-road vehicle category, and with confidence in our new model year ’13 product offerings, we are again raising our full-year sales and earnings guidance. Despite a soft and potentially slowing U.S. economy, we expect a positive reaction to the outstanding lineup we’ll introduce in next week’s dealer meeting. New products and process improvement should contribute to market share gains and margin enhancement throughout the remainder of the year. We are lowering second half expectations for our EMEA business, although they should still surpass 2011 results.

Growth in Asia Pacific Latin America is steady, and international sales overall will be solidly positive for the second half. We are increasing our full-year sales guidance for the entire company to up 14 to 17% over 2011. Coupling this sales growth with productivity gains and relaxing commodity pressure, we now anticipate full-year earnings per share in the $4.05 to $4.15 range, up 27 to 30% over 2011.

Earlier today, we announced we have signed an agreement to create a new joint venture in India with Eicher Motors Limited. We have made excellent progress over the past two years building our Polaris business in India, and are confident that Eicher is the right partner to help us accelerate growth in this important region. Eicher is a New Delhi-based $1.3 billion manufacturer of commercial vehicles and motorcycles, with a rich history and a sterling reputation. Eicher introduced India’s first tractors in 1959, and it was a proud legacy of innovation, including successful stewardship of the iconic Royal Infield motorcycle business. The largest part of the company is their joint venture with Volvo, which produces modern commercial vehicles and components. The 50-50 joint venture anticipates both Polaris and Eicher will invest approximately $25 million over the next three years. The joint venture plans to establish a manufacturing business in India, to develop and commercialize new vehicles for India and other emerging markets. The joint venture will combine Polaris’s innovative designs and engineering acumen with Eicher’s power train expertise, low cost supplier base and intimate knowledge of local consumer trends. Eicher’s strong financial position and powerful brand provide Polaris with firm footing in one of the world’s fastest-growing economies, and this joint venture establishes an important platform from which we can access an expansive group of new Asian customers.

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