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Polaris Reports Record Third Quarter 2012 Results; EPS Increased 40% To $1.33 With Sales Growth Of 21%

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 September 30,

 

For Nine Months Ended September 30,

2012   2011 2012   2011
Sales $ 879,939 $ 729,861 $ 2,309,135 $ 1,874,980
Cost of sales   620,154     523,025   1,637,638    

1,338,705

Gross profit 259,785 206,836 671,497 536,275
Operating expenses
Selling and marketing 57,211 49,074 152,899 129,740
Research and development 32,352 25,750 94,034 74,248
General and administrative   36,882     28,049   104,641     92,632
Total operating expenses 126,445 102,873 351,574 296,620
 
Income from financial services   8,227     6,327   23,625     17,139
Operating income 141,567 110,290 343,548 256,794
 
Non-operating expense (income):
Interest expense 1,465 1,270 4,443 2,766
Other (income) expense, net   (3,989 )   5,480   (6,356 )   3,921
Income before income taxes 144,091 103,540 345,461 250,107
 
Provision for income taxes   49,746     35,903   121,215     86,431
Net Income $ 94,345   $ 67,637 $ 224,246   $ 163,676
 
Basic net income per share $ 1.37   $ 0.98 $ 3.26   $ 2.38
Diluted net income per share $ 1.33   $ 0.95 $ 3.16   $ 2.30
 

Weighted average shares outstanding:

Basic 68,692 68,937 68,761 68,761
Diluted 70,883 71,289 70,956 71,056
 

POLARIS INDUSTRIES INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 

Subject to Reclassification

 

September 30, 2012

 

September 30, 2011

 
Assets
Current Assets:
Cash and cash equivalents $ 412,898 $ 335,747
Trade receivables, net 136,346 108,889
Inventories, net 410,034 338,285
Prepaid expenses and other 43,576 37,762
Income taxes receivable 7,936 9,037
Deferred tax assets   80,040   62,269
Total current assets 1,090,830 891,989
 
Property and equipment, net 230,605 198,018
Investment in finance affiliate 47,521 37,273
Investment in other affiliates 12,000 882
Deferred tax assets 13,768 10,240
Goodwill and other intangible assets, net   76,704   59,658

Total Assets

$ 1,471,428 $ 1,198,060
 

Liabilities and Shareholders’ Equity

Current Liabilities:
Current portion of capitalized lease obligations $ 2,607 $

-

Accounts payable 228,332 187,780
Accrued expenses:
Compensation 159,637 160,414
Warranties 41,571 36,724
Sales promotions and incentives 105,340 80,234
Dealer holdback 75,983 61,196
Other 84,150 67,739
Income taxes payable   3,286   1,598
Total current liabilities 700,906 595,685
 
Long-term income taxes payable 6,749 7,156
Capital lease obligations 4,692 -
Long-term debt   100,000   100,000
Total liabilities   812,347   702,841
 
Shareholders’ Equity:
Total shareholders’ equity   659,081   495,219
Total Liabilities and Shareholders’ Equity $ 1,471,428 $ 1,198,060
 

POLARIS INDUSTRIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

Subject to Reclassification   For Nine Months

Ended September 30,

2012   2011
 
Operating Activities:
Net income $ 224,246 $ 163,676

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

Depreciation and amortization 51,489 50,692
Noncash compensation 26,964 14,815
Noncash income from financial services (2,479 ) (3,398 )
Deferred income taxes (5,277 ) (6,404 )
Tax effect of share-based compensation exercises (17,810 ) (13,361 )
Changes in current operating items:
Trade receivables (20,272 ) (17,563 )
Inventories (109,912 ) (96,474 )
Accounts payable 81,489 73,207
Accrued expenses (451 ) 27,243
Income taxes payable/receivable 36,185 4,819
Prepaid expenses and others, net   (9,684 )   827  
Net cash provided by operating activities 254,488 198,079
 
Investing Activities:
Purchase of property and equipment (65,804 ) (62,474 )
Investment in finance affiliate, net (2,790 ) 3,294
Investment in other affiliates (7,000 )

 

-

Acquisition of businesses, net of cash acquired   (383 )   (27,960 )
Net cash used for investing activities (75,977 ) (87,140 )
 
Financing Activities:
Borrowings under senior notes/capital lease obligations 2,232 100,000
Repayments under credit agreement/capital lease obligations (2,137 ) (200,000 )
Repurchase and retirement of common shares (58,978 ) (62,462 )
Cash dividends to shareholders (76,009 ) (46,147 )
Tax effect of proceeds from share-based compensation exercises 17,810 13,361
Proceeds from stock issuances under employee plans   25,458     28,005  
 
Net cash used for financing activities   (91,624 )   (167,243 )
 
Impact of currency translation on cash balances   675     (1,876 )
 
Net decrease in cash and cash equivalents 87,562 (58,180 )
 
Cash and cash equivalents at beginning of period   325,336     393,927  
 

Cash and cash equivalents at end of period

$ 412,898   $ 335,747  




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