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» Polaris Industries Inc. Q4 2009 Earnings Call Transcript
Now, I'll turn it over to Scott Wine, our CEO. Scott?Scott W. Wine Thanks Richard. Good morning and thank you for joining us. In January we summarized our leadership direction for 2012 with the theme staying on offence. As we discussed our first quarter performance this morning, we will highlight examples of exceptional performance by our teams and business units as well as encouraging signs about our end markets. Over the past few years, we have demonstrated the discipline and focus to excel in difficult market conditions. And now, with a little wind at our backs we will continue to work hard to accelerate growth and extend our market share gains. Sales for the first quarter increased 25% to a record $673.8 million as retail demand for our innovative RANGER and RZR Side by Sides and Victory Motorcycles continue to feel strong orders from dealers and distributors around the world. We were not immune to the impact of limited snow fall and the unseasonably warm winter, but I was proud of the way our snow team battled to keep retail sales flat for the season by delivering industry leading market share gains. International sales also started the year strong, up 20% over the first quarter of 2011. Both demand and internal execution improved throughout the quarter with March representing one of the single best months in the history of Polaris. First quarter net income increased 27% to $60.1 million yielding record earnings per share of $0.85, also a 27% improvement over the prior year period. Gross profit margins expanded 60 basis points to 28.9% as our manufacturing realignment savings and overall gain plans to sustainable margin growth yielded positive results. We continue to make major investments in growth. In research and development and many new exciting market opportunities. But as shown by a 32% improvement on operating profit, our focus on profitable growth is steadfast.
Between our record earnings performance and our accelerating momentum in the first quarter, we are confident that we will surpass our previous full year 2012 sales and earnings guidance. Although we continue to see the potential for an economic slowdown in the later part of this year, we expect to leverage our industry leading combination of innovation and execution to drive solid growth in the second and third quarters.We have modestly increased our estimates for the annual industry growth rates and coupling that with our predictive market share gains, we are comfortable increasing our full year sales guidance to up 13% over 2011. With higher sales and expanding margins, full year earnings per share are now projected to be $3.85 to $4.00 per share, an increase of 20% to 25% over 2011. Our history of consistent quarterly performance proves this Polaris team can set ambitious targets, build solid plans and achieve great results by executing with discipline and speed. We work equally hard to ensure that our tactical actions are aligned with achievement of our long term strategic objectives. Ultimately, our aim to become a more diversified, highly profitable $5 billion plus global enterprise, and we are firmly committed to achieving that goal as we strengthen our position as the world leader in power sports. Due to the recent realignment of our leadership team, we have enhanced our focus on strategic execution and reap the added benefit of bringing new energy and ideas to each of our business units. This is a game of team work and talent and I could not be more pleased with the strength and depth of our Polaris organization. In order to be the best in power sports plus, we must sustain and build on our lead and Off-Road vehicles. Dave Longren and his ORV team are aggressively driving growth and extending our Side by Side armada in the face of ever increasing competition. Steve Menneto and his team are expanding our Motorcycle lineup and doggedly throttling up profitable growth on our Victory business, while also devoting significant time, energy and resources to the monumental re-launch of Indian Motorcycles. Mike Jonikas and the snowmobile team delivered strong performance in the mountain to overcome dismal snow conditions in much of the country. An important move that indirectly but meaningfully affect each of these business units, we hired Steve Eastman in February to spur faster growth in our highest margin division Parts, Garments and Accessories. Read the rest of this transcript for free on seekingalpha.com