Polaris was bolstered by big ATV and side-by-side sales in the third-quarter of 2013, which reached $703 million.
Polaris released its third-quarter financials for 2013 and things are looking good. The Minnesota-based company exceeded one billion dollars in sales during the quarter, a mark never before achieved by the brand. Net income from continuing operations for Q3 reached $116.9 million dollars for an improvement of 24% compared to the same period in 2012. Spikes in growth come from a 12% increase in sales in the United States, a 38% boost in international sales, higher selling prices and lower product costs. Gross profit dollars reached $334 million for a 29% increase over the same period in 2012.
The positive showing has prompted Scott Wine, Polaris’ Chairman and CEO to declare in a company press release that “Our sales growth continues to outpace our long-term projections and we now expect to achieve greater than eight billion in sales by 2020.”
Wine continued, “Our record third quarter results reflect both the ongoing demand for our existing products and the potential contained within the initial shipments of our model year 2014 vehicles, the largest new product introduction in the Company’s history. In the third quarter, we launched more new vehicles than in any previous model year, led by the much anticipated debut of Indian Motorcycles along with several innovative variants of Rangers, RZRs and Victory motorcycles. Additionally, to complement and enhance our consumers’ experience with these vehicles our Parts, Garments and Accessories (PG&A) business introduced over 300 new model year 2014 accessories plus an expanded apparel line-up.
“Our success over the past four years derives from our focused strategy – being the Best in Powersports plus, delivering growth through adjacencies, maintaining global market leadership and demonstrating operational excellence and strong financial performance.”
The bulk of that strength comes from the Off-Road Vehicle (ORV) segment which improved by 23%, reaching a total of $702 million dollars. ORV retail sales in North America grew in the low double-digit percentage range, as did dealer inventories. The segment was stronger internationally, marking sales gains at 20% over the same period in 2012.
Snowmobile sales spiked by 25% to a total of $143 million for Q3, with especially strong results coming from Russia and the Scandinavian region.
Polaris’ Motorcycle division, which includes both Victory and Indian, declined by 6% to $49.4 million dollars compared to Q3 of 2012. The company states that “the decrease in the 2013 third quarter sales is due to Victory dealers continuing to calibrate their inventory levels under the new Retail Flow Management order taking process, which closely ties dealer shipments with retail sales.”
In North America, however, motorcycle sales are up with strong gains made by Victory, which notched a 30% increase over Q3 in 2012. The launch of Indian’s new 2014 models also occurred in Q3 and the company is optimistic that reception will be strong in the coming quarters.
In April of 2013 it was announced that Polaris had acquired Aixam Mega, a small vehicle company in France that produces light duty commercial vehicles and enclosed, on-road quadricycles. The quadricycles are particularly unique in that in many countries allow drivers to operate the vehicles without a full automobile driver’s license. Joining the electric vehicle marques GEM and Groupil already under the auspices of Polaris, the company’s Small Vehicle segment as a whole marked a sales increase of 188% for Q3, totaling $31.7 million dollars.
Finally, PG&A (Parts, Garments and Accessories) jumped by 37% to $176 million dollars in sales.
Even higher growth was offset by a rise in costs as operational expenses jumped 31% largely due to higher sales and marketing required by the roll-out of the new Indian motorcycles. A jury verdict made in July of 2013 “arising from a 2008 collision between a boat and a 2001 Polaris Virage personal watercraft,” also recorded a $3.8 million non-recurring loss for Q3 as well. Polaris ended production of marine product in 2004 and was entirely out of the business of 2007.