October 15, 2009
Polaris Reports Decline in 3Q Sales and Income
Polaris Industries Inc. today reported net income of $31.2 million in the third quarter, a decrease of 17 percent compared to the third quarter 2008 net income of $37.7 million. Sales for the third quarter 2009 totaled $436.2 million, a decrease of 25 percent from the year-ago period’s sales of $580.3 million.
Income from financial services decreased 12 percent to $3.9 million during the third quarter, down from $4.5 million in the year-ago period. The decrease was primarily due to lower income generated from retail credit activity resulting from the lower retail sales levels in 2009.
Polaris reported that availability of retail credit financing has stabilized and remains at acceptable levels through its relationships with HSBC Bank, GE Money Bank and Sheffield Financial, which provide retail revolving and installment financing credit to United States consumers.
During the third quarter 2009, 52 percent of consumer retail credit loan applications from Polaris customers were approved by HSBC, GE or Sheffield, an improvement sequentially from the approval rate of 46 percent for the first six months 2009. Additionally, 35 percent of Polaris’ retail customers in the U.S. financed their Polaris product purchases through HSBC, GE or Sheffield, which is slightly better than the penetration rate achieved for the first six months of 2009.
“Our third quarter 2009 results exceeded our expectations and clearly reflect the strength of our business model and our Polaris team,” commented Scott Wine, CEO of Polaris. “While the economic environment remains challenging, we continue to take the long view and invest in the business for future growth and profitability.”
The company’s off-road vehicle sales, which included sales of core ATVs (all-terrain vehicles) and RANGER side-by-side vehicles, decreased 30 percent in the third quarter 2009, compared to the year-ago period.
Sales of the on-road division, which primarily consists of Victory motorcycles, decreased 56 percent during the third quarter 2009 when compared to the same period in 2008.
Snowmobile sales decreased 13 percent for the 2009 third quarter compared to the year-ago period.
Gross profit as a percentage of sales was 24.1 percent in the quarter, an increase of 160 basis points from 22.5 percent for the year-ago period. Gross profit dollars decreased to $104.9 million for the third quarter 2009, compared to $130.3 million for the third quarter 2008, due to lower sales.