Polaris Industries Inc., the parent company of both Victory and Indian Motorcycles and Slingshot trikes, has reported record first quarter sales totaling $1,033.3 million, up +16 percent from last year’s first quarter sales of $888.3 million.
“I am pleased to report record sales and earnings for our 2015 first quarter. In addition to the +16 percent growth in sales, operating income was up +19 percent and net income up nine percent, our 22nd consecutive quarter of record earnings performance,” said Scott Wine, Polaris’ Chairman and CEO.
|Polaris CEO Scott Wine said that "we out-performed the market again in most of our businesses"|
“We out-performed the market again in most of our businesses in spite of increased competitive promotional pressures, weakening global markets and the corresponding negative effect from currencies. While we are justifiably proud of these accomplishments, we remain focused on seizing the numerous opportunities we missed to perform better.
"From factory inventory being too high to ongoing production inefficiencies, particularly in motorcycles, we did not perform to our capabilities or our expectations. However, we are making great strides towards addressing these issues, and I am confident those efforts will allow us to continue outperforming our markets."
Wine went on to say that “product innovation remains a significant growth driver. During the quarter, we added to our stable of innovative motorcycles with the introduction of the Indian Chief Dark Horse, the Victory Magnum X-1, and a limited edition Slingshot SL."
Motorcycle sales increased +74 percent in the 2015 first quarter to $137.4 million. All three brands, Victory, Indian Motorcycle and Slingshot, increased sales in the first quarter.
Consumer retail demand for Victory and Indian Motorcycles during the 2015 first quarter, was up nearly +40 percent over last year’s first quarter, driven primarily by strong Indian Motorcycle retail sales; first quarter North American industry heavyweight cruiser and touring motorcycle retail sales were up low-single digits percent from 2014.
Polaris says that Slingshot retail sales were ahead of expectations, and that all three brands added to their product portfolios during the quarter with Indian Motorcycle introducing the Indian Chief Dark Horse, (built on the successful Indian Chief platform), Victory showcasing the new Magnum X-1 (a new "bagger") and Slingshot adding a limited edition model.
Sales of Polaris motorcycles outside of North America decreased -12 percent in the first quarter of 2015 as compared to a year ago due to the currency impact of a strengthening U.S. dollar.
International sales to customers outside of North America totaled $153.1 million for the 2015 first quarter, down seven percent from the same period in 2014.
Gross profit increased 14 percent to $293.7 million in the 2015 first quarter compared to $258.4 million in the first quarter of 2014. As a percentage of sales, gross profit margin declined to 28.4 percent of sales for the first quarter of 2015, compared to 29.1 percent of sales for the same period last year.
Equity in loss of affiliates was $1.6 million for the first quarter 2015 compared to $0.9 million last year, which represents the Company’s portion of the start-up costs related to the Polaris/Eicher joint venture in India established in 2012.
The Company increased its quarterly dividend payment for the 20th consecutive year by ten percent to $0.53 per share and paid a total of$35.1 million in dividends to shareholders, and repurchased 571,000 shares for $86.3 million during the 2015 first quarter. The Company’s debt-to-total capital ratio was 28 percent at March 31, 2015, compared to 35 percent a year ago. Cash and cash equivalents were $111.0 million at March 31, 2015, compared to $101.8 million for the same period in 2014.
Net income was $88.6 million, or $1.30 per diluted share, for the quarter ended March 31, 2015, an increase of nine percent from the 2014 first quarter net income of $80.9 million, or $1.19 per diluted share.