Monthly Archives: July 2013

Polaris Announces New 2014 RZR XP 1000

Posted on by
Reply

New 2014 RZR XP 1000 from Polaris

The competition in the side-by-side sport recreation segment continues to heat up with the latest model introduction from Polaris. The new 2014 RZR XP 1000 features a 999cc engine with a reported 107 hp.  This would give the RZR the largest and most powerful engine in the segment. Other key improvements to the top of the line RZR include:

  • A tubular steel chassis
  • Retuned, high performance PVT system
  • Redesigned 3-Link trailing arm rear suspension giving the vehicle 13.5 inches of ground clearance
  • 29 in. Maxxis Bighorn tires on all new 14-inch cast rims
  • Adjustable Walker Evans Position Sensitive Anti-Bottoming Needle Shocks for all for wheels
  • 18 inches of rear travel and 16 inches of front travel
  • Electronic power steering
  • Dual-piston calipers and larger 248mm ventilated discs on all four corners

The interior of the new RZR XP 1000 from Polaris

There were also improvements to the interior over previous RZR models.

  • New seats with more hip cushioning and a new thin-film technology under the cover for a drier ride in wet conditions
  • Tool-less seat sliders
  • New, flow-through tongue seat belt design that is easier to adjust and retract
  • Larger glovebox
  • Sealed smartphone storage
  • LED floor lighting and backlit instrument panel
Other improvements include:
  • 9.5 gallon fuel tank
  • Larger cargo box with more tie-downs
  • Better integration with Polaris accessories for easy installation
The RZR XP 1000 will be offered in White Lightning and Titanium Matte Metallic, and will be available at Polaris dealerships in August.  The MSRP starts at $19,999.

Learn more:  Polaris.com

Arctic Cat Reports Strong Quarterly Results

Posted on by
Reply

Arctic Cat Wildcat Side-by-Side helps drive strong quarterly results

Arctic Cat, manufacturer of snowmobiles, ATVs and the Wildcat side-by-side, announced strong results for the first quarter ending June 30, 2013 of their 2013 fiscal year. The following are some of the highlights of the earnings call with analysts with a focus on UTV/side-by-side issues.

  • Net sales for the first quarter increased nearly 9% to 120.8 million versus 111.3 million for the same quarter last year. Sales growth was driven by increased sales across all product lines.
  • ATV and Side by Side sales increased 5% to 76.3 million versus 73 million
  • Key drivers for the sales increase were the Wildcat X high-horsepower sports Side by Side and the Wildcat four seat model, both of which started shipping during the fourth quarter of last fiscal year.
  • While retail ATV sales underperformed the overall industry, North American Side by Side retail sales experienced strong growth and gained market share with Wildcat retail sales increasing 47%.
  • The new model year 14 lineup which will include some new models that will allow Arctic Cat to enter some new market segments will be announced in a few days.
  • Arctic Cat plans to continue to launch new models each quarter of this fiscal year including the Wildcat 50 trail version that was announced last February. (The new models could be ATVs, side-by-sides or snowmobiles)
  • Management expects new products to help grow the ATV and Side by Side business between 25 and 29% for the fiscal year.
  • Expansion of our Wildcat Side by Side lineup will contribute to increased PG&A sales this fiscal year.
  • During the quarter, R&D expenses increased 18% as product development is a focus.
  • Management sees potential to grow their share of the recreational off road market and some of the new products being launched will take the company into new market segments.

Learn more:  Seekingalpha.com (earnings call transcript)

Comment:  As evidenced by Arctic Cat’s recent and planned model introductions, the competition in the UTV/side-by-side market continues to heat up. It will be interesting to see what new market segments they will be targeting. Similar to Polaris, they are looking to diversify their product line and segment coverage. Going forward the competition should be good for consumers, lowering costs and/or improving the value for their purchasing dollar with more features and better performance. For manufacturers, it may hurt profit margins and/or put more pressure on them to keep innovating and launching new models.

Polaris Reports Another Strong Quarter for Q2 2013

Posted on by
Reply

Polaris Ranger XP 900 helped drive overall sales in the second quarter of 2013

Polaris Industries just announced their Q2 2013 financial results and reported another quarter of strong earnings and market share gains. The following are the highlights of the earnings call with analysts with a focus on the STOV segments.

  • Sales for the second quarter increased 12%, to a record $844.8 million driven by share gains and double-digit retail growth in North America
  • Polaris captured market share in ATVs and side-by-sides which also drove significant gains in PG&A business
  • Second quarter net income rose 15% to $80 million yielding record earnings per share of $1.13, a15% improvement over the prior year period.
  • PG&A sales increased 33% for the quarter
  • ORV segment which includes ATVs and UTVs  performed well fueled by the RANGER 900 XP and supported by RZR products.
  • Revenue for ORV was up 7%, which is less than retail as inventory was reduced in preparation for new model launches.
  • Gained North American market share in both ATVs and side-by-sides.
  • North American side-by-side retail sales strengthened in the second quarter, up double-digits percent driven by growth in both RANGER and RZR categories. In fact, both brands had their largest unit retail quarters in their history.
  • Management estimates the North American side-by-side industry also improved, growing just under 10% in the second quarter and is now up upper-single digits year-to-date.
  • Initial Brutus shipments began into over 400 Polaris commercial dealers.
  • In the military segment Polaris remains the clear #1 in ultralight tactical vehicle space with the new MRZR is selling well globally
  • Due primarily to the Aixam purchase and contributions from GEM and Goupil, small vehicle revenues increased $22 million and 190% for the second quarter. Year-to-date, sales are up 109%.
  • GEM business is improving with second quarter retail sales were up in excess of 50%. Management reports better operations for GEM and improved traction in the B2B market place, particularly in the People Mover sub-segment.
  • Goupil also had a strong second quarter with orders up over 30% and notable cost and productivity improvements in operations, driving gross margin improvements.
  • ORV PG&A sales increased 25% and small vehicles 165%.  “The attachment rate that we’ve seen on the Ranger 900 XP with the new integrated cab system is phenomenal.”
  • In Europe – Polaris’ Q2 ORV retail grew and year-to-date, is about flat in an ORV industry that remains down double digits. Polaris maintains their leading position.

Looking ahead:

  • Future Sales of Off-Road Vehicles are expected to increase in the 8% to 10% range with retail sales of side-by-side vehicles and ATVs outpacing the overall market in North America and internationally
  • ORV market share is expected to continue to increase in 2013
  • For small vehicles, which includes the GEM and Goupil businesses, along with the recently acquired Aixam Mega, sales are expected to increase well over 100% for the full year 2013.
  • Both GEM and Goupil are expected to increase sales for the full year over last year total company sales increase in the range of 13% to 15% for the full year 2013.
  • Management is not feeling pricing pressure in the UTV market as they are confident that the Polaris brand/product can garner a price premium
  • Process improvement in small vehicle operations are improving quality and delivery as well as reducing costs. Management feels they are positioned very well in this space for strong growth.
  • The Bobcat dealer network has lagged Polaris in the commercial utility segment and the sell through of the Brutus vehicles will be slower than consumer vehicles because of the slower commercial vehicle buying cycle.
  • Management was even more upbeat than usually about the 2014 models that will be announced at the dealer meeting in a few days.

Learn more:  Seekingalpha.com (Earnings call transcript)

Comment:  Polaris management continues to execute on their strategic plans very well. They are setting the industry standard for inventory management, operational efficiency and product development and innovation. In an increasingly competitive market it will be interesting to see what features and innovations their new models will have.

Quadski Maker Gibbs Looks to Expand

Posted on by
Reply

Quadski from Gibbs Sports Amphibians

Gibbs Sports Amphibians, the manufacturer of the Quadski, is planning to launch to new models and expand their dealer network.  The Quadski is an amphibious vehicle that converts from an ATV to a PWC in less than five seconds. Gibbs currently has five dealers for the Quadski but expects to have one hundred dealers by the end of 2014. They will need the increased distribution as the company expects to produce 1,000 Quadskis this year. Gibbs is also looking to export their product to international markets.

The Quadski costs about $40,000 and is available in blue, black, yellow, silver and red. It is powered by a 175 hp BMW Motorrad engine and can reach speeds of 45 mph on land or in the water.  In addition to the Quadski, Gibbs is planning on launching new consumer, commercial and military products over the next 18 months. Learn more:  Powersportsbusiness.com

Comment:  Selling 1,000 of these vehicles at $40,000 apiece is an ambitious goal, especially as a purely leisure vehicle. On the other hand, law enforcement and military organizations might find this to be a compelling technology for specific applications and could help meet that goal. The Quadski does represent the continuing innovation and product advancements in the STOV market. Lately the versatility of the vehicles has been a focus, whether it is convertible seating in the Honda Pioneer UTV, the ability to use various work attachments in the Polaris/Bobcat Brutus or now the ability to travel on land or water. It is the versatility of STOVs and the ability to match the vehicle to an application or specific set of applications that has helped the market grow strongly in an overall slow economic recovery.

News from Lithium Boost Technologies

Posted on by
Reply

Lithium Boost Technologies signs manufacturing agreement with Bright Technologies

Lithium Boost Technologies, which produces a lithium battery system to replace the lead acid battery pack in golf cars, industrial and utility vehicles, recently announced a new safety feature and strategic manufacturing agreement. Their new interlock feature locks the vehicle in place to prevent the user from moving it while the battery is in the charging process.

The company also signed a manufacturing agreement with US/Mexico based Bright Manufacturing to produce wiring harnesses and electronic boards for the the battery systems. The agreement will allow the Lithium Boost to improve delivery time and meet growing demand.

Lithium Boost offers a variety of lithium iron phosphate battery solutions including, LithiumBoost Plus for leisure use, LithiumBoost Pro for industrial, and LithiumBoost Ultra for off-road. Depending on vehicle application, the product is available in 36, 48, & 72 volt systems and 60ah-200ah lithium-ion battery cells. Learn more:  Lithiumboost.com

New Florida Law Allows Conversion of LSVs to Golf Car Speeds

Posted on by
Reply

A new Florida law went into effect on July 1, 2013 that allows owners of low-speed vehicles to mechanically convert their vehicles to normal golf car speeds of 20 mph, which lowers their insurance costs. Reportedly thousands of Florida residents are waiting to make the change. The conversion can save an owner between $500 to $800 in insurance costs since a typical golf car can be insured for only $100 compared to $600 to $900 for an LSV. They can also save on the annual LSV registration costs of about $50. The conversion costs about $40.  Learn more:  WUSFNews

Comment:  This law further blurs the line between golf cars and LSVs. While most of the time this hurts the LSV market by making golf cars a more viable substitute, this time the law should help the LSV market by significantly reducing LSV operating costs in a major market for the vehicles. With its many retirement communities geared to golf car or LSV use, Florida has more than 5,000 registered LSVs or golf cars modified to meet LSV requirements.

Polaris to Announce New RZR July 29th

Posted on by
Reply

Polaris is set to unveil their new 2014 RZR on July 29th, the first day of the OEM’s dealer meeting. There is also a consumer contest with five RZR’s being given away connected with the unveil.  Learn more:  Powersportsbusiness.com

Comment:  It will be interesting to see what new features and/or capabilities the new RZR will have. Attractive growth and profit margins in the recreational segment of the side-by-side market has increased the competition between the various OEMs and driven improvements and innovations in horsepower, ground clearance, vehicle suspensions and other capabilities.

BRP Earnings Call Summary

Posted on by
Reply

Can Am Maverick Side-by-Side

BRP, manufacturer of Can-Am products including Maverick and Commander UTVs, recently had an IPO and is now a publicly traded company.  They reported their first quarter earnings several weeks back and here are some of the highlights with a focus on UTV related information.

  • 12% growth in comparable revenue to Q1 fiscal year 2013, which was driven primarily by a 27% growth rate in year-round products, mainly coming from strong side-by-side revenues and increased roadster sales.
  • Double digit retail growth for combined Can-Am Recreational Side-by-Side and Spyder.
  • Deliveries of the new Maverick Side-by-Side vehicle began with in the first quarter very good sell-through at the dealership.
  • On the retail side, the US recreational side-by-side industry grew high single digits, while our North American side-by-side sales grew high double digit.
  • Reported revenues of C$804 million, an increase of 5.5% over the same period in fiscal ’13, representing a record level for the Company in the first quarter.
  • Have added 35 to 40 dealers in the South and Southwestern US as part of a plant to add 200 to 300 dealers in the same areas within the next four years.