Category Archives: Management

News Briefs

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Polaris Adds Jobs – Polaris will be adding 89 jobs in their Osceola, WI plant for work related to their Indian Motorcycle and GEM product lines that were acquired last year.  Work at the plant will include engine production for motorcycles and R&D for GEM vehicles.  The company has also added 200 jobs over the last 18 months at their Spirit Lake facility which is ramping up to full production of Indian motorcycles and GEM vehicles.  Learn more:  Startribune.com

Campus Sustainability Drives Electrics – Washington State University is another example of how sustainability initiatives on campus are driving electric STOV purchases.  The university recently purchased the three GEMs for transportation and general fleet use.  The vehicles help the university meet the governor’s mandate that state entities reduce their carbon footprint.  Learn more:  News.wsu.edu

A Case For NEVs/LSVs – In this brief interview an author in the renewable energy space makes the case for NEVs/LSVs and the role for STOVs.  Learn more:  2greenenergy.com

UTVs Help Drive Strong Earnings At Polaris

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Polaris reported strong first quarter earnings for 2012 with record sales of $673.8 million.  Key sales drivers were Ranger and RZR UTVs and Victory motorcycles across global markets.  Some key takeaways from the earnings call:

  • First quarter net income increased 27% to $60.1 million
  • Earnings per share increased 27% from the prior year period to $0.85
  •  32% improvement on operating profit
  • Management expects sales and earnings for 2012 to surpass previous guidance with full year sales guidance to up 13% over 2011 and 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.
  • Off-road Vehicle business revenue grew 30% in the first quarter.  This includes side-by-sides and ATVs.
  • Polaris gained market share in both ATVs and side-by-sides.
  • Side-by-side retail sales grew at over 30% in North America for Polaris compared to low teens for the overall market with strong performance across all segments
  • Bobcat has reported dealer retail sales increases of upper single-digits in the first quarter
  • Expect a new Bobcat product  in the coming months for both Polaris and Bobcat channels. “This should be a significant capability change from products we’ve offered traditionally.”
  • Management believes they can leverage their strengths in distribution, product cost and product innovation to drive growth in their GEM and Goupil acquisitions. They see the global small electric vehicle market as a growth area and note “… certainly we think we’re not done building out that portfolio.”
  • In Europe under tough conditions Polaris outpaced the overall market with particular strength in France.  Northern Europe is more of a work vehicle/Ranger market while Southern Europe sees more recreational vehicle/RZR sales.

For earnings call transcript:  Seekingalpha.com

Kawasaki Teryx4 Developed in the US

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Kawasaki Teryx4

Kawasaki Teryx4: First vehicle designed and developed primarily in Lincoln, NE

Kawasaki’s Teryx4 which hit dealer showrooms earlier this year was the first vehicle to be designed and developed primarily at the Lincoln, NE manufacturing facility.  The Lincoln R&D team developed the vehicle from the ground up concentrating on the vehicle’s frame and chassis while their counterparts in Japan worked on the engine and styling.  It was a two to three year process.  The Lincoln facility currently produces nearly the full range of Kawasaki’s consumer products with most of production destined for the US market.  Management reports that more full product re-designs are in the future for the Lincoln R&D team.  Learn more:  Journalstar.com

 

Polaris Monterrey, Mexico Plant Praised by Analysts

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Polaris management recently gave analysts that cover the company a tour of their Monterrey, Mexico facility that opened a little over a year ago.  Analyst came away with a positive review of the plant and its impact on the company’s performance.  The plant currently produces about 200 side-by-sides per day on two production lines with a third line likely to be added in the future.  Analysts report the plant has the lowest warranty costs in the company.

The plant was opened to more quickly supply southern US markets as well as international markets such as Brazil, India and China.  The plant has also helped Polaris execute on their objectives of shortening ordering times and reducing dealer inventory.  They have been ahead of their competition in these areas.  Learn more:  Powersportsbusiness.com

Arctic Cat News

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At Arctic Cat Tracy Crocker has been named vice president/general manager of the ATV division where he will be responsible for the ATV/ROV business.  He will be in charge of product development, global strategy and business development.  Previously he was senior vice president of Ecolab’s Hospitality, Healthcare, and Commercial Markets.  He also has experience at well known consumer branding companies such as Nabisco, Pepsi Cola and Proctor & Gamble.  Learn more:  Powersportsbusiness.com

Electric Vehicles International Expands Facilities

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Electric truck manufacturer Electric Vehicles International (EVI) has expanded their manufacturing capacity by adding 30,000 square feet and new equipment to their Stockton, CA headquarters.  The company also opened a sales office in Michigan.  EVI produces larger electric trucks than what we see in the STOV market such as medium duty delivery trucks and walk-in vans.  For the STOV market they offer their E-Mega, a light duty, 72 volt truck with a top speed of 35 mph that is powered by a lithium battery pack. Learn more:  CVBizjornal.com

Artic Cat Reports Strong Quarterly Results

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Last week Arctic Cat reported the results for their third quarter which ended December 31, 2011.  Management reported net sales of $207.0 million  compared to $152.0 million for the the prior-year third quarter.  Net earnings for the same time periods was $17.0 million and $9.3 million respectively.  The sales increase was driven by increased snowmobile sales and international all-terrain vehicle (ATV) sales, as well as the first shipments of their new Wildcat sport side-by-side vehicle.  Arctic Cat’s ATV sales include ATVs and side-by-side vehicles.  “ATV sales increased 12 percent to $54.4 million in the fiscal 2012 third quarter versus $48.6 million in the same period last year, with strong contributions from Arctic Cat’s Prowler line of side-by-sides.”  The company expects to increase production of the Wildcat in the fourth quarter.  Learn more:  Arcticcat.com

Earnings Call Highlights:

  • ATV sales increased 14% to $151.1 million from $133 million for the first three quarters of the fiscal year
  • Management reports a decline of 7% in the quarter for industry ATV sales in North America.  Side-by-side sales continue to grow however and Prowler sales were up for the quarter and first three quarters.
  • Management expects ATV division sales to increase 19% to 22% for the full year, driven by Q4 shipments of the new Wildcat sport side-by-side
  • Arctic Cat has shipped 200 Wildcat side-by-sides to date and estimates based on Q&A comments indicate orders in the range of 6,000 to 10,000 vehicles. Sales are meeting expectations according to management.
  • Arctic Cat has switched to a monthly ordering system for dealers compared to what was more of a quarterly program.  Comment: This will likely be a continuing trend with manufacturers in the industry as Polaris has also already made this transition to shorter ordering time frames.  The shorter time frame has reportedly allowed for lower inventories and costs, better matching of vehicles to customer needs and faster response to changing market conditions.

Polaris Reports Record Financial Results Again

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Showing strength across all product lines Polaris Industries reported record fourth quarter and full year profits on Wednesday.  For the fourth quarter sales increased 26% from 4Q 2010 to $782.0 million and for the full year sales increased 33% from 2010 to $2,656.9 million. Other full year highlights include:

  • Increased market share for all product lines
  • 39% increase in international sales
  • Net income of $227.6 million – 55% more than 2010.
Their Off-Road Vehicle (ORV) segment increased sales 32% over 2010 to $1.82 billion.  The segment includes ATVs and side-by-sides.  Management reports ATV unit retail sales growing upper single digits percent and side-by-side vehicle unit retail sales increasing about 20 percent over the prior year.  Polaris continues to gain market share in each segment.  Learn more:  Marketwatch.com
Earnings Call highlights:
  • The overall ATV market declined low double digits for 2011 while side-by-sides increased low double digits.
  • Polaris sales through their partnership with Bobcat increased 60% in 2011.
  • Polaris has discontinued their Breeze LSV in light of their GEM acquisition and production of GEMs in their Spirit Lake facility has begun.
  • Asia Pacific and Latin America are the key global markets
  • Expectations for a slower level of growth for the company and ORV sales for the coming year.
  • New products with Bobcat likely in end of 2012 or early 2013
  • Strong growth in military segment expected with sales to special forces and in unmanned technology products

 

Polaris Makes Another Move In The EV Market – Acquires Goupil Industrie of France

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Goupil industrie electric truck

Goupil Industrie electric truck

Diversifying their portfolio of electric vehicle offerings, Polaris Industries recently purchased Goupil Industrie SA.  The privately owned French manufacturer produces a line of light duty electric trucks for a variety of commercial uses.  There were no comments by management on whether the Goupil product line would be exported to or produced in the US.

This is the third major transaction in the small electric vehicle space by Polaris this year following the acquisition of GEM and a major investment in Brammo, an electric motorcycle manufacturer known for electric powertrain expertise. The work and hauling oriented Goupil product line will complement the more people mover oriented GEM line.   Goupil’s estimated annual sales of $25 million adds to the estimated $30 million in annual sales that Polaris gained from the GEM acquisition.

Comment:  After testing the LSV market with their Breeze model for personal transportation and the electric UTV market with their electric Ranger, Polaris has now moved decisively into the space.  Management sees the global market for small electric vehicles as a growth area and have executed on that belief by purchasing this manufacturer in France and initiating GEM distribution in India.  Polaris now has a range of small EV product offerings spanning off-road and on-road, consumer and commercial, as well as work and transportation applications.  Learn more:  BizJournals.com

In related news, I noticed that Polaris also has a new website for GEM.  On their home page it is accessible under the tab “Low Emission Vehicles” along with the Breeze LSV.

People On The Move

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Polaris CEO joins Terex Board:  Scott Wine, CEO of Polaris Industries has joined the Board of Directors of Terex Corporation which manufactures equipment for the construction, infrastructure, quarrying, mining, shipping, transportation, refining, energy and utility industries.  Learn more:  SXSNews.com

Brenan takes new position at Kawasaki:  Russ Brenan has changed positions at Kawasaki, moving from advertising supervisor to senior advisor for government relations and public affairs.  He will represent all the companies product categories including motorcycles, all-terrain vehicles, utility vehicles, and personal watercraft.  Learn more:  UTVGuide.net