Polaris Reports 2014 Q4 Earnings

The new four passenger RZR 4 EPS in Havasu Red Pearl from Polaris.

A constant stream of new models like the new four passenger RZR 4 EPS in Havasu Red Pearl help keep Polaris growing.

Polaris continued on the path of strong growth with another record quarter. Managment reported net income was $135.4 million for the fourth quarter of 2014, up 25 percent from the previous fourth quarters net income of $108.7 million. Sales for the fourth quarter of 2014 totaled a record $1,275.0 million, an increase of 18 percent over last years fourth quarter sales of $1,083.7 million.

For the full year ended December 31, 2014, Polaris reported net income from continuing operations of $454.0 million for the full year 2014, up 19 percent from the previous years net income from continuing operations of $381.1 million. Sales for the full year 2014 totaled a record $4,479.6 million, an increase of 19 percent compared to sales of $3,777.1 million for the full year 2013. Some of the highlights related to small, task-oriented vehicles follow.

  • Off-Road Vehicle sales , which includes ATVs and UTVs or side-by-sides, increased 19% from the fourth quarter 2013 to $781.5 million. This increase reflects continued market share gains on strong demand for both ATVs and side-by-sides.
  • Polaris North American ORV unit retail sales were up low-double digits percent from the 2013 fourth quarter with consumer purchases of side-by-side vehicles up double-digits percent and ATV retail sales up high-single digits percent for the 2014 fourth quarter.
  • Polaris introduced over twenty new MY14.5 and MY15 ORV models in 2014, including the all-new RZR® XP 900 trail and RZR® XP4 900 trail, several new value models, and two models in a newly defined category of single-seat, ride-in ATVs, the Polaris ACE.
  • Polaris extended their market share lead in the North American ATV industry for the fourth straight year with retails up mid-single digits in an industry that only rose slightly.
  • ACE sales accelerated notably in the fourth quarter as marketing and the new 570 model began to impact the marketplace.
  • Four recent model year ’15 introductions include the new electronically fuel-injected RZR 170 and the new RZR 900S4, both of which have already begun to ship.
  • Commercial. Sales increased by over 80% in the fourth quarter driven by initial Ariens-Gravely supply vehicle shipments, strong national accounts growth and notably improved BRUTUS and Bobcat retail performance.
  • In the Small Vehicle division which includes GEM, Aixam and Goupil, fourth quarter revenue declined 11% due to the weak French economy afflicting both Aixam and Goupil. For the full year 2014, sales increased 28% fueled by Aixam market share gains and increased sales from both our GEM and Goupil businesses.
  • Polaris significantly outperformed in the ORV market in Europe.
  • For 2015 management expects ORV is expected to grow mid-single digits, driven by new products but offset by further implementation of RFM, their new inventory management program, and slower international demand.

Learn more:  Seekingalpha.com (earnings call transcript)

Comment:  Polaris continues to dominate the market, although like other manufacturers they have been hurt by slower sales in Europe and in countries like Russia. Expect more of the same in 2015 as they continue to rollout products to segment the market and cover a range of price points. They are likely to add more models for their push into the commercial segment as well.

Michelin Launches Non-Pneumatic Wheel For Mowers

The Michelin X Tweel non-pneumatic tire on a John Deere mower.

The Michelin X Tweel non-pneumatic tire on a John Deere mower.

Michelin recently launched their X Tweel non-pneumatic tire for some of their commercial mowers.  The airless tire and wheel uses

“…a combination of deformable polyurethane spokes, a steel-and-rubber outer rim, and rigid metal hub. The outer rim—called a shear beam—carries most of the load. The spokes and hub distribute the load across different parts of the shear beam as the tire rolls over objects.”

The tire is available for their ZTrak series of mowers and according to John Deere lasts two to three times longer than other tires. The X Tweel are only being used on slow-moving vehicles currently because at high speeds, airless tires tend to vibrate and make lots of noise. The company sees golf cars and small utility vehicles as the next likely market. The reported cost is $749 for a pair of tires. Learn more:  Popsci.com

Comment:  Non-pneumatic tires are a likely to become more prevalent in the next three to five years. Polaris has also recently began selling their non-pneumatic wheel into commercial markets after first being used for some of their military vehicles. While it would seem ideal for high end side-by-sides being used on rough trails, Polaris has noted that the wheels have to be in effect “tuned” for a model’s and suspension, so it is likely that commercial users will be the first to use the wheels. Currently a set of four of the Polaris Terrainarmor wheels costs $4,000 and includes a speed key to limit vehicle speed to 25 mph.

What’s Cooking On The STOV

Highlighting some of the many applications for small, task-oriented vehicles

This Polaris UTV is being used to create a skate path on Mirror Lake in Lake Placid, NY.

This Polaris UTV is being used to create a skate path on Mirror Lake in Lake Placid, NY.

A new winter time use for utility vehicles:  clearing skating paths. In Lake Placid, North Elba Park District employees recently plowed a skating path around Mirror Lake using a newly purchased utility vehicle. The idea was first tried last year, but this year the community, led by a local resort owner, raised funds to buy a utility vehicle expressly for the purpose of building the skating path. The lighter utility vehicle allowed employees to safely get onto the ice earlier than heavier alternatives. The community raised around $32,000 for the Polaris UTV which they accessorized with a cab, plow and broom attachment. Donors included local resorts, foundations and citizens as well as a number of private donors from different states.  Learn more:  Lakeplacidnews.com

Polaris To Build Factory In Huntsville, Alabama

The site for the new Polaris factory in Huntsville, AL.

The site for the new Polaris factory in Huntsville, AL.

Polaris Industries has announced that they will begin construction on a new factory in May of this year in Huntsville, AL. The the 600,000-square-foot plant on a 453-acre site is expected to be completed in the second quarter of 2016 and will manufacture Ranger, RZR and Ace utility vehicles. According to reports, operations at the $142 million will include vehicle assembly, chassis and body painting, welding, fabrication and injection molding and employ an estimated 1,700 people full-time when fully operational and potentially 2,000 over time. The average wages are expected to be approximately $18/hr with some highly skilled positions earning $30/hr. Learn more:  Al.com

Comment:  This clearly indicates that Polaris believes their strong growth in the UTV market to continue. I expect one of the reasons they chose Alabama is the strong market for UTVs in the Southeast and in the Southern tier of the US in general. The location is also puts them closer to the Central and South American markets they have been trying to expand as well, although they also have Mexican facilities to serve these markets. Given that they could have expanded operations in Mexico, I suspect the proximity to the Southeastern US markets might be the primary geographical reason for the location. In addition that area of Alabama has an established manufacturing base and the related skilled work force they need.

Polaris Expands RZR and Ranger Lineups

The new four passenger RZR 4 EPS in Havasu Red Pearl from Polaris.

The new four passenger RZR 4 EPS in Havasu Red Pearl from Polaris.

Yesterday Polaris announced new RZR and Ranger models as they continue to build out their 2015 utility vehicle product lines. To the RZR line they are adding the RZR XP 1000 EPS FOX Edition, which includes a special suspension package, the multi-passneger RZR 4 900 EPS in Havasu Red Pearl and Voodoo Blue and special paint and graphic schemes for some of their existing 2015 models. To the Ranger line they are adding the Ranger XP® 900 EPS–Sunset Red Silver, Ranger XP® 900 EPS–Sandstone Metallic, Ranger® Diesel HST & Ranger Diesel HST Deluxe. The press releases follow with more details about vehicle features. The Ranger models will be available at dealerships in late January and the RZRs in February.

POLARIS ANNOUNCES SPECIAL FOX EDITION AND NEW RZRS IN LIMITED EDITION COLORS

Minneapolis, MN (January 7, 2015) – As part of RZR’s continuing innovation and commitment to its enthusiasts, Polaris is announcing several new models featuring new paint schemes and graphics, and a new RZR XP 1000 EPS model with the first-ever Internal Bypass Shocks available on a side-by-side.
The new RZR XP 1000 EPS FOX Edition is hands-down, the best performing suspension ever offered on a sport Side by Side, featuring highly-tuned FOX Podium® Internal Bypass Shocks, re-tuned coil-over springs, new front stabilizer bar and softer rear bar. The vehicle offers the next generation of suspension innovation that takes Razor Sharp Performance to a whole new level.
The new FOX Podium® Internal Bypass Shocks found on the RZR XP 1000 EPS FOX Edition generates highly-progressive damping that gives the vehicle a plush ride with all the bottom-out resistance expected from an ultra-performance off-road vehicle. The shocks have large diameter bodies (3 in/7.6 cm rear, 2.5 in/6.4 cm front), reservoirs and increased fluid capacity for dramatic improvements in heat dissipation, fade resistance and durability. The internal bypass technology offers more zones than a conventional shock for better tenability and performance for the smoothest ride available on a side-by-side and better handling over a wider range of terrain at any speed.
To complement the new shock package, Polaris outfitted the RZR XP 1000 EPS FOX Edition with redesigned coil-over springs. The progressive rate upper spring is a lighter-weight spring that absorbs small impacts while the stiffer, main spring maintains ground clearance and absorbs bigger impacts in rough terrain.
The RZR XP 1000 EPS FOX Edition also is the first RZR XP to feature a front sway bar and also has a redesigned rear sway bar with 25 percent less stiffness. Combined with the FOX Podium Internal Bypass Shocks, the sway bars dramatically decrease body roll and improve vehicle handling and comfort.
Along with the new suspension package, the RZR XP 1000 EPS FOX Edition features Matte Turbo Silver paint, cut and sew seats, new graphics package, innovative 6-Point harnesses and the Polaris Interactive Digital Display which is an integrated, industry-leading LCD display and gauge with full-featured GPS, mapping capability and compass. The display also features integrated Bluetooth functionality and shows the speedometer, tachometer, dual trip meters, odometer and maintenance warnings along with a digital clock, and operating conditions including fuel level and diagnostics.
The RZR XP 1000 EPS FOX Edition will be available in dealerships starting in February 2015.
Along with the new RZR XP 1000 EPS FOX Edition, Polaris also is announcing several other new models with new paint scheme and graphics which include the following:

2015 RZR® 570 EPS Black Pearl
Additional features on this model include:
Electronic Power Steering
Engine Braking System (EBS)
TURF Mode
Sealed under hood storage
Maxxis Tires with Cast Aluminum Rims
High / Low beam headlights
Black Pearl paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs

2015 RZR® 900 EPS Trail Blue Fire
Electronic Power Steering
High Performance Close Ratio AWD
Engine Braking System (EBS)
TURF Mode
Driver’s Side Seat Slider
Cast Aluminum Rims
Blue Fire paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs

2015 RZR® 900 EPS Trail Gloss Nuclear Sunset
Electronic Power Steering
High Performance Close Ratio AWD
Engine Braking System (EBS)
TURF Mode
Driver’s Side Seat Slider
Cast Aluminum Rims
Nuclear Sunset paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs

2015 RZR® S 900 EPS Voodoo Blue
Electronic Power Steering
High Performance Close Ratio AWD
Driver’s Side Seat Slider
High Performance Steering Wheel
Voodoo Blue paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs

2015 RZR® S 900 EPS Stealth Black
Electronic Power Steering
High Performance Close Ratio AWD
Driver’s Side Seat Slider
High Performance Steering Wheel
Stealth Black paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs

2015 RZR® XP 1000 EPS Stealth Black
Electronic Power Steering
Stealth Black paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs

2015 RZR® XP 1000 EPS Orange Madness
Electronic Power Steering
Orange Madness paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs

2015 RZR® XP 4 1000 EPS White Lightning (Monochrome)
Electronic Power Steering
White Lightning paint
Custom graphics package
Custom cut & sew seats with RZR emblem
Color-matched painted front and rear suspension springs
All models will be available in dealerships starting in January.

POLARIS ADDS ANOTHER MULTI-PASSENGER VEHICLE TO THE RZR FAMILY

Introducing the new RZR 4 900 EPS
Minneapolis, MN (January 7, 2015) –This past July, Polaris® introduced one of the biggest RZR® line-ups ever and continued to fuel the RZR lifestyle by offering the widest variety of vehicles for every type of sport riding. With the introduction of the new 2015 RZR 900 and RZR S 900, Polaris redefined the first two RZR products ever built by providing the vehicles with unequalled power, highly-capable suspensions, unmatched agility, and revolutionary ergonomics and styling.
To continue RZR’s tradition of offering the most-complete line-up of sport side-by-sides, Polaris is introducing the new RZR 4 900 EPS, one of the most versatile, multi-passenger side-by-sides available.
Whether you ride in the trail or desert, the RZR 4 900 EPS delivers a multi-passenger option that can tackle a wide variety of terrains at a lower price than a premium model. The vehicle shares many of the same attributes as the RZR S 900; 75 horsepower, ProStar® 900 EFI engine, Dual A-Arm Front and Rear Suspension, High-Performance All Wheel Drive (AWD), 60 in/152.4 cm width, revolutionary ergonomics and styling, and accessory integration; with a 106.5 in/270.5 cm wheelbase that accommodates two more passengers so more family and friends can experience the RZR lifestyle.
At the heart of the RZR 4 900 EPS is a 75 horsepower ProStar® 900 engine offering 40 percent more power than the legendary RZR 4 800 model it replaces. Polaris’ ProStar engines have become the pinnacle of performance engines for RZR due to their efficiency, acceleration and durability. To get more power to the ground, the vehicle also features the extremely-durable RZR XP transmission which is specifically geared to optimize the power of the engine for a huge improvement in acceleration over the RZR 4 800. With improved clutching and calibration, the RZR 4 900 EPS’ ride is also smooth and predictable throughout the power band. And the new, high-flow clutch intake system provides more airflow and decreases belt temperature to provide an extremely durable clutch system.
To handle diverse terrains from high desert to dense trails, the RZR 4 900 EPS features a 106.5 in/270.5 cm long wheelbase paired with a Dual A-Arm Front and Rear Suspension with 12.25 in/31.12 cm of front suspension travel and 13.2 in/33.53 cm in the rear and FOX Performance Series 2.0 Podium X Shocks, so the suspension can be tuned for exactly the way you ride to provide excellent plushness and comfort while still yielding great bottom-out resistance. The unit’s ultra-rigid, tubular chassis is paired with a completely new suspension geometry for less vibration inside the vehicle and more responsive suspension feedback. The machine also features new 27 in/68.58 cm GBC Dirt Commander Tires that offer better side bite, stiffer sidewalls, better tracking through corners and increased durability, making the RZR 4 900 EPS a performance-based, multi-passenger machine that’s predictable and inspires confidence.
For unmatched agility, the RZR 4 900 EPS has several features that were first introduced on the RZR S 900. The vehicle’s optimized track width inspires confidence through corners thanks to an additional 1.3 in/3.3 cm of rear track width while maintaining the overall vehicle width of 60 in/152.4 cm. While all RZR vehicles are equipped with On-Demand True AWD, the RZR 4 900 EPS utilizes Polaris’ High-Performance AWD which keeps the front wheels pulling stronger and longer, maximizing power delivery to the ground in every condition for a more responsive ride. The system provides increased traction without sacrificing steering effort to provide unmatched point-and-shoot handling. The RZR 4 900 EPS also features 20 percent faster steering response with an improved two-turn lock to lock steering ratio. Coupled with the smoothest and most-responsive standard Electronic Power Steering (EPS) with variable assist, the vehicle ensures the operator feels confident and less fatigued, and allows the driver to keep his hands on the steering wheel more often even when navigating through tight terrain.
For excellent rider comfort, the RZR 4 900 EPS features many of the same, unique features found on the RZR XP 1000. Both driver and passenger seats are equipped with seat sliders for easy adjustability, and all four seats offer improved bolstering and more hip cushioning for a more secure feel. A thin-film technology under the cover of the seats offers a drier ride in wet conditions. Rear passengers also will enjoy more foot and leg room, and an angled floor for a more secure feeling. The vehicle also features four, factory-installed quarter doors to make getting in and out easier.
First found on the RZR XP 1000, the cockpit of the RZR 4 900 EPS features front LED floor lighting and a blue back-lighted instrument cluster, readable both in direct sunlight and at night. To take more stuff along, a large center storage area and a bigger glove box provide ample space for any items needed during the ride while the deeper rear box provides ample space for additional cargo. Sealed floor seams and equipment pass-throughs keep the occupants cleaner; while dual removable floor drains allow for easier clean out of the cabin.
The RZR 4 900 EPS also is easier to service due to the ease of access of the major components. The air filter, spark plugs and oil fill are located under the removable box panel in the cargo box of the vehicle while a panel between the seats houses the dipstick and oil filter, and is accessible without removing the seats. The vehicle features an integrated transmission with only one check/fill point and grease zerks for both the inboard and outboard bushings of the A-arms. Durability is taken to a new level with new stronger ball joints, half shafts and hubs with improved bearing fit. To allow for easy electrical accessory installation, the RZR 4 900 EPS features a terminal block for wiring under the hood and a bigger battery with 44 Amp-hours of capacity and 575 cold-cranking amps.
RZR owners love to accessorize their vehicles and the RZR 4 900 EPS’ purpose-built chassis is exclusively engineered for Polaris accessories. With integrated mounting points situated along the vehicle frame and pass-through areas for routing wires, accessories can be attached with minimal installation time. Additions, such as rock sliders and bumpers, easily attach and fit securely to the vehicle’s frame due to Polaris’ innovative Lock & Ride® Expanding Anchor; a revolutionary piece of hardware that expands as it is inserted into a mounting point. Lock & Ride windshields, rear panels, roofs and doors work seamlessly with each other and install directly onto designated mounting points, making installation simple, and providing superior fit and finish.
The RZR 4 900 EPS will be offered in Havasu Red Pearl and Voodoo Blue and will be in dealerships starting in February.
RANGER®
Model Year 2015 brought a 13 percent increase in power to its flagship RANGER vehicle, the RANGER XP 900. The upgraded 68 horsepower ProStar® 900 along with RANGER XP 900’s other class-leading features such as payload, towing, ground clearance, suspension travel and torque ensures the vehicle stays the hardest working, smoothest riding side-by-side in the marketplace. The vehicle also features new, intake openings, on the pillars behind the driver and passenger, allowing for improved airflow for the engine and clutch air intake systems.
Polaris is introducing two more RANGER XP 900 models which include:

2015 RANGER XP® 900 EPS–Sunset Red Silver
Additional features on the upgrade edition model include:
Sunset Red and Silver automotive-style paint and graphic package

Sunset Red and Silver cut and sew seats

Electronic Power Steering (EPS)

PXT Tires on cast aluminum wheels

2015 RANGER XP® 900 EPS–Sandstone Metallic
Additional features on the upgrade edition model include:
Sandstone Metallic automotive-style paint and graphic package
​​
​Sandstone Metallic cut and sew seats

Electronic Power Steering (EPS)

PXT Tires on cast aluminum wheels

2015 RANGER® Diesel HST & RANGER Diesel HST Deluxe
The three-passenger RANGER Diesel HST and RANGER Diesel HST Deluxe offer customers considering a utilitarian side-by-side the most comfortable and easy-to-use options on the market. The vehicles will continue to offer key features that are important to the agricultural and rural lifestyle customer such as diesel power with a hydrostatic transmission, hydraulic power steering, an industry-exclusive treadle pedal, multi-link coil over De Dion rear suspension and premium Lock & Ride® PRO-FIT™ cab system, complete with climate control and new hinged doors with operable windows, which is standard on the RANGER Diesel HST Deluxe. New for 2015, both vehicles feature a 3-cylinder, Tier 4 compliant KOHLER® Diesel engine with double the alternator output, 110 amps, to power more accessories.