UTVs Help Drive Strong Earnings At Polaris

Posted on April 24, 2012 by Marc Cesare

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

Polaris Drives Side-by-Side Market Momentum in Q1

Posted on April 12, 2012 by Marc Cesare

According to preliminary results from a dealer survey conducted by Powersports Business and RBC Capital Markets, powersports dealers are reporting positive results across most categories in Q1 with side-by-sides leading the way. In the latter category Polaris is “outperforming” expectations with nearly half of dealers surveyed reporting double-digit sales increases in side-by-sides. Polaris competitors such as Arctic Cat and Can Am are not impacting the market leader’s performance as significantly as expected to date. Larger dealers are more likely to be selling above plan than smaller dealers. Learn more: Powersportsbusiness.com

Club Car Recalls Limited Number of Utility & Transport Vehicles

Posted on April 12, 2012 by Marc Cesare

Club Car, in cooperation with the Consumer Product Safety Commission, is recalling approximately 100 utility and transport vehicles. The brake pedal mounting blocks can crack and separate, resulting in a loss of braking ability. To date no incidents of cracking or resulting injuries have been reported. The vehicles were sold during April and May of 2011 and include a range of models and serial numbers. Club Car is contacting customers directly to provide a free replacement of the mounting blocks. For more information and specific models and serial numbers affected see CPSC.gov

Polaris Monterrey, Mexico Plant Praised by Analysts

Posted on April 4, 2012 by Marc Cesare

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

UTV Sales Up In The UK Farming Segment

Posted on March 9, 2012 by Marc Cesare

The Agricultural Engineers Association recently reported that ATV sales in the UK totaled more than 10,500 units in 2011, an increase of 4% from 2010. Under ATVs they include both traditional ATVs and UTVs and theses figures appear to cover the farming segment.

A closer look at the data shows a similar trend as the US market, notably a decrease in the ATV market and an increase in the UTV market. UTVs grew 24% from 2010 to reach nearly 3,800 vehicles. Meanwhile ATVs decreased by nearly 5% but still accounted for a larger share of the market. However, at these growth rates UTV sales should surpass as ATVs in a few years as they offer “greater carrying capacity and comfort”. Learn more: FarmersWeekly

Club Car European News

Posted on February 29, 2012 by Marc Cesare

Club Car has launched www.clubcar.tv to showcase the company’s electric golf cars and utility vehicles. The microsite provides information about the Club Car’s latest technologies as well as news and case studies from vehicle operators at various European and Middle Eastern golf facilities. Learn more: Worldgolf.com

Also in the European market, the PGA announced the purchase of an eleven vehicle fleet of Club Car vehicles for use at PGA events. The vehicles will be distributed to various regions in Great Britain and Ireland and the PGA headquarters. A number of the vehicles feature Club Car’s Delta Q on-board charging system. Learn more: Worldgolf.com

Mini-truck Market In Bangladesh

Posted on February 17, 2012 by Marc Cesare

Reports from Bangladesh indicate a small but fast growing mini-truck market. In 2011 the market was estimated to be 8,500 vehicles and the Tata Ace mini-truck, manufactured in neighboring India, accounts for over ninety percent of the market. Tata started selling their mini-trucks in Bangladesh in 2009, selling 3,500 vehicles that first year.

The local distributor Nitol Motors attributes their sales success to growing demand across many industries and a reduced down payment for purchasers. Instead of requiring a 50% initial payment, they only require 30% and sometimes as low as 20%. This has enabled local entrepreneurs to start their own goods shipping businesses. According to Nitrol Motors half the market is for this type of business and the other half for general business use. Buyers are most concerned with the initial payment costs instead of total vehicle costs. The success of the Tata Ace has also taken a large chunk of the used and reconditioned mini-truck market. Learn more: Thedailystar.net

Artic Cat Reports Strong Quarterly Results

Posted on February 3, 2012 by Marc Cesare

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.

Learn more: Seekingalpha.com (call transcript)

Columbia ParCar Recalls Vehicles For Steering Issue

Posted on January 27, 2012 by Marc Cesare

Columbia ParCar, in cooperation with the Consumer Product Safety Commission (CPSC), is recalling nearly 1,400 golf, service and utility vehicles produced between July 1, 2008 through June 30, 2011, which includes 2009, 2010 and 2011 models. The vehicles are being recalled because “…the lower steering yoke can loosen where it attaches to the steering rack and pinion, causing the driver to lose control of the vehicle and crash.” No injuries have been reported related to the issue. Models involved in the recall include the Eagle (P4E) Golf Vehicle, Shuttle (C6E) Personnel Carrier, Tram (C10E) Personnel Carrier, Summit (SM/SUV) Utility Vehicle, Utilitruck (EU4, EU24) Utility Vehicle and Scout (S10E) Utility Vehicle. Check the following link for specific VINs involved. Columbia ParCar dealers will be conducting free inspections and repairs as required. Learn more: CPSC.gov

Polaris Reports Record Financial Results Again

Posted on January 27, 2012 by Marc Cesare

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