Polaris Motorcycle Division to Exhibit & Showcase 2018 Models at 2017 AIMExpo

Indian Motorcycle & Polaris Slingshot to Showcase its Model Year 2018 Lineup at American International Motorcycle Expo in Columbus, Ohio

The Polaris Motorcycle Division announced it will make its American International Motorcycle Expo (AIMExpo) debut in September at the Greater Columbus Convention Center. The appearance of both Indian Motorcycle, America’s first motorcycle company, and Polaris Slingshot, the bold three-wheeled roadster, will allow the motorcycle industry and consumers alike to be one of the first to view each brand’s full 2018 model year lineup.

2017 Indian Chieftain Elite and 2017 Indian Chieftain Limited

Produced by the Motorcycle Industry Council, AIMExpo is the single most important event of its type in the North American market and has international impact within the motorcycle and powersports industry. Polaris Motorcycle Division’s support of AIMExpo further demonstrates the company’s continued support to grow and expand the motorcycle industry. In addition, the AIMExpo provides an ideal platform to reach consumers and entertain dealers.

“The AIMExpo provides both Indian and Slingshot the ideal platform to reach and engage the North American market and to showcase each brand’s new model year lineups,” said Steve Menneto, President, Polaris Motorcycle Division. “Additionally, the city of Columbus is strategically situated within the sweet spot of our consumer base, as well as our dealer network, making it an ideal location to showcase our products to key constituencies.”

Polaris Motorcycle Division to Exhibit & Showcase New Model Lineup at 2017 AIMExpo

The AIMExpo’s purpose is to serve as the catalyst to bring together industry, press, dealers and consumers in a single arena that creates a grand stage for motorcycling and powersports in the U.S. and North America. AIMExpo delivers an efficient and energetic market-timed expo platform for B2B and B2C in the powersports industry.

“We’re excited to welcome Indian Motorcycle and Polaris Slingshot to the AIMExpo for the first time,” said Larry Little, Vice President & General Manager, MIC Events. “Both brands bring a unique story unlike any other brand – with Indian’s historic place in motorcycling and Slingshot’s category-creating design. We fully expect both brands to be well received from attending industry professionals and consumers, and believe Indian and Slingshot will help contribute to make this the best show yet.”

Income Down in Polaris 3Q 2016 Financial Report

Highlights :

Motorcycle retail sales increased high-single digits percent, and as expected, ORV retail sales were down high-single digits during the quarter. Total Company North American retail sales were down nine percent for the quarter, in-line with expectations.

ORV dealer inventory was down 16%, year-over-year. Total dealer inventory was down 10%.

Third quarter results included expenses totaling approximately $65 million for increased warranty, legal and other costs associated with product recall activity.

Announced acquisition of Transamerican Auto Parts (“TAP”) to bolster leadership position in a growing off-road aftermarket space.

Narrowing full year 2016 guidance of $3.40 to $3.60 per diluted share, on total Company sales declines of mid- to high-single digits.

MINNEAPOLIS–(BUSINESS WIRE)–Polaris Industries Inc. (NYSE:PII) reported third quarter net income of $32.3 million, or $0.50 per diluted share, for the quarter ended September 30, 2016 compared to $155.2 million, or $2.30 per diluted share reported in the third quarter of 2015. Sales for the third quarter of 2016 totaled $1,185.1 million, down 19 percent from last year’s third quarter sales of $1,456.0 million.

“Our third quarter results, while discouraging, were in line with our revised guidance and reflect our ongoing execution of the RZR recalls and significant quality and safety improvement initiatives. During the past three months, we have accelerated our efforts to get our loyal owners back to riding safely, and are now over 50 percent complete with the RZR 900/1000 recalls and slightly below 50 percent on the more recent RZR Turbo recall notice. In addition to these recall challenges, we continued to face a weak overall Powersports industry, but were encouraged by continued retail strength for Indian and our overall motorcycle business, and the return to growth for side-by-sides in September,” commented Scott Wine, Polaris’ Chairman and Chief Executive Officer.

“We remain committed to improving our fundamentals and executing our long-term strategy to be the ‘Best in Powersports, Plus’. Our recent announcement to acquire Transamerican Auto Parts, a $740 million, vertically integrated multi-channel leader in the $10+ billion Jeep and truck aftermarket accessory space, is consistent with our strategy and exciting due to its growth potential. This transaction provides us an immediate leadership position in a growing market, while allowing us to accelerate growth and profitability for Polaris,” continued Mr. Wine. “We are making the necessary investments, both internally and externally, to realize the true potential of our organization. Along with improvements in product safety and quality, we are using Huntsville and our go to market Retail Flow Management (“RFM”) process to establish Lean as a competitive advantage, we are bringing technology to the forefront of our industry with Ride Command™, and we are working to transform the customer experience, from purchase to service, to enhance profitability. This commitment to improving our execution and our overall performance will drive a steadier cadence of growth and profitability in the future.”

Off-Road Vehicle (“ORV”) and Snowmobile segment sales, including its respective PG&A sales, decreased 23 percent from the third quarter of 2015 to $923.4 million. Gross profit decreased 40 percent to $231.3 million, or 25.1 percent of sales, in the third quarter of 2016, compared to $388.5 million, or 32.6 percent of sales, in the third quarter of 2015 due to higher warranty costs related to recent recall activity primarily for the Company’s RZR  vehicles.

ORV whole good sales decreased 25 percent to $619.0 million reflecting the Company’s decision to delay model year 2017 shipments, including the high margin RZR Turbo vehicles, in order to revalidate its new model line-up and protect dealer inventory levels. Compared to the 2015 third quarter, Polaris North American ORV unit retail sales were down high-single digits percent, consisting of consumer purchases for side-by-side vehicles down high-single digits percent and ATV retail sales down low-double digits percent. The North American ORV industry was down low-single digits percent compared to the third quarter last year. ORV dealer inventory was down 16 percent in the 2016 third quarter compared to the same period last year.

Snowmobile whole good sales decreased 35 percent to $119.9 million due to timing of shipments, year-over-year, as the Company manufactured and shipped its snowmobiles earlier in 2015.

Motorcycle segment sales, including its respective PG&A sales, decreased three percent in the 2016 third quarter to $183.2 million. Victory and Indian motorcycles reported increased vehicle sales growth, while Slingshot sales were down during the quarter due to shipment timing. Gross profit decreased 26 percent to $21.2 million, or 11.6 percent of sales in the third quarter of 2016, compared to $28.4 million, or 15.1 percent of sales, in the third quarter of 2015 due to higher warranty expense related to recent safety and service bulletins, primarily for Slingshot.

North American consumer retail demand for the Polaris motorcycle segment, including Victory, Indian Motorcycle and Slingshot, increased high-single digits percent during the 2016 third quarter with Indian Motorcycle and Victory increasing low-teens percent combined, while overall motorcycle industry retail sales 900cc and above was down high-single digits percent in the 2016 third quarter. Product availability for all three motorcycle brands remained adequate throughout the quarter as both the Company’s Spirit Lake, Iowa motorcycle plant and the new Slingshot production line in Huntsville, Alabama are producing at retail demand levels.

Global Adjacent Markets segment sales along with its respective PG&A sales, increased six percent to $78.5 million in the 2016 third quarter compared to the 2015 third quarter. Gross profit increased three percent to $21.8 million, or 27.8 percent of sales, in the third quarter of 2016, compared to $21.2 million, or 28.7 percent of sales, in the third quarter of 2015.

Supplemental Data :

Parts, Garments, and Accessories (“PG&A”) sales, which are included in each of the three respective reporting segments, declined one percent during the 2016 third quarter to $224.4 million driven by lower retail sales.

International sales to customers outside of North America totaled $141.0 million for the third quarter of 2016, including PG&A, a decrease of eight percent from the same period in 2015. International sales on a constant currency basis were down seven percent in the 2016 third quarter.

Gross profit for the total Company decreased 37 percent to $260.8 million in the third quarter of 2016, compared to $415.6 million in the third quarter of 2015. As a percentage of sales, gross profit declined 655 basis points to 22.0 percent of sales for the third quarter of 2016, compared to 28.5 percent of sales for the same period last year. Increased warranty and promotional costs and negative product mix, partially offset by lower commodity costs and product cost reduction efforts, were the primary reasons for the gross margin erosion.

Operating expenses increased 16 percent to $222.6 million, or 18.8 percent of sales, for the third quarter of 2016, compared to $192.0 million, or 13.2 percent of sales, for the third quarter of 2015. The change was primarily driven by higher general and administrative expenses due to higher product liability and recall related legal costs and increased research and development expenses for product revalidation and ongoing innovation.

Income from financial services was $19.2 million during the third quarter 2016, a one percent increase compared to $19.1 million in the third quarter of 2015 directly related to lower retail sales during the quarter.

Non-operating other expense (income), net , which primarily relates to foreign currency exchange-rate movements and the corresponding effects on foreign currency transactions related to the Company’s foreign subsidiaries, was $5.7 million of expense in the third quarter of 2016 compared to $1.3 million of income in the third quarter of 2015.

The provision for income taxes for the third quarter of 2016 was $13.5 million or 29.5 percent of pretax income compared to $84.5 million or 35.3 percent of pretax income for the third quarter of 2015. The lower income tax provision rate in the third quarter 2016 is primarily due to the extension of the research and development credit by the U.S. Congress in the 2015 fourth quarter, in addition to certain favorable tax adjustments in the 2016 third quarter that had a more significant impact on the income tax rate due to the lower pretax income generated during the quarter.

Financial Position and Cash Flow

Net cash provided by operating activities was $426.2 million for the nine months ended September 30, 2016, compared to $464.0 million for the same period in 2015. The decrease in net cash provided by operating activities for the 2016 period was due to lower net income in the quarter offset somewhat by lower factory inventory and increased accrued expenses. Total debt for the quarter, including capital lease obligations and notes payable, was $436.7 million. The Company’s debt-to-total capital ratio was 32 percent at September 30, 2016, compared to 25 percent a year ago. Cash and cash equivalents were $122.7 million at September 30, 2016, down from $225.3 million for the same period in 2015.

Share Buyback Activity

During the third quarter 2016, the Company repurchased and retired 111,000 shares of its common stock for $10.5 million. As of September 30, 2016, the Company currently has authorization from its Board of Directors to repurchase up to an additional 8.6 million shares of Polaris stock.

2016 Business Outlook

For the full year 2016, the Company is narrowing its earnings guidance range to $3.40 to $3.60 per diluted share with sales expected to be down in the mid- to high-single digit percent range. The full year 2016 earnings guidance excludes the TAP acquisition. Sales expectations by segment for the full year 2016 are as follows: ORV/Snowmobile sales expected down in the high-single to low-double digits percent range; Motorcycle sales up low-single digits percent; and Global Adjacent Market sales up high-single digits percent.

Third Quarter Segment Results (in thousands)
Includes respective parts, garments and accessories (“PG&A”) related sales
Three months ended September 30, Nine months ended September 30,
2016 2015 Change 2016 2015 Change
Sales
Off-Road Vehicles/Snowmobiles $ 923,389 $ 1,193,514 (23 )% $ 2,452,525 $ 2,846,901 (14 )%
Motorcycles 183,193 188,679 (3 )% 602,762 535,699 13 %
Global Adjacent Markets 78,485 73,807 6 % 243,553 231,072 5 %
Total Sales $ 1,185,067 $ 1,456,000 (19 )% $ 3,298,840 $ 3,613,672 (9 )%
Gross profit
Off-Road Vehicles/Snowmobiles $ 231,323 $ 388,542 (40 )% $ 670,982 $ 927,803 (28 )%
% of sales 25.1 % 32.6 % -750 bps 27.4 % 32.6 % -523 bps
Motorcycles 21,164 28,424 (26 )% 89,841 73,236 23 %
% of sales 11.6 % 15.1 % -351 bps 14.9 % 13.7 % +123 bps
Global Adjacent Markets 21,828 21,200 3 % 66,163 61,987 7 %
% of sales 27.8 % 28.7 % -91 bps 27.2 % 26.8 % +34 bps
Corporate (13,545 ) (22,543 ) (34,135 ) (34,258 )
Total gross profit $ 260,770 $ 415,623 (37 )% $ 792,851 $ 1,028,768 (23 )%
% of sales 22.0 % 28.5 % -655 bps 24.0 % 28.5 % -444 bps

 

Polaris Celebrates Life of Co-Founder David Johnson

Polaris Co-Founder David Johnson

Polaris Co-Founder David Johnson

Polaris employees and Polaris riders worldwide are celebrating the life and mourning the passing of one of the company’s co-founders, David Johnson. He passed away yesterday in Roseau, Minn., after an extended illness. He was 93 years old.

Since he helped start Polaris in the early 1950s, David focused his career on product engineering and manufacturing, and developed a deep connection with Polaris employees during his four-plus decades with the company. In the years following his retirement in 1988, he remained one of the faces of Polaris as he enjoyed visiting the Roseau manufacturing facility and often gave tours at the Polaris Experience Center located near the plant.

“David Johnson embodied the Polaris culture and work ethic, and his positive impact on the company continues to inspire us today,” said Polaris Chairman and CEO Scott Wine. “David valued hard work, passion for the riding experience, and an unwavering spirit of innovation. He set a tremendous example with his dedication and commitment to the company and employees. We are saddened by his passing and offer our sincere condolences to Eleanor and David’s family and friends.”

After working together for a few years, David and his two cousins, Edgar and Allan Hetteen, officially founded Polaris in1954. Polaris produced a variety of products, including several agricultural products such as straw cutter attachments for combines. But David Johnson and several co-workers who were avid outdoorsmen envisioned a vehicle – a snow machine – they could use in winter to reach their remote hunting shacks. In late 1955, David and his cohorts created the first Polaris snowmobile, a machine that made its first run across a snowy Roseau field in January 1956.

Polaris began producing snowmobiles and helped create the global market for the versatile winter machines. David later said that while Polaris did not invent the snow machine, the company was the first to successfully market snowmobiles. With David in production roles such as Vice President of Manufacturing, Polaris became the snowmobile industry’s long-time market share leader, the dominant brand in snowmobile racing, and the brand known for delivering the best ride and handling. By the time David retired in 1988, the company had begun to diversify and was also producing and marketing off-road vehicles.

David was inducted into the Snowmobile Hall of Fame in 1999, and he received numerous honors from snowmobile clubs and associations worldwide.

David Johnson is survived by his wife of 68 years, Eleanor, and their children, Rodney, Mary, Mitchell, and Aaron. Information about funeral services is forthcoming. All Polaris employees are honorary pallbearers for the service.

‘Grizzly’ Sets World Record on Victory Cross Country Tour

World-Record-Victory-Motorcycle-Tour-0

Victory Motorcycles is proud to announce that Swiss endurance rider completed his round-the-world ride challenge in 72 days and 13 hours

Victory Motorcycles is proud to announce that Swiss endurance rider Urs “Grizzly” Pedraita has achieved a new world record by riding across five continents in less than 120 days aboard his Victory Cross Country Tour.

Grizzly covered roughly 47,390 miles in 72 riding days and 13 hours by the time he reached a celebration in his honor at Volusia Motorsports in New Smyrna Beach, Fla., on July 10. The previous record for such a ride was 120 days and 2 hours, and included time-stops for transfers. Grizzly’s overall time without time-stops was 119 days and 21 hours.

Grizzly rode away from Daytona International Speedway on March 12 flanked by hundreds of owners of Victory motorcycles who joined him to ride one lap of the Daytona 200 road course and escort him out of town for the first part of his journey.

From Daytona Beach, Fla., he traveled 3,971 miles in six days and 14 hours to complete the first leg of the ride in Panama City, Panama. He then continued traveling south 6,269 miles for nine days and 23 hours to reach Ushuaia, Argentina, at the tip of South America. From there, he returned 2,088 miles to Santiago, Chile, loaded his bike onto a plane and transferred to Australia, where he spent six days and five hours riding 4,604 miles west across the continent from Sydney to Perth.

World-Record-Victory-Motorcycle-Tour-2From Perth, Grizzly and his Victory were flown to Cape Town, South Africa, and awaited clearance through customs. Thereafter, he took 13 days and 23 hours for a 7,509-mile journey from Cape Town to Cairo, Egypt, and a ferry to take him across the Mediterranean to Tarragona, Spain. From there, he rode 5,447 miles in six days and 23 hours from northern Spain to Gibraltar to North Cape (Nordkapp) Norway.

Grizzly then turned his wheel east, riding through St. Petersburg, Moscow, Irkutsk and Vladivostok during an 11-day-7-hour, 7,280-mile journey across Russia, a 4-hour and 249-mile tour through South Korea, and a 5-day-11-hour and 2,989-mile ride through Thailand and Malaysia.

From Kuala Lumpur, Malaysia, Grizzly loaded his bike onto a plane and traveled to Anchorage, AK, before resuming his ride in a 9-day 1-hour and 6,984-mile zig-zag tour across North America through Edmonton, Winnipeg, Toronto, Chicago and Santa Monica, Calif. to his finish in Daytona Beach.

“With this journey the spirit of the pioneers of the past was re-established,” Grizzly said upon his arrival. “There is no place for time-stops in this kind of adventure. This victory belongs to the team, and is dedicated to my brother and my guardian angel, Emelie from Peru.”

World-Record-Victory-Motorcycle-Tour-7The Victory Cross Country Tour used for this record-setting ride was specially modified by Motostyling Zurich. While the engine, frame and running gear remain relatively untouched, other parts of the bike have been redesigned to fit Grizzly’s needs as he covers long distances in remote parts of the world.

“This record is a testament to the durability, capability and dependability of our Cross Country Touring platform,” says Nate Secor, Marketing Manager for Victory Motorcycles. “Victory Touring owners love to roll back the miles. If you asked them, they’d likely say there’s a little bit of Grizzly in each of them when they’re covering ground during their own journeys.”

Time and position measurement for Grizzly’s record-setting ride were done via GPS and satellite tracking. Timing was not stopped on overland routes (i.e., when waiting to pass a country border or when the rider is sleeping). However, timing was stopped for air and sea transfers between continents and restarted once the bike arrived on the new continent.

Visit GrizzlyRaceTeam.ch for additional information about Grizzly’s travels. Learn more about Victory Motorcycles at VictoryMotorcycles.com or follow on Twitter, Facebook, YouTube and Instagram.

Indian Sales Up, Overall Sales Down in Polaris Industries 2016 Q1 Report

Polaris Industries

Polaris Industries posted its financial report for the first fiscal quarter of 2016. Sales are down five percent in Q1 2016 compared to year-ago totals, down to $983 million from $1,033.3 million in 2015. Net Income took a bigger hit, down 47 percent at $46.9 million, or $0.71 per diluted share, compared to 2015 Q1 totals of $88.6 million, or $1.30 per diluted share.

On the bright side, North American retail sales increased six percent in the quarter while motorcycle sales as a whole was up 18 percent at $188.2 million. Polaris is reporting an astronomical 50 percent bump in the sales of Indian Motorcycles, which continues to cut into Harley-Davidson’s market share in the heavyweight cruiser motorcycle division.

Here’s the full financial report courtesy of Polaris Industries:

First Quarter 2016 Highlights:
North American retail sales increased 6% in the quarter with Indian motorcycles up over 50%.
Dealer inventory was down year-over-year.
Motorcycle sales increased 18% during the quarter. ORV/Snowmobiles and Global Adjacent Markets sales were down, in-line with expectations.
First quarter results included additional expenses totaling approximately $30 million related to certain product liability settlements, ORV related warranty accruals, severance costs and acquisition related costs.
Repurchased 1.0 million shares of Polaris common stock during the first quarter.
Maintaining guidance range for full year 2016 earnings of $6.20 to $6.80 per diluted share, on sales in the range of down 2% to up 3% for the full year 2016.

MINNEAPOLIS-(BUSINESS WIRE)- Polaris Industries Inc. (NYSE:PII) today reported first quarter net income of $46.9 million, or $0.71 per diluted share, for the quarter ended March 31, 2016 compared to $88.6 million, or $1.30 per diluted share reported in the first quarter of 2015, in-line with Company expectations. Sales for the first quarter 2016 totaled $983.0 million, down five percent compared to last year’s first quarter sales of $1,033.3 million.

“Our first quarter results were in line with our projections, in spite of increased expenses for warranty and product liability. Our Customer Excellence initiatives and new products drove a six percent increase in North American retail, and in conjunction with shipment reductions, better demand forecasting, and process control improvements, enabled us to continue reducing dealer inventory levels year-over-year. During the quarter, we improved shipment lead-times, met retail demand from our Spirit Lake motorcycle facility, and completing the acquisition of Taylor-Dunn. I still believe 2016 is likely to be another volatile year in powersports, but we are seeing pockets of strength. The North American ORV industry was up in the first quarter, with March experiencing the strongest improvement,” commented Scott Wine, Polaris’ Chairman and Chief Executive Officer.

“We remain focused on an all-out assault on costs and rededicating the business to drive growth, not only for this year but as part of a renewed commitment to achieving our 2020 objectives. The entire Polaris team is united, and determined, to grow sales and expand margins.”

2016 Business Outlook
While the powersports industry was slightly better than anticipated in the 2016 first quarter, the Company is keeping its guidance range unchanged for the full year 2016 with earnings expected to be in the range of $6.20 to $6.80 per diluted share with sales in the range of down two percent to up three percent over 2015 due to the persistent unpredictability around overall economic trends and more specifically powersports industry trends for the remainder of 2016.

Off-Road Vehicle (“ORV”) and Snowmobile segment sales, including their respective PG&A related sales, decreased nine percent from the first quarter of 2015 to $720.6 million. ORV vehicle sales decreased 12 percent, snowmobile vehicle sales were up two percent and ORV and snowmobile related PG&A sales, combined, increased two percent in the 2016 first quarter compared to the same period last year.

ORV wholegood sales decreased 12 percent reflecting ongoing softness in retail sales in North American oil markets and tough comparables in the first quarter of last year. Polaris North American ORV unit retail sales were flat with the 2015 first quarter, with consumer purchases of side-by-side vehicles down low single-digits percent and ATV retail sales up low-single digits percent over prior year. ORV dealer inventory was down ten percent in the 2016 first quarter compared to the same period last year. While the Company experienced modest ORV market share loss in the 2016 first quarter with ATV market share up slightly and side-by-side’s down, Polaris continues to be the clear #1 market share leader in ORV in North American.

Snowmobile whole good sales increased two percent due to the acquisition of Timbersled in the second quarter of 2015. The Company gained market share the 2016 first quarter and for a third consecutive year for the season ending March 31, 2016.

Motorcycle segment sales, including their respective PG&A related sales, increased 18 percent in the 2016 first quarter to $188.2 million primarily due to continued strong retail sales for Indian motorcycles.

North American consumer retail demand for the Polaris motorcycle segment, including Victory, Indian Motorcycle and Slingshot , was up low-teens percent during the 2016 first quarter while the overall motorcycle industry retail sales, 900cc and above was about flat in the 2016 first quarter. During the 2016 first quarter, the Company began retailing two new additions to its Victory and Indian motorcycle line-up with the introduction of the Octane, Victory motorcycles’ first mid-sized cruiser and the new Indian Springfield, named after the birthplace of Indian Motorcycle. Slingshot also broadened its color options with its 2016 model introduction including the new Limited Edition White Pearl SL. Product availability for Victory, Indian Motorcycle and Slingshot improved considerably in the 2016 first quarter and dealer inventories are essentially at targeted stocking levels at quarter-end.

Global Adjacent Markets segment sales along with their respective PG&A related sales decreased five percent to $74.1 million in the 2016 first quarter compared to the 2015 first quarter.
Work and Transportation group whole good sales were up low single digits percent during the first quarter of 2016 primarily due to growth in the Aixam business. Sales for the Company’s defense business were down significantly due to U.S. military budget spending patterns pushing orders into the future.

Supplemental Data:
Parts, Garments, and Accessories (“PG&A”) sales, which are included in each of the three respective reporting segments, experienced a two percent increase during the 2016 first quarter. All segments experienced higher PG&A sales during the quarter except motorcycles. Motorcycle PG&A sales were down slightly year-over-year due to higher shipments of Slingshot related PG&A in the 2015 first quarter from initial stocking orders.

International sales to customers outside of North America totaled $162.6 million for the first quarter of 2016, including PG&A, up six percent from the same period in 2015. International sales on a constant currency basis were up 12 percent in the 2016 first quarter. Europe, Middle East and Africa (“EMEA”) reported sales increased six percent in the 2016 first quarter and Asia Pacific reported sales were down seven percent while Latin American reported sales were up 29 percent. International reported sales by reportable segment in the first quarter compared to last year were as follows: ORV/Snowmobiles segment sales were down one percent, Motorcycles segment sales were up 42 percent, and Global Adjacent Markets segment sales increased two percent.

Gross profit decreased 16 percent to $247.6 million in the first quarter of 2016, compared to $293.7 million in the first quarter of 2015. As a percentage of sales, gross profit declined 324 basis points to 25.2 percent of sales for the first quarter of 2016, compared to 28.4 percent of sales for the same period last year. Negative currency movements along with increased warranty and promotional costs and negative product mix, were partially offset by lower commodity costs and cost savings from product cost reduction efforts.

Operating expenses increased 20 percent to $189.9 million or 19.3 percent of sales for the first quarter of 2016, compared to $158.1 million or 15.3 percent of sales for the first quarter of 2015. The increase in dollars and percentage of sales, was driven by increased research and development expense for ongoing product innovation, higher selling and marketing expenses to increase Polaris’ brand awareness and an increase in general and administrative expense due to higher product liability, severance and acquisition related costs incurred during the quarter. These costs were partially offset by operating cost control measures taken during the 2016 first quarter.

Income from financial services was $19.5 million during the first quarter 2016, an increase of 33 percent compared to $14.6 million in the first quarter of 2015. The increase is attributable to a higher penetration rate for retail financing programs in the 2016 first quarter.

Equity in loss of affiliates was $2.1 million for the first quarter of 2016 compared to $1.6 million last year, which represents the Company’s portion of the operating results related to the Polaris/Eicher joint venture in India.

Non-operating other expense, net, which primarily relates to foreign currency exchange rate movements and the corresponding effects on foreign currency transactions related to the Company’s foreign subsidiaries, was $0.1 million in the first quarter of 2016 compared to $7.4 million in the first quarter of 2015.

The provision for income taxes for the first quarter of 2016 was $25.3 million or 35.0 percent of pretax income compared to $49.8 million or 36.0 percent of pretax income for the first quarter of 2015. The lower income tax provision rate in the first quarter 2016 is primarily due to the extension of the research and development credit by the U.S. Congress in the fourth quarter of 2015.

Financial Position and Cash Flow
Net cash provided by operating activities was $139.0 million for the quarter ended March 31, 2016, compared to $4.2 million for the same period in 2015. The significant increase in net cash provided by operating activities for the 2016 period was due to decreased working capital. Total debt for the quarter, including capital lease obligations and notes payable, was $532.4 million. The Company’s debt-to-total capital ratio was 36 percent at March 31, 2016, compared to 27 percent a year ago. Cash and cash equivalents were $145.8 million at March 31, 2016, up from $111.0 million for the same period in 2015.

Celebrate the 75th Annual Daytona Bike Week With Indian Motorcycle

Jack-Daniels-Indian-AIM-3MINNEAPOLIS, MN – (Feb 22, 2016) – Indian Motorcycle®, America’s first motorcycle company, loves making history at Daytona, whether it’s winning the first Daytona 200 or drawing the best crowds with our Daytona Bike Week events. This year Indian again has a full schedule of events, including demo rides, new models, vintage & custom bike displays, racing, organized rides and much more during the 75th Anniversary of Daytona Bike Week, March 5-12.

“Seventy-five years after Ed Kretz dominated the first Bike Week race, our team is inspired to honor that legacy and showcase our future,” said Steve Menneto, President of Motorcycles for Polaris Industries. “Whether you’re a cruising enthusiast or long-haul tourer, into customs like those shown in our Project Scout contest or a race enthusiast cheering on the SuperHooligan Scout Sixty bikes, we know that anybody hanging out with Indian Motorcycle will have great stories to tell.”

Below are highlights of the Daytona Bike Week action Indian Motorcycle has planned.

Demo Rides at Daytona International Speedway
(International Speedway Blvd., across from the Florida Hospital Gate)
9 a.m. – 5 p.m., Daily; Last Ride Leaves at 4:30 p.m.
Bike Week attendees will have the chance to ride the entire 2016 line-up of Indian motorcycles, including the Indian Scout® Sixty cruiser, Indian Chief® Vintage bagger, Indian Roadmaster® tourer and a very special new model. Ride multiple bikes, compare, and decide which Indian Motorcycle models best suit your riding style. Demo rides are free and available to those with a valid motorcycle endorsement and proper attire.

Indian Motorcycle Display at Daytona International Speedway
(Richard Petty & Midway Blvd.)
9 a.m. – 5 p.m., Daily.
In addition to the demo site at the historic Daytona Speedway, a display in the Midway area will feature the entire 2016 Indian Motorcycle line-up, as well as engine cutaways, custom & vintage bikes, accessories and apparel. Register for your chance to win a 2016 Indian Scout Sixty, check out the finalists from the ‘Project Scout: Build a Legend’ custom contest, see how an Indian Chieftain® with performance accessories handles the dyno, and make sure to pick up an exclusive Indian Motorcycle Daytona 75th patch simply by showing your Indian Motorcycle proof of ownership (key-ring, badge, etc.)

Hooligan Race Night
(Ocean Complex West Parking Lot, downtown Daytona Beach)
7 p.m. – 9 p.m., March 8
Enjoy live music, food & refreshments as Roland Sands and fellow Team RSD racers battle handlebar-to-handlebar in pursuit of the checkered flag on their RSD SuperHooligan Indian Scout Sixty dirt trackers. Winners of the Project Scout contest will be announced at this event, and you’re welcome to join a celebratory after-party at the Boot Hill Saloon.

Indian Motorcycle of Daytona Beach
(290 North Beach Street)
9a.m. – 8p.m., Daily
Visit the dealership in the heart of Daytona Beach for all of your bike, accessory and apparel needs, as well as a variety of special events.

Indian Motorcycle Rider’s Group & Veterans Ride
(Indian Motorcycle of Daytona Beach, 290 North Beach Street)
9 a.m. – 2 p.m., March 10
Owners of Indian motorcycles join veterans from the Veterans Ride program in an organized tour that begins at Indian Motorcycle of Daytona Beach and travels to Orlando for lunch. Owners can roll alongside a Vet rider from last year’s inaugural Veterans Charity Ride as he captains a new custom Indian Trike. Kickstands go up at 10 a.m.

Celebrate The 75th With Indian Motorcycle
(Boot Hill Saloon, 310 Main Street)
6 p.m., March 11
Put a stamp on the end of a legendary week by joining Indian Motorcycle at the Boot Hill Saloon to ‘Celebrate the 75th’.

Visit www.IndianMotorcycle.com/en-us/daytona for the most up to date schedule. Learn more about Indian Motorcycle by visiting IndianMotorcycle.com and Facebook, Twitter and Instagram social media channels.

New Model Preview – 2016 Victory Magnum X-1

322-22-2_12016 Victory Magnum X-1

Ingredients for a sound performance

text by Dain Gingerelli
photograph courtesy of Victory Motorcycles

With all the noise that came from Polaris Industries’ Indian camp this past year or so, it was only a matter of time before the other motorcycle company from Minnesota broke its silence. And when Victory Motor­cycles decided it was time to be heard, the ruckus came in a big way: a new Magnum-based bagger that pipes 200 watts of audio amped into 10 speakers. Let’s hear it for the Magnum X-1!

“This bike is built to shatter the sound barrier,” says Brandon Kraemer, Victory’s product manager, during the X-1’s special sneak preview at an audio-video studio in Simi Valley, California, last January. Kramer was speaking in figurative terms, of course. His words were aimed at those 10 speakers — six of which reside in the fairing dash, the remainder in the bag lids — that are poised and ready to broadcast whatever tunes you deem worthy of playing through the onboard audio system. For the most part, the sound system’s controls are the same as those on the standard Magnum because the X-1 is essentially a reissue of that model, but with bolder acoustics and a wilder display of paint graphics (Victory describes the red pinstripes as Electric Red), and contrast-machined components that include an all-new 21″ black billet front wheel design. There’s also a sun-bright, smoke-tinted LED headlight that can practically melt your retinas to light the way.

322-22-1

Kraemer’s reference to the sound barrier explains the Magnum’s X-1 moniker, too. The first man to break the sound barrier was US Air Force test pilot Chuck Yeager, and he did so back in 1947 piloting the experimental rocket-powered aircraft Bell X-1. Victory’s new Magnum X-1 won’t necessarily take you near Mach 1, but people at Victory are hedging their bets that the 200-watt audio system is loud enough to break another sound barrier, of sorts. You want loud tunes while you ride? The X-1 will deliver, claimed by Victory to be four times louder than a standard Cross Country. And, to drive home that fact, the folks from Victory parked one of the new bikes in the acoustically rich sound studio where they cranked up the volume. Simon and Garfunkel’s classic “Sounds of Silence” most certainly was not on the play list. Indeed, the Magnum X-1 might be the vanguard of future models from the Minnesota-based motorcycle company because Polaris is poised to ramp up Victory’s role in how it markets motorcycles. Victory Brand General Manager Rod Krois explained that the motorcycle community should expect even more diversity between Indian and Victory models in the future, with America’s oldest brand (Indian) taking the lead in producing designs heavy on heritage while Victory will develop and produce what Polaris calls “performance and muscle” — cruisers and baggers such as the X-1.

322-22-4“We are investing in motorcycles,” Krois explains to motorcycling’s gathered fourth estate, and any doubt about that was left on the table when that same day Victory announced that it was going NHRA Pro-Stock racing. With ambitions to crack into the hotly contested quarter-mile drag racing arena, Victory is teaming up with S&S Cycle to develop an engine and dragster for two-time NHRA champion Matt Smith and his wife/co-rider Angie to compete in the Pro-Stock class this year.

“We’re going to take on Harley,” one Victory spokesperson confides. And his words will be verified by the time this issue of American Iron Magazine hits the newsstands because the NHRA season will already have begun with the first race at the Gatornationals in Gainesville, Florida.

322-22-5No doubt the American V-twin landscape is becoming more and more interesting as time goes by. On one front, we’ve now got more than one American-made brand battling at NHRA race tracks, and we’ll have American baggers vying on the chorus line to see which bike is the loudest. So far the Magnum X-1 has top honors from Victory’s camp. And you can be a part of the magic, too, by underwriting the X-1’s MSRP to the tune of $24,499. AIM

This article originally appeared in American Iron Magazine issue # 322, published June 2015. To order a back issue of this or any other issue of American Iron Magazine, visit Greaserag.com.
 
Follow American Iron Magazine on Facebook, Twitter, and Instagram!
To subscribe to the PRINT edition, click here.To receive DIGITAL DELIVERY, click here.

2015 Victory Motorcycles New Bike Specs – Preview

2015-Victory-Motorcycles-previewNEW BIKE SPECSby Steven Wyman-Blackburn

The fact that Polaris industries’ first venture into the motorcycle world turned 15 years old last year is a pretty big deal. Victory’s base of operations is rooted in a country that prides itself for developing some of motorcycling’s firsts (some argue best) products, and putting them on the shelf among the oldest brands in the industry.

Having to roll out against such competition, Victory had to shout loudly in order to be heard. Victory’s 3/20-of-a-century celebration in 2014 was spearheaded by an anniversary edition of its Cross Country Tour model (a motorcycle which, as Victory made sure to proclaim, sported the largest-ever storage space at 41.1 gallons). This was soon followed by the continuation of the Ness series with Arlen Ness checking off the Cross Country bagger from his Ness/Victory bucket list. However, this bike received extra attention from all three Ness generations — another industry first.

For our complete New Victory specs and photos pick up American Iron Magazine‘s
November issue #316.

The PRINT EDITION hits newsstands October 14.
Subscribe and receive the next issue weeks before it goes on-sale.

The DIGITAL EDITION is available for instant download today!

The All New Indian Motorcycle Thunder Stroke 111 Engine

Indian-Motorcycle-Thunder-Stroke-111-Engine-1Indian Motorcycle, the first American motorcycle company, announced the details of the all new Thunder Stroke 111™ engine that will power the model year 2014 Indian Motorcycle. The new engine was publicly unveiled to a gathering of press and motorcycling fans on Saturday, March 9 at Daytona Bike Week. This marks yet another critical milestone in the company’s persistent drive towards a full launch later this year under the stewardship of Polaris Industries.

Since the April 2011 acquisition of Indian Motorcycle by Polaris Industries, the company has made an unprecedented commitment of time, resources and passion into the design of the all-new power plant. From the outset, the goal was to capture the iconic design and styling aspects of the 112-year old brand’s most historic models and fuse that heritage with state-of-the-art technology and progressive design elements. The new design reflects an unparalleled investment into researching the complete history of Indian Motorcycle power train development, including the review of volumes of historical documentation, miles of riding vintage motorcycles, and studying and dissecting a broad array of legendary Indian Motorcycle models.

Indian-Motorcycle-Thunder-Stroke-111-Engine-2The Thunder Stroke 111 engine features 111 cubic inch displacement and delivers the raw power and iconic styling that have long been hallmarks of the legendary Indian Motorcycle brand. Delivering more than 115 ft-lbs of torque, the 49-degree V-Twin engine is the new heartbeat of Indian Motorcycle and marks the first clean-sheet Indian Motorcycle engine design in seven decades. With parallel pushrod tubes, finned heads, down firing exhausts, left side air intake, and the proportions and layout familiar to Indian Motorcycle fans around the world, the Thunder Stroke 111 is sure to inspire both experienced and new riders. The engineering prowess and financial resources of Polaris Industries will re-forge this iconic brand into the industry leader it deserves to be.

For more info about Indian’s new Thunder Stroke 111 engine, visit www.indianmotorcycle.com.

Victory Motorcycle Dealers Ranked Highest

MONTEREY, CALIFORNIAMay 2, 2011 – The Victory Motorcycle brand from Polaris Industries, Inc. maintained its top ranking in the newly released 2011 Pied Piper Prospect Satisfaction Index® (PSI®) U.S. Motorcycle Industry Benchmarking Study. Harley-Davidson finished second, while Ducati and Triumph tied for third, followed by BMW and Yamaha, all of which scored above the industry average.

2011 marked the fifth year for the independent Pied Piper PSI benchmarking study, which sent 1,967 hired anonymous “mystery shoppers” into motorcycle dealerships nationwide. The study measured how effectively each brand’s dealerships helped motorcycle shoppers become motorcycle buyers.

Victory defended its top ranking despite a lower PSI score compared to the previous year. Overall motorcycle industry performance also declined across a majority of the sales process activities tracked by the study, which led to lower PSI scores for thirteen of the fourteen major motorcycle brands.

Victory dealerships led the industry overall in multiple sales activities such as providing a product walk-around demonstration, mentioning the availability of financing options, mentioning the availability of accessories, and pointing out features unique from the competition. Eleven different brands led at least one sales process category. For example, Harley-Davidson salespeople were most likely to mention specific features and benefits tied to the shopper’s wants and needs. Ducati salespeople were most likely to offer a test ride. Triumph salespeople were most likely to ask for the sale. BMW and Yamaha salespeople were most likely to make an effort to write-up a transaction.

The past two years have been challenging for the U.S. motorcycle industry, with retail sales stuck at roughly one-half of the pre-recession level. The effectiveness of dealership selling actually increased from 2009 to 2010 despite the challenging sales environment, but from 2010 to 2011 the industry gave back most of the sales process improvements as dealership profitability and employment dropped. Notable sales process areas declining over the past year include the salesperson asking for the sale, providing compelling reasons to buy now, and offering a test ride. Sales process areas bucking the trend and improving over the past year include encouraging shoppers to sit on a motorcycle, salespeople introducing themselves to shoppers, and explaining service and maintenance programs.

“A strong dealership sales process is needed today more than ever,” said Fran O’Hagan, President and CEO of Pied Piper Management Co., LLC. “The days of ‘order-taking’ are over, and a helpful and effective salesperson can make the difference by turning a shopper into a buyer.”

The PSI study results also show that top-ranked brands are less likely to suffer from salespeople taking a prospect interested in one brand, and encouraging them to consider another brand instead. Less than one in ten Harley-Davidson, Victory and BMW shoppers encountered salespeople trying to promote another brand instead. In contrast, more than one in four Aprilia, Husqvarna, Kawasaki and Moto Guzzi shoppers experienced salespeople encouraging the shopper to consider another brand instead.

The 2011 Pied Piper Prospect Satisfaction Index U.S. Motorcycle Industry Study was conducted between July 2010 and April 2011 using 1,967 hired anonymous “mystery shoppers” at dealerships located throughout the U.S. Examples of other recent Pied Piper PSI studies are the 2010 Pied Piper PSI U.S. Auto Industry Study, in which Mercedes-Benz was ranked first, and the 2008 Pied Piper PSI U.S. RV Industry Study (Class A), in which Winnebago’s Itasca brand was ranked first. For more information about the Pied Piper Prospect Satisfaction Index, and the patent-pending Pied Piper PSI process, go to www.piedpiperpsi.com.

About Pied Piper Management Company, LLC
Pacific Grove, California-based Pied Piper Management Company, LLC develops and runs sales & marketing programs to maximize the performance of dealer networks. Go to www.piedpipermc.com.