Polaris Fourth Quarter & Full Year 2021 Earnings Results
Polaris reported record annual sales of $8.198 billion for 2021, up 17% year-over-year. Full-year adjusted net income reached $9.13 per diluted share, surpassing guidance. However, Q4 2021 sales saw only a 1% increase to $2.170 billion, with net income declining 56% to $1.40 per share. Gross profit fell 19% to $445 million, impacted by higher costs and supply chain issues. The company anticipates sales growth of 12% to 15% in 2022 with adjusted net income guidance of $10.10 to $10.40 per share.
- 2021 record sales of $8,198 million, up 17% YoY.
- Full-year adjusted net income of $9.13 per share, beating guidance.
- Strong sales growth in PG&A (24%) and International (34%) segments.
- Sales guidance for 2022 suggests growth of 12-15%.
- Q4 2021 net income down 56% YoY to $86.8 million.
- Q4 gross profit decreased 19% to $445 million due to higher input costs.
- Substantial cash flow decline with a 71% drop in net cash from operating activities.
- Loss on sale of GEM and Taylor-Dunn businesses recorded at $36.8 million.
Financial and Operational Highlights
Full year reported and adjusted sales increased
Full year 2021 reported net income was
Fourth quarter reported and adjusted sales increased one percent to
Fourth quarter reported net income was
PG&A and International reported strong sales increasing
Market share improved during the year for ORV and Boats in
Expanded and strengthened the ORV, Snow, Motorcycle, and Boats product portfolios with over 30 new vehicles and nearly 500 new accessories in 2021
GEM and Taylor-Dunn businesses divested during the quarter
Polaris announced full year 2022 sales and adjusted earnings guidance with full year adjusted net income in the range of
Key Financial Data |
|||||||||||
(in millions, except per share data) |
|
|
|
|
|
|
|
|
|||
INCOME STATEMENT - Q4 December 31, 2021 |
Reported |
|
YOY % Chg. |
|
|
Adjusted* |
|
YOY % Chg. |
|||
Sales |
$ |
2,170.4 |
|
|
|
|
$ |
2,170.4 |
|
|
|
Net income attributable to Polaris |
$ |
86.8 |
|
(56)% |
|
|
$ |
134.2 |
|
(36)% |
|
Diluted EPS |
$ |
1.40 |
|
(56)% |
|
|
$ |
2.16 |
|
(35)% |
|
|
|
|
|
|
|
|
|
|
|||
BALANCE SHEET - |
Reported |
|
YOY % Chg. |
|
|
|
|
|
|||
Cash and cash equivalents |
$ |
509.2 |
|
(20)% |
|
|
|
|
|
||
Inventories, net |
$ |
1,644.8 |
|
|
|
|
|
|
|
||
Total debt, finance lease obligations and notes payable |
$ |
1,800.7 |
|
|
|
|
|
|
|
||
Shareholders' equity |
$ |
1,224.3 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|||
CASH FLOW - YTD Q4 December 31, 2021 |
Reported |
|
YOY % Chg. |
|
|
|
|
|
|||
Net cash provided by operating activities |
$ |
293.7 |
|
(71)% |
|
|
|
|
|
||
Purchase of property & equipment |
$ |
298.3 |
|
|
|
|
|
|
|
||
Repurchase and retirement of common shares |
$ |
461.6 |
|
NM |
|
|
|
|
|
||
Cash dividends to shareholders |
$ |
153.4 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|||
NM = Not meaningful |
|
|
|
|
|
|
|
|
|||
*Note: the results and guidance in this release, including the highlights above, include references to non-GAAP operating measures, which are identified by the word “adjusted” preceding the measure. A reconciliation of GAAP / non-GAAP measures can be found at the end of this release. |
CEO Commentary |
Marking a strong finish to the year, we delivered record sales and earnings in 2021, propelled by the Polaris team's dedication and tenacity as they capitalized on opportunities while navigating the macroeconomic-related headwinds. Innovation remained the cornerstone of our culture, supported by the introduction of several new category-defining vehicles this year. With interest in powersports continuing to grow and new customers increasingly entering our industry, we expect 2022 to be another record year for Polaris. Leveraging the Company’s strengths and scale as the global leader in powersports, our refreshed strategy and new strategic objectives will guide our path forward to create greater competitive advantage, welcome new customers and grow the market, drive profitable growth, and deliver value for all our stakeholders.
--
Fourth Quarter Performance Summary (Reported) |
|||||||||||
(in millions, except per share data) |
Three months ended |
||||||||||
|
2021 |
|
2020 |
|
Change |
||||||
Sales |
$ |
2,170.4 |
|
|
$ |
2,156.3 |
|
|
1 |
% |
|
Gross profit |
|
445.2 |
|
|
|
550.0 |
|
|
(19 |
) % |
|
% of Sales |
|
20.5 |
% |
|
|
25.5 |
% |
|
-499 bpts |
||
Total operating expenses |
|
302.9 |
|
|
|
304.4 |
|
|
— |
% |
|
% of Sales |
|
14.0 |
% |
|
|
14.1 |
% |
|
-16 bpts |
||
Income from financial services |
|
12.6 |
|
|
|
17.2 |
|
|
(27 |
) % |
|
% of Sales |
|
0.6 |
% |
|
|
0.8 |
% |
|
-21 bpts |
||
Operating income |
|
154.9 |
|
|
|
262.8 |
|
|
(41 |
) % |
|
% of Sales |
|
7.1 |
% |
|
|
12.2 |
% |
|
-505 bpts |
||
Net income attributable to Polaris |
|
86.8 |
|
|
|
198.8 |
|
|
(56 |
) % |
|
% of Sales |
|
4.0 |
% |
|
|
9.2 |
% |
|
-522 bpts |
||
Diluted net income per share |
$ |
1.40 |
|
|
$ |
3.15 |
|
|
(56 |
) % |
|
|
|
|
|
|
|
Gross profit decreased 19 percent to
Operating expenses were
Income from financial services was
Non-Operating Expenses (Reported) |
|||||||||
(in millions) |
Three months ended |
||||||||
|
2021 |
2020 |
|
Change |
|||||
Interest expense |
$ |
11.2 |
|
$ |
15.3 |
|
|
(27 |
)% |
Other (income) expense, net |
$ |
7.9 |
|
$ |
(0.7 |
) |
|
NM |
|
Loss on sale of businesses |
$ |
36.8 |
|
$ |
— |
|
|
NM |
|
Provision for income taxes |
$ |
12.2 |
|
$ |
49.4 |
|
|
(75 |
)% |
|
|
|
|
|
|
||||
NM = Not meaningful |
|
|
|
|
|
Interest expense was
Other (income) expense, net, was
Loss on sale of businesses was
The provision for income taxes for the fourth quarter of 2021 was
Product Segment Highlights (Reported) |
|||||||||||||||||
(in millions) |
Sales |
|
Gross Profit |
||||||||||||||
|
Q4 2021 |
|
Q4 2020 |
|
Change |
|
Q4 2021 |
|
Q4 2020 |
|
Change |
||||||
Off-Road Vehicles / Snowmobiles |
$ |
1,431.4 |
|
$ |
1,467.9 |
|
(2 |
)% |
|
$ |
274.0 |
|
$ |
387.2 |
|
(29 |
)% |
Motorcycles |
$ |
149.9 |
|
$ |
146.9 |
|
2 |
% |
|
$ |
2.6 |
|
$ |
1.1 |
|
136 |
% |
Global Adjacent Markets |
$ |
174.4 |
|
$ |
141.8 |
|
23 |
% |
|
$ |
46.8 |
|
$ |
41.2 |
|
14 |
% |
Aftermarket |
$ |
234.4 |
|
$ |
238.1 |
|
(2 |
)% |
|
$ |
63.0 |
|
$ |
65.2 |
|
(3 |
)% |
Boats |
$ |
180.3 |
|
$ |
161.6 |
|
12 |
% |
|
$ |
35.6 |
|
$ |
34.8 |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Off-Road Vehicles (“ORV”) and Snowmobiles segment sales, including PG&A, totaled
ORV wholegood sales in the fourth quarter of 2021 decreased seven percent. Polaris North American ORV retail sales decreased mid-twenties percent for the quarter with side-by-side vehicles down mid-twenties percent and ATV vehicles down about thirty percent. The North American ORV industry was down low-twenties percent compared to the fourth quarter last year. ORV market share loss was due to the impact of supply chain disruptions to product availability.
Snowmobile wholegood sales in the fourth quarter of 2021 increased two percent. Polaris snowmobile retail sales were down approximately thirty percent during the fourth quarter of 2021 compared to the prior year while North American industry retail sales were down low-twenties percent for the fourth quarter compared to the prior year.
Motorcycles segment sales, including PG&A, totaled
North American consumer retail sales for Indian Motorcycles decreased low-double digits percent during the fourth quarter of 2021 in a mid-to-heavy-weight two-wheel motorcycle industry that was up mid-single digits percent. North American consumer retail sales for Polaris' motorcycle segment, including both Indian Motorcycle and Slingshot, increased low-single digits percent during the fourth quarter of 2021. North American consumer retail sales for the motorcycle industry including both two-wheel and three-wheel increased low-single digits percent during the fourth quarter of 2021. Indian market share loss was driven by a lack of product availability during the quarter driven by supply chain challenges.
Global Adjacent Markets segment sales, including PG&A, increased 23 percent to
Aftermarket segment sales of
Boats segment sales increased 12 percent to
Supplemental Segment Data:
Parts, Garments, and Accessories (“PG&A”) sales increased 13 percent for the 2021 fourth quarter with all categories and business segments growing sales during the quarter.
International sales to customers outside of
Financial Position and Cash Flow |
|||||||||||
(in millions) |
Twelve months ended |
||||||||||
|
2021 |
|
2020 |
|
Change |
||||||
Cash and cash equivalents |
$ |
509.2 |
|
|
$ |
634.7 |
|
|
(20 |
)% |
|
Net cash provided by operating activities |
$ |
293.7 |
|
|
$ |
1,018.6 |
|
|
(71 |
)% |
|
Repurchase and retirement of common shares |
$ |
461.6 |
|
|
$ |
50.3 |
|
|
NM |
|
|
Cash dividends to shareholders |
$ |
153.4 |
|
|
$ |
152.5 |
|
|
1 |
% |
|
Total debt, finance lease obligations and notes payable |
$ |
1,800.7 |
|
|
$ |
1,450.7 |
|
|
24 |
% |
|
Debt to Total Capital Ratio |
|
60 |
% |
|
|
56 |
% |
|
|
||
|
|
|
|
|
|
||||||
NM = Not meaningful |
|
|
|
|
|
2022 Business Outlook |
The Company announced its sales and adjusted earnings guidance for the full year 2022. Sales are expected to increase to the range of
Non-GAAP Financial Measures |
This press release and our related earnings call contain certain non-GAAP financial measures, consisting of “adjusted" sales, gross profit, income before taxes, net income and net income per diluted share as measures of our operating performance. Management believes these measures may be useful in performing meaningful comparisons of past and present operating results, to understand the performance of its ongoing operations and how management views the business. Reconciliations of reported GAAP measures to adjusted non-GAAP measures are included in the financial schedules contained in this press release. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.
Earnings Conference Call and Webcast |
Today at 10:00
About Polaris |
As the global leader in Powersports,
Forward-looking Statements |
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks and uncertainties include such factors as the severity and duration of the COVID-19 pandemic and the resulting impact on the Company’s business, supply chain, and the global economy; the Company’s ability to successfully implement its manufacturing operations expansion and supply chain initiatives; the Company’s ability to successfully source necessary parts and materials and the ability of the Company to manufacture and deliver products to dealers to meet increasing demand and to bring dealer inventory levels back to optimal levels; the continuation of the increasing consumer demand for the Company’s products; product offerings, promotional activities and pricing strategies by competitors; economic conditions that impact consumer spending; disruptions in manufacturing facilities; acquisition integration costs; product recalls and/or warranty expenses; product rework costs; impact of changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; environmental and product safety regulatory activity; effects of weather; commodity costs; freight and tariff costs (tariff relief or ability to mitigate tariffs); changes to international trade policies and agreements; uninsured product liability claims; uncertainty in the retail and wholesale credit markets; performance of affiliate partners; changes in tax policy; relationships with dealers and suppliers; and the general overall economic, social and political environment. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the
The data source for retail sales figures included in this release is registration information provided by Polaris dealers in
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||
(In Millions, Except Per Share Data) (Unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||
|
Three months ended |
|
Twelve months ended |
|||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||
Sales |
$ |
2,170.4 |
|
$ |
2,156.3 |
|
|
$ |
8,198.2 |
|
|
$ |
7,027.9 |
|
Cost of sales |
|
1,725.2 |
|
|
1,606.3 |
|
|
|
6,255.5 |
|
|
|
5,317.7 |
|
Gross profit |
|
445.2 |
|
|
550.0 |
|
|
|
1,942.7 |
|
|
|
1,710.2 |
|
Operating expenses: |
|
|
|
|
|
|
|
|||||||
Selling and marketing |
|
141.5 |
|
|
139.0 |
|
|
|
584.8 |
|
|
|
544.3 |
|
Research and development |
|
81.6 |
|
|
73.2 |
|
|
|
336.7 |
|
|
|
295.6 |
|
General and administrative |
|
79.8 |
|
|
92.2 |
|
|
|
366.0 |
|
|
|
359.2 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
379.2 |
|
Total operating expenses |
|
302.9 |
|
|
304.4 |
|
|
|
1,287.5 |
|
|
|
1,578.3 |
|
Income from financial services |
|
12.6 |
|
|
17.2 |
|
|
|
53.8 |
|
|
|
80.4 |
|
Operating income |
|
154.9 |
|
|
262.8 |
|
|
|
709.0 |
|
|
|
212.3 |
|
Non-operating expense: |
|
|
|
|
|
|
|
|||||||
Interest expense |
|
11.2 |
|
|
15.3 |
|
|
|
44.2 |
|
|
|
66.7 |
|
Other (income) expense, net |
|
7.9 |
|
|
(0.7 |
) |
|
|
2.3 |
|
|
|
4.2 |
|
Loss on sale of businesses |
|
36.8 |
|
|
— |
|
|
|
36.8 |
|
|
|
— |
|
Income before income taxes |
|
99.0 |
|
|
248.2 |
|
|
|
625.7 |
|
|
|
141.4 |
|
Provision for income taxes |
|
12.2 |
|
|
49.4 |
|
|
|
131.4 |
|
|
|
16.5 |
|
Net income |
|
86.8 |
|
|
198.8 |
|
|
|
494.3 |
|
|
|
124.9 |
|
Net income attributable to noncontrolling interest |
|
— |
|
|
— |
|
|
|
(0.4 |
) |
|
|
(0.1 |
) |
Net income attributable to |
$ |
86.8 |
|
$ |
198.8 |
|
|
$ |
493.9 |
|
|
$ |
124.8 |
|
|
|
|
|
|
|
|
|
|||||||
Net income per share attributable to |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
1.42 |
|
$ |
3.20 |
|
|
$ |
8.06 |
|
|
$ |
2.02 |
|
Diluted |
$ |
1.40 |
|
$ |
3.15 |
|
|
$ |
7.88 |
|
|
$ |
1.99 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||
Basic |
|
61.0 |
|
|
62.1 |
|
|
|
61.3 |
|
|
|
61.9 |
|
Diluted |
|
62.2 |
|
|
63.1 |
|
|
|
62.7 |
|
|
|
62.6 |
|
CONSOLIDATED BALANCE SHEETS |
|||||
(In Millions), (Unaudited) |
|||||
|
|
|
|
||
|
|
|
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
509.2 |
|
$ |
634.7 |
Trade receivables, net |
|
240.5 |
|
|
257.2 |
Inventories, net |
|
1,644.8 |
|
|
1,177.6 |
Prepaid expenses and other |
|
160.5 |
|
|
134.1 |
Income taxes receivable |
|
4.0 |
|
|
3.9 |
Total current assets |
|
2,559.0 |
|
|
2,207.5 |
Property and equipment, net |
|
975.4 |
|
|
888.8 |
Investment in finance affiliate |
|
49.3 |
|
|
59.4 |
Deferred tax assets |
|
163.6 |
|
|
177.7 |
|
|
1,037.5 |
|
|
1,083.7 |
Operating lease assets |
|
165.2 |
|
|
125.4 |
Other long-term assets |
|
97.8 |
|
|
90.2 |
Total assets |
$ |
5,047.8 |
|
$ |
4,632.7 |
Liabilities and Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Current portion of debt, finance lease obligations and notes payable |
$ |
553.3 |
|
$ |
142.1 |
Accounts payable |
|
797.4 |
|
|
782.2 |
Accrued expenses: |
|
|
|
||
Compensation |
|
223.9 |
|
|
215.4 |
Warranties |
|
135.1 |
|
|
140.8 |
Sales promotions and incentives |
|
96.9 |
|
|
138.1 |
Dealer holdback |
|
98.9 |
|
|
121.7 |
Other |
|
268.1 |
|
|
292.4 |
Current operating lease liabilities |
|
39.3 |
|
|
34.7 |
Income taxes payable |
|
17.2 |
|
|
22.0 |
Total current liabilities |
|
2,230.1 |
|
|
1,889.4 |
Long-term income taxes payable |
|
13.3 |
|
|
14.4 |
Finance lease obligations |
|
12.1 |
|
|
14.7 |
Long-term debt |
|
1,235.3 |
|
|
1,293.9 |
Deferred tax liabilities |
|
5.5 |
|
|
4.4 |
Long-term operating lease liabilities |
|
128.5 |
|
|
92.3 |
Other long-term liabilities |
|
185.5 |
|
|
166.5 |
Total liabilities |
$ |
3,810.3 |
|
$ |
3,475.6 |
Deferred compensation |
|
11.2 |
|
|
12.3 |
Equity: |
|
|
|
||
Total shareholders’ equity |
|
1,224.3 |
|
|
1,144.5 |
Noncontrolling interest |
|
2.0 |
|
|
0.3 |
Total equity |
|
1,226.3 |
|
|
1,144.8 |
Total liabilities and equity |
$ |
5,047.8 |
|
$ |
4,632.7 |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In Millions), (Unaudited) |
|||||||
|
|
|
|
||||
|
Twelve months ended |
||||||
|
2021 |
|
2020 |
||||
Operating Activities: |
|
|
|
||||
Net income |
$ |
494.3 |
|
|
$ |
124.9 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
237.1 |
|
|
|
260.7 |
|
Noncash compensation |
|
60.6 |
|
|
|
65.3 |
|
Noncash income from financial services |
|
(7.7 |
) |
|
|
(18.5 |
) |
Deferred income taxes |
|
15.2 |
|
|
|
(83.7 |
) |
Loss on sale of businesses |
|
34.8 |
|
|
|
— |
|
|
|
— |
|
|
|
379.2 |
|
Other, net |
|
7.1 |
|
|
|
1.9 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Trade receivables |
|
(0.2 |
) |
|
|
(56.2 |
) |
Inventories |
|
(503.1 |
) |
|
|
(44.9 |
) |
Accounts payable |
|
27.1 |
|
|
|
326.6 |
|
Accrued expenses |
|
(55.8 |
) |
|
|
54.0 |
|
Income taxes payable/receivable |
|
(4.8 |
) |
|
|
30.5 |
|
Prepaid expenses and other, net |
|
(10.9 |
) |
|
|
(21.2 |
) |
Net cash provided by operating activities |
|
293.7 |
|
|
|
1,018.6 |
|
|
|
|
|
||||
Investing Activities: |
|
|
|
||||
Purchase of property and equipment |
|
(298.3 |
) |
|
|
(213.9 |
) |
Investment in finance affiliate, net |
|
17.8 |
|
|
|
69.8 |
|
Investment in other affiliates, net |
|
(23.4 |
) |
|
|
(6.6 |
) |
Net cash used for investing activities |
|
(303.9 |
) |
|
|
(150.7 |
) |
|
|
|
|
||||
Financing Activities: |
|
|
|
||||
Borrowings under debt arrangements / finance lease obligations |
|
2,424.3 |
|
|
|
1,365.5 |
|
Repayments under debt arrangements / finance lease obligations |
|
(2,073.0 |
) |
|
|
(1,611.7 |
) |
Repurchase and retirement of common shares |
|
(461.6 |
) |
|
|
(50.3 |
) |
Cash dividends to shareholders |
|
(153.4 |
) |
|
|
(152.5 |
) |
Proceeds from stock issuances under employee plans |
|
156.1 |
|
|
|
33.6 |
|
Net cash used for financing activities |
|
(107.6 |
) |
|
|
(415.4 |
) |
Impact of currency exchange rates on cash balances |
|
(10.6 |
) |
|
|
8.7 |
|
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
(128.4 |
) |
|
|
461.2 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
657.5 |
|
|
|
196.3 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
529.1 |
|
|
$ |
657.5 |
|
|
|
|
|
||||
The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets: |
|
|
|
||||
Cash and cash equivalents |
$ |
509.2 |
|
|
$ |
634.7 |
|
Other long-term assets |
|
19.9 |
|
|
|
22.8 |
|
Total |
$ |
529.1 |
|
|
$ |
657.5 |
|
NON-GAAP RECONCILIATION OF RESULTS |
||||||||||||
(In Millions, Except Per Share Data), (Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|||||
|
Three months ended |
|
Twelve months ended |
|||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||
Sales |
$ |
2,170.4 |
|
$ |
2,156.3 |
|
$ |
8,198.2 |
|
$ |
7,027.9 |
|
Restructuring & realignment (4) |
|
— |
|
|
— |
|
|
— |
|
|
(2.9 |
) |
Adjusted sales |
|
2,170.4 |
|
|
2,156.3 |
|
|
8,198.2 |
|
|
7,025.0 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
Gross profit |
|
445.2 |
|
|
550.0 |
|
|
1,942.7 |
|
|
1,710.2 |
|
Restructuring & realignment (4) |
|
1.8 |
|
|
2.1 |
|
|
7.8 |
|
|
24.6 |
|
Adjusted gross profit |
|
447.0 |
|
|
552.1 |
|
|
1,950.5 |
|
|
1,734.8 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
Income before taxes |
|
99.0 |
|
|
248.2 |
|
|
625.7 |
|
|
141.4 |
|
Intangible asset impairment charges (1) |
|
— |
|
|
— |
|
|
— |
|
|
379.2 |
|
Other impairment charges (2) |
|
7.7 |
|
|
— |
|
|
7.7 |
|
|
— |
|
Loss on sale of businesses (3) |
|
36.8 |
|
|
— |
|
|
36.8 |
|
|
— |
|
Restructuring & realignment (4) |
|
6.4 |
|
|
2.4 |
|
|
13.0 |
|
|
39.9 |
|
Intangible amortization (5) |
|
8.3 |
|
|
8.7 |
|
|
34.0 |
|
|
36.1 |
|
Class action litigation expenses (6) |
|
0.7 |
|
|
4.8 |
|
|
9.4 |
|
|
17.1 |
|
Adjusted income before taxes |
|
158.9 |
|
|
264.1 |
|
|
726.6 |
|
|
613.7 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
Net income attributable to |
|
86.8 |
|
|
198.8 |
|
|
493.9 |
|
|
124.8 |
|
Intangible asset impairment charges (1) |
|
— |
|
|
— |
|
|
— |
|
|
289.0 |
|
Other impairment charges (2) |
|
7.7 |
|
|
— |
|
|
7.7 |
|
|
— |
|
Loss on sale of businesses (3) |
|
28.0 |
|
|
— |
|
|
28.0 |
|
|
— |
|
Restructuring & realignment (4) |
|
4.8 |
|
|
1.9 |
|
|
9.9 |
|
|
30.4 |
|
Intangible amortization (5) |
|
6.3 |
|
|
6.6 |
|
|
25.9 |
|
|
27.5 |
|
Class action litigation expenses (6) |
|
0.6 |
|
|
3.6 |
|
|
7.2 |
|
|
12.9 |
|
Adjusted net income attributable to |
|
134.2 |
|
|
210.9 |
|
|
572.6 |
|
|
484.6 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
Diluted EPS attributable to |
$ |
1.40 |
|
$ |
3.15 |
|
$ |
7.88 |
|
$ |
1.99 |
|
Intangible asset impairment charges (1) |
|
— |
|
|
— |
|
|
— |
|
|
4.61 |
|
Other impairment charges (2) |
|
0.12 |
|
|
— |
|
|
0.12 |
|
|
— |
|
Loss on sale of businesses (3) |
|
0.45 |
|
|
— |
|
|
0.45 |
|
|
— |
|
Restructuring & realignment (4) |
|
0.08 |
|
|
0.02 |
|
|
0.16 |
|
|
0.49 |
|
Intangible amortization (5) |
|
0.10 |
|
|
0.11 |
|
|
0.41 |
|
|
0.44 |
|
Class action litigation expenses (6) |
|
0.01 |
|
|
0.06 |
|
|
0.11 |
|
|
0.21 |
|
Adjusted EPS attributable to |
$ |
2.16 |
|
$ |
3.34 |
|
$ |
9.13 |
|
$ |
7.74 |
|
|
|
|
|
|
|
|
|
|||||
(1) Represents impairment charges related to goodwill and other intangible assets associated with the Company's Aftermarket segment |
||||||||||||
(2) Represents impairment charges related to an investment held by the Company |
||||||||||||
(3) Represents the loss associated with the Company's divestiture of the Global Electric Motorcar (GEM) and Taylor-Dunn businesses |
||||||||||||
(4) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation |
||||||||||||
(5) Represents amortization expense for acquisition-related intangible assets |
||||||||||||
(6) Represents adjustments for class action litigation-related expenses |
||||||||||||
(7) The Company used its estimated statutory tax rate of |
NON-GAAP RECONCILIATION OF SEGMENT RESULTS |
||||||||||||
(In Millions), (Unaudited) |
||||||||||||
|
Three months ended |
|
Twelve months ended |
|||||||||
SEGMENT SALES |
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||
ORV/Snow segment sales |
$ |
1,431.4 |
|
$ |
1,467.9 |
|
$ |
5,186.2 |
|
$ |
4,533.3 |
|
No adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted ORV/Snow segment sales |
|
1,431.4 |
|
|
1,467.9 |
|
|
5,186.2 |
|
|
4,533.3 |
|
|
|
|
|
|
|
|
|
|||||
Motorcycles segment sales |
|
149.9 |
|
|
146.9 |
|
|
721.6 |
|
|
581.7 |
|
No adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted Motorcycles segment sales |
|
149.9 |
|
|
146.9 |
|
|
721.6 |
|
|
581.7 |
|
|
|
|
|
|
|
|
|
|||||
Global Adjacent Markets (GAM) segment sales |
|
174.4 |
|
|
141.8 |
|
|
599.8 |
|
|
424.6 |
|
No adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted GAM segment sales |
|
174.4 |
|
|
141.8 |
|
|
599.8 |
|
|
424.6 |
|
|
|
|
|
|
|
|
|
|||||
Aftermarket segment sales |
|
234.4 |
|
|
238.1 |
|
|
930.4 |
|
|
884.9 |
|
No adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted Aftermarket segment sales |
|
234.4 |
|
|
238.1 |
|
|
930.4 |
|
|
884.9 |
|
|
|
|
|
|
|
|
|
|||||
Boats segment sales |
|
180.3 |
|
|
161.6 |
|
|
760.2 |
|
|
603.4 |
|
Restructuring & realignment (1) |
|
— |
|
|
— |
|
|
— |
|
|
(2.9 |
) |
Boats segment sales |
|
180.3 |
|
|
161.6 |
|
|
760.2 |
|
|
600.5 |
|
|
|
|
|
|
|
|
|
|||||
Total sales |
|
2,170.4 |
|
|
2,156.3 |
|
|
8,198.2 |
|
|
7,027.9 |
|
Total adjustments |
|
— |
|
|
— |
|
|
— |
|
|
(2.9 |
) |
Adjusted total sales |
$ |
2,170.4 |
|
$ |
2,156.3 |
|
$ |
8,198.2 |
|
$ |
7,025.0 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Three months ended |
|
Twelve months ended |
|||||||||
SEGMENT GROSS PROFIT |
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||
ORV/Snow segment gross profit |
$ |
274.0 |
|
$ |
387.2 |
|
$ |
1,226.3 |
|
$ |
1,218.4 |
|
No adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted ORV/Snow segment gross profit |
|
274.0 |
|
|
387.2 |
|
|
1,226.3 |
|
|
1,218.4 |
|
|
|
|
|
|
|
|
|
|||||
Motorcycles segment gross profit |
|
2.6 |
|
|
1.1 |
|
|
52.3 |
|
|
20.0 |
|
Restructuring & realignment (1) |
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
Adjusted Motorcycles segment gross profit |
|
2.6 |
|
|
1.1 |
|
|
52.3 |
|
|
20.7 |
|
|
|
|
|
|
|
|
|
|||||
Global Adjacent Markets (GAM) segment gross profit |
|
46.8 |
|
|
41.2 |
|
|
162.3 |
|
|
116.4 |
|
No adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted GAM segment gross profit |
|
46.8 |
|
|
41.2 |
|
|
162.3 |
|
|
116.4 |
|
|
|
|
|
|
|
|
|
|||||
Aftermarket segment gross profit |
|
63.0 |
|
|
65.2 |
|
|
247.2 |
|
|
222.8 |
|
No adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted Aftermarket segment gross profit |
|
63.0 |
|
|
65.2 |
|
|
247.2 |
|
|
222.8 |
|
|
|
|
|
|
|
|
|
|||||
Boats segment gross profit |
|
35.6 |
|
|
34.8 |
|
|
170.6 |
|
|
116.4 |
|
Restructuring & realignment (1) |
|
— |
|
|
0.3 |
|
|
— |
|
|
11.8 |
|
Boats segment gross profit |
|
35.6 |
|
|
35.1 |
|
|
170.6 |
|
|
128.2 |
|
|
|
|
|
|
|
|
|
|||||
Corporate segment gross profit |
|
23.2 |
|
|
20.5 |
|
|
84.0 |
|
|
16.2 |
|
Restructuring & realignment (1) |
|
1.8 |
|
|
1.8 |
|
|
7.8 |
|
|
12.1 |
|
Adjusted Corporate segment gross profit |
|
25.0 |
|
|
22.3 |
|
|
91.8 |
|
|
28.3 |
|
|
|
|
|
|
|
|
|
|||||
Total gross profit |
|
445.2 |
|
|
550.0 |
|
|
1,942.7 |
|
|
1,710.2 |
|
Total adjustments |
|
1.8 |
|
|
2.1 |
|
|
7.8 |
|
|
24.6 |
|
Adjusted total gross profit |
$ |
447.0 |
|
$ |
552.1 |
|
$ |
1,950.5 |
|
$ |
1,734.8 |
|
|
|
|
|
|
|
|
|
|||||
(1) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation |
NON-GAAP ADJUSTMENTS |
|
Restructuring and Realignment Costs
Polaris announced in 2017 that it was making changes to its network to consolidate production and distribution of like products and better leverage plant capacity and embarked on a multi-phase supply chain transformation initiative to continue to leverage its supply chain as a strategic asset. The Company is also executing certain corporate restructuring across the organization to increase efficiency and focus its business including the wind-down of the Rinker, Striper and Larson FX boat brands and the divestiture of GEM and Taylor-Dunn businesses. For the fourth quarter of 2021, the Company has recorded combined costs totaling
Intangible amortization related to acquisitions
The Company uses an adjusted net income metric which excludes intangible amortization from all historical business acquisitions. The Company believes this NON-GAAP information is useful to understanding its operating results and the ongoing performance of its underlying businesses because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company completes. For the fourth quarter of 2021, Polaris recorded
2022 Adjusted Guidance
2022 guidance excludes the pre-tax effect of supply chain transformation, restructuring and network realignment costs of approximately
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FAQ
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