Polaris Fourth Quarter & Full Year 2020 Results
Polaris Inc. (NYSE: PII) reported strong Q4 2020 financial results, with sales of $2,156 million, a 24% increase YoY. Net income reached $199 million, up 101%, with diluted EPS of $3.15. Adjusted gross profit also rose significantly, reflecting strong demand across Powersports. Operating expenses decreased slightly, while cash flow improved, with net cash from operations totaling $1,019 million for the year. The company anticipates 2021 sales between $7,950 million and $8,150 million, reflecting a 13-16% growth driven by increasing outdoor recreation activities.
- Sales increased by 24% YoY to $2,156 million.
- Net income grew by 101% YoY to $199 million, with EPS at $3.15.
- Adjusted gross profit increased by 30% to $550 million.
- Net cash from operating activities increased by 55% YoY to $1,019 million.
- Sales guidance for 2021 estimated between $7,950 million to $8,150 million.
- Income from financial services decreased by 17% YoY to $17 million.
- Adjusted gross profit impacted by supply chain constraints and higher logistical costs.
Polaris Inc. (NYSE: PII):
Key Financial Data |
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(in millions, except per share data) |
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INCOME STATEMENT - Q4 December 31, 2020 |
Reported |
|
YOY % Chg. |
|
|
Adjusted* |
|
YOY % Chg. |
|||||
Sales |
$ |
2,156.3 |
|
|
|
|
|
$ |
2,156.3 |
|
|
|
|
Net income attributable to Polaris |
$ |
198.8 |
|
|
|
|
|
$ |
210.9 |
|
|
|
|
Diluted EPS |
$ |
3.15 |
|
|
|
|
|
$ |
3.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
BALANCE SHEET - December 31, 2020 |
Reported |
|
YOY % Chg. |
|
|
|
|
|
|||||
Cash and cash equivalents |
$ |
634.7 |
|
|
NM |
|
|
|
|
|
|||
Inventories, net |
$ |
1,177.6 |
|
|
|
|
|
|
|
|
|||
Total debt, finance lease obligations and notes payable |
$ |
1,450.7 |
|
|
(14)% |
|
|
|
|
|
|||
Shareholders' equity |
$ |
1,144.5 |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
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|||||
CASH FLOW - YTD Q4 December 31, 2020 |
Reported |
|
YOY % Chg. |
|
|
|
|
|
|||||
Net cash provided by operating activities |
$ |
1,018.6 |
|
|
|
|
|
|
|
|
|||
Purchase of property & equipment |
$ |
213.9 |
|
|
(15)% |
|
|
|
|
|
|||
Repurchase and retirement of common shares |
$ |
50.3 |
|
|
NM |
|
|
|
|
|
|||
Cash dividends to shareholders |
$ |
152.5 |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
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|||||
NM = Not meaningful |
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*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. |
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CEO Commentary
The Polaris team once again demonstrated its strength and agility to deliver a strong finish to an exceptionally unusual year. While 2020 brought many unforeseen challenges, we emerged from the abrupt shutdown of the global economy early in the year to leverage the surge in demand across the Powersports industry and outdoor recreation, growing full year adjusted sales and earnings
-- Mike Speetzen, Interim Chief Executive Officer of Polaris Inc.
| Fourth Quarter Performance Summary (Reported) | |||||||||||
| (in millions, except per share data) | Three months ended December 31, |
||||||||||
|
2020 |
|
2019 |
|
Change |
||||||
Sales |
$ |
2,156.3 |
|
$ |
1,735.9 |
|
24 |
% |
|||
Gross profit |
550.0 |
|
423.4 |
|
30 |
% |
|||||
% of Sales |
|
|
|
|
+112 bpts |
||||||
Total operating expenses |
304.4 |
|
307.7 |
|
(1) |
% |
|||||
% of Sales |
|
|
|
|
-361 bpts |
||||||
Income from financial services |
17.2 |
|
20.7 |
|
(17) |
% |
|||||
% of Sales |
|
|
|
|
-40 bpts |
||||||
Operating income |
262.8 |
|
136.4 |
|
93 |
% |
|||||
% of Sales |
|
|
|
|
+433 bpts |
||||||
Net income attributable to Polaris |
198.8 |
|
99.0 |
|
101 |
% |
|||||
% of Sales |
|
|
|
|
+352 bpts |
||||||
Diluted net income per share |
$ |
3.15 |
|
$ |
1.58 |
|
99 |
% |
|||
Polaris Inc. (NYSE: PII) (the "Company") today released fourth quarter 2020 results with reported sales of
Retail demand and industry tailwinds remained strong during the quarter benefiting Company performance as both new and existing customers continued taking advantage of off-road vehicles, snowmobiles, motorcycles and boats to enjoy the outdoors while maintaining social distancing etiquette.
Gross profit increased 30 percent to
Operating expenses decreased one percent for the fourth quarter of 2020 to
Income from financial services was
Non-Operating Expenses (Reported) |
|||||||||||||||
(in millions) |
Three months ended December 31, |
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|
2020 |
|
|
2019 |
|
|
Change |
||||||||
Interest expense |
$ |
15.3 |
|
|
|
$ |
16.8 |
|
|
|
(9) |
% |
|||
Other (income) expense, net |
$ |
(0.7 |
) |
|
|
$ |
(1.3 |
) |
|
|
NM |
|
|
||
Provision for income taxes |
$ |
49.4 |
|
|
|
$ |
21.9 |
|
|
|
NM |
|
|
||
|
|
|
|
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|
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NM = Not meaningful |
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Interest expense was
Other (income) expense, net, was
The provision for income taxes for the fourth quarter of 2020 was
Product Segment Highlights (Reported) |
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(in millions) |
Sales |
|
Gross Profit |
|
||||||||||||||||||||
|
Q4 2020 |
|
Q4 2019 |
|
Change |
|
Q4 2020 |
|
Q4 2019 |
|
Change |
|
||||||||||||
Off-Road Vehicles / Snowmobiles |
$ |
1,467.9 |
|
|
$ |
1,139.9 |
|
|
29 |
% |
|
$ |
387.2 |
|
|
$ |
299.4 |
|
|
|
29 |
% |
|
|
Motorcycles |
$ |
146.9 |
|
|
$ |
119.5 |
|
|
23 |
% |
|
$ |
1.1 |
|
|
$ |
(5.3 |
) |
|
|
NM |
|
||
Global Adjacent Markets |
$ |
141.8 |
|
|
$ |
120.4 |
|
|
18 |
% |
|
$ |
41.2 |
|
|
$ |
34.8 |
|
|
|
18 |
% |
|
|
Aftermarket |
$ |
238.1 |
|
|
$ |
221.1 |
|
|
8 |
% |
|
$ |
65.2 |
|
|
$ |
49.2 |
|
|
|
33 |
% |
|
|
Boats |
$ |
161.6 |
|
|
$ |
135.0 |
|
|
20 |
% |
|
$ |
34.8 |
|
|
$ |
25.6 |
|
|
|
36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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NM = Not meaningful |
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|
||||||||||||
Off-Road Vehicles (“ORV”) and Snowmobiles segment sales, including PG&A, totaled
ORV wholegood sales for the fourth quarter of 2020 increased 33 percent. Polaris North American ORV retail sales increased low-thirties percent for the quarter with side-by-side vehicles up high-thirties percent and ATV vehicles up high-teens percent. The North American ORV industry was up high-twenties percent compared to the fourth quarter last year.
Snowmobile wholegood sales in the fourth quarter of 2020 were
Motorcycles segment sales, including PG&A, totaled
North American consumer retail sales for Indian Motorcycle increased low-thirties percent during the fourth quarter of 2020 in a weak mid to heavy-weight two-wheel motorcycle industry that was down mid-single digits percent. North American consumer retail sales for Polaris' motorcycle segment, including both Indian Motorcycle and Slingshot, increased high-thirties percent during the fourth quarter of 2020, while the North American motorcycle industry retail sales for mid- to heavy-weight motorcycles including three-wheel vehicles, was down low-single digits percent in the fourth quarter of 2020.
Global Adjacent Markets segment sales, including PG&A, increased 18 percent to
Aftermarket segment sales of
Boats segment sales increased 20 percent to
Supplemental Data:
Parts, Garments, and Accessories (“PG&A”) sales increased 31 percent for the 2020 fourth quarter with all categories and business segments growing sales during the quarter.
International sales to customers outside of North America, including PG&A, totaled
Financial Position and Cash Flow |
||||||||||||
(in millions) |
Twelve months ended December 31, |
|||||||||||
|
2020 |
|
2019 |
|
Change |
|||||||
Cash and cash equivalents |
$ |
634.7 |
|
|
$ |
157.1 |
|
|
NM |
|||
Net cash provided by operating activities |
$ |
1,018.6 |
|
|
$ |
655.1 |
|
|
55 |
% |
||
Repurchase and retirement of common shares |
$ |
50.3 |
|
|
$ |
8.4 |
|
|
NM |
|||
Cash dividends to shareholders |
$ |
152.5 |
|
|
$ |
149.1 |
|
|
2 |
% |
||
Total debt, finance lease obligations and notes payable |
$ |
1,450.7 |
|
|
$ |
1,693.5 |
|
|
(14) |
% |
||
Debt to Total Capital Ratio |
56 |
% |
|
60 |
% |
|
|
|||||
|
|
|
|
|
|
|||||||
NM = Not meaningful |
|
|
|
|
|
|||||||
Net cash provided by operating activities was
2021 Business Outlook
The Company announced its sales and adjusted earnings guidance for the full year 2021. Sales are expected to increase to the range of
2019 Reclassified Segment Gross Profit Results
Beginning in the first quarter of 2020 certain costs, primarily incentive-based compensation costs, previously classified as "Corporate" in the Company's segment gross profit results were allocated to their respective operating segments results. The comparative 2019 reported and adjusted gross profit results for ORV/Snowmobiles, Motorcycles, Global Adjacent Markets, Aftermarket, Boats, and Corporate were reclassified for comparability. Reclassified historical reported and adjusted gross profit results can be found at ir.polaris.com/investors/financial-information.
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 9:00 AM (CT) Polaris Inc. will host a conference call and webcast to discuss the 2020 fourth quarter results released this morning. The call will be hosted by Mike Speetzen, Interim CEO; and Bob Mack, Interim CFO. The earnings presentation and link to the webcast will be posted on the Polaris Investor Relations website at ir.polaris.com. To listen to the conference call by phone, dial 1-877-883-0383 in the U.S., or 1-412-902-6506 internationally. The Conference ID is 0080812. A replay of the conference call will be available by accessing the same link on our website.
About Polaris
As the global leader in Powersports, Polaris Inc. (NYSE: PII) pioneers product breakthroughs and enriching experiences and services that have invited people to discover the joy of being outdoors since our founding in 1954. With annual 2020 sales of
Forward-looking Statements
Except for historical information contained herein, the matters set forth in this presentation, 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; 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 Securities and Exchange Commission. The Company does not undertake any duty to any person to provide updates to its forward-looking statements.
The data source for retail sales figures included in this release is registration information provided by Polaris dealers in North America compiled by the Company or Company estimates and other industry data sources. The Company must rely on information that its dealers supply concerning retail sales, and other retail sales data sources related to Polaris and the powersports industry, and this information is subject to revision. Retail sales references to total Company retail sales includes only ORV, snowmobiles and motorcycles in North America unless otherwise noted. (summarized financial data follows)
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||||||
(In Millions, Except Per Share Data) (Unaudited) |
||||||||||||||||||||
|
Three months ended December 31, |
|
Twelve months ended December 31, |
|||||||||||||||||
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||||
Sales |
$ |
2,156.3 |
|
|
|
$ |
1,735.9 |
|
|
|
$ |
7,027.9 |
|
|
|
$ |
6,782.5 |
|
|
|
Cost of sales |
1,606.3 |
|
|
|
1,312.5 |
|
|
|
5,317.7 |
|
|
|
5,133.7 |
|
|
|||||
Gross profit |
550.0 |
|
|
|
423.4 |
|
|
|
1,710.2 |
|
|
|
1,648.8 |
|
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|||||||||||||
Selling and marketing |
139.0 |
|
|
|
139.5 |
|
|
|
544.3 |
|
|
|
559.2 |
|
|
|||||
Research and development |
73.2 |
|
|
|
72.1 |
|
|
|
295.6 |
|
|
|
292.9 |
|
|
|||||
General and administrative |
92.2 |
|
|
|
96.1 |
|
|
|
359.2 |
|
|
|
393.9 |
|
|
|||||
Goodwill and other intangible asset impairments |
— |
|
|
|
— |
|
|
|
379.2 |
|
|
|
— |
|
|
|||||
Total operating expenses |
304.4 |
|
|
|
307.7 |
|
|
|
1,578.3 |
|
|
|
1,246.0 |
|
|
|||||
Income from financial services |
17.2 |
|
|
|
20.7 |
|
|
|
80.4 |
|
|
|
80.9 |
|
|
|||||
Operating income |
262.8 |
|
|
|
136.4 |
|
|
|
212.3 |
|
|
|
483.7 |
|
|
|||||
Non-operating expense: |
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
15.3 |
|
|
|
16.8 |
|
|
|
66.7 |
|
|
|
77.6 |
|
|
|||||
Equity in loss of other affiliates |
— |
|
|
|
— |
|
|
|
— |
|
|
|
5.1 |
|
|
|||||
Other (income) expense, net |
(0.7 |
) |
|
|
(1.3 |
) |
|
|
4.2 |
|
|
|
(6.8 |
) |
|
|||||
Income before income taxes |
248.2 |
|
|
|
120.9 |
|
|
|
141.4 |
|
|
|
407.8 |
|
|
|||||
Provision for income taxes |
49.4 |
|
|
|
21.9 |
|
|
|
16.5 |
|
|
|
83.9 |
|
|
|||||
Net income |
198.8 |
|
|
|
99.0 |
|
|
|
124.9 |
|
|
|
323.9 |
|
|
|||||
Net (income) loss attributable to noncontrolling interest |
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
0.1 |
|
|
|||||
Net income attributable to Polaris Inc. |
$ |
198.8 |
|
|
|
$ |
99.0 |
|
|
|
$ |
124.8 |
|
|
|
$ |
324.0 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income per share attributable to Polaris Inc. common shareholders: |
|
|
|
|
|
|
|
|||||||||||||
Basic |
$ |
3.20 |
|
|
|
$ |
1.61 |
|
|
|
$ |
2.02 |
|
|
|
$ |
5.27 |
|
|
|
Diluted |
$ |
3.15 |
|
|
|
$ |
1.58 |
|
|
|
$ |
1.99 |
|
|
|
$ |
5.20 |
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||||||||
Basic |
62.1 |
|
|
|
61.6 |
|
|
|
61.9 |
|
|
|
61.4 |
|
|
|||||
Diluted |
63.1 |
|
|
|
62.7 |
|
|
|
62.6 |
|
|
|
62.3 |
|
|
|||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In Millions), (Unaudited) |
||||||||
|
December 31, 2020 |
|
December 31, 2019 |
|||||
Assets |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
634.7 |
|
|
$ |
157.1 |
|
|
Trade receivables, net |
257.2 |
|
|
190.4 |
|
|||
Inventories, net |
1,177.6 |
|
|
1,121.1 |
|
|||
Prepaid expenses and other |
134.1 |
|
|
125.9 |
|
|||
Income taxes receivable |
3.9 |
|
|
32.5 |
|
|||
Total current assets |
2,207.5 |
|
|
1,627.0 |
|
|||
Property and equipment, net |
888.8 |
|
|
899.8 |
|
|||
Investment in finance affiliate |
59.4 |
|
|
110.6 |
|
|||
Deferred tax assets |
177.7 |
|
|
93.3 |
|
|||
Goodwill and other intangible assets, net |
1,083.7 |
|
|
1,490.2 |
|
|||
Operating lease assets |
125.4 |
|
|
110.2 |
|
|||
Other long-term assets |
90.2 |
|
|
99.4 |
|
|||
Total assets |
$ |
4,632.7 |
|
|
$ |
4,430.5 |
|
|
Liabilities and Equity |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Current portion of debt, finance lease obligations and notes payable |
$ |
142.1 |
|
|
$ |
166.7 |
|
|
Accounts payable |
782.2 |
|
|
450.2 |
|
|||
Accrued expenses: |
|
|
|
|||||
Compensation |
215.4 |
|
|
184.5 |
|
|||
Warranties |
140.8 |
|
|
136.2 |
|
|||
Sales promotions and incentives |
138.1 |
|
|
189.9 |
|
|||
Dealer holdback. |
121.7 |
|
|
145.8 |
|
|||
Other |
292.4 |
|
|
213.9 |
|
|||
Current operating lease liabilities |
34.7 |
|
|
34.9 |
|
|||
Income taxes payable |
22.0 |
|
|
5.9 |
|
|||
Total current liabilities |
1,889.4 |
|
|
1,528.0 |
|
|||
Long-term income taxes payable |
14.4 |
|
|
28.1 |
|
|||
Finance lease obligations |
14.7 |
|
|
14.8 |
|
|||
Long-term debt |
1,293.9 |
|
|
1,512.0 |
|
|||
Deferred tax liabilities |
4.4 |
|
|
4.0 |
|
|||
Long-term operating lease liabilities |
92.3 |
|
|
77.9 |
|
|||
Other long-term liabilities |
166.5 |
|
|
143.9 |
|
|||
Total liabilities |
$ |
3,475.6 |
|
|
$ |
3,308.7 |
|
|
Deferred compensation |
12.3 |
|
|
13.6 |
|
|||
Equity: |
|
|
|
|||||
Total shareholders’ equity |
1,144.5 |
|
|
1,108.0 |
|
|||
Noncontrolling interest |
0.3 |
|
|
0.2 |
|
|||
Total equity |
1,144.8 |
|
|
1,108.2 |
|
|||
Total liabilities and equity |
$ |
4,632.7 |
|
|
$ |
4,430.5 |
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||
(In Millions), (Unaudited) |
||||||||||
|
Twelve months ended December 31, |
|||||||||
|
2020 |
|
|
2019 |
|
|||||
Operating Activities: |
|
|
|
|||||||
Net income |
$ |
124.9 |
|
|
|
$ |
323.9 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|||||||
Depreciation and amortization |
260.7 |
|
|
|
234.5 |
|
|
|||
Noncash compensation |
65.3 |
|
|
|
75.0 |
|
|
|||
Noncash income from financial services |
(18.5 |
) |
|
|
(32.5 |
) |
|
|||
Deferred income taxes |
(83.7 |
) |
|
|
(9.5 |
) |
|
|||
Goodwill and other intangible asset impairments |
379.2 |
|
|
|
— |
|
|
|||
Other, net |
1.9 |
|
|
|
5.2 |
|
|
|||
Changes in operating assets and liabilities: |
|
|
|
|||||||
Trade receivables |
(56.2 |
) |
|
|
6.8 |
|
|
|||
Inventories |
(44.9 |
) |
|
|
(149.9 |
) |
|
|||
Accounts payable |
326.6 |
|
|
|
103.8 |
|
|
|||
Accrued expenses |
54.0 |
|
|
|
99.0 |
|
|
|||
Income taxes payable/receivable |
30.5 |
|
|
|
4.9 |
|
|
|||
Prepaid expenses and other, net |
(21.2 |
) |
|
|
(6.1 |
) |
|
|||
Net cash provided by operating activities |
1,018.6 |
|
|
|
655.1 |
|
|
|||
|
|
|
|
|||||||
Investing Activities: |
|
|
|
|||||||
Purchase of property and equipment |
(213.9 |
) |
|
|
(251.4 |
) |
|
|||
Investment in finance affiliate, net |
69.8 |
|
|
|
13.9 |
|
|
|||
Investment in other affiliates, net |
(6.6 |
) |
|
|
— |
|
|
|||
Acquisition of businesses, net of cash acquired |
— |
|
|
|
(1.8 |
) |
|
|||
Net cash used for investing activities |
(150.7 |
) |
|
|
(239.3 |
) |
|
|||
|
|
|
|
|||||||
Financing Activities: |
|
|
|
|||||||
Borrowings under debt arrangements / finance lease obligations |
1,365.5 |
|
|
|
3,368.9 |
|
|
|||
Repayments under debt arrangements / finance lease obligations |
(1,611.7 |
) |
|
|
(3,638.9 |
) |
|
|||
Repurchase and retirement of common shares |
(50.3 |
) |
|
|
(8.4 |
) |
|
|||
Cash dividends to shareholders |
(152.5 |
) |
|
|
(149.1 |
) |
|
|||
Proceeds from stock issuances under employee plans |
33.6 |
|
|
|
15.7 |
|
|
|||
Net cash used for financing activities |
(415.4 |
) |
|
|
(411.8 |
) |
|
|||
Impact of currency exchange rates on cash balances |
8.7 |
|
|
|
(0.8 |
) |
|
|||
|
|
|
|
|||||||
Net increase in cash, cash equivalents and restricted cash |
461.2 |
|
|
|
3.2 |
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period |
196.3 |
|
|
|
193.1 |
|
|
|||
Cash, cash equivalents and restricted cash at end of period |
$ |
657.5 |
|
|
|
$ |
196.3 |
|
|
|
|
|
|
|
|||||||
The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets: |
|
|
|
|||||||
Cash and cash equivalents |
$ |
634.7 |
|
|
|
$ |
157.1 |
|
|
|
Other long-term assets |
22.8 |
|
|
|
39.2 |
|
|
|||
Total |
$ |
657.5 |
|
|
|
$ |
196.3 |
|
|
|
NON-GAAP RECONCILIATION OF RESULTS |
|||||||||||||||||
(In Millions, Except Per Share Data), (Unaudited) |
|||||||||||||||||
|
|
Three months ended December 31, |
|
Twelve months ended December 31, |
|||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
|
2019 |
||||||||
Sales |
$ |
2,156.3 |
|
|
$ |
1,735.9 |
|
|
$ |
7,027.9 |
|
|
|
$ |
6,782.5 |
|
|
Restructuring & realignment (3) |
— |
|
|
— |
|
|
(2.9 |
) |
|
|
— |
|
|||||
Adjusted sales |
2,156.3 |
|
|
1,735.9 |
|
|
7,025.0 |
|
|
|
6,782.5 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
Gross profit |
550.0 |
|
|
423.4 |
|
|
1,710.2 |
|
|
|
1,648.8 |
|
|||||
Restructuring & realignment (3) |
2.1 |
|
|
4.6 |
|
|
24.6 |
|
|
|
22.7 |
|
|||||
Adjusted gross profit |
552.1 |
|
|
428.0 |
|
|
1,734.8 |
|
|
|
1,671.5 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
Income before taxes |
248.2 |
|
|
120.9 |
|
|
141.4 |
|
|
|
407.8 |
|
|||||
Impairment charges (1) |
— |
|
|
— |
|
|
379.2 |
|
|
|
— |
|
|||||
Acquisition-related costs (2) |
— |
|
|
2.4 |
|
|
— |
|
|
|
7.8 |
|
|||||
Restructuring & realignment (3) |
2.4 |
|
|
5.1 |
|
|
39.9 |
|
|
|
23.1 |
|
|||||
Intangible amortization (4) |
8.7 |
|
|
10.2 |
|
|
36.1 |
|
|
|
41.1 |
|
|||||
Class action litigation expenses (5) |
4.8 |
|
|
3.3 |
|
|
17.1 |
|
|
|
20.0 |
|
|||||
Adjusted income before taxes |
264.1 |
|
|
141.9 |
|
|
613.7 |
|
|
|
499.8 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Polaris Inc. |
198.8 |
|
|
99.0 |
|
|
124.8 |
|
|
|
324.0 |
|
|||||
Impairment charges (1) |
— |
|
|
— |
|
|
289.0 |
|
|
|
— |
|
|||||
Acquisition-related costs (2) |
— |
|
|
1.9 |
|
|
— |
|
|
|
5.9 |
|
|||||
Restructuring & realignment (3) |
1.9 |
|
|
3.8 |
|
|
30.4 |
|
|
|
17.6 |
|
|||||
Intangible amortization (4) |
6.6 |
|
|
7.7 |
|
|
27.5 |
|
|
|
31.0 |
|
|||||
Class action litigation expenses (5) |
3.6 |
|
|
2.5 |
|
|
12.9 |
|
|
|
15.2 |
|
|||||
Adjusted net income attributable to Polaris Inc. (6) |
210.9 |
|
|
114.9 |
|
|
484.6 |
|
|
|
393.7 |
|
|||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
Diluted EPS attributable to Polaris Inc. |
$ |
3.15 |
|
|
$ |
1.58 |
|
|
$ |
1.99 |
|
|
|
$ |
5.20 |
|
|
Impairment charges (1) |
— |
|
|
— |
|
|
4.61 |
|
|
|
— |
|
|||||
Acquisition-related costs (2) |
— |
|
|
0.03 |
|
|
— |
|
|
|
0.10 |
|
|||||
Restructuring & realignment (3) |
0.02 |
|
|
0.06 |
|
|
0.49 |
|
|
|
0.28 |
|
|||||
Intangible amortization (4) |
0.11 |
|
|
0.12 |
|
|
0.44 |
|
|
|
0.50 |
|
|||||
Class action litigation expenses (5) |
0.06 |
|
|
0.04 |
|
|
0.21 |
|
|
|
0.24 |
|
|||||
Adjusted EPS attributable to Polaris Inc. (6) |
$ |
3.34 |
|
|
$ |
1.83 |
|
|
$ |
7.74 |
|
|
|
$ |
6.32 |
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Represents impairment charges related to goodwill and other intangible assets associated with the Company's Aftermarket segment |
|||||||||||||||||
(2) Represents adjustments for integration and acquisition-related expenses and purchase accounting adjustments |
|||||||||||||||||
(3) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation |
|||||||||||||||||
(4) Represents amortization expense for acquisition-related intangible assets |
|||||||||||||||||
(5) Represents adjustments for class action litigation-related expenses |
|||||||||||||||||
(6) The Company used its estimated statutory tax rate of |
|||||||||||||||||
NON-GAAP RECONCILIATION OF SEGMENT RESULTS |
|||||||||||||||||||
(In Millions), (Unaudited) |
|||||||||||||||||||
|
Three months ended December 31, |
|
Twelve months ended December 31, |
||||||||||||||||
SEGMENT SALES |
2020 |
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||||
ORV/Snow segment sales |
$ |
1,467.9 |
|
|
$ |
1,139.9 |
|
|
|
$ |
4,533.3 |
|
|
|
$ |
4,209.1 |
|
|
|
No adjustment |
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|||||
Adjusted ORV/Snow segment sales |
1,467.9 |
|
|
1,139.9 |
|
|
|
4,533.3 |
|
|
|
4,209.1 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Motorcycles segment sales |
146.9 |
|
|
119.5 |
|
|
|
581.7 |
|
|
|
584.1 |
|
|
|||||
No adjustment |
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|||||
Adjusted Motorcycles segment sales |
146.9 |
|
|
119.5 |
|
|
|
581.7 |
|
|
|
584.1 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Global Adjacent Markets (GAM) segment sales |
141.8 |
|
|
120.4 |
|
|
|
424.6 |
|
|
|
461.3 |
|
|
|||||
No adjustment |
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|||||
Adjusted GAM segment sales |
141.8 |
|
|
120.4 |
|
|
|
424.6 |
|
|
|
461.3 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Aftermarket segment sales |
238.1 |
|
|
221.1 |
|
|
|
884.9 |
|
|
|
906.7 |
|
|
|||||
No adjustment |
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|||||
Adjusted Aftermarket segment sales |
238.1 |
|
|
221.1 |
|
|
|
884.9 |
|
|
|
906.7 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Boats segment sales |
161.6 |
|
|
135.0 |
|
|
|
603.4 |
|
|
|
621.3 |
|
|
|||||
Restructuring & realignment (1) |
— |
|
|
— |
|
|
|
(2.9 |
) |
|
|
— |
|
|
|||||
Boats segment sales |
161.6 |
|
|
135.0 |
|
|
|
600.5 |
|
|
|
621.3 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Total sales |
2,156.3 |
|
|
1,735.9 |
|
|
|
7,027.9 |
|
|
|
6,782.5 |
|
|
|||||
Total adjustments |
— |
|
|
— |
|
|
|
(2.9 |
) |
|
|
— |
|
|
|||||
Adjusted total sales |
$ |
2,156.3 |
|
|
$ |
1,735.9 |
|
|
|
$ |
7,025.0 |
|
|
|
$ |
6,782.5 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
Three months ended December 31, |
|
Twelve months ended December 31, |
||||||||||||||||
SEGMENT GROSS PROFIT |
2020 |
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||||
ORV/Snow segment gross profit |
$ |
387.2 |
|
|
$ |
299.4 |
|
|
|
$ |
1,218.4 |
|
|
|
$ |
1,145.5 |
|
|
|
No adjustment |
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|||||
Adjusted ORV/Snow segment gross profit |
387.2 |
|
|
299.4 |
|
|
|
1,218.4 |
|
|
|
1,145.5 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Motorcycles segment gross profit |
1.1 |
|
|
(5.3 |
) |
|
|
20.0 |
|
|
|
30.0 |
|
|
|||||
Restructuring & realignment (1) |
— |
|
|
(0.5 |
) |
|
|
0.7 |
|
|
|
(0.5 |
) |
|
|||||
Adjusted Motorcycles segment gross profit |
1.1 |
|
|
(5.8 |
) |
|
|
20.7 |
|
|
|
29.5 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Global Adjacent Markets (GAM) segment gross profit |
41.2 |
|
|
34.8 |
|
|
|
116.4 |
|
|
|
128.8 |
|
|
|||||
No adjustment |
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|||||
Adjusted GAM segment gross profit |
41.2 |
|
|
34.8 |
|
|
|
116.4 |
|
|
|
128.8 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Aftermarket segment gross profit |
65.2 |
|
|
49.2 |
|
|
|
222.8 |
|
|
|
222.7 |
|
|
|||||
No adjustment |
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|||||
Adjusted Aftermarket segment gross profit |
65.2 |
|
|
49.2 |
|
|
|
222.8 |
|
|
|
222.7 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Boats segment gross profit |
34.8 |
|
|
25.6 |
|
|
|
116.4 |
|
|
|
124.6 |
|
|
|||||
Restructuring & realignment (1) |
0.3 |
|
|
— |
|
|
|
11.8 |
|
|
|
— |
|
|
|||||
Boats segment gross profit |
35.1 |
|
|
25.6 |
|
|
|
128.2 |
|
|
|
124.6 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Corporate segment gross profit |
20.5 |
|
|
19.7 |
|
|
|
16.2 |
|
|
|
(2.8 |
) |
|
|||||
Restructuring & realignment (1) |
1.8 |
|
|
5.1 |
|
|
|
12.1 |
|
|
|
23.2 |
|
|
|||||
Adjusted Corporate segment gross profit |
22.3 |
|
|
24.8 |
|
|
|
28.3 |
|
|
|
20.4 |
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||||
Total gross profit |
550.0 |
|
|
423.4 |
|
|
|
1,710.2 |
|
|
|
1,648.8 |
|
|
|||||
Total adjustments |
2.1 |
|
|
4.6 |
|
|
|
24.6 |
|
|
|
22.7 |
|
|
|||||
Adjusted total gross profit |
$ |
552.1 |
|
|
$ |
428.0 |
|
|
|
$ |
1,734.8 |
|
|
|
$ |
1,671.5 |
|
|
|
(1)Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation
|
|||||||||||||||||||
NON-GAAP ADJUSTMENTS
Fourth Quarter & Full Year 2020 Results & 2021 Full Year Guidance
Restructuring, Realignment and Acquisition Related 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. Additionally, the Company has recorded acquisitions and integration related costs associated with the TAP and Boat Holdings acquisitions. Currently, 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. For the fourth quarter of 2020, the Company has recorded combined costs totaling
Intangible amortization related to acquisitions
As a result of the Boat Holdings acquisition, Polaris' amortization of intangible assets increased significantly on an annual basis. Given the significant increase in non-cash amortization associated with this acquisition along with intangible amortization from prior acquisitions, the Company has moved to an adjusted net income metric, excluding intangible amortization from all acquisitions. The Company believes this treatment will provide additional transparency into the true, ongoing earnings performance of its business. For the fourth quarter of 2020, Polaris included
2021 Adjusted Guidance
2021 guidance excludes the pre-tax effect of supply chain transformation, restructuring and network realignment costs of approximately
View source version on businesswire.com: https://www.businesswire.com/news/home/20210126005262/en/
FAQ
What were Polaris Inc.'s Q4 2020 sales figures?
How much did Polaris Inc.'s net income grow in Q4 2020?
What is the earnings per share (EPS) for Polaris Inc. in Q4 2020?
What is Polaris Inc.'s sales guidance for 2021?
How did Polaris perform in terms of cash flow in 2020?
