Polaris Third Quarter 2021 Earnings Results
Polaris Inc. (NYSE: PII) reported Q3 2021 sales of $1,960 million, slightly up from last year, with a net income of $114.6 million or $1.84 per share, down 31% year-over-year. Gross profit margin fell to 23.8%, impacted by rising input costs and supply chain issues. North American retail sales dropped 24% due to product availability constraints. Polaris lowered its full-year adjusted earnings guidance to approximately $9.00 per share, despite a projected 16% increase in sales. The company plans to divest its Global Electric Motorcar and Taylor-Dunn segments by year-end.
- Sales were stable at $1,960 million, showing resilience amid challenges.
- Introduced 15 new ORV vehicles, expanding the product portfolio.
- International sales increased by 21%, indicating strong demand overseas.
- Adjusted earnings guidance predicts an increase to approximately $9.00 per share for the year.
- Net income decreased by 31% to $114.6 million.
Financial and Operational Highlights
Third quarter reported and adjusted sales increased slightly to
Third quarter reported net income was
Market share improved during the quarter for ORV and Snowmobiles
Expanded and strengthened the ORV product portfolio with fifteen new vehicles introduced during the quarter
Gross profit margin, reported and adjusted, for the third quarter was
North American retail sales decreased
GEM and Taylor-Dunn expected to be divested by year-end
Polaris lowered its full year 2021 adjusted earnings and sales guidance given the supply chain constraints and now expects to earn approximately
| Key Financial Data | ||||||||||||
(in millions, except per share data) |
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INCOME STATEMENT - Q3 September 30, 2021 |
Reported |
|
YOY % Chg. |
|
|
Adjusted* |
|
YOY % Chg. |
||||
Sales |
$ |
1,959.5 |
|
|
|
|
|
$ |
1,959.5 |
|
|
|
Net income attributable to Polaris |
$ |
114.6 |
|
|
(31)% |
|
|
$ |
123.4 |
|
|
(31)% |
Diluted EPS |
$ |
1.84 |
|
|
(31)% |
|
|
$ |
1.98 |
|
|
(31)% |
|
|
|
|
|
|
|
|
|
||||
BALANCE SHEET - |
Reported |
|
YOY % Chg. |
|
|
|
|
|
||||
Cash and cash equivalents |
$ |
316.5 |
|
|
(61)% |
|
|
|
|
|
||
Inventories, net |
$ |
1,773.6 |
|
|
|
|
|
|
|
|
||
Total debt, finance lease obligations and notes payable |
$ |
1,523.3 |
|
|
(18)% |
|
|
|
|
|
||
Shareholders' equity |
$ |
1,211.8 |
|
|
|
|
|
|
|
|
||
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|
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CASH FLOW - YTD Q3 September 30, 2021 |
Reported |
|
YOY % Chg. |
|
|
|
|
|
||||
Net cash provided by operating activities |
$ |
153.4 |
|
|
(77)% |
|
|
|
|
|
||
Purchase of property & equipment |
$ |
199.3 |
|
|
|
|
|
|
|
|
||
Repurchase and retirement of common shares |
$ |
411.3 |
|
|
NM |
|
|
|
|
|
||
Cash dividends to shareholders |
$ |
115.2 |
|
|
|
|
|
|
|
|
||
|
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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 |
Throughout the third quarter, the Polaris team displayed a high level of flexibility and demonstrated their commitment to delivering industry-leading products to our dealers and customers as quickly as possible. Retail sales were impacted by the substantial deterioration of the supply chain permeating the global economy, but continued interest and demand from existing riders and new customers advanced our market position, further illustrating Polaris’ role as the global leader in Powersports. Despite total Company sales being flat for the quarter due to component shortages, we gained ORV share for the 4th straight quarter against the backdrop of a very difficult supply chain environment. We expect the supply chain will remain volatile into 2022, but with this team’s tenacity, our strong brands, future product plans, and focused execution, I am excited by what the future holds for Polaris.
--
| Third Quarter Performance Summary (Reported) | |||||||
(in millions, except per share data) |
Three months ended |
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|
2021 |
|
2020 |
|
Change |
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Sales |
$ |
1,959.5 |
|
$ |
1,954.6 |
|
|
Gross profit |
465.6 |
|
534.6 |
|
(13)% |
||
% of Sales |
|
|
|
|
-359 bpts |
||
Total operating expenses |
321.6 |
|
313.3 |
|
|
||
% of Sales |
|
|
|
|
+38 bpts |
||
Income from financial services |
11.3 |
|
18.1 |
|
(38)% |
||
% of Sales |
|
|
|
|
-35 bpts |
||
Operating income |
155.3 |
|
239.4 |
|
(35)% |
||
% of Sales |
|
|
|
|
-432 bpts |
||
Net income attributable to Polaris |
114.6 |
|
166.8 |
|
(31)% |
||
% of Sales |
|
|
|
|
-269 bpts |
||
Diluted net income per share |
$ |
1.84 |
|
$ |
2.66 |
|
(31)% |
|
|
|
|
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The Company continues to experience substantial retail demand requiring little promotional assistance, which has been negatively impacted by ongoing supply chain constraints and components shortages leading to lower dealer inventory and shipments.
Gross profit decreased 13 percent to
Operating expenses increased 3 percent for the third quarter of 2021 to
Income from financial services was
Non-Operating Expenses (Reported) |
(in millions) |
Three months ended |
|||||||||
|
2021 |
|
2020 |
|
Change |
|||||
Interest expense |
$ |
10.8 |
|
|
$ |
17.3 |
|
|
(38) |
% |
Other (income) expense, net |
$ |
0.1 |
|
|
$ |
3.2 |
|
|
(97) |
% |
Provision for income taxes |
$ |
29.6 |
|
|
$ |
52.0 |
|
|
(43) |
% |
|
|
|
|
|
|
|||||
NM = Not meaningful |
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|||||
Interest expense was
Other (income) expense, net, decreased
The provision for income taxes for the third quarter of 2021 was
Product Segment Highlights (Reported) |
(in millions) |
Sales |
|
Gross Profit |
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|
Q3 2021 |
|
Q3 2020 |
|
Change |
|
Q3 2021 |
|
Q3 2020 |
|
Change |
||||||||||
Off-Road Vehicles / Snowmobiles |
$ |
1,208.3 |
|
|
$ |
1,288.8 |
|
|
(6) |
% |
|
$ |
260.3 |
|
|
$ |
377.8 |
|
|
(31) |
% |
Motorcycles |
$ |
194.4 |
|
|
$ |
166.9 |
|
|
16 |
% |
|
$ |
17.8 |
|
|
$ |
15.5 |
|
|
15 |
% |
Global Adjacent Markets |
$ |
146.5 |
|
|
$ |
106.6 |
|
|
37 |
% |
|
$ |
40.9 |
|
|
$ |
31.5 |
|
|
30 |
% |
Aftermarket |
$ |
226.7 |
|
|
$ |
237.2 |
|
|
(4) |
% |
|
$ |
60.1 |
|
|
$ |
63.7 |
|
|
(6) |
% |
Boats |
$ |
183.6 |
|
|
$ |
155.1 |
|
|
18 |
% |
|
$ |
41.2 |
|
|
$ |
33.3 |
|
|
24 |
% |
|
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Off-Road Vehicles (“ORV”) and Snowmobiles segment sales, including PG&A, totaled
ORV wholegood sales for the third quarter of 2021 decreased six 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 twenty percent. The North American ORV industry was down high-twenties percent compared to the third quarter last year.
Snowmobile wholegood sales in the third quarter of 2021 were
Motorcycles segment sales, including PG&A, totaled
North American consumer retail sales for Indian Motorcycles decreased twelve percent during the third quarter of 2021 in a 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, decreased mid-teens percent during the third quarter of 2021. North American consumer retail sales for the motorcycle industry including both two-wheel and three-wheel decreased mid-single digits percent during the third quarter of 2021. Indian and Slingshot market share losses were driven by a lack of product availability during the quarter driven by supply chain challenges.
Global Adjacent Markets segment sales, including PG&A, increased 37 percent to
Aftermarket segment sales of
Boats segment sales increased 18 percent to
Supplemental Segment Data:
Parts, Garments, and Accessories (“PG&A”) sales increased eight percent for the 2021 third 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) |
Nine months ended |
||||||||
|
2021 |
|
2020 |
|
Change |
||||
Cash and cash equivalents |
$ |
316.5 |
|
|
$ |
820.6 |
|
|
(61)% |
Net cash provided by operating activities |
$ |
153.4 |
|
|
$ |
675.7 |
|
|
(77)% |
Repurchase and retirement of common shares |
$ |
411.3 |
|
|
$ |
49.5 |
|
|
NM |
Cash dividends to shareholders |
$ |
115.2 |
|
|
$ |
114.2 |
|
|
|
Total debt, finance lease obligations and notes payable |
$ |
1,523.3 |
|
|
$ |
1,864.4 |
|
|
(18)% |
Debt to Total Capital Ratio |
56 |
% |
|
66 |
% |
|
|
||
|
|
|
|
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|
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NM = Not meaningful |
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2021 Business Outlook |
Given the impact of supply chain constraints on production and shipments through the first nine months of the year and the expectations that those disruptions will not subside by year end, the Company is lowering its expected full year 2021 earnings guidance and now expects adjusted net income to finish around
Divestiture of Business |
The Company expects to divest its Global Electric Motorcar (GEM) and Taylor-Dunn businesses by year-end. Full year 2020 total revenue was less than
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
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 (LOSS) |
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(In Millions, Except Per Share Data) (Unaudited) |
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Three months ended |
|
Nine months ended |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Sales |
$ |
1,959.5 |
|
|
$ |
1,954.6 |
|
|
$ |
6,027.8 |
|
|
$ |
4,871.6 |
|
Cost of sales |
1,493.9 |
|
|
1,420.0 |
|
|
4,530.3 |
|
|
3,711.4 |
|
||||
Gross profit |
465.6 |
|
|
534.6 |
|
|
1,497.5 |
|
|
1,160.2 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Selling and marketing |
143.2 |
|
|
135.5 |
|
|
443.3 |
|
|
405.3 |
|
||||
Research and development |
86.8 |
|
|
77.2 |
|
|
255.1 |
|
|
222.4 |
|
||||
General and administrative |
91.6 |
|
|
100.6 |
|
|
286.2 |
|
|
267.0 |
|
||||
|
— |
|
|
— |
|
|
— |
|
|
379.2 |
|
||||
Total operating expenses |
321.6 |
|
|
313.3 |
|
|
984.6 |
|
|
1,273.9 |
|
||||
Income from financial services |
11.3 |
|
|
18.1 |
|
|
41.2 |
|
|
63.2 |
|
||||
Operating income (loss) |
155.3 |
|
|
239.4 |
|
|
554.1 |
|
|
(50.5 |
) |
||||
Non-operating expense: |
|
|
|
|
|
|
|
||||||||
Interest expense |
10.8 |
|
|
17.3 |
|
|
33.0 |
|
|
51.4 |
|
||||
Other (income) expense, net |
0.1 |
|
|
3.2 |
|
|
(5.6 |
) |
|
4.9 |
|
||||
Income (loss) before income taxes |
144.4 |
|
|
218.9 |
|
|
526.7 |
|
|
(106.8 |
) |
||||
Provision for income taxes |
29.6 |
|
|
52.0 |
|
|
119.2 |
|
|
(32.9 |
) |
||||
Net income (loss) |
114.8 |
|
|
166.9 |
|
|
407.5 |
|
|
(73.9 |
) |
||||
Net (income) loss attributable to noncontrolling interest |
(0.2 |
) |
|
(0.1 |
) |
|
(0.4 |
) |
|
(0.1 |
) |
||||
Net income (loss) attributable to |
$ |
114.6 |
|
|
$ |
166.8 |
|
|
$ |
407.1 |
|
|
$ |
(74.0 |
) |
|
|
|
|
|
|
|
|
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Net income (loss) per share attributable to |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.88 |
|
|
$ |
2.70 |
|
|
$ |
6.63 |
|
|
$ |
(1.20 |
) |
Diluted |
$ |
1.84 |
|
|
$ |
2.66 |
|
|
$ |
6.48 |
|
|
$ |
(1.20 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
61.0 |
|
|
61.9 |
|
|
61.4 |
|
|
61.8 |
|
||||
Diluted |
62.3 |
|
|
62.8 |
|
|
62.9 |
|
|
61.8 |
|
||||
CONSOLIDATED BALANCE SHEETS |
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(In Millions), (Unaudited) |
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|
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|
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Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
316.5 |
|
|
$ |
820.6 |
|
Trade receivables, net |
242.7 |
|
|
241.3 |
|
||
Inventories, net |
1,773.6 |
|
|
1,213.5 |
|
||
Prepaid expenses and other |
114.3 |
|
|
98.6 |
|
||
Income taxes receivable |
0.6 |
|
|
5.7 |
|
||
Total current assets |
2,447.7 |
|
|
2,379.7 |
|
||
Property and equipment, net |
931.4 |
|
|
865.3 |
|
||
Investment in finance affiliate |
31.4 |
|
|
44.9 |
|
||
Deferred tax assets |
160.3 |
|
|
186.4 |
|
||
|
1,053.2 |
|
|
1,087.3 |
|
||
Operating lease assets |
165.1 |
|
|
105.8 |
|
||
Other long-term assets |
81.2 |
|
|
114.2 |
|
||
Total assets |
$ |
4,870.3 |
|
|
$ |
4,783.6 |
|
Liabilities and Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Current portion of debt, finance lease obligations and notes payable |
$ |
53.3 |
|
|
$ |
542.1 |
|
Accounts payable |
928.2 |
|
|
790.7 |
|
||
Accrued expenses: |
|
|
|
||||
Compensation |
241.3 |
|
|
194.6 |
|
||
Warranties |
137.1 |
|
|
140.6 |
|
||
Sales promotions and incentives |
76.9 |
|
|
133.1 |
|
||
Dealer holdback |
79.7 |
|
|
109.7 |
|
||
Other |
255.3 |
|
|
256.6 |
|
||
Current operating lease liabilities |
39.4 |
|
|
33.6 |
|
||
Income taxes payable |
33.6 |
|
|
38.0 |
|
||
Total current liabilities |
1,844.8 |
|
|
2,239.0 |
|
||
Long-term income taxes payable |
16.3 |
|
|
21.3 |
|
||
Finance lease obligations |
12.7 |
|
|
14.4 |
|
||
Long-term debt |
1,457.3 |
|
|
1,307.9 |
|
||
Deferred tax liabilities |
4.2 |
|
|
3.5 |
|
||
Long-term operating lease liabilities |
128.1 |
|
|
74.2 |
|
||
Other long-term liabilities |
181.7 |
|
|
159.3 |
|
||
Total liabilities |
$ |
3,645.1 |
|
|
$ |
3,819.6 |
|
Deferred compensation |
11.5 |
|
|
16.2 |
|
||
Equity: |
|
|
|
||||
Total shareholders’ equity |
1,211.8 |
|
|
947.5 |
|
||
Noncontrolling interest |
1.9 |
|
|
0.3 |
|
||
Total equity |
1,213.7 |
|
|
947.8 |
|
||
Total liabilities and equity |
$ |
4,870.3 |
|
|
$ |
4,783.6 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In Millions), (Unaudited) |
|||||||
|
|
|
|
||||
|
Nine months ended |
||||||
|
2021 |
|
2020 |
||||
Operating Activities: |
|
|
|
||||
Net income (loss) |
$ |
407.5 |
|
|
$ |
(73.9 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
178.2 |
|
|
190.5 |
|
||
Noncash compensation |
45.2 |
|
|
59.4 |
|
||
Noncash income from financial services |
(5.7 |
) |
|
(15.0 |
) |
||
Deferred income taxes |
17.1 |
|
|
(94.1 |
) |
||
|
— |
|
|
379.2 |
|
||
Changes in operating assets and liabilities: |
|
|
|
||||
Trade receivables |
8.2 |
|
|
(48.6 |
) |
||
Inventories |
(604.0 |
) |
|
(90.4 |
) |
||
Accounts payable |
150.1 |
|
|
338.5 |
|
||
Accrued expenses |
(95.8 |
) |
|
(19.4 |
) |
||
Income taxes payable/receivable |
17.6 |
|
|
51.6 |
|
||
Prepaid expenses and other, net |
35.0 |
|
|
(2.1 |
) |
||
Net cash provided by operating activities |
153.4 |
|
|
675.7 |
|
||
|
|
|
|
||||
Investing Activities: |
|
|
|
||||
Purchase of property and equipment |
(199.3 |
) |
|
(131.8 |
) |
||
Investment in finance affiliate, net |
33.7 |
|
|
80.6 |
|
||
Investment in other affiliates, net |
— |
|
|
(2.5 |
) |
||
Net cash used for investing activities |
(165.6 |
) |
|
(53.7 |
) |
||
|
|
|
|
||||
Financing Activities: |
|
|
|
||||
Borrowings under debt arrangements / finance lease obligations |
1,250.1 |
|
|
1,299.9 |
|
||
Repayments under debt arrangements / finance lease obligations |
(1,176.4 |
) |
|
(1,131.6 |
) |
||
Repurchase and retirement of common shares |
(411.3 |
) |
|
(49.5 |
) |
||
Cash dividends to shareholders |
(115.2 |
) |
|
(114.2 |
) |
||
Proceeds from stock issuances under employee plans |
151.7 |
|
|
32.6 |
|
||
Net cash provided by (used for) financing activities |
(301.1 |
) |
|
37.2 |
|
||
Impact of currency exchange rates on cash balances |
(6.9 |
) |
|
1.4 |
|
||
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(320.2 |
) |
|
660.6 |
|
||
Cash, cash equivalents and restricted cash at beginning of period |
657.5 |
|
|
196.3 |
|
||
Cash, cash equivalents and restricted cash at end of period |
$ |
337.3 |
|
|
$ |
856.9 |
|
|
|
|
|
||||
The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets: |
|
|
|
||||
Cash and cash equivalents |
$ |
316.5 |
|
|
$ |
820.6 |
|
Other long-term assets |
20.8 |
|
|
36.3 |
|
||
Total |
$ |
337.3 |
|
|
$ |
856.9 |
|
NON-GAAP RECONCILIATION OF RESULTS |
|||||||||||||||
(In Millions, Except Per Share Data), (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Sales |
$ |
1,959.5 |
|
|
$ |
1,954.6 |
|
|
$ |
6,027.8 |
|
|
$ |
4,871.6 |
|
Restructuring & realignment (2) |
— |
|
|
(1.2) |
|
|
— |
|
|
(2.9) |
|
||||
Adjusted sales |
1,959.5 |
|
|
1,953.4 |
|
|
6,027.8 |
|
|
4,868.7 |
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Gross profit |
465.6 |
|
|
534.6 |
|
|
1,497.5 |
|
|
1,160.2 |
|
||||
Restructuring & realignment (2) |
2.1 |
|
|
2.4 |
|
|
6.0 |
|
|
22.5 |
|
||||
Adjusted gross profit |
467.7 |
|
|
537.0 |
|
|
1,503.5 |
|
|
1,182.7 |
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before taxes |
144.4 |
|
|
218.9 |
|
|
526.7 |
|
|
(106.8) |
|
||||
Impairment charges (1) |
— |
|
|
— |
|
|
— |
|
|
379.2 |
|
||||
Restructuring & realignment (2) |
2.7 |
|
|
2.8 |
|
|
6.6 |
|
|
37.5 |
|
||||
Intangible amortization (3) |
8.5 |
|
|
8.7 |
|
|
25.7 |
|
|
27.4 |
|
||||
Class action litigation expenses (4) |
0.3 |
|
|
4.7 |
|
|
8.7 |
|
|
12.3 |
|
||||
Adjusted income before taxes |
155.9 |
|
|
235.1 |
|
|
567.7 |
|
|
349.6 |
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to |
114.6 |
|
|
166.8 |
|
|
407.1 |
|
|
(74.0) |
|
||||
Impairment charges (1) |
— |
|
|
— |
|
|
— |
|
|
289.0 |
|
||||
Restructuring & realignment (2) |
2.1 |
|
|
2.0 |
|
|
5.1 |
|
|
28.5 |
|
||||
Intangible amortization (3) |
6.5 |
|
|
6.8 |
|
|
19.6 |
|
|
20.9 |
|
||||
Class action litigation expenses (4) |
0.2 |
|
|
3.6 |
|
|
6.6 |
|
|
9.3 |
|
||||
Adjusted net income attributable to |
123.4 |
|
|
179.2 |
|
|
438.4 |
|
|
273.7 |
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Diluted EPS attributable to |
$ |
1.84 |
|
|
$ |
2.66 |
|
|
$ |
6.48 |
|
|
$ |
(1.20) |
|
Weighted average shares outstanding adjustment (6) |
— |
|
|
— |
|
|
— |
|
|
0.02 |
|
||||
Impairment charges (1) |
— |
|
|
— |
|
|
— |
|
|
4.62 |
|
||||
Restructuring & realignment (2) |
0.03 |
|
|
0.03 |
|
|
0.08 |
|
|
0.46 |
|
||||
Intangible amortization (3) |
0.11 |
|
|
0.10 |
|
|
0.31 |
|
|
0.33 |
|
||||
Class action litigation expenses (4) |
— |
|
|
0.06 |
|
|
0.10 |
|
|
0.15 |
|
||||
Adjusted EPS attributable to |
$ |
1.98 |
|
|
$ |
2.85 |
|
|
$ |
6.97 |
|
|
$ |
4.38 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Represents impairment charges related to goodwill and other intangible assets associated with the Company's Aftermarket segment |
|||||||||||||||
(2) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation |
|||||||||||||||
(3) Represents amortization expense for acquisition-related intangible assets |
|||||||||||||||
(4) Represents adjustments for class action litigation-related expenses |
|||||||||||||||
(5) The Company used its estimated statutory tax rate of |
|||||||||||||||
(6) For the three months ended |
|||||||||||||||
NON-GAAP RECONCILIATION OF SEGMENT RESULTS |
|||||||||||||||
(In Millions), (Unaudited) |
|||||||||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||
SEGMENT SALES |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
ORV/Snow segment sales |
$ |
1,208.3 |
|
|
$ |
1,288.8 |
|
|
$ |
3,754.8 |
|
|
$ |
3,065.4 |
|
No adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjusted ORV/Snow segment sales |
1,208.3 |
|
|
1,288.8 |
|
|
3,754.8 |
|
|
3,065.4 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Motorcycles segment sales |
194.4 |
|
|
166.9 |
|
|
571.7 |
|
|
434.8 |
|
||||
No adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjusted Motorcycles segment sales |
194.4 |
|
|
166.9 |
|
|
571.7 |
|
|
434.8 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Global Adjacent Markets (GAM) segment sales |
146.5 |
|
|
106.6 |
|
|
425.4 |
|
|
282.8 |
|
||||
No adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjusted GAM segment sales |
146.5 |
|
|
106.6 |
|
|
425.4 |
|
|
282.8 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Aftermarket segment sales |
226.7 |
|
|
237.2 |
|
|
696.0 |
|
|
646.8 |
|
||||
No adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjusted Aftermarket segment sales |
226.7 |
|
|
237.2 |
|
|
696.0 |
|
|
646.8 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Boats segment sales |
183.6 |
|
|
155.1 |
|
|
579.9 |
|
|
441.8 |
|
||||
Restructuring & realignment (1) |
— |
|
|
(1.2 |
) |
|
— |
|
|
(2.9 |
) |
||||
Boats segment sales |
183.6 |
|
|
153.9 |
|
|
579.9 |
|
|
438.9 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Total sales |
1,959.5 |
|
|
1,954.6 |
|
|
6,027.8 |
|
|
4,871.6 |
|
||||
Total adjustments |
— |
|
|
(1.2 |
) |
|
— |
|
|
(2.9 |
) |
||||
Adjusted total sales |
$ |
1,959.5 |
|
|
$ |
1,953.4 |
|
|
$ |
6,027.8 |
|
|
$ |
4,868.7 |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||
SEGMENT GROSS PROFIT |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
ORV/Snow segment gross profit |
$ |
260.3 |
|
|
$ |
377.8 |
|
|
$ |
952.3 |
|
|
$ |
831.2 |
|
No adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjusted ORV/Snow segment gross profit |
260.3 |
|
|
377.8 |
|
|
952.3 |
|
|
831.2 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Motorcycles segment gross profit |
17.8 |
|
|
15.5 |
|
|
49.7 |
|
|
18.9 |
|
||||
Restructuring & realignment (1) |
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
||||
Adjusted Motorcycles segment gross profit |
17.8 |
|
|
15.5 |
|
|
49.7 |
|
|
19.6 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Global Adjacent Markets (GAM) segment gross profit |
40.9 |
|
|
31.5 |
|
|
115.5 |
|
|
75.2 |
|
||||
No adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjusted GAM segment gross profit |
40.9 |
|
|
31.5 |
|
|
115.5 |
|
|
75.2 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Aftermarket segment gross profit |
60.1 |
|
|
63.7 |
|
|
184.2 |
|
|
157.6 |
|
||||
No adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjusted Aftermarket segment gross profit |
60.1 |
|
|
63.7 |
|
|
184.2 |
|
|
157.6 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Boats segment gross profit |
41.2 |
|
|
33.3 |
|
|
135.0 |
|
|
81.6 |
|
||||
Restructuring & realignment (1) |
— |
|
|
0.4 |
|
|
— |
|
|
11.5 |
|
||||
Boats segment gross profit |
41.2 |
|
|
33.7 |
|
|
135.0 |
|
|
93.1 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Corporate segment gross profit |
45.3 |
|
|
12.8 |
|
|
60.8 |
|
|
(4.3 |
) |
||||
Restructuring & realignment (1) |
2.1 |
|
|
2.0 |
|
|
6.0 |
|
|
10.3 |
|
||||
Adjusted Corporate segment gross profit |
47.4 |
|
|
14.8 |
|
|
66.8 |
|
|
6.0 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Total gross profit |
465.6 |
|
|
534.6 |
|
|
1,497.5 |
|
|
1,160.2 |
|
||||
Total adjustments |
2.1 |
|
|
2.4 |
|
|
6.0 |
|
|
22.5 |
|
||||
Adjusted total gross profit |
$ |
467.7 |
|
|
$ |
537.0 |
|
|
$ |
1,503.5 |
|
|
$ |
1,182.7 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation |
|||||||||||||||
NON-GAAP ADJUSTMENTS |
Third Quarter 2021 Results & Full Year Guidance |
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. For the third 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 third quarter of 2021, Polaris recorded
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/20211026005324/en/
Investor Contact:
Media Contact:
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FAQ
What were the Q3 2021 sales figures for Polaris (PII)?
How did Polaris's net income change in Q3 2021?
What is Polaris's adjusted earnings guidance for 2021?
What impact did supply chain constraints have on Polaris's performance?
