Polaris Third Quarter 2022 Earnings Results
Polaris Inc. (NYSE: PII) reported a robust third quarter in 2022, achieving sales of $2,341 million, a 32% increase compared to last year. Reported diluted earnings per share (EPS) from continuing operations rose to $3.17, marking a 69% rise. This performance was driven by higher volumes and strong pricing, despite an 8% decline in retail sales due to ongoing supply chain challenges. The company maintained its 2022 sales guidance increase of 15% to 16% and adjusted diluted EPS guidance of $10.10 to $10.30.
- Sales of $2,341 million, up 32% YOY.
- Diluted EPS from continuing operations at $3.17, up 69% YOY.
- Adjusted EPS at $3.25, up 64% YOY.
- Gross profit margin increased to 23.9%.
- 2022 sales guidance raised to 15%-16% growth.
- Retail sales down 8% due to supply chain challenges.
- Sales decline in Recreation Off-Road demand.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
-
Third quarter sales were
$2,341 million
-
Third quarter reported diluted earnings per share from continuing operations was
$3.17 $3.25
- Primary drivers in the quarter were higher volumes, strong pricing and favorable mix, supported by modest sequential improvement in supply chain
- Retail sales for the quarter were down eight percent versus last year despite strong performance in Motorcycles, primarily driven by continued supply chain challenges and softness in Recreation Off-Road demand
KEY FINANCIAL DATA
(in millions, except per share data) |
|
|
|
|
|
|
|
|
||||||
Quarter ending |
Reported |
|
YOY % Chg. |
|
|
Adjusted* |
|
YOY % Chg. |
||||||
Sales |
$ |
2,340.6 |
|
|
32 |
% |
|
|
$ |
2,340.6 |
|
|
32 |
% |
Gross profit margin |
|
23.9 |
% |
|
+ 26 bps |
|
|
|
23.9 |
% |
|
+ 15 bps |
||
Total operating expenses |
$ |
317.0 |
|
|
16 |
% |
|
|
|
|
|
|||
Net income from continuing operations attributable to Polaris |
$ |
190.4 |
|
|
63 |
% |
|
|
$ |
195.1 |
|
|
58 |
% |
Adjusted EBITDA Margin |
|
|
|
|
|
|
13.7 |
% |
|
+ 153 bps |
||||
Diluted EPS from continuing operations attributable to Polaris |
$ |
3.17 |
|
|
69 |
% |
|
|
$ |
3.25 |
|
|
64 |
% |
|
|
|
|
|
|
|
|
|
||||||
*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
We maintained our focus on executing for customers, dealers and shareholders. Our results were bolstered by easing supply chain headwinds that enabled us to increase ship volumes and take advantage of our strong pricing strategy, resulting in record sales in the quarter. We believe we are well positioned to meet our commitments for the year, while our team remains highly vigilant and agile should indicators point to shifts in consumer behavior or new market dynamics. Looking forward, our diverse portfolio, commitment to innovation, strong financial position and track record of successfully navigating in various operating environments gives me incredible confidence in Polaris’ ability to deliver long-term profitable growth and shareholder value.
--
PERFORMANCE SUMMARY (Reported)
As reported, third quarter net income from continuing operations attributable to Polaris of
Gross profit margin increased 26 basis points to 23.9 percent. Adjusted gross profit margin of 23.9 percent increased 15 basis points driven by higher pricing.
Operating expenses were
SEGMENT HIGHLIGHTS (Reported)
|
Sales (in millions) |
|
Gross Profit Margin |
|||||||||||||
|
Q3 2022 |
|
Q3 2021 |
|
Change |
|
Q3 2022 |
|
Q3 2021 |
|
Change |
|||||
Off-Road |
$ |
1,746.4 |
|
$ |
1,316.2 |
|
33 |
% |
|
25.7 |
% |
|
22.3 |
% |
|
+340 bps |
On-Road |
$ |
334.0 |
|
$ |
257.8 |
|
30 |
% |
|
18.0 |
% |
|
15.0 |
% |
|
+293 bps |
Marine |
$ |
260.2 |
|
$ |
183.6 |
|
42 |
% |
|
21.5 |
% |
|
22.4 |
% |
|
-91 bps |
Off-Road segment results were primarily driven by these factors:
- Sales were driven by accelerated shipment volume, higher pricing and favorable product mix.
- Parts, Garments and Accessories (PG&A) sales increased 18 percent.
- Gross profit margin performance was driven by favorable pricing and higher volumes.
-
Polaris North America ORV unit retail sales were down high-single digits percent.
Estimated North America industry ORV unit retail sales were up low-single digits percent.
On-Road segment results were primarily driven by these factors:
- Sales were bolstered by sequential improvement in component availability driving increased shipments, stable demand, and higher pricing.
- PG&A sales increased 17 percent.
- Gross profit margin performance was driven by favorable product mix and higher volumes, which more than offset higher input costs and FX headwinds.
-
North America unit retail sales for Indian Motorcycle were up high-single digits percent.North America unit retail sales for the comparable motorcycle industry were down low-single digits percent.
Marine segment results were primarily driven by these factors:
- Sales results were driven by accelerated shipment volume, higher pricing and favorable product mix.
- Gross profit margin performance was driven by higher input costs offset by favorable product mix.
2022 BUSINESS OUTLOOK
The Company now expects 2022 sales to increase 15 percent to 16 percent versus prior guidance of 13 percent to 16 percent. The Company expects adjusted diluted EPS from continuing operations attributed to
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 from continuing operations attributed to
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 Company’s ability to successfully source necessary parts and materials on a timely basis; the ability of the Company to manufacture and deliver products to dealers to meet demand; the Company’s ability to identify and meet optimal dealer inventory levels; the Company’s ability to accurately forecast and sustain consumer demand; the Company’s ability to mitigate increasing input costs through pricing or other measures; the Company’s ability to successfully implement its manufacturing operations strategy and supply chain initiatives; product offerings, promotional activities and pricing strategies by competitors that make our products less attractive to consumers; he Company’s ability to strategically invest in innovation and new products, including as compared to our competitors; the Company’s ability to strategically invest in innovation and new products, including as compared to our competitors; economic conditions that impact consumer spending, including recessionary conditions; the severity and duration of the COVID-19 pandemic and the resulting impact on the Company’s business, supply chain, and the global economy; disruptions in manufacturing facilities; 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 and other litigation expenses incurred due to the nature of the Company’s business; claims and other litigation expenses incurred due to the nature of the Company’s business; uncertainty in the consumer retail and wholesale credit markets; performance of affiliate partners; changes in tax policy; relationships with dealers and suppliers; and the general overall global 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 |
|
Nine months ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Sales |
$ |
2,340.6 |
|
|
$ |
1,777.7 |
|
|
$ |
6,184.9 |
|
|
$ |
5,446.6 |
|
Cost of sales |
|
1,781.4 |
|
|
|
1,357.7 |
|
|
|
4,798.4 |
|
|
|
4,097.4 |
|
Gross profit |
|
559.2 |
|
|
|
420.0 |
|
|
|
1,386.5 |
|
|
|
1,349.2 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Selling and marketing |
|
120.7 |
|
|
|
112.0 |
|
|
|
347.8 |
|
|
|
348.4 |
|
Research and development |
|
98.5 |
|
|
|
84.8 |
|
|
|
266.1 |
|
|
|
249.1 |
|
General and administrative |
|
97.8 |
|
|
|
76.3 |
|
|
|
258.7 |
|
|
|
240.8 |
|
Total operating expenses |
|
317.0 |
|
|
|
273.1 |
|
|
|
872.6 |
|
|
|
838.3 |
|
Income from financial services |
|
12.1 |
|
|
|
11.3 |
|
|
|
33.7 |
|
|
|
41.2 |
|
Operating income |
|
254.3 |
|
|
|
158.2 |
|
|
|
547.6 |
|
|
|
552.1 |
|
Non-operating expense: |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
20.1 |
|
|
|
10.7 |
|
|
|
46.8 |
|
|
|
33.0 |
|
Other (income) expense, net |
|
(7.4 |
) |
|
|
(0.1 |
) |
|
|
(13.9 |
) |
|
|
(5.4 |
) |
Income from continuing operations before income taxes |
|
241.6 |
|
|
|
147.6 |
|
|
|
514.7 |
|
|
|
524.5 |
|
Provision for income taxes |
|
50.9 |
|
|
|
30.4 |
|
|
|
107.9 |
|
|
|
119.0 |
|
Net income from continuing operations |
|
190.7 |
|
|
|
117.2 |
|
|
|
406.8 |
|
|
|
405.5 |
|
Income (loss) from discontinued operations, net of tax |
|
(3.5 |
) |
|
|
(2.4 |
) |
|
|
(11.9 |
) |
|
|
2.0 |
|
Loss from sale / impairment of discontinued operations, net of tax |
|
(0.6 |
) |
|
|
— |
|
|
|
(142.8 |
) |
|
|
— |
|
Net income |
|
186.6 |
|
|
|
114.8 |
|
|
|
252.1 |
|
|
|
407.5 |
|
Net income attributable to noncontrolling interest |
|
(0.3 |
) |
|
|
(0.2 |
) |
|
|
(0.5 |
) |
|
|
(0.4 |
) |
Net income attributable to |
$ |
186.3 |
|
|
$ |
114.6 |
|
|
$ |
251.6 |
|
|
$ |
407.1 |
|
|
|
|
|
|
|
|
|
||||||||
Amounts attributable to |
|
|
|
|
|
|
|
||||||||
Net income from continuing operations |
$ |
190.7 |
|
|
$ |
117.2 |
|
|
$ |
406.8 |
|
|
$ |
405.5 |
|
Less net income attributable to noncontrolling interest |
|
(0.3 |
) |
|
|
(0.2 |
) |
|
|
(0.5 |
) |
|
|
(0.4 |
) |
Net income from continuing operations attributable to |
|
190.4 |
|
|
|
117.0 |
|
|
|
406.3 |
|
|
|
405.1 |
|
Net income (loss) from discontinued operations attributable to |
|
(4.1 |
) |
|
|
(2.4 |
) |
|
|
(154.7 |
) |
|
|
2.0 |
|
Net income attributable to |
$ |
186.3 |
|
|
$ |
114.6 |
|
|
$ |
251.6 |
|
|
$ |
407.1 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
3.21 |
|
|
$ |
1.92 |
|
|
$ |
6.80 |
|
|
$ |
6.60 |
|
Discontinued operations |
$ |
(0.06 |
) |
|
$ |
(0.04 |
) |
|
$ |
(2.59 |
) |
|
$ |
0.03 |
|
Basic |
$ |
3.15 |
|
|
$ |
1.88 |
|
|
$ |
4.21 |
|
|
$ |
6.63 |
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
3.17 |
|
|
$ |
1.88 |
|
|
$ |
6.71 |
|
|
$ |
6.44 |
|
Discontinued operations |
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
$ |
(2.56 |
) |
|
$ |
0.04 |
|
Diluted |
$ |
3.10 |
|
|
$ |
1.84 |
|
|
$ |
4.15 |
|
|
$ |
6.48 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
59.2 |
|
|
|
61.0 |
|
|
|
59.8 |
|
|
|
61.4 |
|
Diluted |
|
60.0 |
|
|
|
62.3 |
|
|
|
60.6 |
|
|
|
62.9 |
|
CONSOLIDATED BALANCE SHEETS |
|||||
(In Millions), (Unaudited) |
|||||
|
|
|
|
||
|
|
|
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
318.9 |
|
$ |
309.7 |
Trade receivables, net |
|
329.5 |
|
|
231.5 |
Inventories, net |
|
1,929.4 |
|
|
1,645.5 |
Prepaid expenses and other |
|
158.3 |
|
|
106.1 |
Income taxes receivable |
|
98.7 |
|
|
0.3 |
Current assets held for sale |
|
— |
|
|
154.6 |
Total current assets |
|
2,834.8 |
|
|
2,447.7 |
Property and equipment, net |
|
957.9 |
|
|
886.8 |
Investment in finance affiliate |
|
58.6 |
|
|
31.4 |
Deferred tax assets |
|
150.1 |
|
|
159.7 |
|
|
907.6 |
|
|
948.7 |
Operating lease assets |
|
105.5 |
|
|
93.9 |
Other long-term assets |
|
78.9 |
|
|
80.5 |
Long-term assets held for sale |
|
— |
|
|
221.6 |
Total assets |
$ |
5,093.4 |
|
$ |
4,870.3 |
Liabilities and Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Current portion of debt, finance lease obligations and notes payable |
$ |
553.5 |
|
$ |
53.3 |
Accounts payable |
|
850.8 |
|
|
907.0 |
Accrued expenses |
|
772.9 |
|
|
721.7 |
Current operating lease liabilities |
|
22.2 |
|
|
20.0 |
Income taxes payable |
|
13.3 |
|
|
33.6 |
Current liabilities held for sale |
|
— |
|
|
109.2 |
Total current liabilities |
|
2,212.7 |
|
|
1,844.8 |
Long-term income taxes payable |
|
14.7 |
|
|
16.3 |
Finance lease obligations |
|
9.4 |
|
|
12.7 |
Long-term debt |
|
1,571.5 |
|
|
1,457.3 |
Deferred tax liabilities |
|
4.9 |
|
|
4.2 |
Long-term operating lease liabilities |
|
83.6 |
|
|
74.1 |
Other long-term liabilities |
|
165.2 |
|
|
172.9 |
Long-term liabilities held for sale |
|
— |
|
|
62.8 |
Total liabilities |
$ |
4,062.0 |
|
$ |
3,645.1 |
Deferred compensation |
|
12.0 |
|
|
11.5 |
Equity: |
|
|
|
||
Total shareholders’ equity |
|
1,016.9 |
|
|
1,211.8 |
Noncontrolling interest |
|
2.5 |
|
|
1.9 |
Total equity |
|
1,019.4 |
|
|
1,213.7 |
Total liabilities and equity |
$ |
5,093.4 |
|
$ |
4,870.3 |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In Millions), (Unaudited) |
|||||||
|
|
|
|
||||
|
Nine months ended |
||||||
|
2022 |
|
2021 |
||||
Operating Activities: |
|
|
|
||||
Net income |
$ |
252.1 |
|
|
$ |
407.5 |
|
(Income) loss from discontinued operations, net of tax |
|
11.9 |
|
|
|
(2.0 |
) |
Loss from sale / impairment of discontinued operations, net of tax |
|
142.8 |
|
|
|
— |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
169.9 |
|
|
|
162.2 |
|
Noncash compensation |
|
47.5 |
|
|
|
45.2 |
|
Noncash income from financial services |
|
(8.5 |
) |
|
|
(5.7 |
) |
Deferred income taxes |
|
11.9 |
|
|
|
17.1 |
|
Other, net |
|
(0.6 |
) |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Trade receivables |
|
(120.7 |
) |
|
|
8.7 |
|
Inventories |
|
(442.5 |
) |
|
|
(597.0 |
) |
Accounts payable |
|
82.9 |
|
|
|
154.4 |
|
Accrued expenses |
|
12.4 |
|
|
|
(104.4 |
) |
Income taxes payable/receivable |
|
(49.7 |
) |
|
|
17.8 |
|
Prepaid expenses and other, net |
|
30.0 |
|
|
|
31.6 |
|
Net cash provided by operating activities of continuing operations |
|
139.4 |
|
|
|
135.4 |
|
Net cash provided by (used for) operating activities of discontinued operations |
|
(25.8 |
) |
|
|
18.0 |
|
Net cash provided by operating activities |
|
113.6 |
|
|
|
153.4 |
|
Investing Activities: |
|
|
|
||||
Purchase of property and equipment |
|
(193.6 |
) |
|
|
(189.2 |
) |
Investment in finance affiliate, net |
|
(0.8 |
) |
|
|
33.7 |
|
Distributions from other affiliates |
|
0.7 |
|
|
|
— |
|
Proceeds from sale of businesses, net |
|
40.8 |
|
|
|
— |
|
Net cash used for investing activities of continuing operations |
|
(152.9 |
) |
|
|
(155.5 |
) |
Net cash used for investing activities of discontinued operations |
|
(5.3 |
) |
|
|
(10.1 |
) |
Net cash used for investing activities |
|
(158.2 |
) |
|
|
(165.6 |
) |
Financing Activities: |
|
|
|
||||
Borrowings under debt arrangements |
|
1,364.0 |
|
|
|
1,250.1 |
|
Repayments under debt arrangements |
|
(1,028.0 |
) |
|
|
(1,176.4 |
) |
Repurchase and retirement of common shares |
|
(378.5 |
) |
|
|
(411.3 |
) |
Cash dividends to shareholders |
|
(113.5 |
) |
|
|
(115.2 |
) |
Proceeds from stock issuances under employee plans |
|
30.7 |
|
|
|
151.7 |
|
Net cash used for financing activities |
|
(125.3 |
) |
|
|
(301.1 |
) |
Impact of currency exchange rates on cash balances |
|
(24.5 |
) |
|
|
(6.9 |
) |
|
|
|
|
||||
Net decrease in cash, cash equivalents and restricted cash |
|
(194.4 |
) |
|
|
(320.2 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
529.1 |
|
|
|
657.5 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
334.7 |
|
|
$ |
337.3 |
|
|
|
|
|
||||
The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets: |
|
|
|
||||
Cash and cash equivalents |
$ |
318.9 |
|
|
$ |
309.7 |
|
Current assets held for sale |
|
— |
|
|
|
6.8 |
|
Other long-term assets |
|
15.8 |
|
|
|
20.8 |
|
Total |
$ |
334.7 |
|
|
$ |
337.3 |
|
NON-GAAP RECONCILIATION OF RESULTS |
|||||||||||||||
(In Millions, Except Per Share Data), (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Gross profit |
|
559.2 |
|
|
|
420.0 |
|
|
|
1,386.5 |
|
|
|
1,349.2 |
|
Restructuring & realignment (2) |
|
— |
|
|
|
2.1 |
|
|
|
0.2 |
|
|
|
6.0 |
|
Adjusted gross profit |
|
559.2 |
|
|
|
422.1 |
|
|
|
1,386.7 |
|
|
|
1,355.2 |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations before income taxes |
|
241.6 |
|
|
|
147.6 |
|
|
|
514.7 |
|
|
|
524.5 |
|
Distributions from other affiliates (1) |
|
(0.7 |
) |
|
|
— |
|
|
|
(0.7 |
) |
|
|
— |
|
Restructuring & realignment (2) |
|
1.2 |
|
|
|
2.7 |
|
|
|
5.5 |
|
|
|
6.6 |
|
Intangible amortization (3) |
|
4.5 |
|
|
|
5.5 |
|
|
|
14.3 |
|
|
|
16.9 |
|
Class action litigation expenses (4) |
|
1.4 |
|
|
|
0.3 |
|
|
|
2.5 |
|
|
|
8.7 |
|
Adjusted Income from continuing operations before income taxes |
|
248.0 |
|
|
|
156.1 |
|
|
|
536.3 |
|
|
|
556.7 |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations attributable to |
|
190.4 |
|
|
|
117.0 |
|
|
|
406.3 |
|
|
|
405.1 |
|
Distributions from other affiliates (1) |
|
(0.7 |
) |
|
|
— |
|
|
|
(0.7 |
) |
|
|
— |
|
Restructuring & realignment (2) |
|
0.9 |
|
|
|
2.1 |
|
|
|
4.2 |
|
|
|
5.0 |
|
Intangible amortization (3) |
|
3.5 |
|
|
|
4.2 |
|
|
|
10.9 |
|
|
|
12.9 |
|
Class action litigation expenses (4) |
|
1.0 |
|
|
|
0.2 |
|
|
|
1.9 |
|
|
|
6.6 |
|
Adjusted net income from continuing operations attributable to |
|
195.1 |
|
|
|
123.5 |
|
|
|
422.6 |
|
|
|
429.6 |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Diluted EPS from continuing operations attributable to |
$ |
3.17 |
|
|
$ |
1.88 |
|
|
$ |
6.71 |
|
|
$ |
6.44 |
|
Distributions from other affiliates (1) |
|
(0.01 |
) |
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
Restructuring & realignment (2) |
|
0.01 |
|
|
|
0.03 |
|
|
|
0.07 |
|
|
|
0.08 |
|
Intangible amortization (3) |
|
0.06 |
|
|
|
0.07 |
|
|
|
0.18 |
|
|
|
0.21 |
|
Class action litigation expenses (4) |
|
0.02 |
|
|
|
— |
|
|
|
0.03 |
|
|
|
0.10 |
|
Adjusted EPS from continuing operations attributable to |
$ |
3.25 |
|
|
$ |
1.98 |
|
|
$ |
6.98 |
|
|
$ |
6.83 |
|
|
|
|
|
|
|
|
|
||||||||
Sales |
$ |
2,340.6 |
|
|
$ |
1,777.7 |
|
|
$ |
6,184.9 |
|
|
$ |
5,446.6 |
|
|
|
|
|
|
|
|
|
||||||||
Net Income from continuing operations |
$ |
190.7 |
|
|
$ |
117.2 |
|
|
$ |
406.8 |
|
|
$ |
405.5 |
|
Provision for income taxes |
|
50.9 |
|
|
|
30.4 |
|
|
|
107.9 |
|
|
|
119.0 |
|
Interest expense |
|
20.1 |
|
|
|
10.7 |
|
|
|
46.8 |
|
|
|
33.0 |
|
Depreciation |
|
51.7 |
|
|
|
48.8 |
|
|
|
155.6 |
|
|
|
141.2 |
|
Intangible amortization (3) |
|
4.5 |
|
|
|
5.5 |
|
|
|
14.3 |
|
|
|
16.9 |
|
Distributions from other affiliates (1) |
|
(0.7 |
) |
|
|
— |
|
|
|
(0.7 |
) |
|
|
— |
|
Restructuring & realignment (2) |
|
1.2 |
|
|
|
2.7 |
|
|
|
5.5 |
|
|
|
6.6 |
|
Class action litigation expenses (4) |
|
1.4 |
|
|
|
0.3 |
|
|
|
2.5 |
|
|
|
8.7 |
|
Adjusted EBITDA |
$ |
319.8 |
|
|
$ |
215.6 |
|
|
$ |
738.7 |
|
|
$ |
730.9 |
|
Adjusted EBITDA Margin |
|
13.7 |
% |
|
|
12.1 |
% |
|
|
11.9 |
% |
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
||||||||
(1) Represents distributions received related to an impaired investment held by the Company |
|||||||||||||||
(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 |
|||||||||||||||
RECONCILIATION OF GAAP OPERATING CASH FLOW TO NON-GAAP FREE CASH FLOW |
||||||||
(In Millions), (Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
Nine months ended |
||||||
|
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
Net cash provided by operating activities of continuing operations |
|
$ |
139.4 |
|
|
$ |
135.4 |
|
Purchase of property and equipment |
|
|
(193.6 |
) |
|
|
(189.2 |
) |
Investment in finance affiliate, net |
|
|
(0.8 |
) |
|
|
33.7 |
|
Free cash flow |
|
$ |
(55.0 |
) |
|
$ |
(20.1 |
) |
|
||||||||
NON-GAAP RECONCILIATION OF SEGMENT RESULTS |
||||||||||||
(In Millions), (Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|||||
|
Three months ended |
|
Nine months ended |
|||||||||
SEGMENT GROSS PROFIT |
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||
Off-Road segment gross profit |
$ |
449.2 |
|
|
$ |
293.8 |
|
$ |
1,062.1 |
|
$ |
1,020.9 |
No adjustment |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
Adjusted Off-Road segment gross profit |
|
449.2 |
|
|
|
293.8 |
|
|
1,062.1 |
|
|
1,020.9 |
|
|
|
|
|
|
|
|
|||||
On-Road segment gross profit |
|
60.1 |
|
|
|
38.7 |
|
|
154.7 |
|
|
129.2 |
No adjustment |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
Adjusted On-Road segment gross profit |
|
60.1 |
|
|
|
38.7 |
|
|
154.7 |
|
|
129.2 |
|
|
|
|
|
|
|
|
|||||
Marine segment gross profit |
|
55.9 |
|
|
|
41.2 |
|
|
169.0 |
|
|
135.0 |
No adjustment |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
Adjusted Marine segment gross profit |
|
55.9 |
|
|
|
41.2 |
|
|
169.0 |
|
|
135.0 |
|
|
|
|
|
|
|
|
|||||
Corporate segment gross profit |
|
(6.0 |
) |
|
|
46.3 |
|
|
0.7 |
|
|
64.1 |
Restructuring & realignment (1) |
|
— |
|
|
|
2.1 |
|
|
0.2 |
|
|
6.0 |
Adjusted Corporate segment gross profit |
|
(6.0 |
) |
|
|
48.4 |
|
|
0.9 |
|
|
70.1 |
|
|
|
|
|
|
|
|
|||||
Total gross profit |
|
559.2 |
|
|
|
420.0 |
|
|
1,386.5 |
|
|
1,349.2 |
Total adjustments |
|
— |
|
|
|
2.1 |
|
|
0.2 |
|
|
6.0 |
Adjusted total gross profit |
$ |
559.2 |
|
|
$ |
422.1 |
|
$ |
1,386.7 |
|
$ |
1,355.2 |
|
|
|
|
|
|
|
|
|||||
(1) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation |
||||||||||||
NON-GAAP ADJUSTMENTS |
Third Quarter 2022 Results & 2022 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 divesting of the GEM, Taylor-Dunn and
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 2022, Polaris recorded
2022 Adjusted Guidance
2022 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/20221025005253/en/
Investor Contact:
Source: Polaris
FAQ
What were Polaris Inc.'s Q3 2022 earnings results for stock symbol PII?
How did Polaris Inc.'s sales perform in Q3 2022 compared to last year?
What is Polaris Inc.'s guidance for 2022 sales and EPS?
What factors impacted Polaris Inc.'s retail sales in Q3 2022?
