Polaris (PII) Q4 2009 earnings summary

Executive summary

• FY 2009 sales fell 20% to $1,565.9 million and net income declined 14% to $101.0 million; gross margin expansion and cost controls partly cushioned the downturn.

• Q4 sales were $471.8 million, net income $43.9 million, and diluted EPS $1.31, compared with $523.6 million, $36.2 million, and $1.11 in Q4 2008.

Financial highlights

• FY sales were $1,565.9 million versus $1,948.3 million; gross profit was $393.2 million versus $445.7 million.

• Operating income was $165.0 million versus $182.8 million; net income was $101.0 million versus $117.4 million, and diluted EPS was $3.05 versus $3.50.

• Operating cash flow rose to $193.2 million from $175.7 million; cash and equivalents ended 2009 at $140.2 million versus $27.1 million.

Outlook and guidance

• 2010 capital expenditures, including tooling and R&D equipment, were expected at $50–$55 million; 2009 tooling for new product development totaled $21.2 million.

• Existing cash, expected operating cash flow, and available credit were considered sufficient for 2010 operations, dividends, repurchases, and capital spending.

• A Bobcat strategic alliance was expected to begin contributing to the bottom line in 2010; anticipated 2010 income from retail credit agreements was similar to 2009.

• Yen movements were expected to pressure 2010 cost of sales versus 2009; Canadian-dollar and other specified currency movements were expected to support sales and gross margins.