News Release
Polaris Industries Media Contact: Marlys Knutson
2100 Highway 55 Phone: 763/542-0533
Medina, MN 55340-9770
marlys.knutson@polarisind.com
Investor Contact: Richard Edwards
Phone: 763/513-3477
richard.edwards@polarisind.com
POLARIS TO REALIGN MANUFACTURING OPERATIONS
Realignment expected to improve long-term competitive positioning resulting from logistical and
production cost savings while expediting delivery times
MINNEAPOLIS (May 20, 2010) – In an effort to improve its long-term competitive positioning, increase
operational efficiencies and position the company for future growth, Polaris Industries Inc. (NYSE: PII) today
announced plans to realign its operations and refocus on its core strategic manufacturing processes. The
Company will create manufacturing centers of excellence for Polaris Products by enhancing the existing
Roseau, Minn. and Spirit Lake, Iowa, production facilities and establishing a new facility in Mexico.
The Company is currently evaluating several possible locations in the Monterrey/Saltillo area of
Mexico for the new facility. The realignment will lead to the eventual sale or closure of Polaris’ Osceola,
Wisconsin manufacturing operations over time. The realignment allows the Company to dedicate capital for
strategic investments in painting, welding and assembly operations by outsourcing certain non-strategic
component manufacturing processes. The Mexico facility is expected to maintain Polaris’ industry leading
quality while improving the Company’s on-time delivery to customers and provide significant savings in
logistical and production costs.
“While this was a difficult decision for us, given the impact on our employees at the Osceola
facility, we believe the creation of these manufacturing centers of excellence will strengthen our company
over the long-term and enable us to maintain our lead in a competitive market,” said Scott Wine, CEO,
Polaris Industries Inc. “Pursuing opportunities in new markets outside the United States, while concurrently
evaluating our cost structure to improve our long-term competitive positioning are key components to our
growth strategy. This decision was based on a thorough review of our worldwide operations and will allow us
to improve our ability to meet the quality, delivery and cost standards desired by our dealers and customers.”
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The realignment of Polaris’ manufacturing footprint will strengthen the Company’s position in
the powersports industry, as it will enable Polaris to have production facilities closer to customers in the
southern United States and global markets the Company currently serves or expects to serve in the future.
When the manufacturing realignment is completed the Company will have capabilities to manufacture ORVs
(both ATVs and side-by-side vehicles), which represents more than two-thirds of the Company’s sales, in
multiple locations depending on customer demand.
Snowmobile assembly will remain in the Roseau facility and Victory motorcycle assembly will
remain in the Company’s Spirit Lake facility. As part of the manufacturing realignment, certain Osceola
manufacturing processes will be moved into the Roseau, Spirit Lake and Mexico facilities to more effectively
utilize Company resources. In addition, certain manufacturing processes and equipment are intended to be
sold to suppliers whom will continue to supply components to Polaris. Other non-strategic component
manufacturing operations currently performed in the Osceola facility will be outsourced. The realignment
will begin immediately and is scheduled to be complete in 2012. The Company will look to have the new
production facility in Mexico operational beginning in the first half of 2011.
Polaris is currently in negotiations with several suppliers to sell certain non-strategic component
manufacturing processes and equipment in the Osceola facility. If successful, Polaris’ intent is that the
suppliers will continue to manufacture these components in the current Osceola location. Polaris will operate
the Osceola manufacturing facilities during the transition period. Upon completion of the transition, Polaris
will provide the affected employees severance benefits and work closely with the Wisconsin Department of
Labor and other state and local agencies to offer employment assistance and other services.
The Company expects to record pretax transition charges to its income statement in the range of
$20 million to $25 million and incur capital expenditures up to $35 million over the next few years related to
the implementation of the manufacturing realignment. The Company expects the Osceola facility exit costs,
comprising largely of one-time employee termination benefits, to amount to approximately a third of the total
transition charges, while the start-up costs related to the new Mexico facility and other centers of excellence
will comprise the balance. Transition charges to be incurred in calendar year 2010 are expected to be in the
range of $8 to $10 million. The Company’s current earnings guidance of earnings per share of $3.48 to $3.60
for the full year 2010 will not change as a result of this announcement. The realignment is expected to
generate pre-tax costs and expense savings in excess of $30 million on an annual basis when the transition has
been completed. The Company expects to begin realizing some of the cost savings as early as 2011.
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Conference Call and Webcast
On Friday, May 21, 2010 at 10:00 AM (CT) Polaris Industries Inc. will host a conference call and
webcast to discuss Polaris’ manufacturing realignment. The call will be hosted by Scott Wine, CEO. A link to
the audio webcast will be posted on the Investor Relations page of the Polaris web site at
www.polarisindustries.com/irhome. To listen to the conference call by phone, dial 800-374-6475 in the U.S. and
Canada, or 973-200-3967 Internationally. The Conference ID is #75828289.
A replay of the conference call will be available approximately two hours after the call for a oneweek
period by accessing the same link on our website, or by dialing 800-642-1687 in the U.S. and Canada,
or 706-645-9291 Internationally.
About Polaris
With annual 2009 sales of $1.6 billion, Polaris designs, engineers, manufactures and markets off-road
vehicles (ORVs), including all-terrain vehicles (ATVs) and the Polaris RANGER™, snowmobiles and
Victory motorcycles for recreational and utility use and has recently introduced a new on-road electric
powered neighborhood vehicle.
Polaris is a recognized leader in the snowmobile industry; and one of the largest manufacturers of
ORVs in the world. Victory motorcycles, established in 1998 and representing the first all-new Americanmade
motorcycle from a major company in nearly 60 years, are rapidly making impressive in-roads into the
cruiser and touring motorcycle marketplace. Polaris also enhances the riding experience with a complete line
of Pure Polaris apparel, accessories and parts, available at Polaris dealerships.
Polaris Industries Inc. trades on the New York Stock Exchange under the symbol “PII,” and the
Company is included in the S&P Small-Cap 600 stock price index.
Information about the complete line of Polaris products, apparel and vehicle accessories are available
from authorized Polaris dealers or anytime from the Polaris homepage at
www.polarisindustries.com.