polaris second quarter offers record sales and earnings

Polaris Industries Inc. reported net income totaling $17.1 million compared to $16.2 million for the second quarter of 2000, a six percent increase. Lower operating expenses and higher sales volume from snowmobiles and parts, garments and accessories contributed to the improvement in net income for the quarter. Sales for the quarter totaled a record $362.5 million, up five percent from last year's second quarter sales of $344.7 million.

Tom Tiller, Polaris' President and Chief Executive Officer, said: "We experienced higher sales in snowmobiles and sales of Polaris parts, garments and accessories continued its strong growth trend of recent periods. The improvements in these product lines more than offset the softness we are currently experiencing in some of our other businesses, particularly the ATV business."

Snowmobile sales remained strong during the quarter, increasing 30 percent over last year. Low season-ending dealer inventories, an extensive line of new models introduced for the upcoming season and the new early season sales program that allows consumers to customize their snowmobile, accounted for the increased sales.

"Our dealers and consumers are very excited about our new lineup of snowmobiles introduced for the 2001 - 2002 season," commented Tiller. "In addition, the ability to customize sleds to their liking has been a big hit with consumers. The tag line 'If you can dream it, we can build it' best characterizes this new program."

Parts, garments and accessories (PG&A) is Polaris' highest margin business Tiller stated. "We have put a lot of time and effort into making this business a bigger piece of our overall portfolio and we continue to see great results. PG&A will remain a growth driver for us."

Polaris' ATV sales declined six percent during the second quarter 2001 compared to the second quarter 2000 as the heavier than usual advertising and promotional activities by several competitors continued throughout the second quarter.

Addressing Polaris' expectations for the second half of the year, Tiller said, "We continue to reiterate our previously announced guidance of six to eight percent sales growth for the full year 2001. Earnings per share in the second half of the year is expected to accelerate to achieve our full year 2001 forecasted earnings per share goal of $3.80 to $4.00 per share, or 9 to 14 percent growth. Based on our current knowledge and experience in the markets we serve, we continue to believe the range for sales and earnings per share remain very achievable for the full year.

"The growth in sales and the acceleration in earnings per share growth in the second half of the year is anticipated to be driven by continued strength in snowmobiles along with solid growth in our PG&A business. Additionally, we expect continued expense savings from the cost control program implemented earlier this year. Based on our current line of product offerings and additional new products to be introduced in the fall, we are well positioned for continued growth in both sales and earnings this year and into the future."