tidbits from the polaris stock holder meeting

 
Polaris held its annual stock holder meeting at its new Medina, Minnesota, facility today. While the official business was brief and uneventful, President Tom Tiller's commentary was quite interesting.

Polaris' stock showed a -5% return to investors for the past year. Tiller attributed the poor performance to the attention shift on Wall Street from traditional consumer durable good manufacturing companies to dot com and technology stocks. "Obviously we are disappointed with the performance," he said. "We will be working harder next year to turn that number around."

All Terrain Vehicles dominated Polaris' revenues last year, accounting for nearly 60% of its business, and the market is forecast to continue double digit growth for at least the next couple of years.

Polaris claims to be the only snowmobile manufacturer to have gained market share, despite the industry's 8% slide overall.

The Parts, Garments and Accessories business is still the company's strongest hope for large growth in the coming year. According to Tiller, last year Polaris offered 640 part numbers. This coming season, he hoped to raise that number to over a thousand different parts, garments and accessories. Through partnering with outside vendors, Polaris adds value to existing products by incorporating its licensed name and marketing ability. The result is premium branded goods which carry a strong draw for Polaris enthusiasts.

Polaris will continue to develop its financial services as another revenue stream. Last year its consumer division showed an 8% retail credit penetration, or roughly half of what Harley Davidson reported. "There is definitely growth potential for the company in this arena," commented Tiller.

The International sales initiative has already shown a 17% increase in the first quarter, Tiller reported.

He also stated, in no uncertain terms, that Polaris is committed to the personal watercraft business. "We have brought new, young blood into the PWC product line," said Tiller. "I am hopeful that we'll see a leveling off of the slump that market has been experiencing, and we'll begin an upswing in sales. It may not be dramatic, but I am confident it will turn for the better."

When asked about the National Parks Service ban on snowmobiles in the park lands and the environmental battles the sled industry is facing, he pointed toward the forthcoming EPA standards to be released this September. "We, as an industry, have been working very closely with the Federal EPA for many years to develop a set of emissions standards for our products. When the agency releases its final standards recommendations later this fall, I'm confident they'll be achievable and fair. We have a couple of options in development, and when we know for sure what the EPA is going to require, we'll finalize our development to be in compliance.

"Once the announcement is made," he continued, "there will be a one-year comments period, when concerned parties can voice their opinions about the proposed rules. After that period is up, I believe the EPA will give the industry two years to finalize its development, and the standards will be in effect for the 2004 product line. Polaris will have no trouble hitting that target."