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T H E # 1 B U S I N E S S M A G A Z I N E F O R T H E A M E R I C A N V- T W I N A N D C U S T O M M O T O R C Y C L E PA R T S I N D U S T RY
Polaris motorcycle sales up +23%
during second quarter; overall
company profits down by -11%
Polaris Industries Inc. has
reported second quarter
total sales of $1,130.8
million, up one percent from last
year’s second quarter sales of
$1,124.3 million.
Motorcycle segment sales, including
its respective PG&A sales, increased
23 percent in the 2016 second quarter
to $231.3 million. All brands grew
sales during the quarter. Gross profit
increased 63 percent to $39.8 million
or 17.2 percent of sales in the second
quarter of 2016, compared to $24.5
million or 13.1 percent of sales in the
second quarter of 2015.
North American consumer retail
demand for the Polaris motorcycle
segment, including Victory, Indian
Motorcycle and Slingshot, was up midteens percent during the 2016 second
quarter, while overall 900cc and above
motorcycle industry retail sales were
down mid-single digits percent in the
2016 second quarter.
Product availability for all three
motorcycle brands remained adequate
throughout the quarter as year-over-
P
year paint capacity at the company’s
Spirit Lake, Iowa motorcycle plant has
significantly improved.
Gross profit for the total company
decreased 11 percent to $284.5
million in the second quarter of 2016,
compared to $319.4 million in the
second quarter of 2015. As a
motorcycle sales
projected up
double-digits
percent for full year
percentage of sales, gross profit
declined 325 basis points to 25.2
percent of sales for the second quarter
of 2016, compared to 28.4 percent of
sales for the same period last year.
Negative currency movements, along
with increased warranty and
promotional costs and negative
product mix, were partially offset by
lower commodity costs and product
cost reduction efforts.
Operating expenses increased nine
percent to $188.0 million or 16.6
percent of sales for the second quarter
of 2016, compared to $173.1 million
or 15.4 percent of sales for the second
quarter of 2015. The change was
driven by increased research and
development expense for ongoing
product innovation and higher general
and administrative expense due to
increased legal expenses and other
costs related to the product recall
notices. These costs were partially
offset by ongoing operating cost
control initiatives.
Income from financial services was
$20.5 million during the second
quarter 2016, an increase of 16
percent compared to $17.6 million in
the second quarter of 2015. The
increase is attributable to a higher
penetration rate for retail financing
programs in the 2016 second quarter.
Net cash provided by operating
activities was $348.3 million for the six
months ended June 30, 2016,
Continued on page 12 >>>
UNLEASHING THE BEAST
Will Lincoln Industries' ownership of
Khrome Werks "unleash the beast"?
AUG 2016
ISSUE #205