Financial and Operational Highlights
First quarter reported and adjusted sales increased 39%
to $1,951 million
First quarter reported net income was $2.11 per share;
adjusted net income for the same period was $2.30 per share
Gross profit margin, reported and adjusted, for the first
quarter was 24.6% and 24.7%, up 378 basis and 352 basis points over
the prior year, respectively. The increase was primarily due to
lower promotional costs, partially offset by costs related to
supplier constraints
North American retail sales increased 70% for the quarter
compared to last year driven by broad-based strength across the
business
Market share improved for all segments during the
quarter; ORV, snowmobiles, motorcycles and boats
Polaris repurchased approximately 2.5 million shares of
Polaris stock during the quarter for $299.1 million
Polaris increased its full year 2021 sales and earnings
guidance and now expects earnings to be in the range of $9.00
to $9.25 per diluted share. Full year 2021 adjusted sales is now
expected to be up 18% to 21% over the prior year
Polaris Inc. (NYSE: PII):
Key Financial Data
(in millions, except per share data)
INCOME STATEMENT - Q1 March 31,
2021
Reported
YOY % Chg.
Adjusted*
YOY % Chg.
Sales
$
1,951.1
39%
$
1,951.1
39%
Net income attributable to Polaris
$
134.1
NM
$
145.6
NM
Diluted EPS
$
2.11
NM
$
2.30
NM
BALANCE SHEET - March 31, 2021
Reported
YOY % Chg.
Cash and cash equivalents
$
432.4
2%
Inventories, net
$
1,339.9
9%
Total debt, finance lease obligations and
notes payable
$
1,433.8
(34)%
Shareholders' equity
$
1,059.4
6%
CASH FLOW - YTD Q1 March 31,
2021
Reported
YOY % Chg.
Net cash provided by operating
activities
$
56.0
NM
Purchase of property & equipment
$
45.4
(3)%
Repurchase and retirement of common
shares
$
299.1
NM
Cash dividends to shareholders
$
38.6
2%
NM = Not meaningful
*Note: the results and guidance in this
release, including the highlights above, include references to
non-GAAP operating measures, which are identified by the word
“adjusted” preceding the measure. A reconciliation of GAAP /
non-GAAP measures can be found at the end of this release.
CEO Commentary
The strength of our brands and the agility and dedication of the
global Polaris team were on full display yet again this quarter,
building on our incredible momentum from 2020 and delivering
results that exceeded our expectations. Despite pandemic-related
supply chain constraints, logistical challenges, and North American
weather-related disruptions, sales across our business grew
double-digits as we leveraged our capabilities and scale as the
industry leader in powersports to deliver for our customers and
dealers. Industry-leading innovation remains core to who we are,
which was evident by the introduction of over 40 new or limited
edition models during the quarter, including 22 new snowmobiles and
a new turbo charged engine, 15 new and limited edition ORV models
and three all-new Indian Chief motorcycles celebrating 100 years of
one of the most historic and influential motorcycles of all time.
We also announced plans to launch an all-new full-size electric
RANGER by year-end, which further positions us to be the leader in
powersports electrification. We will continue to swiftly navigate
the challenges that may present themselves in the coming quarters,
while positioning Polaris for long-term growth and value-creation
for all our stakeholders.
-- Mike Speetzen, Interim Chief Executive Officer of Polaris
Inc.
First Quarter Performance Summary (Reported)
(in millions, except per share data)
Three months ended March
31,
2021
2020
Change
Sales
$
1,951.1
$
1,405.2
39
%
Gross profit
480.5
292.9
64
%
% of Sales
24.6%
20.8%
+378 bpts
Total operating expenses
312.5
307.1
2
%
% of Sales
16.0%
21.9%
-584 bpts
Income from financial services
16.2
19.7
(18)
%
% of Sales
0.8%
1.4%
-58 bpts
Operating income
184.2
5.5
NM
% of Sales
9.4%
0.4%
+905 bpts
Net income (loss) attributable to
Polaris
134.1
(5.4)
NM
% of Sales
6.9%
(0.4)%
+725 bpts
Diluted net income (loss) per
share
$
2.11
$
(0.09)
NM
NM = Not meaningful
Polaris Inc. (NYSE: PII) (the "Company") today released first
quarter 2021 results with reported sales of $1,951 million, up 39
percent from reported sales of $1,405 million for the first quarter
of 2020. The Company reported first quarter 2021 net income of $134
million, or $2.11 per diluted share, compared with a net loss of $5
million, or $(0.09) per diluted share, for the 2020 first quarter.
Adjusted net income for the quarter ended March 31, 2021 was $146
million, or $2.30 per diluted share compared to $14 million, or
$0.22 per diluted share in the 2020 first quarter.
Retail demand and industry tailwinds continued to be strong
during the quarter driving higher Company performance as both new
and existing customer growth accelerated across all segments and
regions of the Company.
Gross profit increased 64 percent to $481 million for the
first quarter of 2021 from $293 million in the first quarter of
2020. Reported gross profit margin was 24.6 percent of sales for
the first quarter of 2021, up 378 basis points compared to 20.8
percent of sales for the first quarter of 2020. The improvement in
gross profit was driven primarily by higher volumes and lower
promotional costs during the quarter, partially offset by higher
logistical costs and plant inefficiencies related to the
supply-chain constraints. Adjusted gross profit for the first
quarter 2021 was $483 million, or 24.7 percent of adjusted sales
compared to the first quarter of 2020 adjusted gross profit of $298
million, or 21.2 percent of sales. Adjusted gross profit for the
first quarter of 2021 and 2020 excludes the negative impact of $2
million and $5 million of restructuring and realignment costs,
respectively.
Operating expenses increased two percent for the first
quarter of 2021 to $313 million from $307 million in the same
period in 2020. Operating expenses were higher due to an increase
in administrative expenses.
Income from financial services was $16 million for the
first quarter of 2021, down 18 percent compared with $20 million
for the first quarter of 2020. The decrease was primarily the
result of a decrease in wholesale financing income during the
quarter due to lower dealer inventory levels.
Non-Operating Expenses (Reported)
(in millions)
Three months ended March
31,
2021
2020
Change
Interest expense
$
11.5
$
16.2
(29)%
Other (income) expense, net
$
(2.5
)
$
0.9
NM
Provision for income taxes
$
41.0
$
(6.2
)
NM
NM = Not meaningful
Interest expense was $12 million for the first quarter of
2021 compared to $16 million for the same period last year
primarily due to lower debt levels.
Other (income) expense, net, was $3 million of income in
the first quarter of 2021 compared to $1 million of expense in the
first quarter of 2020. Other (income) expense is the result of
currency exchange rate movements and the corresponding effects on
currency transactions related to the Company’s international
subsidiaries.
The provision for income taxes for the first quarter of
2021 was $41 million, or 23.4 percent of pretax income, compared
with a tax benefit of $6 million, or 53.8 percent of pretax loss,
for the first quarter of 2020. The decrease in the effective income
tax rate is primarily due to the impact of favorable excess tax
benefits related to share-based compensation on pretax income in
the first quarter of 2021 as compared to the tax benefit from the
pretax loss and the release of tax reserves due to the expiration
of certain statutes of limitations in the first quarter of
2020.
Product Segment Highlights (Reported)
(in millions)
Sales
Gross Profit
Q1 2021
Q1 2020
Change
Q1 2021
Q1 2020
Change
Off-Road Vehicles / Snowmobiles
$
1,232.2
$
823.7
50
%
$
327.4
$
201.7
62
%
Motorcycles
$
165.6
$
126.6
31
%
$
8.0
$
(1.0
)
NM
Global Adjacent Markets
$
124.8
$
98.3
27
%
$
32.9
$
26.9
22
%
Aftermarket
$
229.8
$
202.1
14
%
$
61.3
$
46.3
32
%
Boats
$
198.7
$
154.5
29
%
$
46.4
$
29.7
56
%
NM = Not meaningful
Off-Road Vehicles (“ORV”) and
Snowmobiles segment sales, including PG&A, totaled
$1,232 million for the first quarter of 2021, up 50 percent
compared to $824 million for the first quarter of 2020 driven by
broad based strength across ATVs, side-by-sides and Snowmobile
sales. PG&A sales for ORV and Snowmobiles combined increased 51
percent in the first quarter of 2021 compared to the first quarter
last year. Gross profit increased 62 percent to $327 million in the
first quarter of 2021, compared to $202 million in the first
quarter of 2020. Gross profit percentage increased 208 basis points
during the 2021 first quarter compared to the prior year due to
strong retail demand driving lower promotional and floor-plan
finance spending, partially offset by supply chain constraints.
ORV wholegood sales for the first
quarter of 2021 increased 39 percent. Polaris North American ORV
retail sales increased approximately 80 percent for the quarter
with side-by-side vehicles up high sixty percent and ATV vehicles
up about 100 percent. The North American ORV industry was up about
sixty percent compared to the first quarter last year.
Snowmobile wholegood sales in the
first quarter of 2021 were $75 million compared to $6 million in
the first quarter last year. Polaris snowmobile retail sales were
up low-twenty percent during the first quarter of 2021 and up
mid-twenty percent for the twelve-month season ending March 2021.
North American industry retail was up mid-single digits percent for
the first quarter and up mid-teens percent for the season ending
March 2021.
Motorcycles segment sales,
including PG&A, totaled $166 million, up 31 percent compared to
the first quarter of 2020, driven primarily from increased sales of
Slingshot, Indian Motorcycles, and related PG&A. Gross profit
for the first quarter of 2021 was $8 million compared to a $1
million loss in the first quarter of 2020. The increase in gross
profit margin was driven by volume and lower promotional costs
offset somewhat by increased costs from supply chain constraints
and negative product mix.
North American consumer retail sales for Indian Motorcycles
increased low sixty percent during the first quarter of 2021 in a
mid-to-heavy-weight two-wheel motorcycle industry that was up mid
thirty percent. North American consumer retail sales for Polaris'
motorcycle segment, including both Indian Motorcycle and Slingshot,
increased low-seventies percent during the first quarter of 2021.
North American consumer retail sales for the motorcycle industry
including both two-wheel and three-wheel increased high thirties
percent during the first quarter of 2021.
Global Adjacent Markets
segment sales, including PG&A, increased 27 percent to $125
million in the 2021 first quarter compared to $98 million in the
2020 first quarter driven by increases in demand in North America
and EMEA. Gross profit increased 22 percent to $33 million or 26.3
percent of sales in the first quarter of 2021, compared to $27
million or 27.4 percent of sales in the first quarter of 2020.
Gross profit percentage decreased during the quarter primarily due
to negative product mix offset somewhat by higher pricing.
Aftermarket segment sales of
$230 million in the 2021 first quarter increased 14 percent
compared to $202 million in the 2020 first quarter. Transamerican
Auto Parts (TAP) sales of $193 million in the first quarter of 2021
increased nine percent compared to $177 million in the first
quarter of 2020. The Company's other aftermarket brands sales were
up 45 percent compared to the first quarter of 2020. Gross profit
increased 32 percent to $61 million or 26.7 percent of sales in the
first quarter of 2021, compared to $46 million or 22.9 percent of
sales in the first quarter of 2020. Gross profit percentage
improved during the quarter due to higher volume, improved product
mix and higher pricing.
Boats segment sales
increased 29 percent to $199 million in the 2021 first quarter
compared to $155 million in the 2020 first quarter, driven by sales
growth in all three brands, Bennington, Godfrey and Hurricane.
Gross profit increased 56 percent to $46 million or 23.4 percent of
sales in the first quarter of 2021, compared to $30 million or 19.2
percent of sales in the first quarter of 2020 due to increased
volume and positive product mix partially offset by increased
supply chain constraint costs.
Supplemental Data:
Parts, Garments, and Accessories
(“PG&A”) sales increased 49 percent for the 2021 first
quarter with all categories and business segments growing sales
during the quarter.
International sales to customers
outside of North America, including PG&A, totaled $288 million
for the first quarter of 2021, up 59 percent from the same period
in 2020. All regions realized significant sales increases year over
year.
Financial Position and Cash Flow
(in millions)
Three months ended March
31,
2021
2020
Change
Cash and cash equivalents
$
432.4
$
424.4
2
%
Net cash provided by (used for) operating
activities
$
56.0
$
(71.4
)
NM
Repurchase and retirement of common
shares
$
299.1
$
48.8
NM
Cash dividends to shareholders
$
38.6
$
38.0
2
%
Total debt, finance lease obligations and
notes payable
$
1,433.8
$
2,163.5
(34
)%
Debt to Total Capital Ratio
58
%
68
%
NM = Not meaningful
2021 Business Outlook
Given the 2021 first quarter results, and the expected continued
strong retail demand, the Company is increasing its full year sales
and earnings guidance and now expects adjusted net income to be in
the range of $9.00 to $9.25 per diluted share, compared with
adjusted net income of $7.74 per diluted share for 2020 with full
year 2021 sales now in the range of $8,300 to $8,500 million, up 18
to 21 percent.
Non-GAAP Financial Measures
This press release and our related earnings call contain certain
non-GAAP financial measures, consisting of “adjusted" sales, gross
profit, income before taxes, net income and net income per diluted
share as measures of our operating performance. Management believes
these measures may be useful in performing meaningful comparisons
of past and present operating results, to understand the
performance of its ongoing operations and how management views the
business. Reconciliations of reported GAAP measures to adjusted
non-GAAP measures are included in the financial schedules contained
in this press release. These measures, however, should not be
construed as an alternative to any other measure of performance
determined in accordance with GAAP.
Earnings Conference Call and Webcast
Today at 9:00 AM (CT) Polaris Inc. will host a conference call
and webcast to discuss the 2021 first quarter results released this
morning. The call will be hosted by Mike Speetzen, Interim CEO; and
Bob Mack, Interim CFO. The earnings presentation and link to the
webcast will be posted on the Polaris Investor Relations website at
ir.polaris.com. To listen to the conference call by phone, dial
1-877-883-0383 in the U.S., or 1-412-902-6506 internationally. The
Conference ID is 1811884. A replay of the conference call will be
available by accessing the same link on our website.
About Polaris
As the global leader in Powersports, Polaris Inc. (NYSE: PII)
pioneers product breakthroughs and enriching experiences and
services that have invited people to discover the joy of being
outdoors since our founding in 1954. With annual 2020 sales of $7.0
billion, Polaris’ high-quality product line-up includes the Polaris
RANGER®, RZR® and Polaris GENERAL™ side-by-side off-road vehicles;
Sportsman® all-terrain off-road vehicles; Indian Motorcycle®
mid-size and heavyweight motorcycles; Slingshot® moto-roadsters;
snowmobiles; and deck, cruiser and pontoon boats, including
industry-leading Bennington pontoons. Polaris enhances the riding
experience with parts, garments, and accessories, along with a
growing aftermarket portfolio, including Transamerican Auto Parts.
Polaris’ presence in adjacent markets includes military and
commercial off-road vehicles, quadricycles, and electric vehicles.
Proudly headquartered in Minnesota, Polaris serves more than 100
countries across the globe. www.polaris.com
Forward-looking Statements
Except for historical information contained herein, the matters
set forth in this presentation, are forward-looking statements that
involve certain risks and uncertainties that could cause actual
results to differ materially from those forward-looking statements.
Potential risks and uncertainties include such factors as the
severity and duration of the COVID-19 pandemic and the resulting
impact on the Company’s business, supply chain, and the global
economy; the Company’s ability to successfully implement its
manufacturing operations expansion and supply chain initiatives;
the Company’s ability to successfully source necessary parts and
materials and the ability of the Company to manufacture and deliver
products to dealers to meet increasing demand and to bring dealer
inventory levels back to optimal levels; the continuation of the
increasing consumer demand for the Company’s products; product
offerings, promotional activities and pricing strategies by
competitors; economic conditions that impact consumer spending;
disruptions in manufacturing facilities; acquisition integration
costs; product recalls and/or warranty expenses; product rework
costs; impact of changes in Polaris stock price on incentive
compensation plan costs; foreign currency exchange rate
fluctuations; environmental and product safety regulatory activity;
effects of weather; commodity costs; freight and tariff costs
(tariff relief or ability to mitigate tariffs); changes to
international trade policies and agreements; uninsured product
liability claims; uncertainty in the retail and wholesale credit
markets; performance of affiliate partners; changes in tax policy;
relationships with dealers and suppliers; and the general overall
economic, social and political environment. Investors are also
directed to consider other risks and uncertainties discussed in
documents filed by the Company with the Securities and Exchange
Commission. The Company does not undertake any duty to any person
to provide updates to its forward-looking statements.
The data source for retail sales figures included in this
release is registration information provided by Polaris dealers in
North America compiled by the Company or Company estimates and
other industry data sources. The Company must rely on information
that its dealers supply concerning retail sales, and other retail
sales data sources related to Polaris and the powersports industry,
and this information is subject to revision. Retail sales
references to total Company retail sales includes only ORV,
snowmobiles and motorcycles in North America unless otherwise
noted. (summarized financial data follows)
CONSOLIDATED STATEMENTS OF
INCOME (LOSS)
(In Millions, Except Per Share
Data) (Unaudited)
Three months ended March
31,
2021
2020
Sales
$
1,951.1
$
1,405.2
Cost of sales
1,470.6
1,112.3
Gross profit
480.5
292.9
Operating expenses:
Selling and marketing
145.9
150.2
Research and development
79.5
78.4
General and administrative
87.1
78.5
Total operating expenses
312.5
307.1
Income from financial services
16.2
19.7
Operating income
184.2
5.5
Non-operating expense:
Interest expense
11.5
16.2
Other (income) expense, net
(2.5
)
0.9
Income (loss) before income taxes
175.2
(11.6
)
Provision for income taxes
41.0
(6.2
)
Net income (loss)
134.2
(5.4
)
Net (income) loss attributable to
noncontrolling interest
(0.1
)
—
Net income (loss) attributable to Polaris
Inc.
$
134.1
$
(5.4
)
Net income (loss) per share attributable
to Polaris Inc. common shareholders:
Basic
$
2.16
$
(0.09
)
Diluted
$
2.11
$
(0.09
)
Weighted average shares outstanding:
Basic
62.0
61.9
Diluted
63.4
61.9
CONSOLIDATED BALANCE
SHEETS
(In Millions), (Unaudited)
March 31, 2021
March 31, 2020
Assets
Current assets:
Cash and cash equivalents
$
432.4
$
424.4
Trade receivables, net
237.2
167.9
Inventories, net
1,339.9
1,234.8
Prepaid expenses and other
123.2
112.2
Income taxes receivable
0.4
45.9
Total current assets
2,133.1
1,985.2
Property and equipment, net
879.0
886.1
Investment in finance affiliate
46.8
112.4
Deferred tax assets
158.6
90.9
Goodwill and other intangible assets,
net
1,070.8
1,478.4
Operating lease assets
118.9
110.0
Other long-term assets
106.5
100.9
Total assets
$
4,513.7
$
4,763.9
Liabilities and Equity
Current liabilities:
Current portion of debt, finance lease
obligations and notes payable
$
142.1
$
166.7
Accounts payable
869.1
556.1
Accrued expenses:
Compensation
148.8
79.2
Warranties
139.9
132.8
Sales promotions and incentives
111.9
186.5
Dealer holdback
95.4
121.1
Other
283.2
230.0
Current operating lease liabilities
33.6
36.9
Income taxes payable
32.9
3.7
Total current liabilities
1,856.9
1,513.0
Long-term income taxes payable
15.3
25.2
Finance lease obligations
13.6
14.3
Long-term debt
1,278.1
1,982.5
Deferred tax liabilities
4.3
3.4
Long-term operating lease liabilities
87.1
75.6
Other long-term liabilities
179.5
141.4
Total liabilities
$
3,434.8
$
3,755.4
Deferred compensation
17.9
6.7
Equity:
Total shareholders’ equity
1,059.4
1,001.6
Noncontrolling interest
1.6
0.2
Total equity
1,061.0
1,001.8
Total liabilities and equity
$
4,513.7
$
4,763.9
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In Millions), (Unaudited)
Three months ended March
31,
2021
2020
Operating Activities:
Net income (loss)
$
134.2
$
(5.4
)
Adjustments to reconcile net income (loss)
to net cash provided by (used for) operating activities:
Depreciation and amortization
59.6
62.4
Noncash compensation
8.9
11.9
Noncash income from financial services
(2.6
)
(7.8
)
Deferred income taxes
19.1
0.8
Changes in operating assets and
liabilities:
Trade receivables
14.2
18.0
Inventories
(169.7
)
(121.5
)
Accounts payable
90.7
106.3
Accrued expenses
(114.0
)
(116.2
)
Income taxes payable/receivable
15.6
(18.8
)
Prepaid expenses and other, net
—
(1.1
)
Net cash provided by (used for) operating
activities
56.0
(71.4
)
Investing Activities:
Purchase of property and equipment
(45.4
)
(46.8
)
Investment in finance affiliate, net
15.2
6.0
Net cash used for investing activities
(30.2
)
(40.8
)
Financing Activities:
Borrowings under debt arrangements /
finance lease obligations
95.4
939.4
Repayments under debt arrangements /
finance lease obligations
(111.3
)
(469.2
)
Repurchase and retirement of common
shares
(299.1
)
(48.8
)
Cash dividends to shareholders
(38.6
)
(38.0
)
Proceeds from stock issuances under
employee plans
129.3
2.3
Net cash provided by (used for) financing
activities
(224.3
)
385.7
Impact of currency exchange rates on cash
balances
(4.3
)
(4.9
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(202.8
)
268.6
Cash, cash equivalents and restricted cash
at beginning of period
657.5
196.3
Cash, cash equivalents and restricted
cash at end of period
$
454.7
$
464.9
The following presents the classification
of cash, cash equivalents and restricted cash within the
consolidated balance sheets:
Cash and cash equivalents
$
432.4
$
424.4
Other long-term assets
22.3
40.5
Total
$
454.7
$
464.9
NON-GAAP RECONCILIATION OF
RESULTS
(In Millions, Except Per Share
Data), (Unaudited)
Three months ended March
31,
2021
2020
Sales
$
1,951.1
$
1,405.2
No adjustment
—
—
Adjusted sales
1,951.1
1,405.2
Gross profit
480.5
292.9
Restructuring & realignment (1)
2.2
5.3
Adjusted gross profit
482.7
298.2
Income before taxes
175.2
(11.6
)
Restructuring & realignment (1)
2.2
11.8
Intangible amortization (2)
8.7
10.0
Class action litigation expenses (3)
4.2
3.2
Adjusted income before taxes
190.3
13.4
Net income attributable to Polaris
Inc.
134.1
(5.4
)
Restructuring & realignment (1)
1.7
9.0
Intangible amortization (2)
6.6
7.5
Class action litigation expenses (3)
3.2
2.5
Adjusted net income attributable to
Polaris Inc. (4)
145.6
13.6
Diluted EPS attributable to Polaris
Inc.
$
2.11
$
(0.09
)
Restructuring & realignment (1)
0.03
0.15
Intangible amortization (2)
0.11
0.12
Class action litigation expenses (3)
0.05
0.04
Adjusted EPS attributable to Polaris
Inc. (4)(5)
$
2.30
$
0.22
(1) Represents adjustments for corporate
restructuring, network realignment costs, and supply chain
transformation
(2) Represents amortization expense for
acquisition-related intangible assets
(3) Represents adjustments for class
action litigation-related expenses
(4) The Company used its estimated
statutory tax rate of 23.8% for the non-GAAP adjustments in 2021
and 2020, except for non-deductible items
(5) For the first quarter of 2020, the
Company used 61.9 million and 62.6 million weighted average shares
outstanding to determine Diluted EPS attributable to Polaris Inc.
and Adjusted EPS attributable to Polaris Inc., respectively. The
difference is the result of the exclusion of additional outstanding
stock options and certain shares issued under the Omnibus Plan from
the Diluted EPS attributable to Polaris Inc. calculation because
their effect would have been anti-dilutive as a result of the
Company's net loss during the first quarter of 2020.
NON-GAAP RECONCILIATION OF
SEGMENT RESULTS
(In Millions), (Unaudited)
Three months ended March
31,
SEGMENT GROSS
PROFIT
2021
2020
ORV/Snow segment gross profit
$
327.4
$
201.7
No adjustment
—
—
Adjusted ORV/Snow segment gross profit
327.4
201.7
Motorcycles segment gross
profit
8.0
(1.0
)
Restructuring & realignment (1)
—
0.7
Adjusted Motorcycles segment gross
profit
8.0
(0.3
)
Global Adjacent Markets (GAM) segment
gross profit
32.9
26.9
No adjustment
—
—
Adjusted GAM segment gross profit
32.9
26.9
Aftermarket segment gross
profit
61.3
46.3
No adjustment
—
—
Adjusted Aftermarket segment gross
profit
61.3
46.3
Boats segment gross profit
46.4
29.7
No adjustment
—
—
Boats segment gross profit
46.4
29.7
Corporate segment gross profit
4.5
(10.7
)
Restructuring & realignment (1)
2.2
4.6
Adjusted Corporate segment gross
profit
6.7
(6.1
)
Total gross profit
480.5
292.9
Total adjustments
2.2
5.3
Adjusted total gross profit
$
482.7
$
298.2
(1) Represents adjustments for corporate
restructuring, network realignment costs, and supply chain
transformation
NON-GAAP ADJUSTMENTS First Quarter 2021
Results & Full Year Guidance
Restructuring and Realignment Costs
Polaris announced in 2017 that it was making changes to its
network to consolidate production and distribution of like products
and better leverage plant capacity and embarked on a multi-phase
supply chain transformation initiative to continue to leverage its
supply chain as a strategic asset. The Company is also executing
certain corporate restructuring across the organization to increase
efficiency and focus its business including the wind-down of the
Rinker, Striper and Larson FX boat brands. For the first quarter of
2021, the Company has recorded combined costs totaling $2 million
which was included as a NON-GAAP adjustment.
Intangible amortization related to acquisitions
The Company uses an adjusted net income metric which excludes
intangible amortization from all historical business acquisitions.
The Company believes this treatment provides transparency into the
true, ongoing earnings performance of its business. For the first
quarter of 2021, Polaris recorded $9 million of intangible
amortization related to acquisitions as a NON-GAAP adjustment.
2021 Adjusted Guidance
2021 guidance excludes the pre-tax effect of supply chain
transformation, restructuring and network realignment costs of
approximately $5 million to $10 million, and approximately $5
million to $10 million for class action litigation-related
expenses. Intangible amortization of approximately $35 million
related to all acquisitions has also been excluded. The Company has
not provided reconciliations of guidance for adjusted diluted net
income per share, in reliance on the unreasonable efforts exception
provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company
is unable, without unreasonable efforts, to forecast certain items
required to develop meaningful comparable GAAP financial measures.
These items include restructuring and realignment costs and
acquisition integration costs that are difficult to predict in
advance in order to include in a GAAP estimate.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210427005304/en/
Investor Contact: Richard Edwards 763-513-3477 Media Contact:
Jess Rogers 763-513-3445
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