Victory Motorcycle sales increase 83% during first quarter

First Quarter Highlights:

–Sales grew 16% to $361.7 million from last year’s first quarter

–Net income increased 127% to $0.59 per diluted share, representing a first quarter record for Polaris

–Gross margin percentage for the first quarter 2010 increased 170 basis points to 26.2% due to lower product cost, higher selling prices and favorable currency movements

–Raising guidance for full year 2010 earnings to a range of $3.48 to $3.60 per diluted share, a 14% to 18% increase over full year 2009 on expected full year 2010 sales growth of 8 % to 11%

–The Polaris Board of Directors has approved the regular quarterly cash dividend of $0.40 per share payable May 17, 2010 to shareholders of record as of May 3, 2010

Polaris Industries Inc. /quotes/comstock/13*!pii/quotes/nls/pii (PII 64.85, +4.96, +8.28%) today reported record first quarter net income of $19.8 million, or $0.59 per diluted share for the quarter ended March 31, 2010. By comparison, 2009 first quarter net income was $8.5 million, or $0.26 per diluted share, which included an $0.18 per diluted share non-cash impairment charge on the Company’s investment in KTM. Sales for the first quarter 2010 totaled $361.7 million, an increase of 16 percent from last year’s first quarter sales of $312.0 million.

“Our first quarter results demonstrate that the investments we made throughout the economic downturn have prepared us well to accelerate growth in 2010. Our first quarter sales and earnings growth exceeded our expectations driven by solid execution of our long-term strategy, which includes successfully developing and marketing innovative new products and improving operational efficiencies across our business,” commented Scott Wine, Polaris’ Chief Executive Officer. “Total Company retail sales to consumers in North America grew nine percent during the first quarter, as we saw strong demand for our Off-Road vehicles and Victory motorcycles. Our international sales to customers outside of North America grew 41 percent in the quarter, with surprising strength in Europe and several developing markets. Polaris achieved strong market share improvements in ORV and Victory Motorcycles as our retail sales performance was notably stronger than overall industry retail sales, which remained weak through most of the first quarter.”

Wine continued, “Profitable growth is an important objective for Polaris, and we leveraged operational excellence to ensure that margin expansion accompanied our strong 16 percent organic growth in the quarter. The gross margin expansion realized during the quarter was the result of a number of operational initiatives including the utilization of our world-class engineering team to reduce product costs and our Max Velocity Program, which is enabling us to work with our dealers to drive retail sales and market share growth more efficiently.”

Wine concluded, “While we still have concerns about the strength of the economic recovery and our core powersports industry, I am confident in the ability of this Polaris team to capitalize on our investments in the development of innovative, high quality products, our international expansion efforts and the many exciting new market adjacencies that we are pursuing. We fully expect to deliver consistent long-term, sustainable growth and profitability for all stakeholders.”

2010 Business Outlook

Based on Polaris’ performance during the 2010 first quarter and expectations for the remainder of the year, the Company is increasing its full year sales and earnings guidance for 2010. The Company now expects full year 2010 earnings to be in the range of $3.48 to $3.60 per diluted share, an increase of between 14 and 18 percent when compared to earnings of $3.05 per diluted share for the full year 2009. Sales for the full year 2010 are now expected to grow in the range of 8 to 11 percent. For the second quarter of 2010, the Company expects total sales to increase in the range of 14 to 17 percent primarily due to continued strength in ORV, Victory motorcycles and international retail sales to consumers. Second quarter 2010 earnings are expected to be in the range of $0.63 to $0.67 per diluted share, an increase of 19 to 26 percent, compared to earnings of $0.53 per diluted share for the second quarter of 2009.

First Quarter Performance Summary

(in thousands except per share data)

Three Months ended March 31,

Product line Sales                  2010             2009             Change

Off-Road Vehicles                   $250,403      $   215,461      16   %

Snowmobiles                            5,554            8,166        -32  %

On-Road/Victory Motorcycles             25,353           13,836       83   %

Parts, Garments & Accessories           80,398           74,561       8    %

Total Sales                         $   361,708      $   312,024      16   %

Gross profit                        $   94,914       $   76,434       +24  %

Gross profit as a % of sales            26.2    %        24.5    %    +170 bpts

Operating expenses                  $   67,234       $   58,047       +16  %

Operating expenses as a % of sales      18.6    %        18.6    %    —

Operating Income                    $   31,936       $   22,791       +40  %

Operating Income as a % of sales        8.8     %        7.3     %    +150 bpts

Net income                          $   19,771       $   8,458        +134 %

Net income as a % of sales              5.5     %        2.7     %    +280 bpts

Diluted net income per share        $   0.59         $   0.26         +127 %

Off-Road vehicles (“ORV’) sales during the first quarter 2010, which includes sales of both core ATVs (all-terrain vehicles) and RANGER(TM) side-by-side vehicles, increased 16 percent from the first quarter 2009. This increase reflects significant market share gains for both ATVs and side-by-sides driven by new product offerings including the recently introduced RANGER RZR 4, the Company’s first 4-seat sport side-by-side. The Company’s increase in ORV retail sales and market share also benefited from the success of its go-to-market business model called Max Velocity Program (“MVP”), which is currently in place with approximately 50 percent of the North American ORV dealer volume. North American retail sales to consumers for ORVs increased nearly 20 percent for the 2010 first quarter from the first quarter last year, with side-by-side vehicle retail sales increasing significantly while core ATV retail sales were about flat. Retail sales trends improved sequentially each month during the first quarter of 2010. North American dealer inventories of ORVs were down significantly during the 2010 first quarter, declining 34 percent when compared to 2009 first quarter levels. Sales of ORV to customers outside of North America increased over 40 percent in the first quarter 2010 when compared to the first quarter 2009, due to market share gains in both ATVs and side-by-side vehicles, positive mix benefit as more higher priced side-by-side vehicles were sold, higher selling prices and positive currency benefit from the weaker US dollar.

Snowmobile sales totaled $5.6 million for the 2010 first quarter compared to $8.2 million for the first quarter of 2009. The first quarter is historically a seasonally low quarter for snowmobile shipments. The decrease in sales was primarily the result of timing of shipments in the 2010 first quarter compared to the first quarter last year. Season-end North American dealer inventories of snowmobiles at March 31, 2010 are at acceptable levels. During the quarter the Company introduced 11 new model year 2011 snowmobiles with industry-leading innovation and technology including additional models with the award winning PRO-RIDE(TM) progressive rear suspension, reduced vehicle weight, improved durability and increased horsepower.

Sales of the On-Road division, which primarily consists of Victory motorcycles, increased 83 percent during the first quarter of 2010 when compared to the same period in 2009. This marks the 2nd straight quarter of market share gains and retail sales growth for Victory and reflects the acceptance of the new model year 2010 motorcycles including the new Cross Country(TM) and Cross Roads(TM) touring models. The heavyweight cruiser and touring motorcycle industry remained weak during the quarter, but Victory continued to benefit from aggressive and innovative efforts to accelerate growth. Victory motorcycles had strong retail sales during the 2010 first quarter, increasing in the mid-teens percent range in North America compared to the first quarter last year, resulting in market share gains for the quarter. North American dealer inventory of Victory motorcycles declined 25 percent in the 2010 first quarter compared to 2009 comparable levels. During the 2010 first quarter, Polaris added additional dealers for its electric powered low emission vehicle, the Polaris Breeze(TM), to further penetrate the master planned community market segment.

Parts, Garments, and Accessories (“PG&A”) sales increased eight percent during the first quarter 2010 compared to the same period last year primarily due to increased RANGER(TM) side-by-side vehicle related PG&A sales.

Gross profit as a percentage of sales was 26.2 percent for the first quarter of 2010, an increase of 170 basis points from 24.5 percent for the first quarter of 2009. Gross profit dollars increased 24 percent to $94.9 million for the first quarter of 2010 compared to $76.4 million for the first quarter of 2009. The increase in gross profit dollars and the 170 basis points increase in the gross profit margin percentage in the first quarter 2010 resulted primarily from continued product cost reduction efforts, higher selling prices and favorable currency movements compared to the first quarter of last year.

Operating expenses for the first quarter 2010 increased 16 percent to $67.2 million or 18.6 percent of sales compared to $58.0 million or 18.6 percent of sales for the first quarter of 2009. Operating expenses in absolute dollars for the first quarter 2010 increased primarily due to the increase in incentive compensation plan expenses that were temporarily reduced last year during the extremely uncertain economic environment and the current higher stock price and higher expected profitability for 2010.

Income from financial services was $4.3 million during first quarter 2010 compared to $4.4 million in the first quarter of 2009.

The non-cash Impairment charge on securities held for sale was $0.0 for the first quarter 2010. In the first quarter 2009 the Company recorded a $9.0 million, pretax, or $0.18 per diluted share impairment charge on securities held for sale. During the first quarter 2009, the Company determined that the decline in the market value of the KTM shares owned by the Company was other than temporary and therefore recorded the decrease in the fair value of the investment as a charge to the income statement as of March 31, 2009.

Financial position and cash flow

Net cash provided by operating activities totaled $3.8 million for the first quarter ended March 31, 2010, a significant improvement from cash used for operating activities totaling $33.1 million in the first quarter of 2009. Higher net income and lower working capital requirements for the 2010 first quarter compared to the first quarter last year are the primary reasons for the increased cash provided by operating activities. Borrowings under the credit agreement were $200.0 million at March 31, 2010 compared to $244.0 million at March 31, 2009. Cash and cash equivalents improved to $124.4 million at March 31, 2010 compared to $17.9 million for the same period last year. The Company’s debt-to-total capital ratio was 48 percent at March 31, 2010, compared to 64 percent at the same time last year.

Dividend declared

The Polaris Board of Directors has authorized the payment of a regular quarterly cash dividend of $0.40 per share payable May 17, 2010 to shareholders of record as of May 3, 2010.

Conference Call and Webcast Presentation

Today at 9:00 AM (CT) Polaris Industries Inc. will host a conference call and webcast to discuss Polaris’ 2010 first quarter earnings results released this morning. The call will be hosted by Scott Wine, CEO, Bennett Morgan, President and COO, and Mike Malone, Vice President Finance and CFO. A slide presentation and link to the audio webcast will be posted on the Investor Relations page of the Polaris web site at www.polarisindustries.com/irhome approximately 30 minutes before the conference call begins.

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 #50080804.

A replay of the conference call will be available approximately two hours after the call for a one-week 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(TM), 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 American-made motorcycle from a major company in nearly 60 years, are making 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 is available from authorized Polaris dealers or anytime from the Polaris homepage at www.polarisindustries.com.

Except for historical information contained herein, the matters set forth in this news release, including management’s expectations regarding 2010 sales, shipments, net income, net income per share and cash flow, 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 product offerings, promotional activities and pricing strategies by competitors; warranty expenses; foreign currency exchange rate fluctuations; effects of the KTM relationship; environmental and product safety regulatory activity; effects of weather; commodity costs; uninsured product liability claims; uncertainty in the retail and wholesale credit markets; changes in tax policy and overall economic conditions, including inflation, consumer confidence and spending and relationships with dealers and suppliers. 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.

Source [Polaris]

Ducati “Second Skin” Promotion

Ducati North America is pleased to announce the “Monster Second Skin” promotion for all new purchases of Monster 1100 and 1100 S models. Customers who buy a Monster through June 30 will receive a FREE Monster Art Body Kit, allowing them to customize the look and attitude of their bike.

As the first motorcycle manufacturer to offer do-it-yourself interchangeable panels, Ducati produces artistic options that appeal to a wide range of enthusiasts. The kit includes a tank mudguard, micro-bikini fairing and seat covers in the color of the rider’s choice. Essentially, in as little as 10 minutes, riders can change the body color of their Monster daily to suit their mood and riding style.

The new Monster Art graphic options for the promotion include:

* “Giallo Ducati” Ducati Yellow
* “Lilla Glamour” Lilac
* “Arancione Scrambler” Ducati Scrambler Orange
* “Ducati Corse” Inspired by the new Ducati Corse logo
* “Imola 72” In honor of the Imola 200 winning 750SS
* “Darmah” Modeled after the legendary black and gold striping of the late seventies.
* “Isle of Mann 79” A tribute to Ducati’s 1978 Senior TT Win
* “Pantah” Ducati’s iconic logo from the eighties
* “Mach 1” A vibrant red in the spirit of the 1960’s
* “Sport 100” A historic blue from Ducati’s of the past

All of the new color choices and details on the promotion can be viewed at www.ducatiusa.com; along with the Monster 696, 1100 and the new Monster 796.

Harley-Davidson Beats Expectations with 1st Quarter Results

Boosted by Harley-Davidson’s Financial Services return to profitability, motorcycle retail sales that declined less than expected, and rising stock shares, Harley-Davidson released its 2010 First Quarter results with optimism today. The Motor Company’s first-quarter 2010 income from continuing operations was reported at $68.7 million, or $0.29 per share, which exceeded analysts’ projections of $0.22 per share. The three quarter slump of H-D’s Financial Services was broken by a reported first quarter operating income of $26.7 million, an increase of $15.5 million compared to the same quarter results from 2009. The improvement was said to be driven by improved credit performance in the retail motorcycle loan portfolio and by a lower cost of funds. And backed by the announcement of its first quarter results, Harley stocks jumped this morning with a $2.58 gain to $35.35, a rise of 7.9%.

“We are encouraged by our progress in the first quarter,” said Keith Wandell, President and Chief Executive Officer of Harley-Davidson, Inc. “We are seeing directional improvement in our dealers’ retail motorcycle sales as we enter the key selling season. At the same time, given the global economic uncertainty that still exists, we believe conditions will remain challenging throughout this year, and we will continue to factor that into how we manage the business.

Read Entire Story

Post Courtesy of Motorcycle USA, Editor Bryan Harley

Honda VFR800RR Bioblade

Belgium. The ‘land that God forgot’ is more famous for balding politicians and chocolates than inventions. Perhaps ‘Hercule Poirot’, the detective with the dodgy moustache and equally bizarre habit of stumbling upon random criminals isn’t the best example. But Belgians have been very successful inventors in the past, with the saxophone, the Big Bang Theory and asphalt just for starters. And last year, a couple of brave Belgians took a leap of faith to produce something else they believe the world wanted, the VFR800RR Bioblade.

Bikers world wide hadn’t been hoping, we had been expecting Honda to produce a V-Four-powered sports bike. Its stand at the Milan bike show in 2008 was adorned with V-Four signs, flanked by a spectacular collection of historic V-Four race bikes; the RC45, RC30 and NR750. Photographers were poised with their arms stretched skywards, lenses aimed over the heads of hundreds of waiting journalists. The focus of everyone’s attention was the veiled shape on stage and the promise of a new V-Four. But as the curtain dropped, so did our hopes for a V-Four powered sports bike. Honda’s new V-Four was a sport-tourer, the fresh for 2010 VFR1200F.

Read Entire Story

Post Courtesy of Motorcycle USA – Editor Janie Omorogbe

Victory Motorcycles Announces Finalists In True American Road Trip Promotion

MEDINA, Minn. – Today Victory Motorcycles announced the 10 lucky riders selected from a field of more than 350 entries to take part in Victory’s True American Road Trip this summer. Spanning the entire country, Victory accepted entries during the past two months before deciding on the 10 that best showed each rider’s creativity and passion for a great motorcycle road trip.

The 10 that were selected to take part in the True American Road Trip are: Allison Lins (Milltown, N.J.); Jayne Drinan (Gresham, Ore.); Dick Fox (Smithfield, Va.); Randy Stephenson (Southfield, Mich.); Shane Lautenslager (Tracy, Calif.); Kevin Fury (Westminster, Colo.); Matt Cole (Anacortes, Ore.); Don Williams (St. Cloud, Fla.); Brandon Carlson (Cottonwood Heights, Utah); Sydney Sheppard (Sacramento, Calif.).

“The True American Road Trip is the physical manifestation of the unique relationship Victory Motorcycles shares with riders across the country,” said Josh Kurcinka, marketing manager for Victory Motorcycles. “Victory understands the power of a great ride on a great bike. This program allows us to help 10 people fuel their passion with the open road, and a chance to tell their story through the road trips they construct.”

The 10 riders each will receive a complimentary lease for the remainder of 2010 for one of two new touring motorcycles, the Victory Cross Country™ or Victory Cross Roads™, touring motorcycles that uphold Victory’s reputation for creating class-leading bikes featuring creative styling and innovative engineering. Each rider will plan and execute monthly road trips in May, June, July and August documenting their experience through a variety of online channels, such as YouTube and Flickr.

As each of the road trips are completed, photos, videos and text captured by the riders will be shared on www.TrueAmericanRoadTrip.com. Riders will highlight anything and everything from their trips to share with online audience, allowing anyone to experience the ride through a variety of media without actually having been there. In addition, visitors to the site will be able to view maps of the routes traveled for each road trip, allowing the trip to be recreated by anyone and, hopefully, inspiring riders to create their own.

“There’s nothing better than experiencing unique things America has to offer on the back of an American-made bike,” said Kurcinka. “This summer, Victory will not only provide the opportunity for 10 riders to do exactly that, but offer the entire world the chance to follow along online, soaking up all the great sights and sounds this country has to offer from the comfort of their own home.”

For more information, visit http://www.TrueAmericanRoadTrip.com.

About Polaris

With annual 2008 sales of $1.9 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.

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 American-made motorcycle from a major company in nearly 60 years, is 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, is available from authorized Polaris dealers or anytime from the Polaris homepage at www.polarisindustries.com.

Harley-Davidson brings back Super Ride – Test Drive Before you Buy.

2010 Sportster Forty-Eight - Super Ride

2010 Sportster Forty-Eight - Harley-Davidson

Harley-Davidson and their dealers are bringing back their test ride program, Super Ride. Tough economic times may be playing a part in why Harley-Davidson has decided to bring back the program that allows potential buyers to test ride 2010 Harley-Davidson models. Motorcycle test rides are generally not allowed by most dealers as many motorcycle shoppers already know. The Super Ride program will start on April 1 and end on June 30th.

There are some restrictions to the Super Ride program.

You must have a valid motorcycle license to take the short test ride, among other requirements.
While this program is available to all Harley-Davidson dealers, some may decline to participate.

Check with your local Harley-Davidson dealer to see if they are participating in the Super Ride program.

Source [JS Online, Read Entire Story]

Harley-Davidson unveils newest bike aimed at a younger demographic

Milwaukee based Harley-Davidson has just unveiled a new bike designed to appeal to the next generation of riders and this bike is not your father’s Harley-Davidson. FOX6 Reporter Mike Lowe shows you the newest bike in the Dark Custom series.

Source [Fox 6 Now]

The Governator Promoting Electric Motorcycles

Governor Arnold Schwarzenegger on the Zero Motorcycle

Photo: Zero Motorcycles

California Governor Arnold Schwarzenegger is promoting California’s recent approval of a statewide rebate program which gives consumers $1,500 off the purchase of an electric cycle. To help promote the new rebate, Schwarzenegger along with CEO of Zero Motorcycles, Gene Banman, held a press conference in front of the State Capital in Sacramento. At the press conference, Zero Motorcycles displayed their 2010 models and gave the Governor a personal demonstration of their industry leading bikes.

We are not too sure if the Terminator will be riding a Zero Motorcycle in future movies, but the Governator seems excited about them.

“Zero electric motorcycles are very important technology and this is great for California because this is an ideal place to ride motorcycles,” said Governor Schwarzenegger. “I love the financial side of these motorcycles because they cost less then one cent per mile to operate and you get a 10% federal tax credit plus a California rebate of $1,500. That equates to a 25 percent price reduction making these electric motorcycles affordable for anybody.”

“We are honored to be here and to have received the support of Governor Schwarzenegger. We are a California company creating California jobs and are extremely proud the Governor’s office recognized us for our efforts,” said Gene Banman, CEO, Zero Motorcycles.

Visit Zero Motorcycles for more information about their products.

There is also a good article about the Zero Motorcycle written by Bryan Harley, who is the Cruiser & Custom Editor of Motorcycle USA.

Source [USA Today]

Rumors of a Harley Takeover

March 16, 2010 by  
Filed under Manufacturers

Rumors are floating around that private equity firms are bidding for Harley-Davidson. It looks like some rumors are circulating that several private equity groups are proposing to buy Harley-Davidson. The news has caused Harley’s stock price to rise throughout the day. I don’t know if the rumors are true and if a deal will happen. Just hope Cerberus isn’t one of the bidders.

Source [The Street, Read Entire Story]

Times may be tough at Harley-Davidson, but things are looking up for their CEO.

March 13, 2010 by  
Filed under Manufacturers

Harley Davidson's CEO - Keith WandellAs with most companies, times have been a little rough for Harley-Davidson during the Great Recession. In the past year they have laid off workers, closed some factories, shut down the Buell brand, and lost $218.7 million in the fourth quarter of last year. I am not too sure if Harley-Davidson is starting to turn the corner yet, but hopefully they are.

Things went pretty well for their new CEO, Keith Wandell, during the first eight months of running the troubled motorcycle manufacturer. According to a regulatory filing he received a pay package of $6.4 million dollars for being the head hog during 2009. Keith E. Wandell received a base salary of $650,025 from his start date of May 1 through the end of 2009, according to proxy a filing with the Securities and Exchange Commission. He received a bonus of $780,030 and stock and option awards valued at $4.9 million at the time they were issued.

There is no doubt that Mr. Wandell has a tough road ahead as Harley-Davidson’s boss as he acknowledged that the U.S. motorcycle market will likely take more than a year to rebound fully, if it ever does, amid a pullback in discretionary spending, he said in an interview back in January.

Source [The Associated Press, Read Entire Story]

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