Polaris 2010 Annual Report Download - page 6

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2
Scott W. Wine Bennett J. Morgan
Chief Executive Officer
Sincerely,
President and Chief Operating Officer
LETTER (CONT.)
OUR STRATEGY STATEMENT IS BOLD AND STRAIGHTFORWARD:
partnerships to provide channel and market access
and diversify our product base. Adding the Swissauto
engine and technology develop ment business to
our portfolio last spring was a prime example of
this strategy. While small in size, this acquisition
enhanced our Powertrain design capabilities
and offered access to new European products
and markets.
Adjacency growth for Polaris also has a large
organic component. Our partnership with Bobcat
began strong in 2010, as Polaris-built, Bobcat-
branded utility vehicles sold well in more than
500 Bobcat dealerships in North America. We see
vast potential in our strong relationship with the
Bobcat team. Polaris Defense is another important
adjacent-market opportunity. While our military
business generated lower-than-anticipated
sales and earnings in 2010, the team’s success in
developing new products, advanced technology and
stronger customer relationships positioned us well
for 2011 and beyond. Results of their work included
a $67 million multiyear award from the National
Guard and a healthy year-ending sales backlog.
As we seek to not only grow, but to grow profitably,
we remain laser-focused on ensuring that
Operations Are a Competitive Advantage. We
accelerated our LEAN initiatives to lower costs,
streamline production and further improve
product quality. Our devotion to this task was
apparent as we ramped up production to meet a
27 percent sales increase, while lowering warranty
costs and garnering higher net promoter scores.
Furthering these efforts, in 2010 we announced
a manufacturing realignment, which will add
assembly capability in Monterrey, Mexico, in 2011.
It will also enhance the existing Roseau, Minnesota,
and Spirit Lake, Iowa, production facilities, which
will have a significant impact on product cost and
manufacturing lead times.
Our dealer Max Velocity Program (MVP) initiative
continued to expand and improve throughout
2010, and now supports 100 percent of our North
American ORV dealers. This investment is paying
dividends, enabling us to drive dealer inventory down
to historically low levels, while accelerating sales
and inventory turns. MVP is a great example of how
LEAN will help Polaris outside of our factory walls
and in every part of our business. See Page 4 for
more on the benefits of our manufacturing flexibility.
While 2010 was a very good year for Polaris, it must
serve as a springboard for further improvement.
The world is changing rapidly; for the benefit of all
Polaris stakeholders, we must continually adapt.
By embracing this strategy, we remain confident that our efforts can consistently
DELIVER STRONG FINANCIAL PERFORMANCE.
Our 2010 results validate that confidence — get ready for an even better ride in 2011!
Polaris will become a highly profitable $5 billion global enterprise
by 2019. We will make the best off-road and on-road vehicles and
products for recreation, transportation and work, supporting
consumer, commercial and military applications. Our winning advantage
is our innovative culture, operational speed and flexibility, and passion
to make quality products that deliver value to our customers.