Polaris 2005 Annual Report Download

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POLARIS INDUSTRIES INC. 2005 ANNUAL REPORT
DETERMINED
THE MINDSET OF A WINNER

Table of contents

  • Page 1
    DETERMINED THE MINDSET OF A WINNER POLARIS INDUSTRIES INC. 2005 ANNUAL REPORT

  • Page 2
    ... Products at a Glance Letter from the CEO and COO Letter from the Chairman Operations Review 11-Year Selected Financial Data Directors, Officers and Managers Form 10-K Other Investor Information POLARIS INDUSTRIES INC. is headquartered in Medina, Minnesota, and designs, manufactures and markets...

  • Page 3
    ... CONTINUING OPERATIONS Historic strong sales performance in ATVs, utility vehicles and snowmobiles, along with related PG&A, have fueled shareholder returns that are well above the industry average. Polaris' productivity strategies have resulted in consistent gross margins. The 2005 gross margin...

  • Page 4
    ... first American-made ATV in 1985 and pioneered such market-transforming improvements as automatic transmissions, long travel/independent rear suspensions (IRS), full floorboards, single-lever hydraulic braking, on-demand AWD (true 4-wheel-drive) and the industry's first electronic fuel injected 4x4...

  • Page 5
    .... Parts, garments and accessories (PG&A) delivered solid performance. We introduced new Lock & Rideâ„¢ accessories like the RANGER cab that don't just personalize vehicles - they transform them. This business posted revenue gains, high margins and good execution across the board. 2005 ANNUAL REPORT...

  • Page 6
    ...gain economies of scale. A complementary presence in motorcycles. Victory competes in the heavyweight cruiser market. KTM offers a line of off-road and performance on-road motorcycles that complement the line of Polaris ATVs and Victory motorcycles. An experienced management team with a track record...

  • Page 7
    ...compete very aggressively. This is nothing new. But in 2005 we saw actual declines in the North American ATV and snowmobile industries. The increases in interest rates and general maturing of the markets led to the first fall off in the core traditional North American ATV market in a number of years...

  • Page 8
    ... of operational performance. Just as important, we backfilled the key openings this change created by promoting internal talent. Seizing growth opportunities. Our five-year plan calls for carefully selecting big ideas that create or transform a market and expand our international presence. In 2005...

  • Page 9
    ...a culture that doesn't quit, even when the road gets a little rocky. We simply adapt to market changes and continue to follow the tenets that have made us successful. Those tenets, outlined on the following pages, will help us achieve our goal of becoming dominant in powersports. 2005 ANNUAL REPORT...

  • Page 10
    OFFER SUPERIOR PRODUCTS AND PHOTOS FROM LEFT TO RIGHT: • Victory riders share stories at Sturgis. • Fusion snowmobiles now feature more horsepower to attract performance-minded riders. • Our youth ATVs and snowmobiles help us build loyalty from an early age. 6 POLARIS INDUSTRIES INC.

  • Page 11
    ...huge sales spike in 2005. Sales of the RANGER SpeedKey,â„¢ which allows owners to set the speed at which others drive their vehicle, increased more than 250 percent over 2004. To meet the demand of Victory owners, who spend an average $2,000 each on PG&A, we expanded the Pure Victory apparel line to...

  • Page 12
    ... lets snowmobile enthusiasts switch among seven steering positions for greater comfort and control. • We introduced EFI on our best-selling RANGER 4x4 to make it more fuel efficient. • Our new world-class research and development facility is helping us improve quality and reduce time to market...

  • Page 13
    ... and recently upgraded Roseau development centers are ATVs. We made the world's best-selling ATV, the Sportsman 500, even better by adding electronic fuel injection (EFI) for easy starting in any weather and better fuel economy. We introduced a new Outlaw with independent rear suspension (IRS...

  • Page 14
    ... comfortable and relaxing way out. Assembled a strong team and instituted a disciplined development process. The Victory management team has more than 100 years of combined experience fueled by personal Improved the sales process with two industry firsts. One is a test drive program. More than 70...

  • Page 15
    ... "Cruiser of the Year" by Cycle World â-Š Debuted the industry's first custom order program â-Š Debuted the industry's first motorcycle test drive program â-Š Introduced top-of-the-line cruiser, The Hammer â-Š Victory was first profitable in the fourth quarter of 2005 2005 ANNUAL REPORT 11

  • Page 16
    ... North American company. But we have been steadily growing our international business since the late 1960s, and a new partnership with Austria-based KTM could eventually transform us into the largest non-Japanese manufacturer of powersports products. An international evolution. Polaris began selling...

  • Page 17
    ... behind BMW. Top 5 Markets: United States, Germany, France, Australia, Italy Stock Exchange: Shares of KTM Power Sports AG (formerly CROSS Holding AG) trade on the Vienna Stock Exchange under the symbol KTM Fiscal Year 2005 Sales: â,¬451 million Number of Employees: 1,500 2005 ANNUAL REPORT 13

  • Page 18
    ... increase in PG&A sales. • Displays like this are increasing awareness of the 150 new Victory accessories we introduced in the past two years. • We increased our investment in cooperative event advertising because it's one of the most cost-effective ways to drive dealer traffic. 14 POLARIS...

  • Page 19
    ..., Test Ride and our upcoming Dare to Compare events. We produce the ads and handle placements so dealers can focus on selling. Maximizing dealer sales time was a key impetus for changing our ATV safety training program. Historically, our dealers trained Polaris customers on ATV safety. In 2005...

  • Page 20
    SUCCESS STARTS ON THE INSIDE PHOTOS FROM LEFT TO RIGHT: • Larger-than-life murals at the Wyoming research and development facility help keep employees inspired. • Our reconfigured Spirit Lake production facility has the flexibility to produce almost every type of Polaris vehicle. • Our brand ...

  • Page 21
    ...new product lines Orlen Johnson retired employee This early employee was instrumental in creating the first Polaris snowmobile Raynold Monsrud employee This 36-year employee led development of our dealer sales training program Mies Outland dealership One of our largest dealers is in a tiny Minnesota...

  • Page 22
    ...and Results of Operations," located in the Form 10-K included in this report. For the Years Ended December 31, Statement of Operations Data Sales data: Total sales from continuing operations Percent change from prior year Sales mix by product: All-terrain vehicles Snowmobiles Motorcycles PG&A Gross...

  • Page 23
    ... 7.2 (8.1) (1.5) 2.7 Changes in Current Operating Items $ (7.5) (2.3) 50.4 11.9 (25.9) 51.8 19.3 (1.6) 45.7 (33.2) One-time Provision for Litigation Loss, Net(1) - - $ (39.6 Net Cash Provided by Operating Activities $ 88.9 97.7 124.7 134.5 105.1 192.0 200.6 167.8 245.4 177.6 2005 ANNUAL REPORT 19

  • Page 24
    ... General Manager - Victory Motorcycles Michael P. Jonikas General Manager - Sales and Marketing Eric R. Lindquist General Manager - Snowmobiles Scott A. Swenson General Manager - Parts, Garments and Accessories Thomas C. Tiller Chief Executive Officer Bennett J. Morgan President and Chief Operating...

  • Page 25
    ... and dealer locations, access Polaris on the Internet at: www.polarisindustries.com www.victory-usa.com ANNUAL SHAREHOLDERS' MEETING The meeting will be held at 9 a.m. CST, Thursday, April 20, 2006, at the Polaris Industries Inc. corporate headquarters, 2100 Highway 55, Medina, Minnesota. A proxy...

  • Page 26
    Polaris Industries Inc. 2100 Highway 55 Medina, MN 55340 763-542-0500 763-542-0599 fax www.polarisindustries.com © 2006 Polaris Industries Inc. Printed in the USA E Printed on recycled paper containing 10% post-consumer fiber.