Polaris 2010 Annual Report Download - page 32

partnership may take more time than expected to develop or integrate into our operations, and we cannot guarantee
that acquisitions, alliances, joint ventures, or partnerships will in fact produce any benefits. In addition, acquisitions,
alliances, joint ventures, and partnerships involve a number of risks, including:
• diversion of management’s attention;
• difficulties in integrating and assimilating the operations and products of an acquired business or in realizing
projected efficiencies, cost savings, and synergies;
• potential loss of key employees or customers of the acquired businesses or adverse effects on existing
business relationships with suppliers and customers;
• adverse impact on overall profitability if acquired businesses do not achieve the financial results projected in
our valuation models;
• reallocation of amounts of capital from other operating initiatives and/or an increase in our leverage and debt
service requirements to pay the acquisition purchase prices, which could in turn restrict our ability to access
additional capital when needed or to pursue other important elements of our business strategy;
• inaccurate assessment of undisclosed, contingent or other liabilities or problems, unanticipated costs
associated with an acquisition, and an inability to recover or manage such liabilities and costs;
• incorrect estimates made in the accounting for acquisitions, incurrence of non-recurring charges, and
write-off of significant amounts of goodwill or other assets that could adversely affect our operating results;
• dilution to existing shareholders if our securities are issued as part of transaction consideration or to fund
transaction consideration; and
• inability to direct the management and policies of a joint venture, alliance, or partnership, where other
participants may be able to take action contrary to our instructions or requests and against our policies and
objectives.
Our ability to grow through acquisitions will depend, in part, on the availability of suitable acquisition targets
at acceptable prices, terms, and conditions, our ability to compete effectively for these acquisition candidates, and
the availability of capital and personnel to complete such acquisitions and run the acquired business effectively.
These risks could be heightened if we complete a large acquisition or multiple acquisitions within a relatively short
period of time. Any potential acquisition could impair our operating results, and any large acquisition could impair
our financial condition, among other things.
Our transition to a new dealer ordering process could affect our sales and profitability during the
transition period.
Over the past several years we have been transitioning our North American ORV dealers to the Maximum
Velocity Program, an enhanced dealer ordering process. Currently 100 percent of our ORV dealers in North
America are using the enhanced ordering process. The ordering process negatively impacts sales during the
transition period because dealers place smaller, more frequent orders which allow them to operate with lower
inventory levels. As a result, our results of operations during the transition period may fluctuate more compared to
similar periods in prior years.
We may encounter difficulties in our manufacturing realignment initiatives, which could adversely affect
our operating results or financial condition.
In May 2010, we announced our plans to realign our manufacturing operations footprint by enhancing our
Roseau, Minnesota and Spirit Lake, Iowa production facilities and establishing a new facility in Mexico. The
realignment is planned to lead to the eventual sale or closure of our Osceola, Wisconsin manufacturing operations
by 2012. There are significant risks inherent in our realignment initiatives. The realignment may not be accom-
plished as quickly as anticipated and the expected cost reductions may not fully materialize. We expect to record
transition charges in connection with the realignment efforts, including both exit costs and startup costs, over the
next few years. Even though we anticipate that the realignment will ultimately result in reduced transportation and
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