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Polaris Industries (PII) Q4 2013 Earnings Call January 28, 2014 10:00 AM ET


Good morning, everyone. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome you all to the Polaris Fourth Quarter and Full Year 2013 Earnings Results Conference Call. [Operator Instructions] Thank you.

I'd now like to turn the call over to our host, Mr. Richard Edwards. You may begin your conference

Richard Edwards - Director of Investor Relations
Thank you, Sarah. And good morning, everyone, and thank you for joining us for our 2013 fourth quarter and full year earnings conference call. A slide presentation is accessible at our website at Polaris : Investor Relations : Polaris Industries at a Glance, which has additional information for this morning's call.

The speakers today are Scott Wine, our Chairman and Chief Executive Officer; Bennett Morgan, our President and Chief Operating Officer; and Mike Malone, our Chief Financial Officer.

Let me remind you that during the call today, we will be discussing certain topics, including product demand and shipments, sales and margin trends, income and profitability levels and other matters, including more specific guidance on our expectations for 2014, which should be considered forward-looking for the purposes of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements.

Now I turn it over to Scott Wine. Scott?

Scott W. Wine - Chairman, Chief Executive Officer and Member of Technology Committee
Good morning and thank you for joining us. Each year, we have a competition in the fourth quarter that rewards our top-selling Off-Road Vehicle dealers with the trip to BCS Championship.

It is always nice to spend some time with some of our best dealers and for those of us from Minnesota, the warm weather at the Rose Bowl was certainly an added benefit. We were treated to a hard-fought football game between Auburn and Florida State, a fitting metaphor for the competitive battles Polaris is waging across our businesses.

Our results show that in 2013, we frequently prevailed, but we see many areas where we must improve our execution. With competitors stepping up their game, we are prepared and expect to win.

We entered 2014 with tremendous energy and a renewed focus towards our fifth consecutive year of out-performance. Thanks to substantial demand for our new RANGER and RZR offerings and the excitement in orders surrounding the new Indian Motorcycles, we were able to deliver robust financial performance to close the year and position Polaris for profitable growth. All product lines contributed to the solid year-end finishes for our International and Parts, Garments and Accessories businesses up 46% and 33%, respectively. And our KLIM and Aixam Mega acquisitions also performed at the high end of our expectations.

Overall, sales for the quarter were $1.08 billion, up 20% from the prior year period, and marking our second consecutive quarter with over $1 billion in sales. Net income for the fourth quarter was up 23% to $108.7 million, yielding record earnings per share of $1.56, up 26%.

Full year 2013 sales increased 18% to just under $3.8 billion as our R&D pipeline delivered a record number of new award-winning products across our Powersports portfolio. Consistent with our strategy, our international and adjacent market businesses each grew faster than our core business, up 29% and 79%, respectively.

With the full year net income from continuing operations of $381 million, we achieved our long-term goal of 10% net income margins several years earlier than expected. As a result, earnings per share grew 23% to $5.40 and we generated nearly $500 million of operating cash flow.

Though I believe the stock market may be a bit inflated, given these results and our consistent performance over the past 4 years, it could be argued that our significantly above market shareholder returns are warranted.

Continue Reading Polaris Industries Inc. (PII) news: Polaris Industries Management Discusses Q4 2013 Results - Earnings Call Transcript - Seeking Alpha
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