Polaris Industries Partners LP PII

1
Polaris Industries Partners LP(PII)

• Nicholas Maffeo
• October 26, 2004

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Company Profile

• Started in 1954
• Founded in Roseau, Minnesota
• Company headquarters are in Medina, Minnesota

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What do they do?

• Builds, designs and engineers all terrain
  vehicles (ATVs), snowmobiles, and motorcycles.
• On Sept. 2nd Polaris shut down its personal
  water-craft division after reporting a 3rd
  quarter after-tax loss of 23.9 million.

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Products

• First started making snowmobiles in 1954
• ATVs came into play in 1985 (first N. American
  company to enter into this business)
• PWC in 1992
• Victory motorcycles 1998
• Polaris Ranger
• Introduced 2000
• 6-wheel off-road vehicle
• Garments, parts, and accessories
• Polaris line

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Some popular products. (2005 styles)

• New Sportsman (ATV)
• 900 Fusion/900 RMK/XC SP (Snowmobiles)
• MXS (PWC.. 2004 edition)
• Hammer, Kingpin, Vegas, 8-ball, Ness Vegas
  (Victory motorcycles)
• New line of 2005 Ranger models

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Market

• Sales breakdown (2003)
• ATVs 65, snowmobiles 14, garments, parts, and
  accessories 14, motorcycles 4, PWC 3
• Primary markets are Polaris dealers located in
  the U.S., Canada, and in Europe.
• Wholly-owned subsidiaries in Canada, Australia,
  New Zealand, France, and Great Britain

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Customers

• Wide variety
• Price of products
• Type of products offered
• Styles/quality

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Strengths

• Recognized leader in snowmobile industry
• Frontier won award for best available
  technology
• One of top manufacturers of ATVs
• Predator 500 recently won Sport ATV of the
  Year.
• 2nd time in 3 years.
• 50 year anniversary is this year.
• Anniversary additions
• Victory motorcycles (70 sales increase)
• Although elimination of PWC division, still
  recorded record sales and earnings in 3rd quarter.

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Weaknesses

• Seasonal weather conditions.
• Positive and negative effects
• Competition
• Financially more powerful
• Many well-known companies to compete with

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Opportunities

• Around 400 people in RD/testing division
• Already responsible for many new products in
  particularly with in the snowmobile division.
• Victory (again)
• New styles
• Strong in the ATV and Snowmobile Mkts.
• Many new models already being advertised

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Threats

• Competition
• ACAT, HDI, HMC, Yamaha
• Since Ranger (6X6) many similar versions appeared
• Elimination of PWC
• 10/21/04 Recall of Ranger (4X4)
• Steering shaft assembly missing weld

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Competition chart
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Comparison to Honda Motor Corp./SP500
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Opinion, Pros/cons

• Bought at 41.57.
• Current Price of 58.59
• Already made 1191.40
• 52-week high (59.85)
• Already over-weighted within this Industry

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Recommendation

• sell