Wildcat Expected To drive Strong Arctic Cat Earnings

Based on conversations with dealers, an analyst expects Arctic Cat to report strong earnings next week.  The main driver is sales of the Wildcat side-by-side vehicle.  The company’s off-road vehicle sales are expected to increase 36% compared to the previous year’s quarter and 46% for the full year 2012.  Learn more:  Powersportsbusiness.com

Polaris Drives Side-by-Side Market Momentum in Q1

According to preliminary results from a dealer survey conducted by Powersports Business and RBC Capital Markets, powersports dealers are reporting positive results across most categories in Q1 with side-by-sides leading the way.  In the latter category Polaris is “outperforming” expectations with nearly half of  dealers surveyed reporting double-digit sales increases in side-by-sides.  Polaris competitors such as Arctic Cat and Can Am are not impacting the market leader’s performance as significantly as expected to date.  Larger dealers are more likely to be selling above plan than smaller dealers.  Learn more:  Powersportsbusiness.com

Artic Cat Reports Strong Quarterly Results

Last week Arctic Cat reported the results for their third quarter which ended December 31, 2011.  Management reported net sales of $207.0 million  compared to $152.0 million for the the prior-year third quarter.  Net earnings for the same time periods was $17.0 million and $9.3 million respectively.  The sales increase was driven by increased snowmobile sales and international all-terrain vehicle (ATV) sales, as well as the first shipments of their new Wildcat sport side-by-side vehicle.  Arctic Cat’s ATV sales include ATVs and side-by-side vehicles.  “ATV sales increased 12 percent to $54.4 million in the fiscal 2012 third quarter versus $48.6 million in the same period last year, with strong contributions from Arctic Cat’s Prowler line of side-by-sides.”  The company expects to increase production of the Wildcat in the fourth quarter.  Learn more:  Arcticcat.com

Earnings Call Highlights:

• ATV sales increased 14% to $151.1 million from $133 million for the first three quarters of the fiscal year
• Management reports a decline of 7% in the quarter for industry ATV sales in North America.  Side-by-side sales continue to grow however and Prowler sales were up for the quarter and first three quarters.
• Management expects ATV division sales to increase 19% to 22% for the full year, driven by Q4 shipments of the new Wildcat sport side-by-side
• Arctic Cat has shipped 200 Wildcat side-by-sides to date and estimates based on Q&A comments indicate orders in the range of 6,000 to 10,000 vehicles. Sales are meeting expectations according to management.
• Arctic Cat has switched to a monthly ordering system for dealers compared to what was more of a quarterly program.  Comment: This will likely be a continuing trend with manufacturers in the industry as Polaris has also already made this transition to shorter ordering time frames.  The shorter time frame has reportedly allowed for lower inventories and costs, better matching of vehicles to customer needs and faster response to changing market conditions.

Learn more:  Seekingalpha.com (call transcript)

Polaris Reports Record Financial Results Again

Showing strength across all product lines Polaris Industries reported record fourth quarter and full year profits on Wednesday.  For the fourth quarter sales increased 26% from 4Q 2010 to $782.0 million and for the full year sales increased 33% from 2010 to $2,656.9 million. Other full year highlights include:

• Increased market share for all product lines
• 39% increase in international sales
• Net income of $227.6 million – 55% more than 2010.

Their Off-Road Vehicle (ORV) segment increased sales 32% over 2010 to $1.82 billion.  The segment includes ATVs and side-by-sides.  Management reports ATV unit retail sales growing upper single digits percent and side-by-side vehicle unit retail sales increasing about 20 percent over the prior year.  Polaris continues to gain market share in each segment.  Learn more:  Marketwatch.com

Earnings Call highlights:

• The overall ATV market declined low double digits for 2011 while side-by-sides increased low double digits.
• Polaris sales through their partnership with Bobcat increased 60% in 2011.
• Polaris has discontinued their Breeze LSV in light of their GEM acquisition and production of GEMs in their Spirit Lake facility has begun.
• Asia Pacific and Latin America are the key global markets
• Expectations for a slower level of growth for the company and ORV sales for the coming year.
• New products with Bobcat likely in end of 2012 or early 2013
• Strong growth in military segment expected with sales to special forces and in unmanned technology products

Learn more:  Seekingalpha.com (call transcript)

 

NY Times Runs Side-by-Side Safety Story

Today the New York Times published a front page story on side-by-sides, focusing mainly on their safety. The title, “An A.T.V. With Extra Room, and Maybe More Risks, Too“, is a little misleading given that the statistics they present in the story imply that they are less dangerous than ATVs. The story also covers the decline of ATVs, some of the factors driving consumers to switch to side-by-sides and the current efforts by federal regulators to create new mandatory safety standards.  These standards may push vehicles to be wider and lower which could negatively effect their trail-riding ability.  Learn more:  NYTimes.com

Polaris Reports Record 2Q Earnings

Polaris reported record 2Q earnings driven by growth across product lines and geographic areas with North American sales increasing 43% and International sales increasing 35%.  Management now expects full year sales growth to be in the 25% to 28% range.

Off-road vehicle sales which includes ATVs and UTVs were $482 million for the quarter and $870 million for the first six months of 2011 compared to $342 and $592 million for 2010 respectively.  These figures represent 41% year to year quarterly growth and 47% year to year six month growth.  Management reports gaining market share in both the ATV and side-by-side market segments in North America with ATV sales up less than 10% for the quarter.  Side-by-side sales were not specified but likely increased by over 20% for the quarter.  Off-road military, Bobcat related sales and international sales all increased for the quarter, the latter by 35%.  Learn more:  Marketwatch.com

Road Use Regulations Roundup – April, 2011

Some themes in this latest regulation roundup:

• A couple of the few remaining states without LSVs law are in the process of debating LSV bills.
• More municipalities pass ordinances allowing the use of LSVs on public low speed roads.  The Midwest and North Carolina are the most active areas.
• Safety and congestion are a consistent issue during debates over LSV ordinances.
• Ordinances allowing use of off-road vehicles on public roads generate both support and resistance.

State Level Regulations

Mississippi – Some residents are asking the state legislature to pass a law allowing the use of LSVs on public roads.

Nebraska – A bill is moving through the state legislature that will allow for the use of LSVs on public roads.  This year’s bill excludes golf cars.

Virginia – A bill will likely become law that expands the mobility of golf cars and utility vehicles.  While the bill is restricted to the town of Colonial Beach, it does set a precedent of allowing the vehicles to cross state highways at designated golf car crossings regardless of the state highway’s speed limit.  Currently there was a speed limit restriction of 35 mph. In another bill the state’s parks departments will be able to use golf cars and utility vehicles on roads adjacent to parks as long as the road’ speed limit is 35 mph or less.

New York – A bill is moving through the legislature that would redefine all terrain vehicles (ATV) to include side-by-side utility vehicles that weigh as much as 1,500 pounds, raising the limit from the current 1,000 pounds.  This would allow consumers to register the vehicles and use them for recreational riding where allowed.

Municipality Level Regulations

Waynesville, MO – Councilmen is urging the city to look into an ordinance for LSVs on city streets.  Town officials want to know more about LSVs and the issue of crossing of state highways.

Kansas City, KS – An ordinance was not repealed, which would have allowed residents to operate all-terrain vehicles, micro utility trucks, work-site utility vehicles and golf carts on the city’s streets that feature speed limits of 30 miles an hour or less. The issue may be revisited since the vote was close and the mayor wants more consensus.

Columbus, NE – City officials did not pass a bill that would have allowed expanded use of UTVs on public streets.  Concern about the vehicles operating in higher volume and higher speed traffic was the issue.

Muskego, WI – City officials are discussing allowing LSVs on public roads. Issues of concern are safety and traffic congestion.

Pardeeville, WI – A committee recommended to the full city board a proposal to allow LSVs on public roads.

Columbiana, OH – City officials are considering an ordinance to allow LSVs on public roads.

La Grange, NC – An ordinance was passed allowing golf cars and LSVs to be used on public roads.  Traffic congestion is a concern.

Landis, NC – Town officials are planning a town meeting to discuss an ordinance allowing the use of LSVs on public streets.

Oak Island, NC – The city council had been discussing allowing modified golf cars on public roads but decided not to pursue an ordinance.  The city already allows LSVs.

Rockport, TX – City officials pass ordinance that allows golf cars and LSVs to be used on public streets.

Juneau, AK – City officials are proposing a code change to allow LSVs on public roads, in part to allow the US Forest Service to drive to and from their offices using an electric vehicle they are planning on purchasing.  The ordinance includes a provision that drivers pull over if traffic builds up behind them.

New Polaris Offerings For 2011

Between family vacation and the launch of our latest STOV study It’s been a few weeks since my last post so there have been some developments in the market to catch up on.  I’ll start with the introduction by Polaris of their 2011 product line.  Despite a down economy they have been able take market share and be aggressive in the product development with new vehicles targeting specific market segments and improvements to existing models.  New vehicles include the RANGER 500 EFI, RANGER CREW 500 and RANGER Diesel. The latter targets the agriculture segment where diesel is the preferred fuel.

Enhancements to current product offerings include increased power to RANGER XP 800 and RANGER XP 800 EPS, and power steering on the Polaris Pursuit Camo RANGER CREW 800. All 2011 RANGER products, with the exception of RANGER EV, will be outfitted with easy-buckle driver and passenger safety nets.

The RANGER RZR line will have even more razor sharp performance with a new look that increases cooling airflow by 29 percent, provides a 30 percent improvement in range and delivers increased performance as a result. The RANGER RZR 800 will receive six percent more power with the addition of the 800 H.O. engine and be more trail-friendly with new rear rack extenders.  RANGER RZR S 800 will feature new big bore shocks, be the first stock vehicle to feature ITP 900 XCT tires and will be available in two premium painted editions along with a standard edition, which will receive a new lower price. For razor sharp performance for four, Polaris will offer the RANGER RZR 4 800in two Robby Gordon packages, a painted black and red limited edition and a power steering version that includes Robby Gordon-inspired graphics.

The company also launched the civilian version of their EV LSV which originally targeted the government market and added new parts and accessories for vehicles across the product line.  Learn more:  Motorsportsnewswire.wordpress.com

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• Polaris to Realign Manufacturing Operations (eon.businesswire.com)

New UTVs Hitting The Market

Kawasaki's new Teryx 750 FI 4x4 LE Camo

New Teryx™ 750 FI 4×4 LE – Kawasaki has introduced a a new Teryx™ 750 FI 4×4 LE. Key features include:

• Liquid-cooled, 749cc SOHC, four-valve-per-cylinder, fuel-injected, 90-degree V-twin engine
• Realtree APG HD camouflaged bodywork, wheels, front bumper, roof and dashboard
• Digital fuel injection
• Continuously Variable Transmission features high and low ranges, a reverse gear, very direct feel from the engine, and instantaneous acceleration
• Limited-slip front differential reduces steering effort under normal four-wheel drive operation, while Variable Front Differential Control permits rider to distribute torque equally to left and right front wheels for maximum traction via a hand lever located between the seats
• Selectable two- or four-wheel-drive operation, via dash-mounted switch
• Suspension designed for high-speed operation over varying terrain
• Large 7.4-gal. (28L) fuel tank

Learn more: News.utvguide.net

X4 off-road vehicle from Volteis Electric Car of France

New electric off-road utility vehicle from France - Volteis Electric Car of France recently launched their X4 electric off-road utility vehicle. Reminiscent of WWII Jeep designs, the X4 features twelve 48 volt, 24 amp-hour lead-acid gel batteries located beneath the front sea and has a top speed is 44 mph. The vehicle is available in a number of configurations including dual electric motors, long and short frames and other options. The frame is made of stainless steel and aluminum. Learn more: Greencar.com

Bobcat utility vehicle

Bobcat offers new UTV lineup – Bobcat recently unveiled their new lineup of four utility vehicles: 3200 (4×2), 3400 (4×4), 3400 XL (up to 6 riders; 4×4) and 3450 (4×4). Key features:

• Diesel engine is available in all but the 3200
• All models feature increased horsepower
• Top speed has increased to 30 mph.
• High (30 mph max) and low-speed gearing (15 mph max)
• Increased payload capacity (up to 33% more)
• Electronic fuel injected gas engines
• Four-wheel independent suspension (MacPherson struts, front; 5-way preload adjustable rear shocks with two optional mounting positions for load carrying)
• 3450 includes Bobcat’s exclusive RapidLink attachment mounting system
• All-new frame

The vehicles are a result of Bobcat’s strategic alliance with Polaris Industries to develop vehicles for the work segment . Learn more: ATVmagblog.com

Can-Am Commander in action

Can-Am enters UTV market with Commander 800 and 1000 models – Powersports manufacturer Can-Am has entered the UTV market with their Commander 800 and 1000 models which have 71 hp and 85 hp engines respectively. The vehicles features give them a mix of work qualities as well as those for aggressive trail riding. For a more complete review of the vehicle features and technologies Learn more: ATVmagonline.com

New Gator XUV 825i from John Deere

John Deere launches new lineup of crossover utility vehicles (XUVs) - The leading model of Deere’s new trio of XUVs is the XUV 825i which features a 50 hp engine and a top speed of 44 mph. The XUV lineup designed for both work applications and the needs of the “outdoor enthusiast”. Key features include:

• An 815cc, liquid cooled, inline 3-cylinder engine with 4 valves per cylinder, dual overhead cams and electronic fuel injection.
• Re-designed front and rear independent suspension system designed for less body roll and superior side-hill stability with either no-load or maximum cargo.
• 1500 lbs. of towing and 1400 lbs. of payload capacity.
• New hybrid metal and composite cargo box with 16.4 cu. ft. of capacity and an available factory installed spray-in bed liner with 20 integrated tie downs
• New braking system that improves stopping performance over previous models.

Learn more: News.utvguide.net

News Briefs

Strong UTV Sales In Australian Farming Segment – An Australian farming magazine reports about the increasing demand for UTVs and the entry of new manufacturers like Honda, Case IH and New Holland into the market.  Learn more:  FW.farmonline.com.au

Platinum Group Acquires Tiziani Golf Car of Minnesota – The Platinum Group, a private equity fund that focuses on underperforming companies or those in need of turnaround expertise, recently purchased the assets of Tiziani Golf Car of Minnesota.  The company will be renamed Superior Golf Cars and will continue to be the exclusive distributor of Club Car vehicles in eastern Minnesota and western Wisconsin.  Learn more:  peHub.com

Phillips Develops Crosswalk System For Silent Vehicles – Phillips is developing an LED based crosswalk lighting system to warn pedestrians of approaching but silent vehicles such as electric buses, autos and scooters.   The embedded LEDs react to approaching vehicles the same way traffic lights do by changing color from green to amber to red.
Learn more:  Worldcarnews.com

Phillips Develops LED Crosswalk System