MINNEAPOLIS -- (Business Wire)
Polaris Industries Inc. (NYSE:PII) today announced that it has purchased
all of Fuji Heavy Industries Ltd.’s (“FHI”) 3.96 million shares of
Polaris’ common stock for a purchase price of $497.5 million, thereby
reducing its outstanding share count by approximately six percent.
Polaris funded this purchase with a combination of cash on hand and $250
million of borrowings under the Company’s revolving credit facility.
Polaris and FHI have a long successful engine supplier relationship
dating back to 1968, when FHI began manufacturing Polaris’ exclusive
“Star” engine. FHI was the sole manufacturer of Polaris’ engines from
1968 to 1995, at which time Polaris gradually began to produce its own
engines for select models. For model year 2013, FHI supplied
approximately one-fourth of Polaris’ engines used in a number of models
of snowmobiles and off-road vehicles. For model year 2014 and beyond,
the Company anticipates that the percentage of FHI-supplied engines will
decline further as Polaris continues to significantly expand its own
engine portfolio.
Scott Wine, Polaris’ Chairman and CEO stated, “FHI has been a valued
partner and long-term engine supplier since 1968 and a significant,
loyal and stable shareholder since we first began trading as a public
company in 1987. FHI approached us with the opportunity to repurchase
their entire block of Polaris stock at a negotiated discount to the most
recent average market price. Our decision to repurchase these shares
demonstrates not only the confidence we have in the fundamentals of our
business, but also our long-term growth prospects and the commitment we
have to provide an above-average return to our shareholders. However,
this opportunistic share repurchase transaction in no way signals a
change in our strategic direction. We continue to believe there are
abundant opportunities to further expand and diversify our businesses
both organically and through acquisitions and we have ample borrowing
capacity and strong cash flow to fund the anticipated growth of Polaris.”
Polaris currently intends to issue $100 million of debt under an
existing private placement Master Note Purchase Agreement before
December 31, 2013 in order to reduce the borrowings under the Company’s
revolving credit facility. After taking into consideration the funding
and transaction costs and lower outstanding share count, this
transaction is expected to have only a slightly positive impact on the
Company’s 2013 fourth quarter and full year earnings per share from
continuing operations. The Company’s previously issued guidance for full
year 2013 earnings per share from continuing operations, raised on
October 22, 2013, remains unchanged at $5.30 to $5.37 per diluted share.
On a pro forma basis, assuming this transaction had occurred on January
1, 2013, the positive impact on expected full year 2013 earnings per
share from continuing operations would have been approximately $0.25 per
share. The Company’s share repurchase program authorization remains in
place with approximately 1.6 million shares available for repurchase.
The existing program does not have an expiration date.
Goldman, Sachs & Company acted as financial advisor to Polaris in this
transaction.
About Polaris
Polaris is a recognized leader in the powersports industry with annual
2012 sales of $3.2 billion. Polaris designs, engineers, manufactures and
markets innovative, high quality off-road vehicles, including
all-terrain vehicles (ATVs) and the Polaris RANGER® and RZR®
side-by-side vehicles, snowmobiles, motorcycles and small vehicles.
Polaris is among the global sales leaders for both snowmobiles and
off-road vehicles and has established a presence in the heavyweight
cruiser and touring motorcycle market with the Victory and Indian
motorcycle brands. Additionally, Polaris continues to invest in the
global on-road small vehicle industry with Global Electric Motorcars
(GEM), Goupil Industrie SA, Aixam Mega S.A.S., and internally developed
vehicles. Polaris enhances the riding experience with a complete line of
Polaris and KLIM branded apparel and Polaris accessories and parts.
Polaris Industries Inc. trades on the New York Stock Exchange under the
symbol “PII”, and the Company is included in the S&P Mid-Cap 400 stock
price index.
Information about the complete line of Polaris products, apparel and
vehicle accessories are available from authorized Polaris dealers or
anytime at www.polaris.com.
Except for historical information contained herein, the matters set
forth in this document, including but not limited to management’s
expectations regarding 2013 sales, shipments, margins, and net income
and cash flow from both continuing and discontinued operations, the
ability to issue long-term notes, the trend toward producing more of the
Company’s own engines for its vehicles, the opportunities for expansion
and diversification of the Company’s business, the impact of the
repurchase of shares on the Company’s full year 2013 earnings per share
and the Company’s guidance on earnings per share from continuing
operations are forward-looking statements that involve certain risks and
uncertainties that could cause actual results to differ materially from
those forward-looking statements.Potential risks and
uncertainties include such factors as product offerings, promotional
activities and pricing strategies by competitors; manufacturing
operation initiatives; acquisition integration costs; warranty expenses;
impact of changes in Polaris stock prices on incentive compensation;
foreign currency exchange rate fluctuations; environmental and product
safety regulatory activity; effects of weather; commodity costs;
uninsured product liability claims; uncertainty in the retail and
wholesale credit markets; changes in tax policy and overall economic
conditions, including inflation, consumer confidence and spending and
relationships with dealers and suppliers.Investors are also
directed to consider other risks and uncertainties discussed in our 2012
annual report and Form 10-K filed by the Company with the Securities and
Exchange Commission. The Company does not undertake any duty to any
person to provide updates to its forward-looking statements.
Contacts:
Polaris Industries Inc.
Richard Edwards, 763-513-3477
Source: Polaris Industries Inc.
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