Polaris Inc. Fourth Quarter And Full Year 2022 Financial Results
Polaris has today released its fourth quarter and full year 2022 earnings results. Polaris shared this:
“Polaris ended the year strong. We delivered record full year sales and earnings, a testament to our team’s focus, dedication, and execution,” said Mike Speetzen, chief executive officer of Polaris Inc. “Throughout the year, we continued to assert our position as the global leader in powersports by renewing our commitment to our core businesses, delivering rider-driven innovation, and successfully navigating a challenging environment. Looking ahead, we see significant opportunity for success supported by a strong pipeline of new products and continued supply chain improvement. Although macroeconomic headwinds may persist in 2023, our team remains agile and poised to deliver industry-leading innovation that is consistent with the Polaris brand.”
Financial and Operational Highlights
- Record full year 2022 sales were $8,589 million, up 15 percent compared to last year.
- Record full year 2022 reported diluted earnings per share from continuing operations was $10.04, up 27 percent versus last year; adjusted diluted earnings per share from continuing operations was $10.40, up 15 percent versus last year.
- Record fourth quarter sales were $2,404 million, up 21 percent compared to last year.
- Record fourth quarter reported diluted earnings per share from continuing operations was $3.36, up 129 percent versus last year; adjusted diluted earnings per share from continuing operations was $3.46, up 57 percent versus last year.
- Primary sales drivers in the quarter were higher volumes, strong pricing and favorable mix, offsetting foreign exchange-related headwinds.
- Retail sales for the quarter were down six percent versus last year despite improving performance in utility Off Road and Indian Motorcycle, offset by softness in recreational Off Road demand.
Performance Summary (Reported)
Polaris Inc. has released its fourth quarter and full year 2022 results. The company reported worldwide sales of $2,404 million, up 21 percent versus the fourth quarter of 2021. North America sales of $2,108 million represented 88 percent of total company sales and increased 23 percent from $1,715 million in 2021. International sales of $296 million represented 12 percent of total company sales and increased seven percent versus the fourth quarter of 2021. Sales growth in the fourth quarter of 2022 was driven by sustained shipment momentum supported by modest improvement in the supply chain, higher pricing and favorable mix, offsetting foreign exchange-related headwinds.
As reported, fourth quarter net income from continuing operations attributable to Polaris of $197 million increased 116 percent and diluted earnings per share from continuing operations (“EPS”) of $3.36 increased 129 percent compared to the fourth quarter of 2021. Adjusted net income from continuing operations attributable to Polaris for the quarter was $202 million, up 48 percent and adjusted EPS was $3.46, up 57 percent, in each case as compared to the fourth quarter of 2021.
Gross profit margin increased 367 basis points to 23.8 percent for the fourth quarter. Adjusted gross profit margin of 23.8 percent increased 358 basis points driven by higher volumes and favorable pricing partially offset by warranty costs.
Operating expenses were $331 million in the fourth quarter of 2022 compared to $254 million in the fourth quarter of 2021 due to higher marketing and G&A expense. Operating expenses, as a percentage of sales, of 13.8 percent were up in the fourth quarter of 2022 compared to the fourth quarter of 2021.
Segment Highlights (Reported)
Off Road segment results were primarily driven by these factors:
- Sales were driven by higher pricing and favorable product mix.
- Parts, Garments and Accessories (PG&A) sales increased eight percent.
- Gross profit margin performance was driven by favorable pricing and higher volumes, more than offsetting higher warranty expense.
- Snow season-to-date unit retail sales were down due to sale and ship holds associated with recalls.
- Polaris North America ORV unit retail sales were down mid-single digits percent. Estimated North America industry ORV unit retail sales were down low-single digits percent.
On Road segment results were primarily driven by these factors:
- Sales were bolstered by a modestly improving supply chain environment, as well as favorable mix and price.
- PG&A sales were essentially flat.
- Gross profit margin performance was driven by favorable product mix and higher volumes, which more than offset higher warranty expense and foreign exchange headwinds.
- North America unit retail sales for Indian Motorcycle were up low-single digits percent. North America unit retail sales for the comparable motorcycle industry were down mid-single digits percent.
Marine segment results were primarily driven by these factors:
- Sales results were driven by higher pricing and favorable product mix, as well as healthier inventory levels heading into boat show season.
- Gross profit margin performance was largely driven by better mix.
2023 Business Outlook
The Company expects 2023 sales to be flat to up five percent versus 2022. The Company expects adjusted diluted EPS from continuing operations attributed to Polaris Inc. common shareholders to be down three percent to up three percent versus 2022.
Polaris has not provided reconciliations of guidance for adjusted diluted net income per share, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures. These items include restructuring and realignment costs and acquisition integration costs that are difficult to predict in advance in order to include in a GAAP estimate.
Noted Italian Distributor of Performance Motorcycle and Bicycle Suspension Products Opens US Distribution Arm
Andreani, known throughout Europe as the premier distributor of motorcycle and bicycle suspension products, announced today the opening of their first US office and distribution center, located in Hendersonville NC. The facility is building a stock of products from their own lines as well as well-known brands that will be distributed to US bicycle shops and motorcycle dealerships.
The Andreani USA facility is a 10,000 square foot distribution center and houses the offices for Andreani USA. The company currently employs four people in the US and expects that number to increase as business grows. Andreani USA currently distributes products from SKF, Intek, Kayaba, Showa, and Ohlins, as well as its own Andreani line of suspensions for motorcycles and bicycles.
“The Andreani Group is thrilled to open our operations in the United States. The US market is a tremendous opportunity for our company. We believe that our approach to high performance two-wheelers, which is to provide great products and help technicians by offering comprehensive training, will have a significant impact on bicycle and motorcycle riders in the USA,” said President of Andreani USA Luciano Ubaldini.
Andreani Group International was founded in Pesaro, Italy in 1987 by Giuseppe Andreani, a former motorcycle racing champion. Initially focused on supporting the performance needs of motorcycle riders and racers, Andreani quickly realized that the science of vehicle suspension was not well understood by riders and technicians in the motorcycle world. Andreani worked with industry experts and built a training program, which became the premier resource for technicians and tuners in Europe to get the most out of their motorcycles.
Andreani USA will begin offering this type of training in the United States later this year and will encourage technicians from their customers’ dealerships to attend, along with tuners from some of the top road racing and motocross teams in the industry. The company will also offer training for mountain bike racing teams and technicians, leveraging the company’s deep roots in all types of performance two-wheelers.
The company expects the staff in Hendersonville to grow to 10-15 employees by the end of 2023 and will expand to offer more products and more top brands of motorcycle and bicycle suspension products.
ABOUT ANDREANI GROUP
Andreani Group International is a privately-held company focused on providing top quality suspension components to bicycle and motorcycles riders around the world. The company distributes top name brands, as well as their own lines of products including the innovative Misano EVO cartridge, one of the most successful products in the suspension category. Andreani Group International has distribution centers in its home town of Pesaro Italy and Barcelona Spain, and recently opened Andreani USA in Hendersonville, North Carolina. Since its beginning in 1987, the company has been focused on great suspension products, along with training and support for technicians and tuners that help riders get the most from their bikes.
LiveWire Group, Inc. Reports Fourth Quarter and Full Year Financial Results
LiveWire Group, Inc. (“LiveWire”) (NYSE: LVWR) today reported fourth quarter and full year 2022 results.
“2022 saw a significant milestone in LiveWire’s journey with the company becoming the first listed electric motorcycle company on the NYSE,” said Jochen Zeitz, Chairman and CEO, LiveWire. “For 2023, investment into product development continues to be at the top of our priority list; advancing the technologies, platforms and products that will further our position as pioneers of the industry.”
“We’re excited to continue building the LiveWire brand globally, and in 2023 we expect to see the introduction of LiveWire ONE to the European market and the launch of the S2 platform,” said Ryan Morrissey, President, LiveWire.
2022 Business Highlights
- Completed the carve-out and stand-up of LiveWire as separate public company
- Sold 597 LiveWire electric motorcycles, ahead of expectations
- Nearly doubled the reach of the U.S. retail network to 75 contracted partner locations
- Delivered STACYC revenue growth of 26% with successful launch of two new products
- Continued development of the S2 platform with production of Del Mar planned for 2023
- On track to expand distribution of LiveWire into Europe in 2023
Fourth Quarter and Full Year 2022 Results
LiveWire Group, Inc. – Consolidated Results
| $ in millions | 4th quarter | Full Year | ||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | |
| Motorcycle Units | 69 | 186 | (63%) | 597 | 461 | 30% |
| Consolidated Revenue | $9 | $13 | (28%) | $47 | $36 | 31% |
| Electric Motorcycles | $2 | $4 | (57%) | $14 | $10 | 44% |
| STACYC | $8 | $9 | (17%) | $ 33 | $26 | 26% |
| Consolidated Op Income (Loss) | ($29) | ($20) | nm | ($85) | ($68) | nm |
| Electric Motorcycles | ($29) | ($21) | nm | ($89) | ($70) | nm |
| STACYC | $1 | $1 | (31%) | $4 | $2 | 96% |
| Net Loss | ($22) | ($20) | nm | ($79) | ($68) | nm |
| nm – not meaningful |
LiveWire Group, Inc. is comprised of two separate business segments:
- Electric Motorcycles – a business segment focused on the sale of electric motorcycles & related products
- STACYC – a business segment focused on the sale of electric balance bikes for kids & related products
Electric Motorcycles
Electric Motorcycles revenue was down 57% in the fourth quarter, due to lower unit sales. The fourth quarter of 2021 was higher than normal due to wholesale units invoicing to dealers to start the early build out of the U.S. retail network. Revenue was up 44% for the full year, driven by increased unit sales.
Increased operating losses versus 2021 in both Q4 and total annual was driven by the increase in product development investment needed to advance the electric vehicle systems and deliver the S2 platform. Operating losses also incorporate the added cost of standing up a new organization, including growing headcount.
STACYC
STACYC revenue was down 17% in the fourth quarter, due to timing of wholesale shipments. Revenue was up 26% for the full year driven by favorable product mix including the launch of new 18- and 20-inch electric balance bikes.
STACYC operating income for the fourth quarter decreased 31%, driven by lower volume due to timing of wholesale shipments. Operating income for the full year improved 96%, driven by increased revenue and margin mix.
2023 Financial Outlook
For the full year 2023, the Company expects:
- Electric Motorcycle wholesale units of 750 to 2,000
- LiveWire Group Operating Loss of $115 to $125 million
Liquidity
- To support future ongoing operations, the Company has the following available liquidity:
- Cash and cash equivalents at 2022 year-end of $265 million
- A non-binding $200 million loan facility with majority shareholder
Webcast
The public is invited to attend an audio webcast from 8-9 a.m. CT. LiveWire President, Ryan Morrissey, will be joining the Harley-Davidson, Inc. audio webcast to discuss our results, developments in the business, and updates to the Company’s outlook. The webcast login can be accessed at https://investor.livewire.com/news-events-1/events/default.aspx. The audio replay will be available by approximately 10:00 a.m. CT.
About LiveWire
LiveWire has a dedicated focus on the electric motorcycle sector. LiveWire’s majority shareholder is Harley-Davidson, Inc. LiveWire comes from the lineage of Harley-Davidson and is capitalizing on a decade of its learnings in the EV sector. With a dedicated focus on EV, LiveWire plans to develop the technology of the future and to invest in the capabilities needed to lead the transformation of motorcycling. www.livewire.com
Cautionary Note Regarding Forward-Looking Statements
The Company intends that certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Words or phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” and “would,” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the risks, uncertainties and assumptions described in prior public filings titled “Risk Factors.” These forward-looking statements are subject to numerous risks, including, without limitation, the following: our history of losses and expectation to incur significant expenses and continuing losses for the foreseeable future; our limited operating history, the rollout of our business and the timing of expected business milestones, including our ability to develop and manufacture electric vehicles of sufficient quality and appeal to customers on schedule and on a large scale; our financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder; changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; our ability to attract and retain a large number of customers; our future capital requirements and sources and uses of cash; our ability to obtain funding for our operations and manage costs; challenges we face as a pioneer into the highly-competitive and rapidly evolving electric vehicle industry; our operational and financial risks if we fail to effectively and appropriately separate the LiveWire business from the H-D business; H-D making decisions for its overall benefit that could negatively impact our overall business; our relationship with H-D and its impact on our other business relationships; our ability to leverage contract manufacturers, including H-D and Kwang Yang Motor Co., Ltd., a Taiwanese company (“KYMCO”), to contract manufacture our electric vehicles; retail partners being unwilling to participate in our go-to-market business model or their inability to establish or maintain relationships with customers for our electric vehicles; potential delays in the design, manufacture, financing, regulatory approval, launch and delivery of our electric vehicles; building out our supply chain, including our dependency on our existing suppliers and our ability to source suppliers, in each case many of which are single-sourced or limited-source suppliers, for our critical components such as batteries and semiconductor chips; our ability to rely on third-party and public charging networks; our ability to attract and retain key personnel; our business, expansion plans and opportunities, including our ability to scale our operations and manage our future growth effectively; the effects on our future business of competition, the pace and depth of electric vehicle adoption generally and our ability to achieve planned competitive advantages with respect to our electric vehicles and products, including with respect to reliability, safety and efficiency; our business and H-D’s business overlapping and being perceived as competitors; our inability to maintain a strong relationship with H-D or to resolve favorably any disputes that may arise between us and H-D; our dependency on H-D for a number of services, including services relating to quality and safety testing. If those service arrangements terminate, it may require significant investment for us to build our own safety and testing facilities, or we may be required to obtain such services from another third-party at increased costs; any decision by us to electrify H-D products, or the products of any other company; our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; potential harm caused by misappropriation of our data and compromises in cybersecurity; changes in laws, regulatory requirements, governmental incentives and fuel and energy prices; the impact of health epidemics, including the COVID-19 pandemic, on our business, the other risks we face and the actions we may take in response thereto; litigation, regulatory proceedings, complaints, product liability claims and/or adverse publicity; and the possibility that we may be adversely affected by other economic, business and/or competitive factors. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. Some of these risks and uncertainties may in the future be amplified by new risk factors and uncertainties that may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this press release will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise. You should read this earnings release completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Back by Popular Demand Polaris Off Road Reintroduces Purpose-Built Ranger and Sportsman Models Specifically Designed for Trail Rides, Ranchers and Property Owners
– Polaris Off Road, the world leader in powersports and off-road innovation, has expanded its offering of class-leading vehicles with the return of its popular RANGER CREW XP 1000 Texas Edition and RANGER SP 570 NorthStar & RANGER CREW SP 570 NorthStar Edition designed for the rancher, farmer and landowner. For ATV riders, Polaris is bringing back its Sportsman 850 and XP 1000 High Lifter Editions, Sportsman 570 and XP 1000 Ride Command Editions and Sportsman 570 Utility HD model packed with factory-equipped technology and features allowing riders to explore further when on the trails or in the mud. Thanks to enhanced performance and durability features across the line up, Polaris is delivering class-leading features to keep up with the demands of hard-working riders.
“We are constantly learning from the unique ways customers use our products,” said Steve Menneto, President of Polaris Off Road. “From mudding to property maintenance, these vehicles are purpose-built with enhanced features that enable our customers to make the most of their day, and we’re excited to bring them back for 2023.”
From task to trail, the RANGER and Sportsman models offer all-day comfort and uncompromising toughness to tackle the toughest jobs. They are packed with features to meet the needs of riders that require more capability, performance, and durability from their off-road vehicle. From mudding and trail adventures to property maintenance and hard work, these models are designed to meet the needs of riders and their lifestyles.
RANGER
2023 RANGER CREW XP 1000 Texas Edition, starting at $24,299 U.S. MSRP
The RANGER CREW XP 1000 Texas Edition features exclusive Texas badging elements and more capability to tackle the toughest jobs on the ranch.
The RANGER CREW XP 1000 Texas Edition features include:
- Custom Styling – The Texas Edition comes with exclusive Texas badging, unique colors and graphics and is fully customizable with accessories to get the job done.
- Towing and Hauling Confidence – Class-leading 2,500 lb towing and 1,000 lb bed capacity, plus a factory-installed 4,500 lb winch with synthetic rope and autostop gives ranchers the confidence to pull and haul more around the property.
- All-Day Comfort – A factory-installed poly sport roof and contoured seats with back bolsters for all day comfort to tackle tasks from sun up to sun down.
- Built for Texas – Tackle tough terrain with high clearance arched A-arms and 8-ply 29″ Pro Armor tires that provide 14″ of ground clearance and durability.
- Powerful LED Lighting – With high-intensity LED headlights, ranchers have the ability to work early mornings and tackle late-night tasks with bold, improved visibility.
- Remain in Charge – Power phones and small electronic devices with a new USB charging port in the dash.
2023 RANGER SP 570 NorthStar Edition, starting at $19,299 U.S. MSRP
2023 RANGER CREW SP 570 NorthStar Edition, starting at $21,999 U.S. MSRP
Back for 2023 is the class-exclusive RANGER SP 570 NorthStar edition, featuring a fully enclosed cab and factory-installed heating, enabling customers to comfortably extend the use of their vehicle through the winter.
The RANGER SP 570 and CREW SP 570 NorthStar Edition features include:
- Pro Shield Cab System – Best-in-class full-cab delivers comfort and protection from rain, dust and cold weather with full crank-down windows doors and front and rear panels for added comfort.
- Work and Play in Comfort – Heating and ventilation to allow for year-round use of the vehicle in the comfort of a warm cab during cold days and early mornings.
- Redefined Powerful LED Lighting – New for 2023, LED headlights allow customers to work and play with more confidence in low-light conditions.
- Added Protection – New Mud Guards prevent debris collection under the cab for less clean up and more durability.
- Capability – Factory-equipped Polaris Pro HD 3,500 lb winch with synthetic rope and autostop adds the confidence to take on any task with ease.
- Remain in Charge – With a new USB charging port in the dash, customers can stay charged and connected while on the move.
To learn more about the 2023 RANGER family, please visit Polaris.com/RANGER or join the conversation and follow on Facebook®, Instagram®, YouTube® and Twitter®
Sportsman
2023 Sportsman 850 High Lifter Edition, starting at $12,199 U.S. MSRP
2023 Sportsman XP 1000 High Lifter Edition, starting at $16,899 U.S. MSRP
Made for the mud, Polaris brings back the Sportsman 850 and Sportsman XP 1000 High Lifter Editions that have been fully engineered for extreme mud performance.
Key features for the Sportsman 850 and Sportsman XP 1000 High Lifter Edition include:
- Navigate the Mud – High-mount air intakes and clutch ducting allow clean, cool air to enter the engine when traversing mud/water.
- Mud Specific Tires – 30″ Outlaw 2 tires and 14″ aluminum wheels offer greater clearance and handling on deep mud, rocks, and trails.
- Traction and Suspension – Equipped with 13.5″ ground clearance to clear obstacles.
- Recovery Ready – Factory-installed on Sportsman XP 1000 Mud Edition, the 3,500 lb winch has the power to pull.
2023 Sportsman 570 Ride Command Edition, starting at $12,399 U.S. MSRP
2023 Sportsman XP 1000 Ride Command Edition, starting at $16,699 U.S. MSRP
The Sportsman 570 and XP 1000 Ride Command editions are factory-equipped with a 7-inch glove-touch display powered by RIDE COMMAND, featuring GPS navigation and communication technology that elevates the ATV trail riding experience.
Key features for the Sportsman 570 and XP 1000 Ride Command Editions include:
- RIDE COMMAND+ – Factory installed on the Sportsman XP 1000 Ride Command Edition, receives key information including remote vehicle location services, vehicle health monitoring, and more. All available in the Polaris App.
- Duro Tires – Up to 27″ Duro Tires and 14″ aluminum rims offer greater clearance and handling on the trail to confidently tackle off-road terrain.
- Powerful LED Lighting – Extend the riding day with LED headlights, providing better visibility in low-light conditions to brighten the trail from dawn to dusk.
- Premium Style & Protection – Both Ride Command Editions feature the new Silver Quartz Metallic colorway plus front bumpers for the ultimate vehicle protection on the trails ahead.
2023 Sportsman 570 Utility HD, starting at $10,199 U.S. MSRP
The Sportsman 570 Utility HD is back for 2023 giving riders more confidence in the field, including the utility front bumper with hitch, front and rear metal racks and more.
The Sportsman 570 Utility HD features include:
- Strength and Capability – 1,350 lb of towing, 270 lb of rack capacity, the Sportsman 570 Utility HD is equipped with the strength and capability to get the work done.
- Ready For Tough Jobs – Easily Park a trailer in a tight spot with more direct control thanks to the front hitch and added vehicle protection with the front utility bumper.
- Get More Done – With the addition of a rear power port plug, it’s easier than ever for users to integrate added equipment like utility sprayers and grass mowers.
- Extra Capacity – With added front and rear metal racks, riders have extra space to tie down cargo and get around the property.
For full details on the 2023 Polaris Sportsman lineup, the Sportsman 850 and Sportsman1000 High Lifter Edition models, Sportsman 570 and Sportsman 1000 Ride Command, Sportsman 570 Utility HD and other 2023 Sportsman models, visit Polaris.com/Sportsman.
About Polaris
As the global leader in powersports, Polaris Inc. (NYSE: PII) pioneers product breakthroughs and enriching experiences and services that have invited people to discover the joy of being outdoors since our founding in 1954. Polaris’ high-quality product line-up includes the Polaris RANGER®, RZR® and Polaris GENERAL™ side-by-side off-road vehicles; Sportsman® all-terrain off-road vehicles; military and commercial off-road vehicles; snowmobiles; Indian Motorcycle® mid-size and heavyweight motorcycles; Slingshot® moto-roadsters; Aixam quadricycles; Goupil electric vehicles; and pontoon and deck boats, including industry-leading Bennington pontoons. Polaris enhances the riding experience with a robust portfolio of parts, garments, and accessories. Proudly headquartered in Minnesota, Polaris serves more than 100 countries across the globe. www.polaris.com
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