<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
---------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_______________________to_________________
Commission File Number 1-11411
--------------------------------------------------------
Polaris Industries Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-1790959
- --------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
1225 Highway 169 North, Minneapolis, MN 55441
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(612) 542-0500
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
------ -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of August 2, 1996, 27,282,073 shares of Common Stock of the issuer were
outstanding.
<PAGE>
POLARIS INDUSTRIES INC.
TABLE OF CONTENTS
Part I. FINANCIAL INFORMATION
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets Pg. 3
Consolidated Statements of Operations Pg. 4
Consolidated Statements of Cash Flows Pg. 5
Consolidated Statement of Shareholders' Equity Pg. 6
Notes to Consolidated Financial Statements Pg. 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Results of Operations Pg. 10
Cash Dividends Pg. 12
Liquidity and Capital Resources Pg. 12
Inflation and Exchange Rates Pg. 12
Part II OTHER INFORMATION Pg. 14
Item 1 - Legal Proceedings
Item 2 - Changes in Securities
Item 3 - Defaults upon Senior Securities
Item 4 - Submission of Matters to a Vote
of Security Holders
Item 5 - Other Information
Item 6 - Exhibits and Reports on Form 8-K
SIGNATURE PAGE Pg. 16
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<PAGE>
POLARIS INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $6,938 $3,501
Trade receivables 49,871 40,402
Inventories 150,680 104,633
Prepaid expenses and other 3,532 6,735
Deferred tax assets 20,000 20,000
-------- --------
Total current assets 231,021 175,271
-------- --------
Deferred Tax Assets 33,000 35,000
Property and Equipment, at cost, net of accumulated
depreciation of $62,929 in 1996 and $47,867 in 1995 81,256 78,455
Investments in Affiliates 12,087 557
Intangible Assets, at cost, net of accumulated
amortization of $9,344 in 1996 and $9,006 in 1995 24,815 25,153
-------- --------
Total Assets $382,179 $314,436
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $77,931 $57,388
Distributions payable 0 0
Accrued expenses 77,755 85,748
Income taxes payable 19,338 12,586
-------- --------
Total current liabilities 175,024 155,722
Borrowings under credit agreement 64,000 40,200
-------- --------
Total Liabilities 239,024 195,922
-------- --------
Shareholders' Equity:
Common stock 276 273
Additional paid-in capital 117,169 109,344
Deferred compensation (1,757) 0
Compensation payable in common stock 8,641 11,418
Retained earnings (accumulated deficit) 18,826 (2,521)
-------- --------
Total Shareholders' Equity 143,155 118,514
-------- --------
Total Liabilities and Shareholders' Equity $382,179 $314,436
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements
-3-
<PAGE>
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
UNAUDITED
<TABLE>
<CAPTION>
Second Quarter For the Six Months
Ended June 30, Ended June 30,
---------------------- ---------------------
1996 1995 1996 1995
---------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales $317,053 $285,357 $595,094 $540,150
Cost of Sales 253,859 227,323 481,242 435,401
-------- -------- -------- --------
Gross profit 63,194 58,034 113,852 104,749
Operating Expenses
Selling and marketing 30,569 28,961 52,150 48,830
General and administrative 7,930 8,780 15,272 16,009
-------- -------- -------- --------
Total operating expenses 38,499 37,741 67,422 64,839
-------- -------- -------- --------
Operating Income 24,695 20,293 46,430 39,910
Nonoperating Expense (Income), net (82) 76 205 (1,179)
-------- -------- -------- --------
Income before income taxes 24,777 20,217 46,225 41,089
Provision for Income Taxes 8,491 7,682 16,641 15,614
-------- -------- -------- --------
Net Income $16,286 $12,535 $29,584 $25,475
-------- -------- -------- --------
-------- -------- -------- --------
Net Income Per Share $0.58 $0.45 $1.06 $0.92
-------- -------- -------- --------
-------- -------- -------- --------
Weighted Average Number of
Common and Common Equivalent
Shares Outstanding 28,070 27,790 28,026 27,786
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
See Notes to Consolidated Financial Statements
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<PAGE>
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
UNAUDITED
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
---------------------------
1996 1995
----------- ----------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $29,584 $25,475
Adjustments to reconcile net income to
cash flow from operating activities:
Depreciation 15,062 12,539
Amortization 338 430
Noncash compensation 3,344 2,935
Deferred income taxes 2,000 5,000
Changes in current operating items -
Trade receivables (9,469) 1,866
Inventories (46,047) (25,769)
Accounts payable 20,543 4,881
Accrued expenses (7,993) 3,246
Income taxes payable 6,752 (2,463)
Others, net 3,153 2,632
------- -------
Net cash provided by
operating activities 17,267 30,772
------- -------
Cash Flows From Investing Activities:
Purchase of property and equipment (17,863) (21,407)
Investments in affiliates (11,530) (977)
------- -------
Cash flow used for investing activities (29,393) (22,384)
------- -------
Cash Flows From Financing Activities:
Borrowings under credit agreement, net 23,800 0
Cash distributions to partners 0 (12,736)
Cash dividends to shareholders (8,237) (40,403)
------- -------
Cash flow provided by (used for) financing activities 15,563 (53,139)
------- -------
Increase (decrease) in cash and cash equivalents 3,437 (44,751)
Cash and Cash Equivalents, Beginning 3,501 62,881
------- -------
Cash and Cash Equivalents, Ending $6,938 $18,130
------- -------
------- -------
</TABLE>
See Notes to Consolidated Financial Statements
-5-
<PAGE>
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In Thousands)
UNAUDITED
<TABLE>
<CAPTION>
Retained
Additional Compensation Earnings
Common Paid-In Deferred Payable in (Accumulated
Stock Capital Compensation Stock Deficit) Total
----- ------- ------------ ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 $273 $109,344 $0 $11,418 ($2,521) $118,514
First Rights conversion to stock 2 5,717 0 (5,769) 0 (50)
First Rights grants 0 0 0 2,992 0 2,992
Restricted stock 1 2,108 (1,757) 0 0 352
Cash dividends declared 0 0 0 0 (8,237) (8,237)
Net income 0 0 0 0 29,584 29,584
---- -------- ------- ------ ------- --------
Ending Balance, June 30, 1996 $276 $117,169 ($1,757) $8,641 $18,826 $143,155
---- -------- ------- ------ ------- --------
---- -------- ------- ------ ------- --------
</TABLE>
See Notes to Consolidated Financial Statements
-6-
<PAGE>
POLARIS INDUSTRIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial statements and, therefore, do not include all
information and disclosures of results of operations, financial
position and changes in cash flow in conformity with generally
accepted accounting principles for complete financial statements.
Accordingly, such statements should be read in conjunction with the
previously filed Form 10-K. In the opinion of management, such
statements reflect all adjustments (which include only normal
recurring adjustments) necessary for a fair presentation of the
financial position, results of operations, and cash flows for the
periods presented. Due to the seasonality of the snowmobile, all
terrain vehicle (ATV) and personal watercraft (PWC) business, and to
certain changes in production and shipping cycles, results of interim
periods are not necessarily indicative of the results to be expected
for the complete year.
Certain amounts previously reported in the 1995 consolidated financial
statements have been reclassified to conform to the 1996 presentation.
These reclassifications had no effect on previously reported net
income or shareholders' equity.
NOTE 2. INVENTORIES
The major components of inventories are as follows (in thousands):
June 30, 1996 December 31, 1995
------------- -----------------
Raw Materials $44,946 $26,526
Service Parts 43,893 39,952
Finished Goods 61,841 38,155
------- -------
$150,680 $104,633
------- -------
------- -------
NOTE 3. FINANCING AGREEMENT
The Company has an unsecured bank line of credit arrangement with
maximum available borrowings of $125,000,000. Interest is charged at
rates based on LIBOR or "prime" (5.84% at June 30, 1996) and the
agreement expires on March 31, 1998. As of June 30, 1996, total
borrowings under this credit agreement were $64,000,000 and have been
classified as long-term liabilities in the accompanying consolidated
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<PAGE>
balance sheets. Cumulative borrowings and repayments under the credit
agreement during the six months ended June 30, 1996, were
$169,000,000 and $145,200,000 respectively.
NOTE 4. INVESTMENTS IN AFFILIATES
The Company's investments in joint ventures are accounted for under
the equity method and consisted of the following carrying amounts (in
thousands):
June 30, 1996 December 31, 1995
------------- -----------------
Polaris Acceptance $11,288 $0
Robin Manufacturing, U.S.A. 799 557
------- ----
$12,087 $557
------- ----
------- ----
In February, 1996 a wholly-owned subsidiary of the Company entered
into a partnership agreement with Transamerica Commercial Finance
Corporation (TCFC) to form Polaris Acceptance. Polaris Acceptance
provides floor plan financing and may in the future provide other
financial services to dealers, distributors and retail customers of
the Company. Under the partnership agreement the Company's
subsidiary has a 25 percent equity interest in Polaris Acceptance and
an option to increase its equity interest to 50 percent effective
January 1, 1997. The Company has guaranteed 25 percent of the
outstanding indebtedness of Polaris Acceptance under a credit
agreement between Polaris Acceptance and TCFC. At June 30, 1996, the
Company's contingent liability with respect to the guarantee was
approximately $67,000,000.
In February, 1995, the Company entered into an agreement with Fuji
Heavy Industries Ltd. to form Robin Manufacturing, U.S.A. ("Robin").
Under the agreement, Polaris has a 40 percent ownership interest in
Robin, which builds engines in the United States for recreational and
industrial products.
The Company's allocable share of the income of Polaris Acceptance and
Robin was not significant for the reported periods and has been
included as a component of nonoperating expense (income) in the
accompanying consolidated statements of operations.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Historically, the Company elected not to insure for product liability
losses. Effective June 1996, the Company purchased excess insurance
coverage for catastrophic product liability claims for incidents
occurring in future periods that exceed a significant self-insured
retention. The estimated costs resulting from any losses are charged
to operating expenses when it is probable a loss has been incurred and
the amount
-8-
<PAGE>
of the loss is determinable.
The Company is a defendant in lawsuits and subject to claims arising
in the normal course of business. It is the opinion of management
that their outcomes will not, in the aggregate, have a material
adverse effect on the financial position or operations of the Company.
NOTE 6. SUBSEQUENT EVENT
On July 18, 1996, the Board of Directors of the Company declared a
regular cash dividend of $0.15 per share payable on August 15, 1996,
to holders of record on August 1, 1996.
-9-
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion pertains to the results of operations and financial
position of Polaris Industries Inc., a Minnesota corporation (the "Company"),
for the quarters and six-month periods ended June 30, 1996 and 1995. Due to the
seasonality of the snowmobile, all terrain vehicle (ATV) and personal watercraft
(PWC) business, and to certain changes in production and shipping cycles,
results of interim periods are not necessarily indicative of the results to be
expected for the complete year.
RESULTS OF OPERATIONS
Sales increased to $317.1 million in the second quarter of 1996, representing an
11 percent increase over $285.4 million in sales for the same period in 1995.
The increase in sales is attributable to a significant increase in sales of ATVs
due to continued strong demand, as well as increases in sales of parts, garments
and accessories.
ATV unit sales volume in the second quarter of 1996 increased 34 percent from
the comparable period in 1995. The average per unit sales price for ATVs
increased by 3 percent in the 1996 period as a result of the introduction of
new, high performance models with additional features that have a higher selling
price than other segments of the ATV product line.
Snowmobile unit volume in the second quarter of 1996 was approximately the same
as the comparable period in 1995.
PWC unit sales volume in the second quarter of 1996 decreased 6 percent from the
comparable period in 1995 reflecting the late-arriving summer in many parts of
the country and an overall slowing in PWC industry growth.
Sales of related parts, garments and accessories (PG & A) in the second quarter
of 1996 increased 21 percent over the comparable period in 1995. Each product
line recorded PG & A sales increases in the second quarter of 1996 over the same
period in 1995.
Sales increased to $595.1 million for the year-to-date period ended June 30,
1996, representing a 10 percent increase over the $540.2 million of sales for
the same period in 1995. Total finished goods unit shipments for the year-to-
date 1996 period increased 4 percent over the same period in 1995.
-10-
<PAGE>
Polaris Industries Inc.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations (cont'd)
Gross profit of $63.2 million in the second quarter of 1996 represents a 9
percent increase over gross profit of $58.0 million for the same period in 1995.
Gross profit of $113.9 million in the year-to-date period ended June 30, 1996
represents a 9 percent increase over gross profit of $104.7 million for the same
period in 1995. The gross profit margin percentage decreased to 19.9 percent
for the second quarter of 1996 as compared to 20.3 percent for the comparable
period in 1995 and to 19.1 percent for the year-to-date period ended June 30,
1996, as compared to 19.4 percent for the year-to-date period in 1995. This
decrease in gross margin percentage is largely attributable to a) an increase in
warranty expenses as a result of the emphasis on technological innovation and
introduction of new high performance models offset by b) decreases in raw
material purchase prices for engines and certain other component parts because
of the recent strengthening of the U.S. dollar in relation to the Japanese yen
when compared to the comparable 1995 periods; and c) a change in the sales mix
which resulted in higher PG & A sales which generate higher margins than sales
of whole goods.
Operating expenses in the second quarter of 1996 increased $0.8 million (2
percent) over the 1995 period as a result of the sales volume increase, but as a
percentage of sales, decreased to 12.1 percent for the second quarter of 1996
compared to 13.2 percent for the same period in 1995. Operating expenses in the
year-to-date period ended June 30, 1996 increased $2.6 million (4 percent) over
the comparable period in 1995, primarily as a result of the sales volume
increase, but as a percentage of sales, decreased to 11.3 percent for the year-
to-date period of 1996 compared to 12.0 percent for the same period in 1995.
The percentage decreases in the second quarter and year-to-date periods are due
primarily to the Company's supporting an increasing level of sales without a
corresponding increase in general and administrative expenses.
The increase of $1.4 million in nonoperating expense in the year-to-date period
ended June 30, 1996 over the comparable period in 1995 is primarily a result of
a) interest expense incurred in 1996 from borrowings under the bank line of
credit arrangement used to fund the payment of special cash distributions
totaling $104.9 million during 1995; b) lower cash and cash equivalent balances
in 1996 generated lower investment income during the first half of 1996 compared
to the same period in 1995; offset by c) equity in the income of affiliates
recorded in the first half of 1996.
The provision for income taxes for the year-to-date period ended June 30, 1996
has been recorded at a rate of 36 percent of pretax income compared to 38
percent for the same period in 1995. This change reflects the recent settlement
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<PAGE>
Polaris Industries Inc.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations (cont'd)
reached with the Canadian income tax authorities regarding a claim for
additional income taxes payable by the Company's Canadian subsidiary for tax
years 1987 through 1991.
CASH DIVIDENDS
On April 15, 1996, the Board of Directors of the Company declared a regular cash
dividend of $0.15 per share payable on May 15, 1996, to holders of record on May
1, 1996.
On July 18, 1996, the Board of Directors of the Company declared a regular cash
dividend of $0.15 per share payable on August 15, 1996, to holders of record on
August 1, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The seasonality of production and shipments causes working capital requirements
to fluctuate during the year. Effective May 8, 1995, the Company entered into
an unsecured bank line of credit arrangement with maximum available borrowings
of $125.0 million. Interest is charged at rates based on LIBOR or "prime" and
the agreement expires March 31, 1998. At June 30, 1996, the Company had
borrowings under its bank line of credit arrangement of $64.0 million and cash
and cash equivalents of $6.9 million, compared to $40.2 million in borrowings
and cash and cash equivalents of $3.5 million at December 31, 1995.
Beginning in early July 1996, the Company began to repurchase its shares under
the 1,000,000 share repurchase authorization approved by the Board of Directors
in January, 1996.
Management believes that existing cash balances and bank borrowings, cash flow
to be generated from operating activities and available borrowing capacity under
the line of credit arrangement will be sufficient to fund operations, regular
dividends, share repurchases, and capital requirements for 1996.
INFLATION AND EXCHANGE RATES
The Company does not believe that inflation has had a material impact on the
results of its operations. However, the changing relationships of the U.S.
dollar to the Japanese yen and Canadian dollar have had a material impact from
time to time.
Over the past several years, weakening of the U.S. dollar in relation to the yen
has
-12-
<PAGE>
Polaris Industries Inc.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations (cont'd)
resulted in higher raw material purchase prices. In 1995, approximately 27
percent of the Company's cost of sales was attributable to purchases from
Japanese suppliers. Management believes that such cost increases also affect
its principal competitors in ATVs, and, to varying degrees, some of its
snowmobile and PWC competitors. The strengthening of the U.S. dollar in
relation to the yen during 1996 has reversed this trend. The Company's cost of
goods sold in the second quarter and year-to-date periods ended June 30, 1996,
were positively impacted by the yen exchange rate fluctuation when compared to
the same periods in 1995. In view of the foreign exchange hedging contracts
currently in place, the Company anticipates that it will continue to have a
positive impact on cost of goods sold during the remaining two quarters of 1996
when compared to the same periods in 1995.
The Company operates in Canada through a wholly-owned subsidiary. Over the past
several years, strengthening of the U.S. dollar in relation to the Canadian
dollar has resulted in lower gross margin levels on a comparable basis.
However, the fluctuation of the Canadian dollar exchange rate did not have a
significant impact on the gross margin levels achieved in the second quarter and
year-to-date period ended June 30, 1996, when compared to the same periods in
1995.
In the past, the Company has been a party to, and in the future may enter into,
foreign exchange hedging contracts for both the Japanese yen and the Canadian
dollar to minimize the impact of exchange rate fluctuations within each year.
At June 30, 1996, the Company had open Japanese yen and Canadian dollar foreign
exchange hedging contracts which mature throughout 1996.
Forward-looking statements herein are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. There are
certain important factors that could cause results to differ materially from
those anticipated by some of the statements made herein. Investors are
cautioned that all forward-looking statements involve risks and uncertainty. In
addition to the factors discussed above, among the other factors that could
cause actual results to differ materially are the following: product offerings
and pricing strategies by competitors; foreign currency exchange rate
fluctuations; environmental and product safety regulatory activity; effects of
weather; uninsured product liability claims; and overall economic conditions,
including inflation and consumer confidence.
-13-
<PAGE>
POLARIS INDUSTRIES INC.
PART II. OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of shareholders on May 9, 1996.
Proxies for matters to be voted upon at the annual meeting were
solicited pursuant to Regulation 14 of the Securities Exchange Act of
1934, as amended. The following matters were voted upon at the
meeting:
1. To elect the following nominees as Class II Directors for a
new term of three years and until their successors are duly
elected and qualified:
Votes Withhold
For Authority
--- ---------
Beverly F. Dolan 23,755,744 188,714
Robert S. Moe 23,768,179 176,280
The terms of the following directors continued after the meeting:
Andris A. Baltins, Kenneth D. Larson, Gregory R. Palen, Stephen G.
Shank and W. Hall Wendel, Jr.
The Board of Directors of the Company has increased the size of the
Board to eight members and elected Raymond J. Biggs as a director of
the Company effective July 1, 1996. Mr. Biggs will serve as a director
until the Annual Meeting of Shareholders of the Company in 1997 and
until his successor is duly elected and qualified.
2. To approve the Polaris Industries Inc. 1996 Restricted Stock
Plan:
Votes For Abstentions Broker Non-Votes Votes Against
--------- ----------- ---------------- -------------
22,545,981 270,660 3,382 1,124,436
-14-
<PAGE>
Polaris Industries Inc.
Part II. Other Information
(cont'd)
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8 - K
(a) EXHIBITS
Exhibit No. 11 - Computation of Per Share Earnings.
Exhibit No. 27 - Financial Data Schedule.
(b) REPORTS ON FORM 8 - K
No reports on Form 8-K have been filed during the quarter for
which this report was filed.
-15-
<PAGE>
POLARIS INDUSTRIES INC.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
POLARIS INDUSTRIES INC.
(Registrant)
Date: August 2, 1996 /s/ W. Hall Wendel, Jr.
-----------------------
W. Hall Wendel, Jr.
Chairman of the Board
and Chief Executive Officer
Date: August 2, 1996 /s/ John H. Grunewald
---------------------
John H. Grunewald
Vice President, Chief Financial
Officer, Treasurer and Secretary
(Principal Financial and Chief
Accounting Officer)
-16-
<PAGE>
EXHIBIT 11
POLARIS INDUSTRIES INC.
COMPUTATION OF NET INCOME PER SHARE
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Second Quarter For the Six Months
Ended June 30, Ended June 30,
-------------- --------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income for the Period $16,286 $12,535 $29,584 $25,475
------- ------- ------- -------
------- ------- ------- -------
Weighted Average Number of Outstanding:
Common Shares 27,532 27,317 27,480 27,264
Rights 431 473 484 522
Restricted stock plan 62 0 31 0
Deferred Compensation Plan for Directors 5 0 4 0
Stock option plan 40 0 27 0
------- ------- ------- -------
Total common and common
equivalent shares 28,070 27,790 28,026 27,786
------- ------- ------- -------
------- ------- ------- -------
Net Income Per Share $0.58 $0.45 $1.06 $0.92
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF POLARIS INDUSTRIES INC. AS OF JUNE 30, 1996,
AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, SHAREHOLDERS' EQUITY AND
CASH FLOWS FOR THE QUARTER ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,938
<SECURITIES> 0
<RECEIVABLES> 49,871
<ALLOWANCES> 0
<INVENTORY> 150,680
<CURRENT-ASSETS> 231,021
<PP&E> 144,185
<DEPRECIATION> 62,929
<TOTAL-ASSETS> 382,179
<CURRENT-LIABILITIES> 175,024
<BONDS> 64,000
0
0
<COMMON> 0
<OTHER-SE> 143,155
<TOTAL-LIABILITY-AND-EQUITY> 382,179
<SALES> 595,094
<TOTAL-REVENUES> 595,094
<CGS> 481,242
<TOTAL-COSTS> 481,242
<OTHER-EXPENSES> 67,422
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 205
<INCOME-PRETAX> 46,225
<INCOME-TAX> 16,641
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,584
<EPS-PRIMARY> 1.06
<EPS-DILUTED> 1.06
</TABLE>
