<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 March 31, 1997
--------------------------------------------------
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 May 8, 1997, 26,649,254 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. 11
Liquidity and Capital Resources Pg. 11
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. 15
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<PAGE>
POLARIS INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
March 31, 1997 December 31, 1996
-------------- -----------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 8,460 $ 5,812
Trade receivables 24,875 36,158
Inventories 115,926 122,911
Prepaid expenses and other 2,696 3,524
Deferred tax assets 24,000 25,000
-------- --------
Total current assets 175,957 193,405
-------- --------
Deferred Tax Assets 29,000 30,000
Property and Equipment, net 89,474 93,513
Investments in Affiliates 20,530 10,421
Intangible Assets, net 24,160 24,378
-------- --------
Total Assets $339,121 $351,717
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 47,617 $ 50,514
Accrued expenses 72,933 102,316
Income taxes payable 12,183 8,557
-------- --------
Total current liabilities 132,733 161,387
Borrowings under credit agreement 55,000 35,000
-------- --------
Total Liabilities 187,733 196,387
-------- --------
Shareholders' Equity:
Common stock 269 270
Additional paid-in capital 99,469 102,946
Deferred compensation (2,789) (978)
Compensation payable in common stock 3,372 9,710
Retained earnings 51,067 43,382
-------- --------
Total shareholders' equity 151,388 155,330
-------- --------
Total Liabilities and Shareholder $339,121 $351,717
-------- --------
-------- --------
See Notes to Consolidated Financial Statements
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<PAGE>
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
UNAUDITED
For the Three Months
Ended March 31,
-----------------------
1997 1996
---- ----
Sales $224,634 $278,041
Cost of Sales 180,741 227,383
-------- --------
Gross profit 43,893 50,658
Operating Expenses
Selling and marketing 19,688 21,581
General and administrative 6,560 7,342
-------- --------
Total operating expenses 26,248 28,923
-------- --------
Operating income 17,645 21,735
Nonoperating Expense (Income)
Interest expense 744 823
Equity in income of affiliates (1,386) -
Other expense (income), net (492) (536)
-------- --------
Income before income taxes 18,779 21,448
Provision for Income Taxes 6,760 8,150
-------- --------
Net income $ 12,019 $ 13,298
-------- --------
-------- --------
Net Income Per Share $ 0.44 $ 0.48
-------- --------
-------- --------
Weighted Average Number of
Common and Common Equivalent
Shares Outstanding 27,450 27,982
-------- --------
-------- --------
See Notes to Consolidated Financial Statements
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<PAGE>
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
UNAUDITED
For the Three Months
Ended March 31,
-----------------------
1997 1996
---- ----
Cash Flows From Operating Activities
Net Income $ 12,019 $ 13,298
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,868 6,988
Noncash compensation 1,198 1,496
Equity in income of affiliates (1,386) -
Deferred income taxes 2,000 2,000
Changes in current operating items -
Trade receivables 11,283 9,549
Inventories 6,985 (31,952)
Accounts payable (2,897) 19,364
Accrued expenses (29,383) (30,946)
Income taxes payable 3,626 5,647
Others, net 830 2,569
-------- --------
Net cash provided by
operating activities 13,143 (1,987)
-------- --------
Cash Flows From Investing Activities:
Purchase of property and equipment (4,611) (10,059)
Investments in affiliates, net (8,723) (7,943)
-------- --------
Net cash used for investing activities (13,334) (18,002)
Cash Flows From Financing Activities:
Borrowings under credit agreement 90,300 103,900
Repayments under credit agreement (70,300) (82,100)
Repurchase and retirement of common shares (12,827) -
Cash dividends to shareholders (4,334) (4,107)
-------- --------
Net cash provided by financing activities 2,839 17,693
-------- --------
Increase (Decrease) in cash and
cash equivalents 2,648 (2,296)
Cash and Cash Equivalents, Beginning 5,812 3,501
-------- --------
Cash and Cash Equivalents, Ending $ 8,460 $ 1,205
-------- --------
-------- --------
See Notes to Consolidated Financial Statements
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<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, 1996 $270 $102,946 ($978) $9,710 $43,382 $155,330
First Rights conversion to stock 3 7,164 - (7,210) - (43)
Employee stock compensation 1 2,181 (1,811) 872 - 1,243
Cash dividends declared - - - - (4,334) (4,334)
Repurchase and retirement of common shares (5) (12,822) - - - (12,827)
Net income - - - - 12,019 12,019
------- --------
Balance, March 31, 1997 $269 $ 99,469 ($2,789) $3,372 $51,067 $151,388
---- -------- ------- ------ ------- --------
---- -------- ------- ------ ------- --------
</TABLE>
See Notes to Consolidated Financial Statements
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<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 such
periods are not necessarily indicative of the results to be expected
for the complete year.
NOTE 2. INVENTORIES
The major components of inventories are as follows (in thousands):
March 31, 1997 December 31, 1996
-------------- -----------------
Raw Materials $ 17,598 $ 24,469
Service Parts 42,186 45,809
Finished Goods 56,142 52,633
-------- --------
$115,926 $122,911
-------- --------
-------- --------
NOTE 3. FINANCING AGREEMENT
Polaris has an unsecured bank line of credit arrangement with maximum
available borrowings of $150.0 million. Interest is charged at rates
based on LIBOR or "prime" (5.88% at March 31, 1997) and the agreement
expires on March 31, 2000, at which time the balance is due. As of
March 31, 1997, total borrowings under this credit agreement were
$55.0 million and have been classified as long-term in the
accompanying consolidated balance sheets.
NOTE 4. INVESTMENTS IN AFFILIATES
In February, 1996 a wholly-owned subsidiary of Polaris entered into a
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<PAGE>
partnership agreement with Transamerica Commercial Finance Corporation
(TCFC) to form Polaris Acceptance. Polaris Acceptance provides floor
plan financing to dealer and distributor customers of Polaris, and may
in the future provide other financial services to dealers,
distributors and retail customers of Polaris. In January 1997,
Polaris exercised its option to increase its equity interest in
Polaris Acceptance to 50 percent. Polaris has guaranteed 50 percent
of the outstanding indebtedness of Polaris Acceptance under a credit
agreement between Polaris Acceptance and TCFC. At March 31, 1997,
Polaris' contingent liability with respect to the guarantee was
approximately $110.0 million.
In February, 1995, Polaris 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.
Polaris' investments in affiliates are accounted for under the equity
method. Polaris' allocable share of the income of Polaris Acceptance
and Robin has been included as a component of nonoperating expense
(income) in the accompanying consolidated statements of operations.
NOTE 5. SHAREHOLDERS' EQUITY
Polaris has a continuing authorization from its Board of Directors to
repurchase up to 3,000,000 shares of the Company's outstanding common
stock. During the first quarter of 1997, Polaris paid $12.8 million
to repurchase and retire 515,000 shares of its common stock with cash
on hand and borrowings under its line of credit. As a result of
repurchases prior to and in the first quarter, Polaris has 1,964,000
shares available to repurchase under this authorization.
On January 23, 1997, the Polaris Board of Directors declared a regular
cash dividend of $0.16 per share payable on February 17, 1997, to
holders of record on February 6, 1997.
On April 17, 1997, the Polaris Board of Directors declared a regular
cash dividend of $0.16 per share payable on May 15, 1997, to holders
of record on April 30, 1997.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Polaris is subject to product liability claims in the normal course of
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<PAGE>
business. Effective June 1996, Polaris purchased excess insurance
coverage for catastrophic product liability claims for incidents
occurring subsequent to the policy date that exceed a self insured
retention. The estimated costs resulting from any losses are charged
to expense when it is probable a loss has been incurred and the amount
of the loss is reasonably determinable.
Injection Research Specialists commenced an action in 1990 against
Polaris in Colorado Federal Court alleging various claims relating to
electronic fuel injection systems for snowmobiles. On April 25, 1997,
a trial jury returned a verdict awarding the plaintiffs $24.0 million
in compensatory damages and $10.0 million in punitive damages against
Polaris, before interest. Polaris believes this award is unjustified
and intends to appeal. Polaris has been advised by outside legal
counsel that it has substantial grounds available for appeal and it
will vigorously pursue available avenues in the post-trial and
appellate review processes. Management and legal counsel are
currently analyzing the verdict and the Company's related financial
exposure and developing post-trial and appellate strategy. As a
result of this process, the Company may record additional reserves
associated with this litigation on its financial statements.
In addition to the aforementioned matter, Polaris is a defendant in
lawsuits and subject to claims arising in the normal course of
business. In the opinion of management, these legal proceedings
pending against or involving Polaris will not have a material adverse
effect on Polaris' financial position or results of operations.
NOTE 7. NEW ACCOUNTING PRONOUNCEMENTS
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share", (SFAS128), which changes the way companies calculate their
earnings per share (EPS). SFAS 128 replaces primary EPS with basic
EPS. Basic EPS is computed by dividing reported earnings by weighted
average shares outstanding, excluding potentially dilutive securities.
Fully diluted EPS, termed diluted EPS under SFAS 128, is also to be
disclosed. Polaris is required to adopt SFAS 128 in the first quarter
of 1998 at which time all prior year EPS are to be restated in
accordance with SFAS 128.
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<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 ("Polaris" or
the "Company"), for the quarters ended March 31, 1997 and 1996. 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 such periods are not necessarily indicative of the results
to be expected for the complete year.
RESULTS OF OPERATIONS
Sales were $224.6 million in the first quarter of 1997, representing a 19
percent decrease from $278.0 million in sales for the same period in 1996.
Sales of parts, garments and accessories ("PG & A") which were separately
reported in prior years are now being included within reported North American
sales for each of the related product lines. In addition, international
sales are now being separately reported.
North American sales of snowmobiles and related PG & A of $21.6 million for
first quarter 1997 were seven percent lower than $23.1 million for the
comparable period in 1996. Historically, unit shipments of snowmobiles are
minimal in the first quarter of the year.
North American sales of ATVs and related PG & A of $143.5 million for first
quarter 1997 were eight percent lower than the comparable period in 1996 of
$155.9 million. The decline is driven by Polaris' focused efforts to reduce
days supply of inventory at dealers.
North American sales of PWC and related PG & A of $46.0 million for the first
quarter 1997 were 48 percent lower than the comparable period in 1996 of
$88.4 million. The decline is due to significantly lower planned production
levels of PWC in 1997 to compensate for the increased dealer inventory
remaining from last season. Partially offsetting the reduced production
level was a nine percent increase in the average per unit sales price
reflecting a shift to more sales of higher priced 3-passenger PWC models.
International sales of snowmobiles, ATVs, PWC and PG & A of $13.5 million
were 27 percent higher than the comparable period in 1996 of $10.6 million.
The increase is due primarily to increased effort to pursue international
opportunities.
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<PAGE>
Polaris Industries Inc.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations (cont'd)
Gross profit of $43.9 million in the first quarter of 1997 represents a 13
percent decrease from gross profit of $50.7 million for the same period in
1996 primarily as a result of the lower sales volume. The gross profit
margin percentage increased to 19.5% for the first quarter of 1997 from 18.2%
for the same period in 1996. This increase in gross profit margin percentage
is primarily attributable to a) continued cost reduction efforts, including
expanded domestic engine production, b) a continuing shift in sales mix to
higher margin products, and c) decreases in costs of certain purchased
components because of the continued strengthening of the U.S. dollar in
relation to the Japanese yen when compared to the comparable 1996 period.
Operating expenses in the first quarter of 1997 decreased nine percent to
$26.2 million from $28.9 million for the comparable period in 1996 primarily
as a result of the lower sales volume. As a percentage of sales, operating
expenses increased to 11.7 percent for the first quarter of 1997 compared to
10.4 percent for the same period in 1996. The percentage increase was
primarily due to an increased level of advertising and promotional costs
related to efforts to assist dealers in retailing remaining snowmobile and
PWC inventory.
The improvement in net nonoperating expense (income) in the first quarter of
1997 from the comparable period in 1996 primarily reflects the positive
financial impact of the Company's equity in the income of Polaris Acceptance
which was formed late in the first quarter of 1996.
CASH DIVIDENDS
On January 23, 1997, the Polaris Board of Directors declared a regular cash
dividend of $0.16 per share payable on February 17, 1997, to holders of
record on February 6, 1997.
On April 17, 1997, the Polaris Board of Directors declared a regular cash
dividend of $0.16 per share payable on May 15, 1997, to holders of record on
April 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
The seasonality of production and shipments causes working capital
requirements to fluctuate during the year. Polaris maintains an unsecured
bank line of credit arrangement with maximum available borrowings of $150.0
million. Interest is charged at rates based on LIBOR or "prime" and the
agreement expires March 31, 2000. At March 31, 1997, Polaris had borrowings
under its bank line of credit arrangement of
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<PAGE>
Polaris Industries Inc.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations (cont'd)
$55.0 million and cash and cash equivalents of $8.5 million, compared to
$35.0 million in borrowings and cash and cash equivalents of $5.8 million at
December 31, 1996.
Polaris has a continuing authorization from its Board of Directors to
repurchase up to 3,000,000 shares of the Company's outstanding common stock.
During the first quarter of 1997, Polaris paid $12.8 million to repurchase
and retire 515,000 shares of its common stock with cash on hand and
borrowings under its line of credit. As a result of repurchases prior to and
in the first quarter, Polaris has 1,964,000 shares available to repurchase
under this authorization.
Injection Research Specialists commenced an action in 1990 against Polaris in
Colorado Federal Court alleging various claims relating to electronic fuel
injection systems for snowmobiles. On April 25, 1997, a trial jury returned
a verdict awarding the plaintiffs $24.0 million in compensatory damages and
$10.0 million in punitive damages against Polaris, before interest and
awarding $15.0 million in compensatory damages and $8.0 million in punitive
damages against Fuji Heavy Industries, Ltd., one of Polaris' sources of
supply of engines. Polaris believes this award is unjustified and intends to
appeal. Polaris has been advised by outside legal counsel that it has
substantial grounds available for appeal and it will vigorously pursue
available avenues in the post-trial and appellate review processes.
Management and legal counsel are currently analyzing the verdict and the
Company's related financial exposure and developing post-trial and appellate
strategy. As a result of this process, the Company may record additional
reserves associated with this litigation on its financial statements.
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, potential outcomes of
litigation matters and capital requirements for 1997.
INFLATION AND EXCHANGE RATES
Polaris does not believe that inflation has had a material impact on the
results of its recent operations. However, the changing relationships of the
U.S. dollar to the Japanese yen and Canadian dollar has a material impact
from time to time.
Over the past several years, weakening of the U.S. dollar in relation to the
yen has resulted in higher raw material purchase prices. In 1996, purchases
totaling 22 percent of Polaris' cost of sales were from yen-denominated
suppliers. Management
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<PAGE>
Polaris Industries Inc.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations (cont'd)
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 over the past 18
months has reversed this trend. Polaris' cost of sales in the first quarter
of 1997 was favorably impacted by the yen-dollar exchange rate fluctuation
when compared to the first quarter of 1996. In view of the foreign exchange
hedging contracts currently in place, Polaris anticipates that the yen-dollar
exchange rate will continue to have a favorable impact on cost of sales
during the remaining three quarters of 1997 when compared to the same periods
in 1996.
Polaris 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 achieved in the first quarter of 1997
when compared to the same period in 1996.
In the past, Polaris 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 March 31, 1997, Polaris had open Japanese yen and Canadian dollar foreign
exchange hedging contracts which mature throughout 1997.
Certain matters discussed in this report are "forward-looking statements"
intended to qualify for the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These "forward-looking statements" can
generally be identified as such because the context of the statement will
include words such as the Company or management "believes", "anticipates",
"expects", "estimates" or words of similar import. Similarly, statements
that describe the Company's future plans, objectives or goals are also
forward-looking. Shareholders, potential investors and others are cautioned
that all forward-looking statements involve risks and uncertainty that could
cause results to differ materially from those anticipated by some of the
statements made herein. 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; future
conduct of litigation and the judicial appeals processes; warranty expenses;
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
and spending.
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<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
None.
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
On February 21, 1997, the Company filed a current report on Form
8-K announcing that it is adding motorcycles to its line of
businesses with the introduction of a made-in-the-U.S.A. model
under the brand name "Victory", to be available in limited
quantities in the spring of 1998.
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<PAGE>
POLARIS INDUSTRIES INC.
SIGNATURES
Pursuant to the requirements of the Securities 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: May 8, 1997 /s/ W. Hall Wendel, Jr.
------------------------------
W. Hall Wendel, Jr.
Chairman of the Board
and Chief Executive Officer
Date: May 8, 1997 /s/ Michael W. Malone
------------------------------
Michael W. Malone
Vice President Finance, Chief Financial
Officer, Treasurer and Secretary (Principal
Financial and Chief Accounting Officer)
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<PAGE>
EXHIBIT 11
POLARIS INDUSTRIES INC.
COMPUTATION OF NET INCOME PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
QUARTER ENDED
-------------
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
Net Income for the Period $12,019 $13,298
------- -------
------- -------
Weighted Average Number of Outstanding:
Common Shares 27,007 27,428
Rights 264 536
Deferred compensation plan for directors 9 4
Stock option plan - 14
Employee stock ownership plan 170 -
------- -------
Total common and common
equivalent shares 27,450 27,982
------- -------
------- -------
Net Income Per Share $ 0.44 $ 0.48
------- -------
------- -------
<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 MARCH 31, 1997, AND
THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, SHAREHOLDERS EQUITY, AND CASH
FLOWS FOR THE QUARTER ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,460
<SECURITIES> 0
<RECEIVABLES> 24,875
<ALLOWANCES> 0
<INVENTORY> 115,926
<CURRENT-ASSETS> 175,957
<PP&E> 167,464
<DEPRECIATION> 77,990
<TOTAL-ASSETS> 339,121
<CURRENT-LIABILITIES> 132,733
<BONDS> 55,000
0
0
<COMMON> 269
<OTHER-SE> 151,119
<TOTAL-LIABILITY-AND-EQUITY> 339,121
<SALES> 224,634
<TOTAL-REVENUES> 224,634
<CGS> 180,741
<TOTAL-COSTS> 180,741
<OTHER-EXPENSES> 26,248
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 744
<INCOME-PRETAX> 18,779
<INCOME-TAX> 6,760
<INCOME-CONTINUING> 12,019
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,019
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
