Polaris Stock

Polaris Inc. (Polaris) designs, engineers, manufactures, and markets powersports vehicles, which include off-road vehicles (‘ORV’), including all-terrain vehicles (‘ATV’) and side-by-side vehicles; military and commercial ORVs; snowmobiles; motorcycles; moto-roadsters; quadricicycles; and boats.

The company also designs and manufactures or sources parts, garments and accessories (‘PG&A’), including aftermarket accessories and apparel. The company’s products are sold online and through dealers and distributors principally located in the United States, Canada, Western Europe, Australia, and Mexico.

Business Segments

The company operates in three business segments: Off Road, On Road, and Marine. The company’s products are sold through a network of approximately 2,500 independent dealers in North America, approximately 1,500 independent international dealers through over 25 subsidiaries, and approximately 70 independent distributors in nearly 90 countries outside of North America.

Off Road

The Off Road segment primarily consists of ORVs and snowmobiles. ORVs are four-wheel vehicles designed for off-road use and traversing a wide variety of terrain, including dunes, trails, and mud. The vehicles can be multi-passenger or single passenger, are used for recreation in such sports as fishing and hunting and for trail and dune riding, and for utility purposes on farms, ranches, and construction sites. The ORV industry is consisted of ATVs and side-by-side vehicles. Internationally, ATVs and side-by-sides are sold primarily in Western Europe, Australia, and Mexico by similar manufacturers as in North America.

In 2023, the company continued to be the North America market share leader in off-road vehicles. The company’s ORV lineup includes the RZR sport side-by-side, the RANGER utility side-by-side, the GENERAL crossover side-by-side, the Polaris XPEDITION adventure side-by-side and the Sportsman ATV. The full line spans 107 models, including two-, four-, and six-wheel drive general purpose and recreational vehicles. In many of the company’s segments, the company offers youth, value, mid-size, premium and extreme-performance vehicles, which come in both single passenger and multi-passenger seating arrangements. Key 2023 ORV product introductions included the Extreme Duty RANGER XD 1500, RANGER XP Kinetic and the Polaris XPEDITION.

The company sells its ORVs directly to a network of approximately 1,400 dealers in North America and 1,100 international dealers. Many of the company’s ORV dealers and distributors are also authorized snowmobile dealers. The company produces and delivers its products throughout the year based on dealer, distributor, and customer orders. The company utilizes its Retail Flow Management (‘RFM’) ordering system for ORV dealers, which allows dealers to order daily and create a segment stocking order, which helps to reduce order fulfillment times.

The company produces a full line of snowmobiles consisting of 57 models, ranging from youth models to utility and economy models to performance and competition models.

Key model introductions in 2023 included the new Series 9 325 track that further elevates the Polaris RMK line. The company also manufactures a snow bike conversion kit system under the Timbersled brand. In 2023, the company launched the new RIOT Gen 2 system, as well as more trim levels and options.

Polaris snowmobiles are sold principally in the United States, Canada, and Northern Europe. The company sells its snowmobiles directly to a network of over 580 dealers in North America, primarily located in the snowbelt regions of the United States and Canada, and over 300 international dealers. The company offers a pre-order SnowCheck program in the spring for its customers that assists the company in production planning. This program allows the company’s customers to order a true factory-customized snowmobile by selecting various options, including chassis, track, suspension, colors and accessories.

The company’s commercial and government/defense businesses design and manufacture vehicles that support various commercial and government applications for transporting people and hauling equipment, as well as tactical defense vehicles. The company’s defense vehicles, which include ATVs and side-by-side vehicles with features specifically designed for military applications, provide versatile mobility for up to nine passengers, and include the company’s DAGOR, Sportsman MV and MRZR models. The company offers 26 models across its brands.

The company’s commercial and government/defense businesses each have their own distribution networks outside of the company’s traditional dealer channels through which their respective vehicles are distributed. ProXD, one of the company’s vehicle brands, is sold through a growing network of over 200 dealers and also direct to customer where permitted.

The company designs, engineers, produces or supplies a variety of replacement parts and Polaris Engineered Accessories for the company’s Off Road Segment. ORV accessories include winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks and oil. The company also markets a full line of gear and apparel related to its ORVs, including helmets, jackets, gloves, pants and hats. Snowmobile accessories include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil and lubricants. The company also markets a full line of gear and apparel for its snowmobiles, including helmets, goggles, jackets, gloves, boots, bibs, pants and hats. Gear and apparel are designed to the company’s specifications, purchased from independent vendors and sold by the company through its dealers, distributors, and online.

PG&A products for the Off Road segment include the company’s OEM brands, as well as other portfolio brands, including Kolpin, Pro Armor, Klim, 509, and Trail Tech. Kolpin, Pro Armor and Trail Tech serve various accessory related needs. Kolpin is a lifestyle brand specializing in purpose-built and universal-fit accessories for a variety of off-road vehicles and off-road outdoor enthusiasts. Pro Armor offers a lineup that specializes in accessories for performance side-by-side vehicles, snowmobiles and ATVs. Brands in the company’s Apparel category include Klim, which specializes in premium technical riding gear for snowmobile and off-road activities, and 509, which is an aftermarket leader in snowmobile and off-road apparel, helmets and goggles. Kolpin, Pro Armor and Trail Tech are marketed through Apex Product Group, a unified sales, customer service, distribution and vertically integrated manufacturing organization. Apex allows the company to access customers through strategic retail and e-commerce marketplaces, as well as dealerships (Polaris and non-Polaris), to reach owners of Polaris and other OEM’s products. Klim and 509 each have their own dealer/distributor networks.

On Road

The company’s On Road segment designs and manufactures motorcycles, moto-roadsters, light duty hauling, and passenger vehicles.

In 2023, the company held the number two position in North America market share for the 900cc+ category. The company’s motorcycles lineup includes Indian Motorcycle and Slingshot, a three-wheel open air roadster. The company’s 2024 model year line of motorcycles for Indian Motorcycle and Slingshot consists of 38 models. In 2023, Indian Motorcycle launched its all-new 2024 lineup, featuring a limited edition FTR x 100% R Carbon, a new Challenger Elite, and completely redesigned PowerBand Audio system. Slingshot launched its all-new 2024 lineup with thoughtful refinement and bold graphics.

The company designs, engineers, produces or sources a variety of replacement parts and accessories for the company’s motorcycles. Motorcycle accessories include saddle bags, handlebars, backrests, exhausts, windshields, seats, oil and various chrome accessories. The company also markets a full line of gear and apparel for its motorcycles, including helmets, jackets, leathers and hats. Gear and apparel are purchased from independent vendors and sold by the company through its dealers, distributors, and online under the company’s brand names. PG&A products for the On Road segment include the company’s OEM brands, as well as other portfolio brands, including Klim and 509.

Indian Motorcycle and Slingshot are distributed directly through independently owned dealers and distributors. Indian Motorcycles are sold through a network of over 200 dealers in North America and over 350 international dealers. Slingshot has over 325 dealers globally. The company utilizes its RFM ordering system for motorcycle dealers, which allow dealers to order daily and create a segment stocking order, which helps to reduce order fulfillment times.

The company also designs and manufactures vehicles that support various commercial and industrial work applications and include products in the light-duty hauling, industrial and urban/suburban commuting sub-sectors. The company’s vehicle brands include Goupil and Aixam, which are primarily marketed in Western Europe. The company offers 13 models across these brands. These businesses each have their own distribution networks through which their respective vehicles are distributed. Goupil and Aixam sell directly to customers in France, through subsidiaries in certain Western European countries and through several dealers and distributors for markets outside such countries.

Marine

The company’s Marine segment designs and manufactures boats that are designed to compete in key segments of the recreational marine industry, specifically pontoon and deck boats.

The company’s brands, Bennington, Godfrey and Hurricane, are strategically positioned with over 500 base models. The company also offers custom layouts and features and work with most engine manufacturers enabling customers to build a boat that meets their specifications. The combination of the company’s Bennington and Godfrey brands is the market share leader in pontoon boats.

In 2023, Polaris Marine launched the model year 2024 boats for the Bennington, Godfrey and Hurricane brands. Notable launches include Bennington’s SV and S series refresh that offers an enhanced style and streamlined product offering at a competitive price point, and Godfrey’s XP series, a new halo product that elevates design, sound and lighting. Additionally, Godfrey launched the entry level Xperience series and Hurricane launched the Sundeck 217/Sundeck Sport 218 models, as well as the Sundeck 2050/Sundeck Sport 2050 models.

The company’s extensive, experienced and loyal network of over 550 global dealers is a competitive advantage, helping to generate steady demand. Concentrated primarily in North America, this dealer network is organized into distinct sales territories supported by experienced sales representatives and leadership.

Polaris Adventures

The company’s Polaris Adventures business partners with local outfitters to deliver unique ride experiences leveraging many of the company’s global vehicle platforms. The Polaris Adventures network has completed over 1,500,000 rides since 2017, and had over 250 locations as of December 31, 2023. The financial results of the Polaris Adventures business are included within the Off Road and On Road segments, depending on the vehicle platform used in the ride experience.

Financial Services Arrangements

Floor Plan Financing: The company has arrangements with Polaris Acceptance (United States), a joint venture between Polaris and a subsidiary of Wells Fargo Bank, N.A., Wells Fargo affiliates (who provide floor plan financing for customers in many countries and regions, including Canada, Australia, France, Germany, the United Kingdom and Scandinavia), and a subsidiary of Huntington Bancshares Incorporated to provide floor plan financing for many of the company’s dealers. A majority of the company’s sales of ORVs, snowmobiles, motorcycles, boats, and related PG&A are financed under these arrangements whereby the company receives payment within a few days of shipment of its product.

Customer Financing. The company does not offer consumer financing directly to the end users of its products. Instead, the company has agreements in place with third-party financing companies to provide financing services to those end consumers.

Manufacturing and Distribution Operations

The company’s products are primarily assembled at its 20 global manufacturing facilities, many of which are shared across business segments. The company is vertically integrated in several key components of its manufacturing process, including plastic injection molding, precision machining, welding, clutch assembly and painting. Raw materials and other component parts are purchased from third-party vendors. The company has a long-term supply contract with a boat engine manufacturer.

Contract carriers ship the company’s products from its manufacturing and distribution facilities to its customers. The company maintains several leased wholegoods distribution centers where final set-up and up-fitting is completed for certain models before shipment to dealers, distributors, and customers.

The company’s products are distributed to its dealers, distributors, and customers through a network of over 40 distribution centers, including third-party providers.

Sales and Marketing

The company’s marketing activities are designed primarily to promote and communicate with consumers to enable the marketing and selling efforts of the company’s dealers and distributors globally. The company advertises its brands directly to consumers via digital, television, print, out of home, radio, events and sponsorships. The company utilizes public relations and partnerships to drive earned media. The company provides advertising assets and content and partially underwrites dealer and distributor advertising to a degree and on terms, which vary by brand and from year to year. The company also provides print materials, signage and other promotional items for use by dealers.

Intellectual Property

Some of the more important trademarks used in the company’s global operations include POLARIS, RANGER, RZR, GENERAL, Polaris XPEDITION, SPORTSMAN, INDIAN MOTORCYCLE, SLINGSHOT, BENNINGTON, and KLIM. The company protects these marks as appropriate through registrations in the United States and other jurisdictions.

Product Safety & Regulatory Affairs

In the United States, the Consumer Product Safety Commission (‘CPSC’) has federal oversight over product safety issues related to snowmobiles, snow-bikes and off-road vehicles; (ii) the National Highway Traffic Safety Administration (‘NHTSA’) has federal oversight over product safety issues related to motorcycles and Slingshot; and (iii) the U.S. Coast Guard and its foreign equivalents have oversight over the marine safety regulations for the company’s marine products. In addition, the company designs its products to comply with various applicable voluntary safety standards promulgated by industry associations.

History

The company, a Minnesota corporation, was founded in 1945. It was incorporated in 1994. The company was formerly known as Polaris Industries Inc. and changed its name to Polaris Inc. in 2019.