Polaris(PII)2025-02-18 19:39Financial Performance - Total sales for 2024 were $7.2 billion, a decrease of 20% from 2023[153]. - Gross profit for 2024 was $1.5 billion, down 25% from $2.0 billion in 2023, with a gross profit margin of 20.4%[154]. - Net income from continuing operations attributable to Polaris Inc. was $110.8 million, or $1.95 per diluted share, a decline of 78% from $502.8 million, or $8.71 per diluted share in 2023[155]. - Adjusted EBITDA for 2024 was $635.4 million, a decrease of 38% from $1,020.9 million in 2023[158]. - Operating income decreased significantly to $290.6 million in 2024 from $700.9 million in 2023[256]. - Comprehensive income attributable to Polaris Inc. was $42.8 million in 2024, down from $532.8 million in 2023[259]. - Net income for 2024 was $111.2 million, a decrease of 77.9% compared to $502.7 million in 2023[265]. Sales and Revenue - Sales in the United States accounted for 79% of total sales, totaling $5.6 billion, down 21% from 2023[160]. - Total sales decreased by 20% in 2024 to $7,175.4 million compared to $8,934.4 million in 2023[1]. - Off Road segment sales fell by 18% to $5,706.7 million, while On Road and Marine segments decreased by 17% and 37%, respectively[2][3]. - Wholegoods revenue for 2024 was $5,469.0 million, down from $7,122.1 million in 2023, representing a decline of 23.3%[320]. - Total revenue for the year ended December 31, 2024, was $7,175.4 million, a decrease of 19.7% from $8,934.4 million in 2023[320]. Expenses and Costs - Operating expenses for 2024 were $1.3 billion, a decrease of 5% from $1.3 billion in 2023, with an operating expense margin of 17.8%[158]. - Cash provided by operating activities dropped significantly to $268.2 million in 2024 from $925.8 million in 2023, a decrease of $657.6 million[1][5]. - The company reported a significant increase in research and development expenses to $336.9 million in 2024, compared to $374.3 million in 2023[256]. - The Company incurred $85.5 million in advertising expenses in 2024, a decrease of 9.3% compared to $94.1 million in 2023[300]. - The Company incurred restructuring expenses of $23.4 million, primarily related to severance and other employee-related costs[301]. Debt and Financing - The company had outstanding borrowings of $282.0 million under its $1.4 billion Revolving Loan Facility as of December 31, 2024[1][7]. - As of December 31, 2024, the company's debt to total capital ratio was 62%, up from 57% in 2023[198]. - The company issued $500 million in 6.95% Senior Notes, with net proceeds of approximately $492 million after fees, maturing in March 2029[196]. - The Company amended its Term Loan Facility to $500 million and extended the maturity date to December 2029[344]. - As of December 31, 2024, total financing obligations amounted to $2,072.4 million, an increase from $1,908.4 million in 2023[341]. Inventory and Assets - Total Polaris North America snowmobile dealer inventories increased by approximately 10%[1][9]. - The Company’s net inventories as of December 31, 2024, were $1,741.5 million, a decrease of 3.8% from $1,810.5 million in 2023[319]. - Total assets increased slightly to $5,525.2 million in 2024 from $5,516.3 million in 2023[254]. - The Company’s property and equipment, net, was $1,186.7 million as of December 31, 2024, a decrease from $1,201.5 million in 2023[319]. Tax and Interest - The effective income tax rate for 2024 was 21.0%, up from 19.0% in 2023, reflecting lower pretax earnings[168]. - Interest expense rose to $137 million in 2024, an increase of 10% from $125 million in 2023, primarily due to higher interest rates[166]. - A 100 basis point increase or decrease in interest rates would increase or decrease interest expense by approximately $8 million based on unhedged variable-rate debt[225]. Shareholder Actions - The company repurchased 1.0 million shares for $82.7 million in 2024, positively impacting diluted net income per share by three cents[199]. - Cash dividends paid per share were $2.64 in 2024, compared to $2.60 in 2023 and $2.56 in 2022[262]. - The Company granted 386,055 stock options in 2024, with a weighted-average exercise price of $89.96[331]. Compliance and Risk Management - The company remains in compliance with all debt covenants, maintaining an interest coverage ratio of not less than 3.00 to 1.00[198]. - The Company’s internal control over financial reporting was evaluated as effective as of December 31, 2024, based on COSO criteria[232]. - The Company is subject to market risk from fluctuating prices of commodities such as steel, aluminum, and diesel fuel, which are critical to its operations[218]. - The Company actively manages foreign currency exposure through hedging contracts, including $12 million in Australian dollars and $79.2 million in Canadian dollars[223].