On April 12, all-terrain-vehicle, snowmobile, and motorcycle manufacturer Polaris Industries
- Weakening demand for ATVs, Polaris' leading product, contributed to a 4% drop in net sales.
- While still in the red, cash flow from operations did improve, primarily from lower accounts receivable and fewer cash payments against accrued expenses.
- Management's outlook for 2007 remains gloomy, with expected sales growth of 1% to 3% as dealers continue to lower their inventories.
- Polaris, along with peer Arctic Cat
(NASDAQ:ACAT) , carries a lowly one-star rating in The Motley Fool's CAPS community. In contrast, eco-friendly automobile giant Honda(NYSE:HMC) , a rival in the ATV segment, boasts a full five-star rating. Find out why Honda has an opportunity to ride high as the best international stock for 2007.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|---|
|
Sales |
$311,640 |
$317,713 |
$333,509 |
(4.7%) |
|
Net Profit |
-- |
$12,393 |
$11,530 |
7.5% |
|
EPS |
$0.32 |
$0.34 |
$0.27 |
25.9% |
|
Diluted Shares |
36,552 |
43,124 |
(15.2%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
20.44% |
20.21% |
0.23 |
|
Operating Margin |
5.05% |
4.82% |
0.23 |
|
Net Margin |
3.90% |
3.46% |
0.44 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$45,115 |
$10,913 |
313.4% |
|
Accounts Rec. |
$51,957 |
$60,712 |
(14.4%) |
|
Inventory |
$236,739 |
$220,005 |
7.6% |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$105,795 |
$97,959 |
8% |
|
Long-Term Debt |
$243,000 |
$80,000 |
203.8% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
($15,007) |
($43,752) |
(65.7%) |
|
Capital Expenditures |
$14,307 |
$14,023 |
2% |
|
Free Cash Flow |
($29,314) |
($57,775) |
(49.3%) |
Free cash flow is a Fool's best friend.
Related Foolishness:
- Warren Buffett's Priceless Investment Advice
- Foolish Forecast: Polaris Launches a New Year
- 70 Times Better Than the Next Microsoft
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
