Press release from Business Wire
Polaris Receives Verdict in 2010 Lawsuit Involving Discontinued Marine Products Division
<p class='bwalignc'> <i>Polaris' full year 2013 sales and earnings from continuing operations guidance remains unchanged</i> </p>
Thursday, July 25, 2013
Polaris Receives Verdict in 2010 Lawsuit Involving Discontinued Marine Products Division19:23 EDT Thursday, July 25, 2013
MINNEAPOLIS (Business Wire) -- Polaris Industries Inc. (NYSE: PII) today announced that a Los Angeles County jury returned an unfavorable verdict against Polaris on July 23, 2013 in the Esparza (“Plaintiff”) vs. Polaris Industries Inc. lawsuit arising out of a collision between a boat and a 2001 Polaris Virage personal watercraft (“Virage”) that occurred on the Colorado River in 2008. Plaintiff was a passenger on the Virage and was seriously injured. The driver of the other boat has subsequently pleaded guilty to three felony counts of driving under the influence of alcohol and causing injury. The jury returned a verdict finding that the accident was caused by multiple actions: the majority of which was attributed to the negligence of the other boat driver, with the balance attributed to the reckless behavior of the driver of the Virage and the design of the Virage.
While our hearts go out to the Plaintiff and her family, Polaris disagrees with the jury's finding and believes the evidence clearly demonstrated that the Virage was a safe vessel and the crash was caused by a combination of too much speed, too much alcohol, and reckless driving. The jury awarded approximately $21 million in damages. Although Polaris cannot determine its potential liability with certainty because the judgment has not yet been entered, Polaris estimates its maximum potential liability in this case is $11 million of the total damages.
Taking into consideration the amount the Company previously accrued for this case, it is anticipated that Polaris will record a non-recurring loss from discontinued operations of up to approximately $4 million, net of tax, or approximately $0.06 per diluted share, in the Company's 2013 third quarter financial statements. The Company's previously issued guidance for sales and earnings from continuing operations, reported earlier this week, does not change. In 2004, the Company announced that it had decided to cease manufacturing marine products in September of that year. Since then, any material financial results of that division have been recorded in discontinued operations.
Polaris is a recognized leader in the powersports industry with annual 2012 sales of $3.2 billion. Polaris designs, engineers, manufactures and markets innovative, high quality off-road vehicles, including all-terrain vehicles (ATVs) and the Polaris RANGER® and RZR® side-by-side vehicles, snowmobiles, motorcycles and small vehicles.
Polaris is among the global sales leaders for both snowmobiles and off-road vehicles and has established a presence in the heavyweight cruiser and touring motorcycle market with the Victory and Indian motorcycle brands. Additionally, Polaris continues to invest in the global on-road small vehicle industry with Global Electric Motorcars (GEM), Goupil Industrie SA, Aixam Mega S.A.S., and internally developed vehicles. Polaris enhances the riding experience with a complete line of Polaris and KLIM branded apparel and Polaris accessories and parts.
Polaris Industries Inc. trades on the New York Stock Exchange under the symbol “PII”, and the Company is included in the S&P Mid-Cap 400 stock price index.
Information about the complete line of Polaris products, apparel and vehicle accessories are available from authorized Polaris dealers or anytime at www.polaris.com.
Except for historical information contained herein, the matters set forth in this news release, including management's expectations regarding 2013 sales, shipments, net income, net income per share, new manufacturing operations initiatives, joint venture projects and savings in logistical and production costs, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks and uncertainties include such factors as the Company's ability to successfully implement its manufacturing operations initiatives, product offerings, promotional activities and pricing strategies by competitors; acquisition integration costs; joint venture projects; warranty expenses; impact of changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; environmental and product safety regulatory activity; effects of weather; commodity costs; uninsured product liability claims; uncertainty in the retail and wholesale credit markets; changes in tax policy and overall economic conditions, including inflation, consumer confidence and spending and relationships with dealers and suppliers. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. The Company does not undertake any duty to any person to provide updates to its forward-looking statements.
Polaris Industries Inc.
Richard Edwards, 763-542-0500