Minnepolis, MN (7/28/06) –
Polaris Industries Inc. (NYSE/PSE: PII) and KTM Power Sports
AG (“KTM”) today jointly announced that they
will continue their strategic partnership at an operational
and technical level but that they no longer anticipate that
Polaris will acquire a majority equity interest in KTM.
On July 19, 2005 the companies announced that Polaris purchased
approximately a 25 percent interest in KTM and that Polaris
and KTM’s largest shareholder, Cross Industries AG
(“Cross”), had entered into an option agreement
which provided that, under certain conditions in 2007, either
Cross could purchase Polaris’ interest in KTM or,
alternatively, Polaris could purchase Cross’ majority
interest in KTM. Although the options are not exercisable
until 2007, it is likely that under the terms of the option
agreement, Cross would have the initial option to purchase
Polaris’ equity interest in KTM. On July 19, 2005
the companies also announced that during the first phase
of the partnership each company would be run independently
and that Polaris and KTM would work on several specific
cooperative projects.
“Our teams have worked well together over the past
year. The strategic partnership has accomplished a tremendous
amount so far and achieved nearly all our goals during
the first 12 months of its existence.” said Tom
Tiller, Polaris’ CEO. “For instance, in February
of this year Polaris and KTM entered into a long-term
exclusive engine supply agreement for ATV applications
and in March of this year KTM became Polaris’ distributor
in Germany. Additionally, our co-development projects
are progressing nicely and we expect to make an exciting
announcement about one of our projects in the near future.
These and other joint cooperation projects will continue
into the future. I expect the technical cooperation between
our companies to continue to be strong in the coming years.”
“We are very pleased with the results of the first
phase of the strategic partnership and look forward to
continuing the relationship” said Stefan Pierer,
KTM’s CEO. “Nevertheless, Rudolf Knünz
(the other principal in Cross) and I have recently informed
Polaris of our intention not to sell Cross’ interest
in KTM to Polaris. We wish to remain in control of KTM
and for KTM to remain an independent company.”
Tom Tiller concluded, “When we structured Polaris’
path toward complete ownership of KTM as a 2-staged process,
we recognized that this was a possible outcome. Polaris
continues to own a 25 percent equity interest in KTM and
we continue to have confidence in the KTM management team
and their ability to execute the KTM operational plan.”
Conference Call to be Held
Today at 10:00 AM (CDT) Polaris Industries Inc. will host
a conference call to discuss Polaris’ investment
and partnership with KTM. The conference call is accessible
by dialing 800-374-6475 in the U.S. and Canada or 706-679-2596
for International calls or via the Investor Relations
page of the Company’s web site, www.polarisindustries.com
(click on Our Company then Investor Relations). The conference
call will be available through Friday August 4, 2006 by
dialing 800-642-1687 in the U.S. and Canada, or 706-645-9291
for International calls and entering passcode 3652602,
and on Polaris’ web site.
About Polaris
With annual 2005 sales of $1.9 billion, Polaris designs,
engineers, manufactures and markets snowmobiles, all-terrain
vehicles (ATVs), Victory motorcycles and the Polaris RANGER
for recreational and utility use.
Polaris is a recognized leader in
the snowmobile industry; and one of the largest manufacturers
of ATVs in the world. Victory motorcycles, established
in 1998 and representing the first all-new American-made
motorcycle from a major company in nearly 60 years, are
rapidly making impressive in-roads into the motorcycle
cruiser marketplace. Polaris also enhances the riding
experience with a complete line of Pure Polaris apparel,
accessories and parts, available at Polaris dealerships.
Polaris Industries Inc. trades on
the New York Stock Exchange and Pacific Stock Exchange
under the symbol “PII,” and the Company is
included in the S&P Small-Cap 600 stock price index.
Information about the complete line
of Polaris products, apparel and vehicle accessories is
available from authorized Polaris dealers or anytime from
the Polaris homepage at www.polarisindustries.com.
About KTM
KTM Power Sports AG designs, engineers, manufactures
and markets off-road and on-road motorcycles and related
parts, garments and accessories with annual sales of 451.2
million Euros in 2005. The product portfolio consists
of over 23 different off-road and on-road motorcycles
ranging in engine size from 50cc to 990cc.
KTM is best known for its racing heritage.
KTM has won 120 World Championship Titles, 14 in 2005
alone. The Company employs approximately 1,600 employees
and assembles its engines and motorcycles in Mattighofen,
Austria. Additionally, the Company manufactures exhaust
systems, frames, shocks and spoke wheels. KTM sells its
motorcycles through a network of over 1400 independent
dealers and approximately 50 distributors worldwide with
Europe being its strongest market. Information about the
complete line of KTM products, apparel and vehicle accessories
is available from authorized KTM dealers or from the KTM
homepage at www.ktm.com
www.polarisindustries.com
2100 Highway 55
Medina, MN 55340
(763) 417-8650
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