Third Quarter Report
Shows Polaris Sled,
ATV Sales Down,
Motorcycle Sales Up

In its 10-Q financial report, Polaris reported sled sales decreased 42 percent for year-to-date versus last season.

Sales of snowmobiles were $87.2 million for the third quarter 2006, a decrease of 16 percent compared to sales of $104.2 million for the comparable quarter in 2005. For the year-to-date 2006 period, snowmobile sales declined 42 percent to $95.0 million from $163.3 million for the prior year-to-date period.

Shipments in the third quarter 2006 were lower as a result of a significant decrease in dealer orders for 2007 model year snowmobiles. As discussed in prior communications, the reduced levels of dealer orders resulted from increased dealer inventory levels at the end of the prior 2005-2006 snowmobile season due to below average snowfall across many regions of North America and quality issues relating to certain 2005 and 2006 model year snowmobiles.

During the third quarter 2006 Polaris has begun shipping its IQ and models which utilize the new 600 HO Cleanfire semi-direct injection engine technology which has received positive reviews.

The average snowmobile per unit sales price for the year-to-date 2006 period decreased three percent when compared to the same period last year due to product mix change.

Sales of ATVs were $308.3 million in the third quarter 2006, a decrease of 12 percent from the third quarter 2005 sales of $351.2 million. Despite the lower sales performance, several of the Polaris’ newer products continued to show growth during the quarter including the entry-level Hawkeye ATV and the two-up ATV-the Sportsman X2. Polaris also experienced double digit sales growth during the third quarter and year-to-date 2006 periods in the RANGER™ product line.

A bright spot were sales of the company's Victory motorcycles which were $25.8 million for the third quarter 2006, a 60 percent increase from $16.2 million for the comparable period in 2005.