Issue link: https://read.dmtmag.com/i/730410
24 • October 3, 2016 • Powersports Business FINANCIAL www.PowersportsBusiness.com Wolters Kluwer Governance, Risk & Compli- ance (GRC) in early September announced it has signed an agreement to sell its indirect loan origination solutions, including the AppOne software platform, to The Reynolds and Reyn- olds Company, a provider of software, docu- ments, and professional services to automotive retailers, for €32 million in cash. Wolters Kluwer's intended divestment is in line with the GRC division's strategy to focus its financial services group of businesses on grow- ing its market-leading compliance content and expert solutions for banks and other financial institutions globally. The company's AppOne indirect loan origi- nation platform, compliance documents and risk mitigation services are used primarily by automotive, marine, powersports and recre- ational vehicle dealers across the U.S. to facili- tate interaction with lenders. Wolters Kluwer expects to report a €13 million book gain, net of tax, on the divestment. Reynolds and Reyn- olds anticipates extending offers of employ- ment to 36 Wolters Kluwer employees as part of the transaction. "As a leader in automotive dealership solu- tions, Reynolds and Reynolds is well-posi- tioned to continue to support the unique needs of indirect loan origination customers," said Richard Flynn, CEO of Wolters Kluwer's GRC division. "Wolters Kluwer will continue to invest in our core regulatory compliance busi- ness, which serves thousands of banks, credit unions and mortgage lenders globally." "At the same time, we remain committed to providing these banks and other licensed lend- ers with our proven regulatory expertise, solu- tions and services for their mortgage, consumer and commerical lending as well as investment and insurance businesses," said Steven Meir- ink, executive vice president and general man- ager of the Compliance Solutions business unit for Wolters Kluwer's GRC division. The divestiture is expected to close by the end of 2016. PSB Wolters Kluwer sells AppOne platform Polaris Industries Inc. (NYSE:PII) provided an update to its full-year guidance on Sept. 12. The company now expects full-year 2016 earnings to be in the range of $3.30 to $3.80 per diluted share, $2.50 to $2.70 per diluted share lower than previously expected of which approxi- mately two-thirds is expected to be incurred in the third quarter. Polaris also expects total company sales for the full-year 2016 to be down in the mid- to high-single digit percent range compared to previously issued guidance of flat to down 2 percent. Since Polaris last updated its full year guidance and hosted its investor day in July, the company has experienced additional RZR thermal-related issues and was unable to sufficiently validate the initially identi- fied RZR Turbo recall repair, necessitating a more complex and expensive repair solu- tion. As a result, the voluntary stop ride/stop sale notification issued on July 25 remained in place significantly longer than origi- nally anticipated, delaying any sales of the highly-requested RZR Turbo vehicle. Also, given the additional RZR thermal issues, the company revalidated many of its recently introduced model year 2017 ORV products, causing a delay in shipments of those vehi- cles. The company believes its model year 2017 products and the more aggressive pro- grams it has planned for the second half of 2016 will have a positive impact on off-road vehicle sales. However, given the delayed model year 2017 shipments and additional recall activity, the expected positive impact will be deferred later than the company had originally estimated. The earnings revision of $2.50 to $2.70 per diluted share can be summarized as follows: Approximately half is related to the margin impact from delayed model year 2017 ship- ments, including the high-margin RZR Turbo vehicles, as the company revalidated its new model lineup and protects dealer inventory levels, along with correspondingly lower sales of the company's high-margin parts, garments and accessories business; and about 25 percent is the result of higher promotional and cus- tomer appreciation costs to rebuild confidence and credibility with RZR owners. The remain- ing 25 percent is primarily related to expedit- ing the product recall repairs, including the recently announced RZR Turbo recall, which, when combined with the one-time warranty, legal and acquisition related costs recorded in the first half of 2016, totals approximately $120 million, or about $1.20 per diluted share of costs that should be considered non-recur- ring in 2017. "Our number one priority is to get our loyal owners back to riding safely," stated Scott Wine, Polaris' chairman and chief executive officer. "We share the frustration of our cus- tomers and dealers, and we are working dili- gently to expedite the completion of the recall repairs and significantly improve the quality and safety of our products. We are providing increased support to our dealers and RZR own- ers, so they can complete the necessary repairs with minimal disruption. We have engaged outside engineering experts to help accelerate the remediation process, we are sending addi- tional repair technicians into the field to assist our dealers, and we have created a new inde- pendent safety and quality function reporting directly to me." PSB Polaris lowers '16 guidance