Polaris Industries Inc. announced unaudited consolidated earnings results for the fourth quarter and year ended December 31, 2016. For the quarter, the company reported sales of $1,217.8 million up 10% from $1,105.6 million for the fourth quarter of 2015. Fourth quarter 2016 reported net income was $62.6 million, or $0.97 per diluted share, compared with $110.7 million, or $1.66 per diluted share, for the 2015 fourth quarter. Adjusted net income for the quarter was $76.1 million or $1.18 per diluted share compared with $110.7 million or $1.66 per diluted share a year ago. Operating income was $98.7 million compared with $159.2 million a year ago. Income before income taxes was $85.5 million compared with $151.1 million a year ago.

For the year, the company reported sales of $4,516.6 million, a decrease of 4% against $4,719.3 million in the prior year. Reported net income was $212.9 million, or $3.27 per diluted share, compared with $455.4 million, or $6.75 per diluted share, for the full year 2015. Adjusted net income was $226.5 million or $3.48 per diluted share compared with $455.4 million or $6.75 per diluted share a year ago. Net cash provided by operating activities was $571.8 million for the full 2016 year, compared with $440.2 million for the year ended December 31, 2015 due to lower working capital requirements. Operating income was $350.3 million compared with $716.1 million a year ago. Income before income taxes was $313.3 million compared with $685.7 million a year ago. Purchase of property and equipment was $209.1 million compared with $249.5 million a year ago.

The company expects full year 2017 adjusted net income to be in the range of $4.25 to $4.50 per diluted share, compared with adjusted net income of $3.48 per diluted share for 2016. Full year 2017 sales are anticipated to increase in the range of 10% to 13% over 2016 sales of $4,516.6 million. The 2017 sales growth includes the following assumptions: Foreign exchange is, again, expected to be a headwind in 2017 of approximately $30 million for the full year. For full year 2017, the company is expecting adjusted gross margins to improve from 2016 levels, increasing approximately 180 basis points, which is driven by a reduction on onetime warranty costs incurred in 2016, representing approximately 160 basis points favorable impact to gross margins in 2017. The income tax rate is anticipated to be approximately 34.5% for the full year 2017 and operating cash flow performance is expected to be down significantly from 2016 driven by timing of cash outlays associated with the recall and legal activity from 2016 as well as the onetime cash outlays from the Victory wind down in 2017.