§ Reported earnings from continuing operations per diluted share of $0.34, up 31 percent from $0.26 per diluted share last year
§ Gain of $4.8 million, pretax, or approximately $0.09 per diluted share, was realized on the sale of 1.11 million shares of Polaris’ KTM investment
§ Operating cash flow used for continuing operations improved $28.3 million
§ Guidance for full year 2007 earnings from continuing operations remains unchanged at $2.91 to $3.03 per diluted share

Polaris Industries Inc. (NYSE: PII) today reported first quarter net income from continuing operations of $12.6 million or $0.34 per diluted share for the quarter ended March 31, 2007, in line with previously issued guidance. By comparison, 2006 first quarter net income from continuing operations was $11.2 million or $0.26 per diluted share. Sales from continuing operations for the first quarter 2007 totaled $317.7 million, a decrease of five percent from last year’s first quarter sales from continuing operations of $333.5 million. Reported net income for the 2007 first quarter, including discontinued operations was $12.4 million, or $0.34 per diluted share compared to net income of $11.5 million, or $0.27 per diluted share in the first quarter of 2006, which included $0.4 million or $0.01 per share of a cumulative effect of adopting SFAS 123(R) in the first quarter 2006.

“Our first quarter results were solid,” commented Tom Tiller, Chief Executive Officer. “Additionally, at the retail level we continue to see progress in our dealers’ efforts to lower their inventories for both ATVs and snowmobiles due to the combination of a reduction of shipments to our North American dealers and improved retail sales during the first quarter 2007. We are on track for dealer ATV inventory to be at acceptable levels by mid year 2007 as we have previously indicated.”

Tiller added, “It has been almost two months since we unveiled three all new products to consumers, the Victory Vision Street™, Victory Vision Tour™ and the RANGER RZR™. Since introduction, the excitement about these products has exceeded our expectations. We believe that our commitment to lead in innovation as evidenced by these recent product introductions will continue to differentiate Polaris from our competitors and provide sustainable long-term growth opportunities to the Company.”

2007 Business Outlook
Guidance for full year 2007 earnings from continuing operations remains unchanged and is expected to be in the range of $2.91 to $3.03 per diluted share compared to earnings from continuing operations of $2.72 per diluted share for the full year 2006 on expected sales growth of one percent to three percent for the full year 2007. During the second quarter of 2007, the Company anticipates that North American ATV shipments will decrease once again as dealers continue to manage their inventory to lower levels, resulting in total sales expectations for second quarter 2007 to be lower than the second quarter of 2006 in the range of down three to five percent. Second quarter 2007 earnings from continuing operations are expected to be in the range of $0.57 to $0.60 per diluted share, compared to earnings from continuing operations of $0.53 per diluted share for the second quarter of 2006.

ATV (all-terrain vehicle) sales in the 2007 first quarter decreased nine percent from the first quarter 2006. As planned, shipments of core ATVs to dealers in North America decreased in response to dealer inventory levels and weaker overall market conditions. The RANGER™ utility vehicle product line continued to experience solid, double-digit growth in shipments and retail sales during the quarter. The new RANGER RZR™ has been extremely well received and will begin shipping to dealers in limited quantities in the second quarter 2007.

Sales of Victory motorcycles increased five percent during the 2007 first quarter compared to the first quarter of 2006. The increase is driven by the ongoing excitement around the Victory brand and the strengthening of the dealer channel. The new 2008 Victory Vision™ models that were unveiled during the first quarter have been very well received and shipments to dealers are expected to begin in the second half of 2007.

Parts, Garments, and Accessories sales increased six percent during the 2007 first quarter compared to last year’s first quarter driven by increased sales of ATV and utility vehicle related PG&A during the quarter.

Snowmobile sales totaled $2.9 million for the 2007 first quarter compared to $2.5 million for the prior year’s first quarter. The first quarter is historically a seasonally low quarter for snowmobile shipments. During the first quarter of 2007 improved late season snowfall resulted in increased retail sales which helped to further reduce dealers’ snowmobile inventories. However, retail sales for the full snowmobile riding season ended March 31, 2007 were lower than the previous season for both Polaris and the overall snowmobile industry due in large part to poor snowfall for the majority of the season in many regions of the country.