Polaris Ind has stopped making personal watercraft -- effective immediately -- the company announced in a news release Thursday.
Tom Tiller, CEO of the Medina-based maker of snowmobiles, Victory motorcycles and all-terrain vehicles, said in a statement the decision was based on a number of factors, including declining sales of watercraft over the last few years and the fact that the division had never been profitable.
The marine products division showed a pretax loss of $13 million in 2003, Tiller said. He also noted that the market is now about half the size of the market at its peak in 1996, while less than 25 percent of Polaris dealers in North America carry marine products.
"The decision will ultimately strengthen Polaris' position in the powersport industry," Tiller said, adding that the company will focus its research and development efforts and money on its product lines with "greater growth potential."
Polaris expects to lay off about 20 employees as a result of its decision.
Polaris said it will help dealers liquidate its watercraft inventory and will continue to provide parts and warranties for its products.
The company expects its decision will result in a loss of about $36 million ($24 million after tax), or 53 cents per diluted share in the third quarter of 2004.
Shares of Polaris (NYSE:PII) closed up $2.53, or 5.2 percent, at $51 in very active trading Thursday.