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Aug. 15, 2005 – Finance Digest

August 15, 2005
Filed under Features

Arctic’s 1Q Profit Triples
Arctic Cat Inc., Thief River Falls, Minn., reported net earnings of $448,000, or $0.02 per diluted share, for the fiscal 2006 first quarter ended June 30. This compares to net earnings of $124,000, or $0.01 per diluted share, for the same period of 2004.
Arctic’s net sales for the first quarter ended June 30, 2005, were $107.9 million, up 5% from sales of $102.6 million in the same period last year.
The company’s ATV sales increased 6% to $41.4 million versus $39.2 million in the first quarter of last year; snowmobile sales rose 3% to $52.0 million, compared to $50.7 million in the prior-year first quarter; and sales of parts, garments and accessories were $14.5 million, up from $12.7 million in the year-ago period
“We are pleased to report another record first quarter,” said Christopher A. Twomey, chairman and chief executive officer. “Sales increased across all product lines and exceeded our expectations, due to slightly higher than anticipated sales to dealers.”
Arctic Cat anticipates that net sales will grow 3% to 5% and be in the range of $710 million to $723 million for the fiscal year ending March 31, 2006. However, the company is forecasting lower margins in fiscal 2006, due to increased raw material costs, lower snowmobile sales and a less favorable yen/dollar exchange rate, resulting in estimated full-year diluted earnings per share in the range of $1.31 to $1.40 (Suzuki owns approximately 32% of Arctic’s stock and supplies the U.S. manufacturer with most of its engines).
“Our outlook for fiscal 2006 remains unchanged,” said Twomey. “We continue to anticipate record full-year sales, but lower margins are expected to constrain earnings.”
Arctic shares have traded in a 52-week range of $18.63 to $29.20.

Sparta Completes $3 Million Private Placement
Sparta Commercial Services, Inc., an Internet-based sales finance and leasing company dedicated exclusively to the powersports industry, says it has completed a $3 million private placement of units consisting of 6% Series A convertible, redeemable preferred stock, and three-year common stock warrants.
“We are pleased to complete this offering as it represents an important step in the launching of our powersports financing platform,” said Anthony L. Havens, Sparta’s CEO. “Having strengthened our finances with this initial offering, we are now building lending relationships that will provide additional capital to fund our lease and retail installment sales contract originations.
“Leveraging our proprietary point of sale iPLUS (Internet Purchasing Leasing Underwriting Servicing) Web-based origination platform, we launched our private label financing programs for scooters and can now launch our motorcycle finance products focused on vehicles 600 cc and above.”
New York-based Maxim Group, LLC served as the placement agent for the offering. Sparta has agreed to file a registration statement for the resale of common stock underlying the units within 90 days of the final closing of the private placement.
Sparta provides a full line of financing solutions including indirect retail installment sales contracts and direct closed-end leases, as well as related services including GAP coverage and vehicle service contracts.

Nova Signs with Blue Sky Investor Relations
Nova Communications, Ltd., the Reno-based parent company of AquaXtremes, manufacturer of the X-Board watercraft, has appointed Blue-Sky Solutions, LLC, as its investor relations firm.
Nova Communications Ltd. is a publicly traded company on the OTCBB (NVAC). NVAC also owns Nacio, a web hosting and development company; and XtremeEngines, manufacturer of engines for the X-Board and other light craft.

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