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Aug. 15, 2005 – Finance Digest

August 15, 2005
Filed under Features

Japan’s Yamaha Motor Co. Ltd. says net sales for the six months ended June 30, 2005, were 677.0 billion yen, profit was 56.75 billion yen, and operating income was 56.7 billion yen.
Yamaha changed its accounting period to calendar year last year. Previously, its business year started on April 1.
Comparing the results for the first half-year ended June 30, 2005 with those for the six-month period from January 1, 2004 through June 30, 2004, net sales and operating income increased by 11.3% and 1.7%, respectively.
Broken down by business segment, motorcycle sales during the first six months of 2005 totaled 381.2 billion yen; sales of marine products totaled 133.2 billion yen; power product sales were 92.4 billion yen; and sales in the “other products” segment reached 70.1 billion yen. Compared with the figures for the previous period, sales in all business segments rose.
Yamaha raised its forecasted consolidated business results for the full fiscal year ending December 31, 2005, to net sales of 1,320 billion yen (a 7.3% increase from the target at the beginning of the fiscal year). It expects net income of 60 billion yen (a 27.7% increase from the original target).
The upward revisions are due to updated expectations of higher sales than the original targets in all business segments, as well as higher operating income than the original targets for marine products, power products and the “other products” segment.
The forecast is based on the assumption that the U.S. dollar will trade at 105 yen during the period (an appreciation of three yen from the target at the beginning of the fiscal year), and the euro at 135 yen (a depreciation of two yen from the original target).
As with other exporters, a weaker yen benefits Yamaha, which earns about 90% of its revenues overseas.
In related news, Yamaha plans to bolster its main motorcycle business in the emerging markets of Brazil, Russia, India and China, reported the Nihon Keizai Shimbun, without citing sources.
The newspaper said Yamaha aims to increase its total motorcycle sales in these countries to more than one million units by 2007 – 60% more than last year’s sales.


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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