Arctic Cat’s sales, profits fall in first quarter
August 14, 2006
Filed under Features
Arctic Cat, Inc. had a net loss of $4.5 million, or $0.23 per diluted share, for the first quarter ended June 30, down from a profit of $448,000, or $0.02 per diluted share, for the first quarter of 2005.
First-quarter sales were $96.4 million, down more than 10 percent from $107.9 million for the same period last year.
Arctic Cat’s first quarter ATV sales totaled $60.2 million, up 45 percent from $41.4 million in the prior-year quarter; snowmobile sales declined 60 percent to $20.9 million from $52.0 million; and sales of parts, garments and accessories totaled $15.4 million, up 6 percent from $14.5 million in the year-ago period.
Arctic Cat attributed the ATV sales gains to continued high demand for the Prowler UTV and the timing of shipments. PG&A benefited primarily from ATV parts and accessories sales.
Contributing to the snowmobile results was the previously disclosed, planned shift of sled production, along with related revenue and earnings, into the company’s 2007 second and third fiscal quarters. The company still expects full-year snowmobile revenues to exceed last year based on the strength of its 2007 model line-up, of which nearly 80 percent is new models.
“Our first-quarter results were better than planned, primarily due to higher all-terrain vehicle sales to dealers,” said Christopher Twomey, chairman and chief executive officer. “We are pleased with our dealers’ positive response to our newest model ATVs, which we unveiled at our June dealer show. We also are encouraged that retail sales of Arctic Cat ATVs grew at a much faster pace than the overall ATV industry during the quarter.”
Twomey said Arctic anticipates reporting record full-year sales for fiscal 2007. “However, lower margins are expected to continue to constrain earnings, primarily as a result of our continued shift in product mix to a higher percentage of ATV sales versus snowmobiles,” he said.
Arctic Cat reported a net loss of $592,000, or $0.03 per diluted share, for its fiscal fourth quarter ended March 31, down from net earnings of $2.7 million, or $0.13 per diluted share, in the same period last year. The company’s fourth quarter net sales were $153.3 million, down from sales of $157 million in the prior year fourth quarter.
For the year ended March 31, Arctic Cat net earnings totaled $23.7 million, or $1.20 per diluted share, down from $28.3 million, or $1.36 per diluted share, for fiscal 2005. However, the company posted its sixth consecutive year of record sales with consolidated net sales of $732.8 million, up from $689.1 million last fiscal year.
Cat officials expect net sales to grow 3 to 6 percent and be in the range of $754 to $776 million for the fiscal year ending March 31, 2007. PSB