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Nov. 10, 2008 – Rising PG&A sales boost Arctic Cat’s 2Q

November 10, 2008
Filed under Features

Although its second-quarter sales dropped slightly, manufacturer Arctic Cat is still expecting to grow its revenue in the upcoming quarter over a year ago.
The Minnesota-based manufacturer reported increases in snowmobile and PG&A revenue in its second quarter while its ATV sales slumped. Overall sales were $204.3 million, a less than 1 percent drop from the year-ago period. Net earnings, however, increased more than 20 percent to $16.9 million.
CEO Christopher Twomey said the company ended its first half in a slightly better position than it originally expected. Increasing PG&A sales — up 12 percent — for both snowmobiles and ATVs played a big role in that better-than-expected revenue total.
Arctic Cat’s core ATV retail sales remain down from a year ago, mirroring the industry overall. Twomey said Arctic Cat remains slightly better off in retail sales than its competitors in the core North American ATV market.
The company’s Prowler sales continue to perform better than last year, although Twomey said side-by-side sales are not growing as fast as they had in previous years.
“UTVs with large-displacement engines are showing better sales at retail,” he said, noting Arctic Cat has yet to ship its largest-displacement, new model-year Prowlers.
Twomey said ATV inventory levels in North America are at or below last year’s levels and the company has not seen an increase in side-by-side inventory levels.
In its snowmobile sector, sales totaled $98.4 million, up 1 percent from a year ago. Twomey noted the company has received good reports from dealers on early season sled shopping activity and “and spring guarantee orders were up 70 percent compared to last year.”
Twomey also noted the company’s decision to manufacture fewer snowmobiles last year has paid off as dealer inventories are down 24 percent compared to last year.
Looking ahead, the company is expecting its third-quarter sales to total $179 million-$189 million, a rise from last year’s total of $159.6 million. psb

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