Feb. 9, 2009 – Improved sled sales boost Arctic Cat’s 3Q
February 9, 2009
Filed under Features
A dramatic rise in snowmobile sales coupled with decreased operational expenses allowed Arctic Cat to vastly improve its third-quarter earnings.
Last year, Arctic Cat finished its third quarter with a net loss of $10.5 million. This year, the company’s net loss fell to $2.7 million for the quarter, allowing the company to be profitable after its fiscal year’s first nine months.
The company’s net income after its first nine months stands at $7.2 million in comparison to a $3.7 million loss at this time last year.
“Unfortunately, overall demand for recreational products remains weak, due to the year-long deterioration in global economic conditions, higher unemployment, historically low consumer confidence and the continued credit crisis,” Arctic Cat CEO Christopher Twomey said in a press release. “As a result, industry-wide ATV retail sales declined further in the December quarter and we do not see a quick recovery.”
Arctic Cat’s ATV sales in the third quarter were down 18 percent compared to a year ago. As a result, Twomey says the company is significantly cutting back ATV production in its fiscal year’s final quarter. For its first three quarters, Arctic Cat’s ATV sales are down 12 percent.
Snowmobile sales, however, climbed to $90.9 million, 51 percent over the year-ago period. The company’s year-to-date sled sales remain 25 percent over last year’s levels.
“We are pleased with the response to our 2009 model introductions,” Twomey said of the company’s sled lineup. “Our newest snowmobiles demonstrate our ongoing strategy to grow market share by offering industry-leading technologies with products such as our Z1 Turbo Sno Pro.”
The company’s PG&A sales fell 11 percent in its third quarter to $26.1 million. The decrease, the company says, was primarily a result of the timing of shipments of snow-related preseason productions, which were reported in the company’s second quarter. Year-to-date PG&A sales are up 4 percent to $79.1 million.
Due to its significantly reduced ATV production in the fourth quarter, Arctic Cat expects to ends its fiscal year with sales of $562 million-$572 million in comparison to its last fiscal year’s revenue total of $621.6 million. psb