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Arctic Cat expects another record sales year – February 12, 2007

February 12, 2007
Filed under Uncategorized

However, the company says its sales might be down in the 4th quarter vs. previous year Arctic Cat reported a mixed bag in its third-quarter financial report, showing net sales on the rise but overall earnings continue to drag behind last year.
The Thief River Falls, Minn.-based manufacturer reported its net sales grew to $228.1 million in its fiscal third quarter, which ended Dec. 31. That’s nearly a 17 percent increase from the previous year quarter.
Plus, revenue from snowmobiles, ATVs and PG&A are all up for its nine-month period, which also ended Dec. 31. Snowmobile sales are up 5 percent for the nine-month period, ATVs have increased 7 percent and PG&A is up 2 percent.
“Contributing to record sales and increased earnings for the third quarter were anticipated higher snowmobile sales and continued strong demand for our Prowler utility ATV,” Christopher Twomey, Arctic Cat’s CEO, said in a press release.
“Although we expect to post sales gains across all of our product lines this fiscal year and will report our seventh consecutive year of record sales, challenging market conditions for our snow-related products could impact our full-year profitability.”
In fact, the company anticipates its fourth-quarter net sales will hover between $150 million-$170 million, which could be a drop from last year’s $153.3 million fourth-quarter result.
Looking ahead
Net earnings through the third quarter also remain below last year’s total. For its nine-month reporting period, Arctic Cat showed a net earning of $23.6 million, nearly a 3 percent drop from the previous year.
However, the manufacturer does expect its net sales to grow between 4-6 percent to a range of $760-$780 million for its fiscal year.
Putting together a seventh consecutive year of record sales won’t come easy in what the company called “a sluggish industry-wide retail environment for snow-related products.”
Arctic Cat said that environment could transfer into lower PG&A sales and require higher sales incentives for its snowmobiles. Snowmobile net sales, in its first nine months, have amounted to $248.8 million.
Other results
The third-quarter financial results also reported:

  • the company repurchased approximately 915,000 shares under its stock repurchase program in its third quarter. That included 300,000 shares of common stock and 615,000 shares of stock from Suzuki Motor Corp., meaning Suzuki now owns 33 percent of Arctic Cat’s common stock.
  • PG&A sales were basically flat in the third quarter compared to the previous year period at $29.9 million, but nine-month sales have increased to $75.3 million.
  • ATV sales were up 1 percent in the third quarter compared to the previous year period at $106.4 million. psb
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