Appeals Court Upholds Dismissal of Litigation Against Arctic Cat.

Business Editors/Legal Writers

THIEF RIVER FALLS, Minn.--(BUSINESS WIRE)--July 10, 2000

Arctic Cat Inc. (NASDAQ: ACAT), announced today that the U.S. Court of Appeals for the 10th Circuit has affirmed a previous ruling by the U.S. District Court in Colorado dismissing a lawsuit filed by Injection Research Specialists, Inc., (IRS) and Pacer Industries, Inc., alleging misappropriation of trade secrets.

Commenting on the appellate court's decision, Christopher A. Twomey, Arctic Cat's chief executive officer, stated: "From the outset, we believed that the claims against Arctic Cat were unfounded. In addition, the suit was brought too late and, consequently, barred by the statute of limitations. We fully expected that the lower court's decision to dismiss the lawsuit would be upheld. We are pleased that the court has reaffirmed our position regarding this case."

IRS and Pacer had previously obtained a judgment against another snowmobile maker and its engine manufacturer for misappropriation of trade secrets relating to electronic fuel injection (EFI) systems used on snowmobiles. In 1997, IRS and Pacer brought similar claims against Arctic Cat based on Arctic Cat's purchase of engines containing an EFI system from the same vendor. On December 11, 1998, the U.S. District Court for the District of Colorado granted summary judgment dismissing all claims against Arctic Cat.

Arctic Cat Inc., based in Thief River Falls, Minn., designs, engineers, manufactures and markets snowmobiles and all-terrain vehicles (ATVs) under the Arctic Cat(R) brand name, as well as related parts, garments and accessories. Arctic Cat markets its products through a network of independent dealers located throughout the contiguous United States and Canada, and through distributors representing dealers in Alaska, Europe, the Middle East, Asia and other international markets.