Arctic Cat Announces Record 2002 Second-Quarter Sales and Earnings.Business Editors THIEF RIVER The Thief River is a tributary of the Red Lake River in northwestern Minnesota in the United States. Via the Red Lake River, the Red River of the North, Lake Winnipeg and the Nelson River, it is part of the watershed of Hudson Bay. FALLS, Minn.--(BUSINESS WIRE)--Oct. 25, 2001 Arctic Cat Arctic Cat is a producer of all-terrain vehicles and snowmobiles in the United States. Located in Thief River Falls, Minnesota, they are a top competitor with other snowmobile companies such as Polaris, Ski-Doo by Bombardier, and Yamaha Motor Company Ltd.. Inc. (Nasdaq:ACAT ACAT See: Automated Customer Account Transfer ): -- Net Sales Rise 11 Percent for the Quarter -- EPS is 84 Cents Versus 76 Cents -- Company Beats First Call Estimate Arctic Cat Inc. (Nasdaq:ACAT) today reported results for the fiscal 2002 second-quarter and six-months ended September 30, 2001. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 11 percent to $218,948,000 for the 2002 second quarter versus $197,074,000 for the same period last year. Net earnings rose 9 percent to $20,332,000, or 84 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the second quarter compared to net earnings of $18,606,000, or 76 cents per diluted share, reported for the second quarter of fiscal 2001. For the six-month period, net sales increased 5 percent to $298,182,000 compared to $285,039,000 for the same period last year. Net earnings grew 8 percent to $22,289,000, or 92 cents per diluted share, compared to net earnings of $20,658,000, or 84 cents per diluted share, reported in the first half of fiscal 2001. Christopher A. Twomey, president and chief executive officer, said, "We are pleased with the record sales and net earnings achieved this quarter, which are the highest of any quarter in our company's history. Arctic Cat posted double-digit sales growth in all areas of the business - snowmobiles, all-terrain vehicles all-ter·rain vehicle n. Abbr. ATV A small, open motor vehicle having one seat and three or more wheels fitted with large tires. It is designed chiefly for recreational use over roadless, rugged terrain. (ATVs), and parts, garments and accessories." Commenting on Arctic Arctic area of constant cold. [Geography: WB, A:600] See : Coldness (language, music) Arctic - A real-time functional language, used for music synthesis. ["Arctic: A Functional Language for Real-Time Control", R.B. Cat's ATV (1) (Advanced TV) An early name for the digital TV standard proposed by the Advisory Committee on Advanced Television Service (ACATS). See ACATS. See also ATV Forum. (2) (Analog TV) Refers to the NTSC, PAL and SECAM analog TV standads. and snowmobile snowmobile, vehicle designed to travel over snow, ice, and similar surfaces that offer limited traction and weight-supporting capability. As the performance of the vehicle depends to a large extent on keeping its weight as low as possible, there is no enclosure for businesses, Twomey said: "We gained further market share in the ATV segment, as our ATV sales continued to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, the U.S. industry's double-digit growth rate. As part of our ATV line extension, we recently introduced a fully automatic ATV model, the Arctic Cat 375cc, that just reached our dealers. We expect retail sales of this model to further enhance our rapid growth in this industry. In our snowmobile business, the retail season is just beginning and our dealers are reporting encouraging early season retail sales activity. In fact, extra early orders, which are retail orders accompanied by a cash downpayment, have increased 30 percent over last year. Additionally, increased attendance at all the major snowmobile consumer shows and events continues to demonstrate strong consumer interest this year, which we expect will boost retail sales of Arctic Cat snowmobiles." During the second quarter, the company repurchased 423,000 shares of common stock and Arctic Cat has now repurchased over 6 million shares under three share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. authorizations. The company has approximately 1.5 million additional shares remaining under its current repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. authorization The right or permission to use a system resource; the process of granting access. See access control. and plans to continue to buy shares from time to time in the market. Outlook Arctic Cat's outlook for fiscal 2002 remains positive and unchanged despite the current uncertain economic environment. Said Twomey, "We anticipate that fiscal 2002 snowmobile revenues will increase 10 to 15 percent based on orders already received and low dealer inventories. We also continue to expect that ATV revenues will increase during this fiscal year and that our retail sales will again outpace the industry. As a result, we expect to report continued record-breaking revenues and increased earnings in the year ahead." Conference Call Arctic Cat will host a conference call to discuss the second quarter results at 10:30 a.m. CT (11:30 a.m. ET) on Thursday, October 25. A replay of the call will be available from 11:30 a.m. CT on Thursday, October 25, until 6:00 p.m. CT on Friday, October 26. To access the replay, dial (800) 633-8284, conference ID No.19876506. The conference call also will be Webcast. To access this Webcast, go to the corporate portion of the company's Web site at www.arctic-cat.com, and click on the conference call icon. A replay of the Webcast will be archived on Arctic Cat's Web site following the call. Arctic Cat Inc. 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. For more information on Arctic Cat, visit the company's Web site at http://www.arctic-cat.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for certain forward-looking statements. The Company's Annual Report, as well as the Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and future filings with the Securities and Exchange Commission, the Company's press releases and oral statements made with the approval of an authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: executive officer, contain forward-looking statements that reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. The words "aim," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that indicate future events and trends identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to: product mix and volume; competitive pressure on sales and pricing; increase in material or production cost which cannot be recouped in product pricing; changes in the sourcing of engines from Suzuki; warranty expenses; foreign currency exchange rate fluctuations; product liability claims and other legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. in excess of insured amounts; environmental and product safety regulatory activity; effects of the weather; overall economic conditions; and consumer demand and confidence.
ARCTIC CAT INC.
Financial Highlights
Unaudited
(000s omitted, except per share amounts)
Three Months Ended Six Months Ended
September 30, September 30,
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2001 2000 2001 2000
-------- -------- -------- --------
Net Sales $218,948 $197,074 $298,182 $285,039
Cost of Goods Sold 159,233 145,426 218,055 211,817
-------- -------- -------- --------
Gross Profit 59,715 51,648 80,127 73,222
Selling, General And
Administrative Expenses 30,283 24,682 48,551 44,301
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Operating Profit 29,432 26,966 31,576 28,921
Other Income
Interest Income 476 804 1,202 1,911
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Earnings Before Income Taxes 29,908 27,770 32,778 30,832
Income Taxes 9,576 9,164 10,489 10,174
-------- -------- -------- --------
Net Earnings $ 20,332 $ 18,606 $ 22,289 $ 20,658
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Net Earnings Per Share
Basic $ 0.85 $ 0.77 $ 0.93 $ 0.84
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Diluted $ 0.84 $ 0.76 $ 0.92 $ 0.84
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Weighted Average Shares
Outstanding
Basic 23,869 24,294 23,846 24,550
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Diluted 24,165 24,544 24,176 24,724
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