Arctic Cat Announces Record 2003 Third-Quarter Sales.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)--Jan. 30, 2003 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 ): -- Comparable third-quarter diluted EPS rises 12 percent versus prior-year period -- Comparable year-to-date EPS is $1.36 versus $1.27 last year -- Reduction of restructuring accruals adds 15 cents diluted EPS in 2003 third quarter Arctic Cat Inc. (Nasdaq:ACAT) today reported third quarter ended December December: see month. 31, 2002, 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 of $176.2 million, up 5 percent over $167.9 million for the same period last year. Net earnings in the 2003 quarter increased 45 percent to $11.9 million, or 53 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, compared to net earnings of $8.2 million, or 34 cents per diluted share, in the year-ago quarter. The quarter's results included the net reduction of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. related to 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 exit from the personal watercraft personal watercraft n. 1. A motorized recreational water vehicle normally ridden by straddling a seat. 2. (used with a pl. verb) Such water vehicles considered as a group. (PWC) business in September September: see month. 1999. Excluding non-recurring items, net sales in the 2003 third quarter rose 3 percent to $172.2 million, net earnings increased 4 percent to $8.5 million, and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 12 percent to 38 cents. For the 2003 nine-month period, net sales including non-recurring items grew 2 percent to $465.7 million compared to $456.8 million in the prior year. As a result, 2003 net earnings were $34.4 million, or $1.51 per diluted share, compared to net earnings of $30.4 million in the year-ago period, or $1.27 per diluted share. Excluding non-recurring PWC items, year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. net sales increased 1 percent to $461.7 million, net earnings rose 2 percent to $31.0 million, and diluted earnings per share increased 7 percent to $1.36. "Our record quarterly revenues were driven by increased 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. sales, offsetting a planned decline in 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 sales this year," said Christopher A. Twomey, Arctic Cat's president and chief executive officer. "Arctic Cat's retail ATV sales in calendar 2002 were approximately double the industry's growth rate, due to our expanded offerings in the growing utility segment of this market." Commenting on the snowmobile business, Twomey said: "This has been a lackluster lack·lus·ter adj. Lacking brightness, luster, or vitality; dull. See Synonyms at dull. Adj. 1. lackluster - lacking brilliance or vitality; "a dull lackluster life"; "a lusterless performance" year for the entire snowmobile industry due to the disappointing snow conditions throughout most of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . However, we are encouraged by the relative strength of Arctic Cat snowmobile sales, which declined by less than half that of the rest of the industry. Significantly, this means we gained market share. In addition, since we planned on lower demand this year and built fewer snowmobiles, we expect to end the winter season with manageable inventory levels." Arctic Cat introduced several industry-leading all-terrain vehicle 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. (ATV) and snowmobile products this year. These include the previously announced Multi-Rack Platform (MRP (Material Requirements Planning) An information system that determines what assemblies must be built and what materials must be procured in order to build a unit of equipment by a certain date. ) ATV, which enables users to adapt their ATV to a wide range of applications by attaching up to 20 different accessories on the vehicle's front and rear racks, and the all-new Firecat Firecat is a Server-side JavaScript webserver. With Firecat a developer can build complete web applications using JavaScript on both the Client-Side (Ajax) and the Server-Side(NSP). high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" snowmobile. In addition, the company announced in January January: see month. 2003 that during the fourth quarter it will offer a limited number of F6 Firecat EFI See UEFI. EFI - Extensible Firmware Interface high-performance snowmobiles with a 600cc engine, providing a sneak preview sneak preview n. A single public showing of a movie before its general release. Noun 1. sneak preview - a preview to test audience reactions of Arctic Cat's 2004 model line-up. "We're pleased with consumers' response to all of our new models," Twomey said. "Further, we're building on our success by introducing new features that we expect will boost demand in fiscal 2004, including breakthroughs in performance, styling and comfort." During the third quarter, the company repurchased 153,000 shares of common stock, bringing its total stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. during the current fiscal year to 1.4 million shares. Since 1996, Arctic Cat has repurchased more than 8 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. Outlook Arctic Cat continues to expect record revenues for its 2003 fiscal year, ending March 31, 2003. "We sell the majority of our products to dealers in our second and third quarters, which provides strong predictability in our sales and earnings projections for the remainder of the year," Twomey said. "Our focus is on building shareholder value, with a goal of 10 percent earnings-per-share growth in fiscal 2003. We remain on track to achieve this." Arctic Cat anticipates that most of its growth this year will be driven by ATV sales, which will offset the planned decrease in snowmobile sales. The company expects 2003 fourth-quarter net sales will be in the range of $99 million to $105 million, compared to $99.3 million for the same period last year. The net loss for the fourth quarter is estimated between 4 to 8 cents per diluted share versus a net loss of 8 cents per diluted share in the prior-year quarter. For the 2003 fiscal year, Arctic Cat anticipates net sales, including non-recurring PWC items, in the range of $560 million to $570 million versus net sales of $556.1 million for the prior year. Diluted earnings per share, including non-recurring PWC items, are estimated to be in the range of $1.43 to $1.47. Excluding non-recurring PWC items, diluted earnings per share are estimated to increase approximately 10 percent and be in the range of $1.28 to $1.32. Conference Call Arctic Cat will host a conference call to discuss the third quarter results at 10:30 a.m. CT (11:30 a.m. ET) today. A replay of the call will be available from approximately noon CT on Thursday, January 30, until 6 p.m. CT on Friday, January 31. To access the replay, dial 402-977-9140 and enter conference call ID #21107684. The conference call also will be Webcast live. To access this Webcast, go to the corporate portion of the company's Web site at www.arcticcat.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. About Arctic Cat 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 www.arcticcat.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
(000s omitted, except per share amounts) (Unaudited)
Three Months Ended December 31,
------------------------------------------
2002 2001
------------------------------- ---------
Before Non- Non-
Recurring Recurring
Items Items(a) Reported Reported
--------- --------- --------- ---------
Net Sales $ 172,175 $ 4,000 $ 176,175 $ 167,917
Cost of Goods Sold 136,522 -- 136,522 132,275
--------- --------- --------- ---------
Gross Profit 35,653 4,000 39,653 35,642
Selling, General And
Administrative Expenses 23,595 1,000 24,595 24,345
Watercraft Exit Costs -- (2,404) (2,404) --
--------- --------- --------- ---------
Operating Profit 12,058 5,404 17,462 11,297
Other Income (Expense):
Interest Income 452 -- 452 690
--------- --------- --------- ---------
Earnings Before Income Taxes 12,510 5,404 17,914 11,987
Income Taxes 4,003 1,999 6,002 3,836
--------- --------- --------- ---------
Net Earnings $ 8,507 $ 3,405 $ 11,912 $ 8,151
========= ========= ========= =========
Net Earnings Per Share
Basic $ 0.38 $ 0.15 $ 0.54 $ 0.35
========= ========= ========= =========
Diluted $ 0.38 $ 0.15 $ 0.53 $ 0.34
========= ========= ========= =========
Weighted Average Shares
Outstanding
Basic 22,099 22,099 22,099 23,335
========= ========= ========= =========
Diluted 22,289 22,289 22,289 23,671
========= ========= ========= =========
(a) Net reduction of accrual related to September 1999 exit from the
personal watercraft business.
ARCTIC CAT INC.
Financial Highlights
(000s omitted, except per share amounts) (Unaudited)
Nine Months Ended December 31,
------------------------------------------
2002 2001
------------------------------- ---------
Before Non- Non-
Recurring Recurring
Items Items(a) Reported Reported
--------- --------- --------- ---------
Net Sales $ 461,700 $ 4,000 $ 465,700 $ 456,819
Cost of Goods Sold 354,234 -- 354,234 350,376
--------- --------- --------- ---------
Gross Profit 107,466 4,000 111,466 106,443
Selling, General And
Administrative Expenses 62,952 1,000 63,952 63,570
Watercraft Exit Costs -- (2,404) (2,404) --
--------- --------- --------- ---------
Operating Profit 44,514 5,404 49,918 42,873
Other Income (Expense):
Interest Income 1,068 -- 1,068 1,892
--------- --------- --------- ---------
Earnings Before Income Taxes 45,582 5,404 50,986 44,765
Income Taxes 14,586 1,999 16,585 14,325
--------- --------- --------- ---------
Net Earnings $ 30,996 $ 3,405 $ 34,401 $ 30,440
========= ========= ========= =========
Net Earnings Per Share
Basic $ 1.38 $ 0.15 $ 1.53 $ 1.29
========= ========= ========= =========
Diluted $ 1.36 $ 0.15 $ 1.51 $ 1.27
========= ========= ========= =========
Weighted Average Shares
Outstanding
Basic 22,505 22,505 22,505 23,676
========= ========= ========= =========
Diluted 22,737 22,737 22,737 24,008
========= ========= ========= =========
(a) Net reduction of accrual related to September 1999 exit from the
personal watercraft business.
Selected Balance Sheet Data: 12/31/02 12/31/01
--------------------------- -------- --------
Cash and Short-term Investments $86,429 $82,881
Accounts Receivable, net 42,074 49,568
Inventories, net 85,702 77,919
Total Assets 291,575 284,911
Accounts Payable 32,218 28,241
Long-term Debt 0 0
Shareholders' Equity 192,233 187,104
Three Months Ended Nine Months Ended
December 31, December 31,
----------------------------------------------------------------------
Product Line Data 2002 2001 Incr% 2002 2001 Incr%
----------------------------------------------------------------------
Snowmobiles $ 96,003 $105,446 -9% $243,671 $255,103 -4%
All-terrain Vehicles 52,315 38,767 35% 153,179 135,292 13%
Parts, Garments &
Accessories 23,857 23,704 1% 64,850 66,424 -2%
-------------------------------------------------
Total Net Sales $172,175 $167,917 3% $461,700 $456,819 1%
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