Arctic Cat Reports 2005 Third-Quarter Results.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. -- Earnings Per Share of $0.28 Exceed Expectations for the Quarter; Sales in-Line with Company's Guidance; Company Reiterates Outlook for Record Full-Year Sales and Increased Earnings 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 ) today reported 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 $188.9 million for the fiscal 2005 third quarter ended December 31, 2004, down 3 percent compared to net sales of $194.6 million in the prior-year period. Third-quarter net earnings were $5.8 million, or $0.28 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, versus net earnings of $9.7 million, or $0.46 per diluted share, in the same period last year. The quarter's results reflect anticipated lower 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 and a less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. Japanese foreign currency conversion. Year-to-date, net sales grew 4 percent to $532.1 million compared to $509.5 million in the year-ago period. Net earnings totaled $25.6 million, or $1.22 per diluted share, versus $31.4 million, or $1.44 per diluted share, in the nine-month period last year. "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 continue to be our primary growth driver and we are successfully increasing our share of this market," said Christopher A. Twomey, 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 chairman and chief executive officer. "During calendar year 2004, Arctic Cat's sales growth again outpaced the industry as we have every year since entering the ATV market." Sales of 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) in the third quarter grew to $84.1 million, up from $67.1 million in the same period last year. The company's year-to-date ATV sales rose to $223.9 million compared to $190.2 million last year. Production of the first Arctic Cat-designed and built ATV engine, the new 650 H1, is proceeding. The company is currently taking orders for the 650 H1 ATV model and expects to begin shipping this product in the fourth quarter ending March 31, 2005. Continuing a planned reduction in its fiscal 2005 snowmobile production after several seasons of poor snow conditions, Arctic Cat's snowmobile sales declined in the third quarter to $78.9 million versus $100.9 million in the prior-year quarter. Year-to-date snowmobile sales are on plan, totaling $241.6 million compared to $253.3 million during the same period last year. Arctic Cat has already unveiled its first 2006 model snowmobile, the Crossfire A multi-GPU interface from ATI for connecting two ATI display adapters together for faster graphics rendering on one monitor. CrossFire machines require PCI Express slots, a CrossFire-enabled motherboard and, depending on which models are used, either a pair of ATI Radeon adapters or one , a versatile hybrid machine designed for both mountain and trail riding. Unseasonably warm weather through mid-December resulted in poor snow conditions in the East and Midwest, slowing industrywide in·dus·try·wide adv. & adj. Throughout an entire industry: sales that have decreased industrywide; industrywide cooperation. retail snowmobile sales during the quarter. At the end of December and in early January, Arctic Cat's retail activity began gaining momentum due to snow accumulations in late December and retail sales programs announced earlier in the month. As a result of slightly lower wholesale and lower carryover carryover n. in taxation accounting, using a tax year's deductions, business losses or credits to apply to the following year's tax return to reduce the tax liability. (See: carryback) inventory, overall inventory at the dealer level is manageable at this time. Parts, garments and accessories (PG&A) sales were $25.8 million versus $26.6 million in the prior-year third quarter. Year-to-date PG&A sales grew to $66.7 million compared to $66.0 million in the year-ago period. These sales have also been adversely affected by the unseasonably warm weather through mid-December, but are expected to recover now that the weather has normalized. Arctic Cat repurchased 190,000 shares of its common stock in the fiscal third quarter and has approximately $11.6 million remaining on its current 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. authorization The right or permission to use a system resource; the process of granting access. See access control. . At the end of the third quarter ended December 31, 2004, the company reported $84.2 million in cash and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Company Reiterates Outlook for 2005 Fiscal-Year Growth "We expect higher sales of ATVs in our fiscal fourth quarter than in previous fourth-quarter periods, leading to record full-year sales and higher earnings," said Twomey. Arctic Cat expects net sales for the fourth quarter ending March 31, 2005, to range between $155 million and $168 million, compared to $140.2 million for the same period last year. Net earnings for the quarter are estimated to be between $0.24 and $0.29 per diluted share versus a net loss of $0.05 per diluted share in the prior-year period. For the fiscal year ending March 31, 2005, Arctic Cat anticipates that net sales will grow 5 percent to 8 percent and be in the range of $687 million to $700 million. Full-year 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 are estimated to grow 4 percent to 8 percent and be in the range of $1.46 to $1.51. Conference Call Arctic Cat will host a conference call today to discuss the second-quarter results at 10:30 a.m. CT (11:30 a.m. ET). To access the replay, dial 800-405-2236 and enter conference call ID 11021926. The audio replay will be available beginning at approximately noon CT on Thursday, January 20, until 6 p.m. CT on Thursday, January 27. The conference call also will be Webcast. To access the live Webcast, go to the corporate portion of the company's Web site at www.arcticcat.com, and click on the conference call icon. About Arctic Cat Arctic Cat Inc. designs, manufactures and markets world-class snowmobiles and all-terrain vehicles (ATVs) under the Arctic Cat(R) brand name, as well as related parts, garments and accessories. Its common stock is traded on the Nasdaq National Market under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "ACAT." More information about Arctic Cat and its products is available on the Internet 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 Nine Months Ended
December 31, December 31,
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2004 2003 2004 2003
--------- --------- --------- ---------
Net Sales $188,855 $194,618 $532,122 $509,457
Cost of Goods Sold 151,006 150,637 422,705 390,778
--------- --------- --------- ---------
Gross Profit 37,849 43,981 109,417 118,679
Selling, General and
Administrative Expenses 29,712 29,945 72,602 73,186
--------- --------- --------- ---------
Operating Profit 8,137 14,036 36,815 45,493
Other Income
Interest Income 380 279 783 690
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Earnings Before Income Taxes 8,517 14,315 37,598 46,183
Income Taxes 2,725 4,582 12,031 14,779
--------- --------- --------- ---------
Net Earnings $5,792 $9,733 $25,567 $31,404
========= ========= ========= =========
Net Earnings Per Share
Basic $0.28 $0.46 $1.24 $1.46
========= ========= ========= =========
Diluted $0.28 $0.46 $1.22 $1.44
========= ========= ========= =========
Weighted Average Shares
Outstanding:
Basic 20,413 21,009 20,649 21,562
========= ========= ========= =========
Diluted 20,679 21,316 20,928 21,855
========= ========= ========= =========
December 31,
---------------------
Selected Balance Sheet Data: 2004 2003
---------------------------- ---------- ----------
Cash and Short-term Investments $84,244 $64,642
Accounts Receivable, net 42,215 43,066
Inventories, net 90,973 103,948
Total Assets 305,254 292,721
Current Liabilities 97,245 88,914
Long-term Debt 0 0
Shareholders' Equity 190,828 190,674
Three Months Ended Nine Months Ended
December 31, December 31,
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Product Line Sales: 2004 2003 Change 2004 2003 Change
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Snowmobiles $78,891 $100,865 -22% $241,569 $253,293 -5%
All-terrain Vehicles 84,139 67,138 25% 223,869 190,184 18%
Parts, Garments &
Accessories 25,825 26,615 -3% 66,684 65,980 1%
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Total Sales $188,855 $194,618 -3% $532,122 $509,457 4%
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