Arctic Cat Reports Fiscal 2006 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. -- Company Continued to Gain 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. Market Share; Announced Largest Introduction of New 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 Models in Its History; For fiscal 2007, Company Expects 7th Consecutive Year of Record Sales 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 $153.3 million for the fiscal fourth-quarter ended March 31, 2006, compared with net sales of $157.0 million in the same period last year. The fourth-quarter net loss was $592,000, or $0.03 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 $2.7 million, or $0.13 per diluted share, in the prior-year fourth quarter. Arctic Cat posted its sixth consecutive year of record sales, with full-year net sales totaling $732.8 million versus $689.1 million last fiscal year. Net earnings totaled $23.7 million, or $1.20 per diluted share, compared with $28.3 million, or $1.36 per diluted share, for fiscal 2005. "Our performance in fiscal 2006 was mixed, despite the fact that we posted another year of record sales," said Christopher A. Twomey, chairman and chief executive officer of Arctic Cat. "While our ATV sales grew, our fourth quarter results were negatively affected by poor snowfall in the East and Midwest that reduced sales of snowmobiles and snow-related parts, garments and accessories, coupled with increased sales incentive Noun 1. sales incentive - remuneration offered to a salesperson for exceeding some predetermined sales goal bonus, incentive - an additional payment (or other remuneration) to employees as a means of increasing output programs on snowmobiles and ATVs." During fiscal 2006, Arctic Cat repurchased 727,000 shares of its common stock. The company has approximately $10.5 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 2006 fourth quarter, Arctic Cat reported $69.9 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. . Business Line Results 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) sales grew to $126.8 million in the 2006 fourth quarter versus $117.1 million in the same period last year. For fiscal 2006, the company's ATV sales rose to $394.9 million compared with $341.0 million last year. During the quarter, Arctic Cat announced a strategic partnership with the Piaggio Group to expand 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 international distribution capabilities and open new growth channels for ATVs. Initially, Arctic Cat and Piaggio will cooperate on product distribution, with Arctic Cat selling its ATV products through selected Piaggio dealers in Europe, and with Piaggio selling its motorcycles and motor scooters motor scooter: see motorcycle. through selected Arctic Cat North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. dealers. In another move designed to increase operational efficiency and manufacturing flexibility, Arctic Cat remains on track to open an ATV engine manufacturing facility in St. Cloud, Minnesota St. Cloud (IPA: /ˌseɪntˈklaʊd/) is a city in the U.S. state of Minnesota and the major population center in the state's central region. As of the 2000 census, the city had a total population of 59,107. . Construction on the plant is under way, with continued production of Arctic Cat's 650 H1 ATV engine slated to begin there in the fall of 2006. Commented Twomey: "We remain excited about our ATV business for several reasons, chief among them is the fact that we continue to gain market share, as we have every year since we entered the ATV business. Strong sales of our Prowler UTV UTV Ulster Television UTV Utility Terrain Vehicle UTV Unmanned Transport Vehicle contributed to our growth in fiscal 2006. Further, we expect to improve Arctic Cat's efficiency and profitability, once we begin producing more of our own ATV engines and leveraging that investment. We also anticipate that the Piaggio partnership will enhance our penetration of the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. market over the long-term." Snowmobile sales in the 2006 fourth quarter were $140,000 versus $10.9 million in the prior-year quarter. Arctic Cat's 2006 fiscal year snowmobile sales totaled $238.1 million compared with $252.5 million in the prior year. In March, Arctic Cat unveiled its 2007 model year snowmobile line-up, which is the most extensive new model introduction in the company's history. The product line includes: --completely new designs across most snowmobile model segments; --a revolutionary new chassis Pronounced "chah-see," it is a physical structure that holds everything or that everything is attached to. A computer's cabinet is often called the chassis. that provides industry leading ride and comfort; --the snowmobile industry's most advanced 4-stroke snowmobile engine and the first engine specifically designed for use in a snowmobile, rather than adapted from another use; as well as --two totally new emissions-reduced, large displacement displacement, in psychology: see defense mechanism. Same as offset. See base/displacement. 2-stroke snowmobile engines, which will be used in most model segments. "This may be the largest new model introduction in the power sports industry for any one year, as 75 percent to 80 percent of our 2007 model snowmobiles are new," said Twomey. "As a result, based on orders already received from our dealers, we expect snowmobile revenues to be higher in fiscal 2007 than they were in fiscal 2006." Sales of parts, garments and accessories in the 2006 fourth quarter were $26.4 million versus $29.0 million in the year-ago period. For the full fiscal year, sales of parts, garments and accessories totaled $99.8 million up from $95.7 million last year. Outlook For its fiscal year ending March 31, 2007, Arctic Cat anticipates shifting production of its significant new snowmobile models and related revenue and earnings into the second and third fiscal quarters. As a result of this production shift and its affect on snowmobile shipments, Arctic Cat anticipates fiscal 2007 first-quarter net sales for the period ending June 30, 2006, will be in the range of $85 million to $95 million compared with $107.9 million in the prior-year period. The net loss for the first quarter is estimated to be $0.27 to $0.31 per diluted share, including approximately $0.02 per diluted share for the non-cash expensing of stock options, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the company's adoption on April 1, 2006, of the Statement of Financial Accounting Standards SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123(R), which requires the expensing of all stock based compensation. Net earnings were $0.02 per diluted share in the prior-year quarter. For the fiscal year ending March 31, 2007, Arctic Cat anticipates reporting its seventh consecutive year of record sales. Net sales are estimated to grow 3 percent to 6 percent and be in the range of $754 million to $776 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 anticipated to be in the range of $1.13 to $1.19, including approximately $0.07 to $0.08 per diluted share for the impact of adopting SFAS 123R. Conference Call Arctic Cat will host a conference call today to discuss the fourth-quarter and full-year results at 10:30 a.m. CT (11:30 a.m. ET). To listen to the live Webcast or replay of this call via the Internet, go to the corporate portion of the company's Web site at www.arcticcat.com, and click on the conference call icon. A telephone replay also will be available from approximately 12:30 p.m. CT today until 6 p.m. CT on Friday, May 19. To access the telephone replay, dial 800-405-2236 and enter conference call ID 11060502. About Arctic Cat Arctic Cat Inc. designs, engineers and markets all-terrain vehicles (ATVs) and snowmobiles 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. The Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
ARCTIC CAT INC.
Financial Highlights
(000s omitted, except per share amounts) (Unaudited)
Three Months Ended Year Ended
March 31, March 31,
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2006 2005 2006 2005
--------- --------- --------- ---------
Net Sales $153,299 $157,023 $732,794 $689,145
Cost of Goods Sold 130,223 130,660 596,284 553,365
--------- --------- --------- ---------
Gross Profit 23,076 26,363 136,510 135,780
Selling, General and
Administrative Expenses 25,263 23,143 103,775 95,745
--------- --------- --------- ---------
Operating Profit (Loss) (2,187) 3,220 32,735 40,035
Other Income
Interest Income 582 430 1,451 1,213
--------- --------- --------- ---------
Earnings (Loss) Before Income
Taxes (1,605) 3,650 34,186 41,248
Income Taxes (Benefit) (1,013) 918 10,440 12,949
--------- --------- --------- ---------
Net Earnings (Loss) $(592) $2,732 $23,746 $28,299
========= ========= ========= =========
Net Earnings (Loss) Per Share
Basic $(0.03) $0.14 $1.21 $1.38
========= ========= ========= =========
Diluted $(0.03) $0.13 $1.20 $1.36
========= ========= ========= =========
Weighted Average Shares
Outstanding:
Basic 19,405 20,118 19,642 20,516
========= ========= ========= =========
Diluted 19,405 20,394 19,828 20,794
========= ========= ========= =========
March 31,
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Selected Balance Sheet Data: 2006 2005
------------------------------------------------ ---------- ----------
Cash and Short-term Investments $69,893 $88,394
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Accounts Receivable, net 42,295 46,472
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Inventories 92,289 67,989
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Total Assets 311,236 291,733
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Current Liabilities 110,402 92,792
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Long-term Debt 0 0
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Shareholders' Equity 189,365 185,510
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Three Months Ended Year Ended
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March 31, March 31,
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Business Line
Data: 2006 2005 Change 2006 2005 Change
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All-terrain
Vehicles $126,798 $117,104 8% $394,873 $340,974 16%
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Snowmobiles 140 10,946 -99% 238,113 252,514 -6%
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Parts, Garments
& Accessories 26,361 28,973 -9% 99,808 95,657 4%
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Total Sales $153,299 $157,023 -2% $732,794 $689,145 6%
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