Arctic Cat Reports Fiscal 2007 Second-Quarter Results.Second-quarter earnings per share rise, in line with guidance; 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.. introduces industry's first diesel 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. , capable of using biodiesel fuels; Outlook for record fiscal 2007 remains unchanged 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. -- Arctic Cat 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 grew to $285.3 million for the fiscal 2007 second quarter ended September 30, 2006, compared to $276.3 million in the same period last year. Net earnings for the quarter increased to $20.0 million, or $1.03 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. This was in the range of the company's earnings guidance of $1.03 to $1.08 per diluted share. The fiscal 2007 second quarter earnings include $0.02 per diluted share for the non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) of stock options in accordance with 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 123(R). The company reported net earnings in the prior-year period of $19.2 million, or $0.96 per diluted share. "Our record sales and increased earnings for the second quarter were driven primarily by a 9 percent increase 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, continued strong demand for our Prowler utility ATV, and higher ATV parts and accessories sales," said Christopher A. Twomey, chairman and chief executive officer. "We are confident that we remain on track to post sales gains across all of our product lines for the fiscal year." Some snowmobile and ATV sales to dealers that were anticipated to occur in the second quarter will now occur in the third quarter, due to the timing of shipments. Arctic Cat continues to expect full-year revenue growth in the range of 5 percent to 9 percent for snowmobiles, a 3 percent to 5 percent increase in ATV sales, and a gain of 3 percent to 6 percent for parts, garments and accessories sales. For the six-month period, net sales were $381.7 million compared to $384.2 million in the first half of last fiscal year. Net earnings were $15.4 million, or $0.79 per diluted share, versus net earnings of $19.7 million, or $0.98 per diluted share, in the prior-year first half. The fiscal 2007 first half earnings include $0.03 per diluted share for the non-cash expense of stock options in accordance with SFAS 123(R). During its fiscal 2007 second quarter, Arctic Cat repurchased approximately 100,000 shares of its common stock, leaving $6.8 million remaining under the company's $20 million 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. program. Product Line Results Sales of Arctic Cat's ATVs totaled $133.8 million compared to $135.8 million in the prior-year second quarter. Year-to-date ATV sales grew 9 percent to $194.0 million versus $177.3 million in the first six months of last fiscal year. The Prowler UTV UTV Ulster Television UTV Utility Terrain Vehicle UTV Unmanned Transport Vehicle continued to be a strong contributor to Arctic Cat's ATV business during the second quarter and first six months. During the second quarter, Arctic Cat also began shipping the industry's first twin cylinder diesel ATV with the introduction of its new Diesel 700 model. "We are excited to begin shipping the first biodiesel-compatible ATV," said Twomey. "This machine reflects our stewardship goal to be a leader in fuel efficiency." Arctic Cat's Diesel ATV, with its exceptional low-end torque, is ideally matched to Arctic Cat's line of SPEEDPoint accessories, making the machine highly versatile and allowing operators to change a variety of accessories in less than a minute. Sales of Arctic Cat snowmobiles totaled $121.5 million in the 2007 second quarter, up 9 percent versus sales of $111.4 million in the same period last year. Contributing to the increase was the previously disclosed shift of Arctic Cat's extensive new model snowmobile production, and related revenue and earnings, into the company's fiscal 2007 second and third quarters. The company's year-to-date snowmobile sales totaled $142.4 million compared to $163.5 million in the prior-year period. Arctic Cat continues to anticipate that its full-year snowmobile revenues will exceed last year based on strong dealer orders for its 2007 model line-up, of which 80 percent are new models. In recognition of its snowmobile innovation this year, three 2007 Arctic Cat sleds already have been named among the year's top sleds by a leading industry magazine. Snowmobiles chosen to receive this honor include Arctic Cat's Jaguar Z1, with the first 4-stroke engine built specifically for snowmobiles, the fast F8 Sno Pro, and the M1000 mountain sled with its leading power-to-weight ratio Power-to-weight ratio (specific power) is a calculation commonly applied to engines and other mobile power plants to enable the comparison of one unit (design) to another. Power-to-weight ratio is a measurement of actual performance of any engine (power plant). . Parts, garments and accessories (PG&A) sales rose 3 percent to $30.0 million compared to $29.0 million in the prior-year second quarter. PG&A continued to benefit primarily from increased ATV parts and accessories sales. Six-month PG&A sales grew 4 percent to $45.3 million versus $43.5 million in the year-ago period. Outlook Arctic Cat anticipates fiscal 2007 third-quarter net sales for the period ending December 31, 2006, to range between $210 million and $230 million, compared to $195.3 million for the same period last year. Net earnings are estimated to be between $0.33 and $0.38 per diluted share, including the impact of SFAS 123(R), which is estimated to be $0.02 per diluted share in the third quarter. The company reported earnings of $0.24 per diluted share in the prior-year quarter, which did not include the non-cash expensing of stock options. For the current fiscal year ending March 31, 2007, Arctic Cat continues to anticipate 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 123(R). In fiscal 2006, the company reported full-year earnings per diluted share of $1.20, which did not include the non-cash expensing of stock options. Conference Call Arctic Cat will host a conference call to discuss the second-quarter results today 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 website at www.arcticcat.com. A telephone replay also will be available until Wednesday, November 1. To access the telephone replay, dial (800) 405-2236, passcode 11074054. About Arctic Cat Arctic Cat Inc. designs, engineers, manufactures and markets 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 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.
[TABLE OMITTED]
> > Septem-
Selected Balance Sheet Data: > > 2006
2005
Cash and Short-term Investments > > $ 8,448
$62,274
Accounts Receivable, net > > 95,698
64,969
Inventories > > 154,206
120,432
Total Assets > > 366,411
344,125
Current Liabilities > > 154,697
143,613
Shareholders' Equity > > 201,171
186,803
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