Arctic Cat Reports Record Sales and EPS in 2003 Second Quarter.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. 31, 2002 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 ): -- Quarterly EPS is 91 Cents Versus 84 Cents Last Year -- Company Exceeds Quarterly Consensus Estimate of 88 Cents -- Six-Month EPS is 98 Cents Compared to 92 Cents Last Year Arctic Cat Inc. (Nasdaq:ACAT) today reported results for the fiscal 2003 second quarter and six months ended September 30, 2002, exceeding consensus estimates. 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 were a record $211.2 million for the quarter versus $211.1 million for the same period last year. Net earnings reached a record $20.5 million, or 91 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 $20.3 million, or 84 cents per diluted share, reported for the second quarter of fiscal 2002. For the six-month period, net sales were $289.5 million compared to $288.9 million for the same period last year. Net earnings were $22.5 million, or 98 cents per diluted share, compared to net earnings of $22.3 million, or 92 cents per diluted share, reported in the first half of fiscal 2002. "We are pleased to report very strong sales and earnings for the quarter," said Christopher A. Twomey, president and chief executive officer. "Sales came in just above last year's record-setting levels despite the dramatic growth we experienced a year ago. In addition to increased earnings, we continued to drive earnings-per-share growth by repurchasing our stock." Contributing to the second-quarter results were strong 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. (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. ) sales, which grew 11 percent during the quarter versus the prior-year period, offset by anticipated lower sales of snowmobiles and related parts, garments and accessories. "We believe that our 2003 model year line-up is one of our strongest, and we're excited about the favorable reception Noun 1. favorable reception - acceptance as satisfactory; "he bought it on approval" favourable reception, approval acceptance - the state of being acceptable and accepted; "torn jeans received no acceptance at the country club" to our newest ATV 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 products," said Twomey. "Among our ATV highlights this year, we added greater horsepower horsepower, unit of power in the English system of units. It is equal to 33,000 foot-pounds per minute or 550 foot-pounds per second or approximately 746 watts. and performance to our popular 500cc ATV and we have begun taking orders for our innovative, new MultiRack 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 system. Arctic Cat ATVs equipped with this revolutionary new rack system can secure more than 20 different accessory accessory, in criminal law, a person who, though not present at the commission of a crime, becomes a participator in the crime either before or after the fact of commission. attachments on the vehicle's front and rear racks, allowing consumers to adapt their ATVs to a wide range of applications, from construction work to camping. The MRP solidifies 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 position as a proven leader in the utility segment of the ATV market." "In addition, we're excited to have begun delivering our new FireCat snowmobile to dealers," said Twomey. "This advanced sled offers a host of technological breakthroughs for which we are seeking 20 patents." Among the FireCat's high-performance features are an engine with a lower center of gravity for better handling, a front-end air intake and exhaust Exhaust may refer to: In mathematics:
see furcula. suspension system Noun 1. suspension system - a mechanical system of springs or shock absorbers connecting the wheels and axles to the chassis of a wheeled vehicle suspension that is two generations ahead of the competition. Twomey added, "Whether in snowmobiles or ATVs, our offerings again reflect the technology advantage we consistently build into our products and is a true competitive advantage of our company." During the second quarter, the company repurchased 310,000 shares of common stock. 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 "We remain confident in our outlook for the remainder of fiscal 2003," said Twomey. "Our goal continues to be 10 percent earnings-per-share growth in fiscal 2003 and we are on track to achieve this." Arctic Cat anticipates that most of its growth this year will be driven by ATV sales, which are expected to increase by 10 percent in fiscal 2003, due to the launch of new models and market-share gains. The company also anticipates a 10 percent annual increase in parts, garments and accessories sales. Snowmobile sales are expected to decline 7 to 10 percent this fiscal year, as dealers ordered conservatively due to last year's poor snow conditions. The company anticipates 2003 third-quarter net sales will be in the range of $168 million to $173 million, compared to $167.9 million for the same period last year. Net earnings for the third quarter are estimated between 35 to 38 cents per diluted share versus 34 cents per diluted share in the prior-year quarter. For the fiscal year ending March 31, 2003, Arctic Cat continues to anticipate net sales in the range of $556 million to $570 million versus net sales of $556.1 million for the prior 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 increase approximately 10 percent and be in the range of $1.30 to $1.34. 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 31. To access a live Webcast of the call, 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 for 30 days following the call. If you do not have access to the Internet and want to listen to an audio replay of the second-quarter conference call, dial 800-633-8284 and enter conference call ID #20941532. The audio replay will be available beginning at approximately noon CT on Thursday, October 31, until 5 p.m. CT on Thursday, November 7. 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. 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 Six Months Ended
September 30, September 30,
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2002 2001 2002 2001
-------- -------- -------- --------
Net Sales $211,242 $211,081 $289,525 $288,902
Cost of Goods Sold 158,272 159,156 217,712 218,101
-------- -------- -------- --------
Gross Profit 52,970 51,925 71,813 70,801
Selling, General and
Administrative Expenses 23,032 22,493 39,357 39,225
-------- -------- -------- --------
Operating Profit 29,938 29,432 32,456 31,576
Other Income
Interest Income 238 476 616 1,202
-------- -------- -------- --------
Earnings Before Income Taxes 30,176 29,908 33,072 32,778
Income Taxes 9,656 9,576 10,583 10,489
-------- -------- -------- --------
Net Earnings $20,520 $20,332 $22,489 $22,289
======== ======== ======== ========
Net Earnings Per Share
Basic $0.92 $0.85 $0.99 $0.93
======== ======== ======== ========
Diluted $0.91 $0.84 $0.98 $0.92
======== ======== ======== ========
Weighted Average Shares
Outstanding:
Basic 22,414 23,869 22,708 23,846
======== ======== ======== ========
Diluted 22,600 24,165 22,962 24,176
======== ======== ======== ========
Selected Balance Sheet Data: 09/30/02 09/30/01
--------------------------- -------- --------
Cash and Short-term Investments $56,339 $73,093
Accounts Receivable, net 70,461 67,781
Inventories, net 94,521 89,967
Total Assets 297,936 301,406
Accounts Payable 43,832 49,433
Long-term Debt 0 0
Shareholders' Equity 182,756 183,631
Three Months Ended Six Months Ended
September 30, September 30,
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Product Line Data 2002 2001 Incr% 2002 2001 Incr%
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Snowmobiles $101,921 $105,358 -3% $150,725 $151,545 -1%
All-terrain Vehicles 79,451 71,476 11% 98,566 95,566 3%
Parts, Garments &
Accessories 29,870 34,247 -13% 40,234 41,791 -4%
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Total Sales $211,242 $211,081 0% $289,525 $288,902 0%
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