Arctic Cat Reports Record Second-Quarter Sales and Earnings.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. 16, 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 ): -- Revenues Up 13% in Quarter; 9% Year-to-Date -- Second Quarter EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Grows 8% to 98 Cents -- Company Exceeds Quarterly Consensus Estimate of 96 Cents -- 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 Increase 17%; 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 Up 14% in Quarter Arctic Cat Inc. (Nasdaq:ACAT) today reported record 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 $237.7 million for the fiscal 2004 second quarter ended September 30, 2003, compared to $211.2 million in the same period last year. The net earnings for the quarter were $21.6 million, or 98 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, versus net earnings of $20.5 million, or 91 cents per diluted share, in the prior-year period. For the six-month period, net sales were $314.8 million compared to $289.5 million in the first half of last year. Net earnings were $21.7 million, or 98 cents per diluted share, versus $22.5 million, or 98 cents per diluted share, for the prior year six-month period. "We are pleased with our record second-quarter sales and earnings," said Christopher A. Twomey, chairman and chief executive officer. "Our results again exceeded the previous-year's record quarter." Sales of Arctic Cat snowmobiles totaled $117.7 million in the 2004 second quarter, an increase of 17 percent versus sales of $100.7 million in the same period last year. Year-to-date snowmobile sales were $152.4 million, up 3 percent from $147.8 million in the prior-year period. "Snowmobile sales are on plan for the year," Twomey said. "Although we will produce fewer snowmobiles this year in response to 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" snowfall in recent years, we continue to offer exciting new models, with cutting-edge technology, to snowmobile enthusiasts. A normal snowfall this winter could drive significantly increased snowmobile sales and greater profitability next year." Among Arctic Cat's extensive 2004 model snowmobile line, it is the first manufacturer to offer a turbo-charged engine on a four-stroke snowmobile, which is cleaner and quieter than a two-stroke engine. This breakthrough T660 Turbo 4-Stroke sled outperforms the EPA's 2012 emissions requirements, and offers a cleaner, quieter and faster ride. The T660 Turbo 4-Stroke again demonstrates Arctic Cat's leadership in fuel-management technology. Arctic Cat manufactures the lowest emission four-stroke snowmobiles available within the industry. In September, five of Arctic Cat's four-stroke snowmobiles became the first to be approved for use this winter in Yellowstone National Park Yellowstone National Park, 2,219,791 acres (899,015 hectares), the world's first national park (est. 1872), NW Wyo., extending into Montana and Idaho. It lies mainly on a broad plateau in the Rocky Mts., on the Continental Divide, c. and Grand Teton National Park Grand Teton National Park (tētŏn`, tē`tŏn), 309,993 acres (125,503 hectares), NW Wyo.; est. 1929. The park, which includes Jackson Lake and part of Jackson Hole, embraces the most scenic portion of the glaciated, snow-covered Teton by the National Park Service (NPS NPS National Park Service NPS Naval Postgraduate School NPS Net Promoter Score (customer management) NPS Non-Point Source pollution NPS Native Plant Society NPS Norfolk Public Schools (Virginia) ), after meeting the NPS' new rules for lower snowmobile emissions and noise levels. The emissions from Arctic Cat's approved four-stroke snowmobiles significantly outperformed both the NPS' requirements, as well as the Environmental Protection Agency's year 2012 standards. 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) grew to $91.6 million, up 14 percent from $80.1 million in the prior-year second quarter. Year-to-date ATV sales increased 22 percent to $123.0 million. Arctic Cat's ATV sales continue to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, industry sales, driven by demand for the company's innovative new products. "We experienced particularly strong orders for our new 650cc V-Twin ATV, which is our most powerful ATV yet, and our DVX DVX Digital Voice Exchange DVX Dvd Extended DVX Device Driver sports model," said Twomey. "Both were introduced in June and represent our first entries into the growing big bore and sport market segments. Many of our dealers have pre-sold these models before they hit their dealerships." Parts, garments and accessories (PG&A) sales were $28.4 million compared to $30.4 million in the second quarter of last year. Six-month PG&A sales totaled $39.4 million versus $41.0 million in the previous-year period. "We expect full-year PG&A sales to grow, led by ATV-related sales, despite a decrease in snowmobile garment sales this fiscal year," said Twomey. During the second quarter, the company repurchased 843,000 shares of Class B stock from Suzuki Motor Corporation, or 4 percent of Arctic Cat's total outstanding shares. The buyback returned Suzuki's ownership to just under 32 percent, or 6.7 million shares, of Arctic Cat's common stock. The transaction allowed Arctic Cat to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. a large block of shares without adversely impacting the current level of publicly traded shares. The company has approximately 700,000 shares remaining under its board-authorized repurchase program. Outlook Arctic Cat anticipates fiscal 2004 third-quarter net sales for the period ending December 31, 2003, in the range of $177 million to $185 million, compared to $176.2 million for the same period last year. Net earnings for the quarter are estimated to be between 43 cents and 47 cents per diluted share versus earnings of 53 cents per diluted share in the prior-year quarter. For comparison purposes, Arctic Cat's results in the prior-year third quarter benefited from a 15 cent per diluted share 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 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 1999. Excluding non-recurring items, comparable third-quarter earnings were 38 cents per diluted share in the year-ago period. For the current fiscal year ending March 31, 2004, Arctic Cat anticipates net sales will grow 3 to 6 percent and be in the range of $595 million to $607 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 be in the range of $1.39 to $1.41. Due to the seasonal nature of Arctic Cat's snowmobile and ATV products, the company sells the majority of its products during its second and third fiscal quarters. 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 16. To access the replay, dial 402-977-9140 and enter conference call ID 21163052. The audio replay will be available beginning at approximately noon CT on Thursday, October 16, until 6 p.m. CT on Tuesday, October 21. 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 Six Months Ended
September 30, September 30,
---------------------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net Sales $237,650 $211,242 $314,839 $289,525
Cost of Goods Sold 181,478 158,272 240,141 217,712
--------- --------- --------- ---------
Gross Profit 56,172 52,970 74,698 71,813
Selling, General and
Administrative Expenses 24,616 23,032 43,241 39,357
--------- --------- --------- ---------
Operating Profit 31,556 29,938 31,457 32,456
Other Income
Interest Income 162 238 411 616
--------- --------- --------- ---------
Earnings Before Income Taxes 31,718 30,176 31,868 33,072
Income Taxes 10,149 9,656 10,197 10,583
--------- --------- --------- ---------
Net Earnings $21,569 $20,520 $21,671 $22,489
========= ========= ========= =========
Net Earnings Per Share
Basic $0.99 $0.92 $0.99 $0.99
========= ========= ========= =========
Diluted $0.98 $0.91 $0.98 $0.98
========= ========= ========= =========
Weighted Average Shares
Outstanding:
Basic 21,707 22,414 21,838 22,708
========= ========= ========= =========
Diluted 21,999 22,600 22,125 22,962
========= ========= ========= =========
Six Months Ended
September 30,
------------------------------
Selected Balance Sheet Data: 2003 2002
------------------------------- -------------- -------------
Cash and Short-term Investments $40,698 $56,339
Accounts Receivable, net 75,639 70,468
Inventories, net 108,229 94,521
Total Assets 306,525 297,936
Current Liabilities 113,070 106,371
Long-term Debt 0 0
Shareholders' Equity 181,278 182,756
Three Months Ended Six Months Ended
September 30, September 30,
-------------------------------------
Product Line Data: 2003 2002 Change 2003 2002 Change
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Snowmobiles $117,662 $100,734 17% $152,428 $147,770 3%
All-terrain Vehicles 91,554 80,142 14% 123,046 100,767 22%
Parts, Garments &
Accessories 28,434 30,366 -6% 39,365 40,988 -4%
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Total Sales $237,650 $211,242 13% $314,839 $289,525 9%
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