Arctic Cat Reports Results for Fiscal 2007 First Quarter; Revenues higher than anticipated, led by 45% increase in ATV sales.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 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 $96.4 million for the fiscal 2007 first quarter ended June June: see month. 30, 2006, compared to $107.9 million for the same period last year. The net loss for the quarter was $4.5 million, or $0.23 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, including approximately $0.01 per diluted share for the non-cash expensing of stock options as required by 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), which the company adopted in the first quarter of fiscal 2007. The company reported net earnings in the prior-year period of $448,000, or $0.02 per diluted share, which did not include the non-cash expensing of stock options. "Our first quarter results were better than planned, primarily due to higher 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 to dealers," said Christopher A. Twomey, chairman and chief executive officer. "We are pleased with our dealers' positive response to our newest model ATVs, which we unveiled at our June dealer show. We also are encouraged that retail sales of Arctic Cat ATVs grew at a much faster pace than the overall 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. industry during the quarter." 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 ATV sales increased 45 percent to $60.2 million in the first quarter versus $41.4 million in the prior-year quarter. The company attributed the ATV sales gains to continued high demand for its Prowler UTV UTV Ulster Television UTV Utility Terrain Vehicle UTV Unmanned Transport Vehicle and the timing of shipments. As expected, 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 declined 60 percent to $20.9 million from $52.0 million in the prior-year quarter. Contributing to these results was the previously disclosed, planned shift of Arctic Cat's extensive new 2007 model snowmobile production, along with related revenue and earnings, into the company's 2007 second and third fiscal quarters. The company still expects full-year snowmobile revenues to exceed last year based on the strength of its 2007 model line-up, of which nearly 80 percent is new models. Parts, garments and accessories (PG&A) sales grew 6 percent to $15.4 million versus $14.5 million in the year-ago period. PG&A benefited primarily from ATV parts and accessories sales, including Arctic Cat's new SPEEDPoint(TM) System of pull-behind attachments that enable ATVs to be used for a broader range of farming and landscaping activities. During the 2007 first quarter, Arctic Cat repurchased approximately 112,500 shares of its common stock, leaving $8.5 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. Outlook "We anticipate reporting record full-year sales for fiscal 2007," said Twomey. "However, lower margins are expected to continue to constrain con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. earnings, primarily as a result of our continued shift in product mix to a higher percentage of ATV sales versus snowmobiles." Arctic Cat anticipates fiscal 2007 second-quarter net sales for the period ending September 30, 2006, to range between $290 million and $300 million, up from $276.3 million for the same period last year. Net earnings are estimated to be between $1.03 and $1.08 per diluted share, including the impact of SFAS 123(R), which is estimated to be $0.02 per diluted share in the second quarter. The company reported earnings of $0.96 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 first-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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , go to the corporate portion of the company's website at www.arcticcat.com. A telephone replay also will be available from approximately 12:30 p.m. CT today until 6 p.m. CT on Wednesday, August 2. To access the telephone replay, dial (800) 405-2236, conference ID #11066382. About Arctic Cat Arctic Cat Inc. designs, engineers, manufactures 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 June 30,
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2006 2005
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Net Sales $96,418 $107,924
Cost of Goods Sold 80,137 85,644
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Gross Profit 16,281 22,280
Selling, General And
Administrative Expenses 22,844 21,908
------------------ -----------------
Operating Profit (Loss) (6,563) 372
Other Income (Expense):
Interest Income 243 310
Interest Expense (212) (23)
------------------ -----------------
31 287
Earnings (Loss) Before
Income Taxes (6,532) 659
Income Tax Expense (Benefit) (2,000) 211
------------------ -----------------
Net Earnings (Loss) $(4,532) $448
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Net Earnings (Loss) Per Share
Basic $(0.23) $0.02
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Diluted $(0.23) $0.02
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Weighted Average Shares
Outstanding
Basic 19,417 20,015
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Diluted 19,417 20,229
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June 30,
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Selected Balance Sheet Data: 2006 2005
------------------------------- ------------------ -----------------
Cash and Short-term Investments $14,963 $14,335
Accounts Receivable, net 41,225 48,475
Inventories 168,263 134,218
Total Assets 333,808 287,700
Current Liabilities 139,265 95,335
Long-term Debt 0 0
Shareholders' Equity 183,629 178,748
Three Months Ended
June 30,
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Product Line Information 2006 2005 Incr %
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Snowmobiles $20,910 $52,010 -60%
All-Terrain Vehicles 60,151 41,449 45%
Parts, Garments & Accessories 15,357 14,465 6%
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Total Sales $96,418 $107,924 -11%
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