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Arctic Cat Streamlines Workforce

THIEF RIVER FALLS, Minn.--Arctic Cat Inc. today announced a workforce reduction in order to lower the companys cost structure and align resources with current business conditions.

This was not an easy decision, but it reflects the realities of the current industrywide market conditions, particularly for sales of snow-related products, said Christopher A. Twomey, chairman and chief executive officer. "We are rightsizing the business to lower our cost structure, strengthen our profitability and increase our long-term competitiveness. We continue to be excited about the snowmobile market and plan to keep investing in this profitable business at levels that allow us to develop innovative new products and improve distribution, but also more realistically reflect the current size of the market."

Approximately 65 positions are being eliminated, effective immediately, primarily in Thief River Falls, Minn. This represents less than 4 percent of Arctic Cats 1,800 employees. The company does not expect any material financial impact related to this announcement in its fiscal fourth quarter ending March 31, 2007.

About Arctic Cat

Arctic Cat Inc. designs, engineers, manufactures and markets all-terrain vehicles (ATVs) and snowmobiles under the Arctic Cat brand name, as well as related parts, garments and accessories. Its common stock is traded on the Nasdaq Global Select Market under the ticker symbol ACAT. More information about Arctic Cat and its products is available at www.arcticcat.com.