Cycle Country Announces Conference Call for January 16, 2009 at 11:00 AM (EST)
SPENCER, Iowa january 14, 2009: Cycle Country Accessories Corp. (AMEX:ATC), the recognized leader in development, sales, marketing, and manufacturing of a variety of products for all terrain vehicles (ATV), garden tractors, and golf cars, earlier today announced earnings for fiscal 2009, (ended September 30, 2008), of a loss of six cents (0.06) per share versus a gain of six cents per share for fiscal 2007. This is the first loss in the company’s 28 year history. The revenue increased YOY by 23%. The company, believing that it’s common equity to be grossly undervalued, (it is trading both on a Price to Book and a Price to Sales of under 0.2 for example), has, also over the course of the past calendar quarter, (October-December 2008), purchased 363,000 shares; this amount is in addition to the 19.2% of its common already in Treasury Stock.
As was noted in our press releases from both May 14 and August 14 of 2008, ATC has, in fiscal 2008, experienced significant increases in raw material costs as well as increases in Selling, General and Administrative costs which have effectively wiped out the significant increase in revenues. Also contributing to the loss for the quarter was continued weakness in both the Weekend Warrior and Plastic Wheel Covers divisions, as well as, to a lesser degree, their Contract Manufacturing segment.
SG&A increased 18.5%. There was nearly 412k in payments and accruals associated with the departure of the CEO, (and to a much lesser extent, the CFO), which has been expensed in Fiscal ‘08. Also contributing to the increase was a renewed emphasis on advertising as well as needed compliance for Sarbanes-Oxley, (which was 126k).
While the company’s major division increased its revenue by 5.3%, their Wheel Cover division experienced a decline of 28.9%, their Weekend Warrior revenue declined by 57.8%, and their Contract Manufacturing was down on a revenue basis 11.8%.
Cash year over year declined from 455k to 195k, a decline of 57.2%.
Management believes that the Company's operations are not expected to require significant capital expenditures during fiscal year 2009. Management also believes that existing cash balances and cash flow to be generated from operating activities and available borrowing capacity under its line of credit agreement will be sufficient to fund normal operations, and capital expenditure requirements, for at least the next twelve months.
In fiscal 2008 ATC made approximately $1,280,108 in capital expenditures, and paid approximately $684,879 of long-term debt principal.