Arctic Cat Announces Higher Third-Quarter Sales and Earnings
THIEF RIVER FALLS, Minn.--Jan. 25, 2001--Arctic Cat Inc. today reported results for the fiscal 2001 third-quarter and nine-months ended December 31, 2000.Net sales increased 42 percent to $154.9 million for the 2001 third quarter versus $109.0 million for the same period last year. Net earnings rose 71 percent to $7.4 million, or 30 cents per share on a diluted basis, compared to $4.3 million, or 17 cents per diluted share, earned in the third quarter of fiscal 2000.
For the nine-month period, net sales increased 8 percent to $433.7 million compared to $401.4 million in the prior-year period. Net earnings grew 11 percent to $28.0 million, or $1.14 per diluted share, for the first nine months of fiscal 2001 compared to adjusted net earnings of $25.2 million, or 98 cents per diluted share, reported during the first nine months of fiscal 2000. Prior-year adjusted net income and adjusted net income per diluted share do not include certain costs related to the discontinued personal watercraft (PWC) business. In September 1999, the company recorded an after-tax charge of $16.9 million, or 66 cents per diluted share, for these costs. Including the effects of the PWC exit and related costs, Arctic Cat reported net earnings of $8.3 million, or 32 cents per diluted share, for the nine months ended December 31, 1999.
"As expected, Arctic Cat's third-quarter sales growth reflects increased shipments of all-terrain vehicles (ATVs) and the timing of snowmobile shipments," said Christopher A. Twomey, president and chief executive officer. "Our business mix continues to shift toward a larger percentage of ATV sales, as part of our strategic plan to lessen the impact of weather-related snowmobile demand. Industry sales of ATVs during the 2000 calendar year experienced double-digit growth for the eighth consecutive year and, once again, Arctic Cat outpaced the industry. We are very excited about the new products which we will unveil during calendar 2001, and believe that they will help us continue our strong ATV sales growth."
Commenting on snowmobile retail sales, Twomey said, "U.S. snowmobile industry retail sales through December were higher this year than last year even though industry production was down in response to last year's generally poor snow conditions. Arctic Cat's retail snowmobile sales also outpaced the industry. With normal snow levels throughout most of the snowbelt driving retail sales, we expect year-end dealer inventories to be lower than they have been in any of the last three years. As a result of the current, good snow conditions, dealers are experiencing strong sales of parts, garments and accessories which will improve their financial position. Low inventories, financially stronger dealers and exciting new models make us very optimistic about the 2002 model year which we will kick off at our late-February dealer meeting."
During the quarter, Arctic Cat completed a limited production run of 100 new cleaner, quieter four-stroke snowmobiles, including 50 machines that are available for public rental in Yellowstone National Park this season. The company is scheduled to begin full production of the four-stroke product next year, making it commercially available in time for the 2001-02 season. Arctic Cat is the first major manufacturer to deliver four-stroke technology in a snowmobile, a development that the industry views as a significant breakthrough. The four-stroke model produces lower emissions and is quieter than typical two-stroke models. Arctic Cat's four-stroke technology has been in development since 1996, specifically to address consumer requests for snowmobiles with lower emissions and a quieter ride.
Further demonstrating Arctic Cat's technology leadership, the company recently announced a revolutionary new 600cc EFI snowmobile featuring the new Smart Ride Suspension(TM). This innovation uses a micro-processor capable of taking 1000 measurements per second resulting in a continuously variable suspension. The breakthrough will give our customers the smoothest, most comfortable ride on a wide range of trail conditions.
"Due to our strong ATV sales growth and good snowmobiling conditions to-date, we expect to report record-breaking revenues and increased earnings this fiscal year," said Twomey. "Looking ahead to next year, we're excited about the new products we're bringing to market."
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. For more information, please visit Arctic Cat's Web site at www.arctic-cat.com.
Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. This press release contains 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 depending on a variety of factors, including, but not limited to: product mix; 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; warranty expenses; foreign currency exchange rate fluctuations; product liability claims and other legal proceedings in excess of insured amounts; environmental and product safety regulatory activity; effects of the weather; and overall economic conditions and consumer confidence. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission.
ARCTIC CAT INC.
Financial Highlights
Unaudited
(000s omitted, except per share amounts)
Three Months Ended
December 31,
--------------------------------------
2000 1999
------------- -------------
Net Sales $154,865 $109,009
Cost of Goods Sold 112,751 75,595
------------- -------------
Gross Profit 42,114 33,414
Selling, General And
Administrative Expenses 32,270 28,210
------------- -------------
Operating Profit 9,844 5,204
Other Income (Expense):
Interest Income 1,149 1,480
Interest Expense - -
------------- -------------
1,149 1,480
Earnings Before Income Taxes 10,993 6,684
Income Taxes 3,628 2,373
------------- -------------
Net Earnings $7,365 $ 4,311
============= =============
Net Earnings Per Share
Basic $ 0.31 $ 0.17
============= =============
Diluted $ 0.30 $ 0.17
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Weighted Average Shares
Outstanding
Basic 23,939 25,542
============= =============
Diluted 24,162 25,630
============= =============
ARCTIC CAT INC.
Financial Highlights
Unaudited
(000s omitted, except per share amounts)
Nine Months Ended
December 31,
--------------------------------------
2000 1999
------------- -------------
Net Sales $433,680 $401,444
Cost of Goods Sold 318,344 294,674
Watercraft Inventory Writedown - 2,835
------------- -------------
------------- -------------
Gross Profit 115,336 103,935
Selling, General And
Administrative Expenses 76,571 75,481
Watercraft Exit Costs - 18,627
------------- -------------
Operating Profit 38,765 9,827
Other Income (Expense):
Interest Income 3,060 3,109
Interest Expense - -
------------- -------------
3,060 3,109
Earnings Before Income Taxes 41,825 12,936
Income Taxes 13,802 4,592
------------- -------------
Net Earnings $28,023 $ 8,344(a)
============= =============
Net Earnings Per Share
Basic $ 1.15 $ 0.32
============= =============
Diluted $ 1.14 $ 0.32(a)
============= =============
Weighted Average Shares
Outstanding
Basic 24,347 25,733
============= =============
Diluted 24,537 25,785
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(a) Includes a $16.9 million after tax charge or 66 cents per diluted
share for certain costs related to discontinued personal
watercraft business.