Arctic Cat Announces First Quarter Results
30 July 1998
Arctic Cat Announces First Quarter Results
THIEF RIVER FALLS, Minn.--July 30, 1998--Arctic Cat Inc. today reported results for the first quarter ended June 30, 1998.Net sales were $88,651,000 for the quarter ended June 30, 1998, up from $85,467,000 for the same period last year. Net earnings for the quarter were $1,529,000, or $0.05 per basic and fully diluted share, compared with net earnings of $872,000, or $0.03 per basic and fully diluted share, for the first quarter of fiscal 1998.
Christopher A. Twomey, President and Chief Executive Officer, commented, "We are pleased with our first quarter results which are in line with our expectations. While the increase in net sales and earnings during the first quarter is mainly attributable to an increase in snowmobile sales over last year, as we previously announced, we anticipate moderately lower snowmobile revenues for the fiscal year based upon this season's snowmobile orders received from dealers."
Mr. Twomey noted that in response to the anticipated decrease in snowmobile revenues the Company has identified operating expense and product cost reductions that are expected to soften the earnings impact resulting from the decrease in revenues.
Commenting on Arctic Cat's personal watercraft (PWC) and all-terrain vehicle (ATV) businesses, Mr. Twomey said, "Our PWC retail sales are down this year, but by a lower rate than the industry as a whole. We expect that by season end both our PWC field inventory and the industry's will be down from last year. The Company will introduce our exciting new 1999 models to dealers this fall."
"Arctic Cat continues to remain optimistic about the ATV market. During the first six months of calendar 1998, retail sales of Arctic Cat ATVs outpaced the industry's double digit growth rate. We continue to expect strong growth from the ATV product line in fiscal 1999."
Arctic Cat Inc. designs, engineers, manufactures and markets snowmobiles and all-terrain vehicles (ATVs) under the Arctic Cat(R) brand name, and personal watercraft under the Tigershark(R) brand name, as well as related parts, garments and accessories.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. The Company's Annual Report, as well as the Report on Form 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 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 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
(Unaudited, 000s omitted, except per share amounts)
Three Months Ended
June 30,
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1998 1997
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Net Sales $88,651 $85,467
Cost of Goods Sold 66,700 64,075
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Gross Profit 21,951 21,392
Selling, General and
Administrative Expenses 19,979 20,374
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Operating Profit 1,972 1,018
Other Income (Expense):
Interest Income 425 381
Interest Expense (26) (47)
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399 334
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Earnings Before Income Taxes 2,371 1,352
Income Tax Expense 842 480
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Net Earnings $ 1,529 $ 872
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Net Earnings Per Share
Basic $ 0.05 $ 0.03
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Diluted $ 0.05 $ 0.03
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Weighted Average Shares
Outstanding
Basic 28,157 29,178
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Diluted 28,300 29,267
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