Arctic Cat Announces Third Quarter Results
27 January 2000
Arctic Cat Announces Third Quarter Results
THIEF RIVER FALLS, Minn.--Jan. 27, 2000--Arctic Cat Inc. today reported results for the third quarter and nine months ended December 31, 1999.
Net sales were $109,009,000 for the third quarter ended December 31, 1999 versus $109,750,000 for the same period last year. Net earnings were $4,311,000, or $0.17 per share on a diluted basis, compared to $4,278,000, or $0.16 per diluted share, earned in the third quarter of fiscal 1999.
For the nine-month period ended December 31, 1999, net sales were $401,444,000 compared to $391,783,000 for the same period last year. Adjusted net earnings were $25,243,000, or $0.98 per diluted share, for the first nine months of fiscal 2000, compared to $24,846,000, or $0.89 per diluted share, earned during the first nine months of fiscal 1999. Adjusted net income and adjusted net income per diluted share do not include certain costs related to the discontinued personal watercraft (PWC) business. The Company took a charge for these costs last quarter. Including the effects of the PWC exit and related costs, Arctic Cat reported net earnings of $8,344,000, or $0.32 per diluted share for the nine months ended December 31, 1999.
Commenting on the quarter, Christopher A. Twomey, president and chief executive officer, said, "Our essentially flat sales for the quarter result from increased ATV sales and the previously announced planned decrease in snowmobile shipments reflecting moderately lower dealer orders related to snow conditions."
Twomey noted: "Overall ATV industry retail sales continued their strong double-digit growth again during calendar year 1999, and Arctic Cat's retail sales growth out paced the industry. Late in the quarter, we began shipping a new 500cc model which is Arctic Cat's first fully automatic ATV. Initial customer response has been very encouraging. As a result of growing brand awareness and the availability of models in every major market segment, we look forward to continued strong ATV sales growth during calendar year 2000."
Twomey went on to say, "Snowmobile retail sales through December for the industry and Arctic Cat were slightly lower than last year. While customer interest remains strong, good rideable snow only arrived in mid-January over most of the snow belt. To help dealers sell their remaining inventory, Arctic Cat has initiated a factory cash-back program direct to retail customers, which already appears to be stimulating retail sales. With continued good snow conditions driving retail sales we expect to end the year with very manageable inventory levels and look forward to our exciting model year 2001, which will be unveiled at our dealer shows in February."
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,
--------------------------------------
1999 1998
------------- -------------
Net Sales $109,009 $109,750
Cost of Goods Sold 75,595 78,227
------------- -------------
Gross Profit 33,414 31,523
Selling, General And
Administrative Expenses 28,210 25,781
------------- -------------
Operating Profit 5,204 5,742
Other Income (Expense):
Interest Income 1,480 892
Interest Expense - (1)
------------- -------------
1,480 891
Earnings Before Income Taxes 6,684 6,633
Income Taxes 2,373 2,355
------------- -------------
Net Earnings $4,311 $ 4,278
============= =============
Net Earnings Per Share
Basic $ 0.17 $ 0.16
============= =============
Diluted $ 0.17 $ 0.16
============= =============
Weighted Average Shares
Outstanding
Basic 25,542 27,480
============= =============
Diluted 25,630 27,515
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ARCTIC CAT INC.
Financial Highlights
Unaudited
(000s omitted, except per share amounts)
Nine Months Ended December 31,
---------------------------------------------
1999 1998
---------------------------------------------
Before Non- Non-
Recurring Recurring
Charges Charges(a) Reported Reported
------------- ---------- ---------- -----------
Net Sales $401,444 $401,444 $391,783
Cost of Goods Sold 291,612 3,062 294,674 285,045
Watercraft
Inventory Writedown - 2,835 2,835 -
--------- --------- ------------- -----------
Gross Profit 109,832 (5,897) 103,935 106,738
Selling, General And
Administrative Expenses 73,805 1,676 75,481 69,949
Watercraft Exit Costs - 18,627 18,627 -
--------- --------- ------------- -----------
Operating Profit 36,027 (26,200) 9,827 36,789
Other Income (Expense):
Interest Income 3,109 - 3,109 1,759
Interest Expense - - - (27)
--------- --------- ------------- -----------
3,109 - 3,109 1,732
Earnings Before
Income Taxes 39,136 (26,200) 12,936 38,521
Income Taxes 13,893 (9,301) 4,592 13,675
--------- --------- ------------- -----------
Net Earnings $25,243 $(16,899) $8,344 $24,846
========= ========= ============= ===========
Net Earnings Per Share
Basic $ 0.98 $ (0.66) $ 0.32 $ 0.89
========= ========= ============= ===========
Diluted $ 0.98 $ (0.66) $ 0.32 $ 0.89
========= ========= ============= ===========
Weighted Average Shares
Outstanding
Basic 25,733 25,733 25,733 27,822
========= ========= ============= ===========
Diluted 25,785 25,785 25,785 27,858
========= ========= ============= ===========
(a) Costs related to discontinued personal watercraft business.