Arctic Cat Reports Fiscal 2013 First Quarter Results
- Net sales up 49 percent to $111.3 million, primarily due to strong Wildcat™ ROV sales;
- Diluted EPS of $0.14 versus a loss of $0.13 in prior-year quarter;
- Gross profit margin up 114 basis points to 20.2 percent;
- Company swings to operating profit of $3.1 million, up from a loss of $3.6 million;
- Raising full-year sales and earnings outlook for fiscal 2013
MINNEAPOLIS, MN July 26, 2012 – Arctic Cat Inc. (NASDAQ: ACAT) today reported the company swung to net earnings of $2.0 million, or $0.14 per diluted share, for the fiscal first quarter ended June 30, 2012, up from a prior-year net loss of $2.3 million, or a loss of $0.13 per diluted share. Arctic Cat’s net sales for the fiscal 2013 first quarter grew 49 percent to $111.3 million versus net sales of $74.9 million in the same quarter last year.
“We are very pleased to start our new fiscal year with another quarter of outstanding sales and earnings,” said Claude Jordan, Arctic Cat’s president and chief executive officer. “Sales rose across all product lines in the first quarter, led by strong contributions from our new Wildcat pure sport and Prowler side-by-side vehicles, and core ATVs. We continued to leverage higher sales volumes and a lower cost structure to deliver improved profitability in the first quarter.”
Among the highlights of Arctic Cat’s fiscal 2013 first-quarter financial results versus the prior-year quarter:
- Net sales grew 49 percent, chiefly driven by increased Wildcat and Prowler recreational off-highway vehicle (ROV) sales;
- Gross margins improved 114 basis points, due to higher volumes;
- Operating expenses as a percent of sales declined to 17 percent compared to 24 percent;
- The company reported operating profit of $3.1 million versus a loss of $3.6 million;
- The company had no long-term debt.
Business Line Results
Sales in Arctic Cat’s all-terrain vehicle (ATV) business rose 93 percent to $73.0 million, up from $37.9 million in the same period last year. The increase was primarily due to strong dealer and customer demand for the all-new Wildcat V-Twin 1000i H.O. pure-sport ROV, as well as Prowler side-by-side utility vehicles and core ATVs.
Commented Jordan: “Wildcat sales are on track to meet our high expectations this fiscal year for the growing ROV market. In addition, with the further reductions achieved in our ATV/ROV inventory in fiscal 2012, dealer inventory is now near optimum levels and we are starting to see increased demand from our dealers.”
In August 2012, Arctic Cat will begin shipping new model year 2013 ATVs/ROVs, including five ATV models and a new limited edition Wildcat 1000 ROV. The new limited Wildcat will offer upgraded styling features, as part of a standard package.
Arctic Cat’s snowmobile sales in the fiscal 2013 first quarter rose 4 percent to $18.0 million, up from $17.4 million in the prior-year quarter. For the 2013 model year, the company is building snowmobiles on its new ProCross™ performance and ProClimb™ mountain chassis platforms, introduced in fiscal 2012, and will continue offering innovative suspension, drive and braking technologies. Arctic Cat is committed to investing in research and development, in order to remain an industry innovation leader and in anticipation of manufacturing its own snowmobile engines in fiscal 2015.
Sales of parts, garments and accessories (PG&A) in the fiscal 2013 first quarter increased 3 percent to $20.4 million versus $19.7 million in the prior-year quarter. Contributing to the growth were accessory sales for the Wildcat ROV. Arctic Cat’s growing line of Wildcat accessories now includes 43 wide-ranging options for riding enjoyment and vehicle customization. Among the top-selling Wildcat accessories are front and rear bumpers, flip up windshields, skid plates and winches.
Company Raises Fiscal 2013 Sales and Earnings Outlook
“We are bullish about our future,” said Jordan. “We expect to generate further revenue and earnings growth by continuing our product development focus and entering new segments that we’re not in today. Our goal for fiscal 2013 is to deliver the highest net earnings in Arctic Cat’s 50-year history.”
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