Aug. 10, 2009 – Arctic Cat reduces losses in first quarter

Arctic Cat was able to reduce its losses in its recent fiscal quarter despite a more than 25 percent slide in its sales.
The Minnesota-based manufacturer reduced its inventory and operating expenses and as a result decreased its quarterly losses. Arctic Cat posted a net loss of $5.9 million in comparison to a $7 million loss in the year-ago period.
Arctic Cat’s sales dropped 26 percent to $69.4 million, with its biggest segment — ATVs and side-by-sides — decreasing even more. Arctic Cat’s ATV segment sales fell 40 percent to
$32 million.
“With the current retail ATV sales slump driven by the recession, we are working harder than ever to offer consumers the innovative products they want, in the ATV segments that currently show some signs of improvement,” Arctic Cat CEO Chris Twomey said in a press release.
The company’s snowmobile revenue fell
16 percent to $17.9 million. Arctic Cat said it expects lower worldwide snowmobile orders in fiscal 2010 as a result of the economic downturn but expects to maintain or increase its North American market share.
To deal with these sales declines, the company has worked to cut costs, including operating expenses, which have declined 23 percent compared to a year ago, and inventories, which have been reduced 19 percent compared to a year ago.
“Through strong inventory management, expense controls and a rescaled business, we are on track to deliver improved operating results this fiscal year on lower sales,” Twomey said.
Looking forward, Arctic Cat estimates sales for its fiscal year in the range of $425 million-$460 million, based on achieving ATV sales of $188 million-$203 million and snowmobile sales of $140 million-$152 million. psb