June 2, 2003 – Finance Digest
Arctic Cat grows ATV business in fiscal 2003
Arctic Cat Inc. (Nasdaq:ACAT), Thief River Falls, Minn., has reported strongly improved performance from its ATV business in the fiscal year ended March 31, 2003.
The performance of the ATV segment helped Arctic post record sales and improved earnings for the period.
Sales of ATVs grew 14% in the fourth quarter of 2003 to $82.7 million versus $72.6 million in the same period last year. For fiscal 2003, ATV sales rose 13% to $235.9 million.
“We are particularly pleased with the success of our Multi-Rack Platform (MRP) ATV, which was named the ATV Product Innovation of the Year by ATV Magazine,” noted Chris Twomey, Arctic president and CEO. The MRP model enables users to adapt their ATVs to a wide range of applications by attaching up to 24 different, interchangeable accessories on the vehicle’s front and rear racks for work and recreation.
Since entering the ATV market in 1996, Arctic Cat’s ATV sales have grown to 41% of the company’s revenues. Arctic Cat’s ATV sales have continually outpaced the industry’s growth rate, the company said.
For the fiscal year ended March 31, 2003, Arctic posted record net sales of $577.1 million, compared to $556.1 million last fiscal year. Net earnings grew 14% to $32.7 million, or $1.45 per diluted share, compared to net earnings of $28.6 million, or $1.20 per diluted share, for fiscal 2002. Fiscal 2003 results included the third-quarter extraordinary items from the personal watercraft (PWC) business in September 1999. Excluding non-recurring items, net sales in fiscal 2003 rose 3% to $573.1 million, net earnings increased 2% to $29.3 million, and diluted earnings per share grew 8% to $1.30.
In the 2003 fourth quarter, net sales increased 12% to $111.4 million versus $99.3 million in the same period last year. The company reported a net loss of $1.7 million, or 8 cents per diluted share, compared to a net loss of $1.8 million, or 8 cents per diluted share, in the fourth quarter of 2002.
At the same time, sales of Arctic Cat snowmobiles fared better than the industry overall, said Twomey, adding that Arctic gained market share during a difficult snowmobile season. “Our North American dealers ended the year with lower snowmobile inventory levels than last year despite the challenging snow conditions,” he said.
Snowmobile sales in the 2003 fourth quarter totaled $1.5 million versus $3.3 million in the prior-year quarter, due to increased sales incentives related to poor snow conditions across much of the Midwest. Arctic Cat’s full-year wholesale sales were down 5% to $245.2 million.
The company’s full-year retail snowmobile sales also fell by 5%, representing less than half of the industry’s retail sales decline, as the company gained market share. (See related snowmobile industry sales story on Page 5.)
Sales of parts, garments, and accessories grew 16% to $27.2 million in the fourth quarter. For the fiscal year, sales of PG&A increased 3% to $92.0 million, due to increased sales of ATV-related parts and accessories.
Arctic Cat anticipates 2004 first-quarter net sales for the period ending June 30, 2003, to be in the range of $70 million to $80 million, compared to $78.3 million for the same period last year. Net earnings for the quarter are estimated between breakeven to a loss of 6 cents per diluted share versus earnings of 8 cents per diluted share in the prior-year quarter. The first quarter’s results will be lower than last year’s first quarter due to fewer snowmobiles in the sales mix.
For the fiscal year ending March 31, 2004, Arctic Cat anticipates net sales will grow 3% to 5% and be in the range of $590 million to $602 million. Diluted earnings per share are estimated to be in the range of $1.39 to $1.41. The company sells the majority of its products during its second and third fiscal quarters.
During the fourth quarter, Arctic repurchased 62,000 shares of its common stock, bringing the total shares repurchased in fiscal 2003 to 1.5 million. Since 1996, the company has repurchased more than 8 million shares under four share repurchase authorizations.
rctic Cat Inc. (Nasdaq:ACAT), Thief River Falls, Minn., has reported strongly improved performance from its ATV business in the fiscal year ended March 31, 2003.
The performance of the ATV segment helped Arctic post record sales and improved earnings for the period.
Sales of ATVs grew 14% in the fourth quarter of 2003 to $82.7 million versus $72.6 million in the same period last year. For fiscal 2003, ATV sales rose 13% to $235.9 million.
“We are particularly pleased with the success of our Multi-Rack Platform (MRP) ATV, which was named the ATV Product Innovation of the Year by ATV Magazine,” noted Chris Twomey, Arctic president and CEO. The MRP model enables users to adapt their ATVs to a wide range of applications by attaching up to 24 different, interchangeable accessories on the vehicle’s front and rear racks for work and recreation.
Since entering the ATV market in 1996, Arctic Cat’s ATV sales have grown to 41% of the company’s revenues. Arctic Cat’s ATV sales have continually outpaced the industry’s growth rate, the company said.
For the fiscal year ended March 31, 2003, Arctic posted record net sales of $577.1 million, compared to $556.1 million last fiscal year. Net earnings grew 14% to $32.7 million, or $1.45 per diluted share, compared to net earnings of $28.6 million, or $1.20 per diluted share, for fiscal 2002. Fiscal 2003 results included the third-quarter extraordinary items from the personal watercraft (PWC) business in September 1999. Excluding non-recurring items, net sales in fiscal 2003 rose 3% to $573.1 million, net earnings increased 2% to $29.3 million, and diluted earnings per share grew 8% to $1.30.
In the 2003 fourth quarter, net sales increased 12% to $111.4 million versus $99.3 million in the same period last year. The company reported a net loss of $1.7 million, or 8 cents per diluted share, compared to a net loss of $1.8 million, or 8 cents per diluted share, in the fourth quarter of 2002.
At the same time, sales of Arctic Cat snowmobiles fared better than the industry overall, said Twomey, adding that Arctic gained market share during a difficult snowmobile season. “Our North American dealers ended the year with lower snowmobile inventory levels than last year despite the challenging snow conditions,” he said.
Snowmobile sales in the 2003 fourth quarter totaled $1.5 million versus $3.3 million in the prior-year quarter, due to increased sales incentives related to poor snow conditions across much of the Midwest. Arctic Cat’s full-year wholesale sales were down 5% to $245.2 million.
The company’s full-year retail snowmobile sales also fell by 5%, representing less than half of the industry’s retail sales decline, as the company gained market share. (See related snowmobile industry sales story on Page 5.)
Sales of parts, garments, and accessories grew 16% to $27.2 million in the fourth quarter. For the fiscal year, sales of PG&A increased 3% to $92.0 million, due to increased sales of ATV-related parts and accessories.
Arctic Cat anticipates 2004 first-quarter net sales for the period ending June 30, 2003, to be in the range of $70 million to $80 million, compared to $78.3 million for the same period last year. Net earnings for the quarter are estimated between breakeven to a loss of 6 cents per diluted share versus earnings of 8 cents per diluted share in the prior-year quarter. The first quarter’s results will be lower than last year’s first quarter due to fewer snowmobiles in the sales mix.
For the fiscal year ending March 31, 2004, Arctic Cat anticipates net sales will grow 3% to 5% and be in the range of $590 million to $602 million. Diluted earnings per share are estimated to be in the range of $1.39 to $1.41. The company sells the majority of its products during its second and third fiscal quarters.
During the fourth quarter, Arctic repurchased 62,000 shares of its common stock, bringing the total shares repurchased in fiscal 2003 to 1.5 million. Since 1996, the company has repurchased more than 8 million shares under four share repurchase authorizations.
Ducati starts strong
Ducati Motor Holding S.p.A. reported revenues for its first quarter ended March 31 of 100.3 million euro, up 23.4% including foreign exchange losses (or up 26.3% excluding foreign exchange activity) over the same period in 2003.
Revenues from Ducati motorcycles for the period increased 22.1% to 80.0 million euro and represented 79.8% of total revenues. Motorcycle-related products, including spare parts, technical accessories and apparel, increased 23.5% to 18.8 million euro over the comparable period in the previous year.
Gross margin was 35.9% of revenues including foreign exchange effects (or 37.2% excluding these effects) versus 36.9% in the same period a year ago. The negative foreign exchange impact more than offset margin improvements, the company said. Sales costs represented 19.1% of sales versus 21.4% in the period last year.
Pre-tax profit of the Ducati Group was 800,000 euro in the first quarter of 2004, compared with a loss of 6.2 million euro in the first quarter of 2003, including the impact of a one-off 3.5 million euro restructuring charge.
Unofficial Ducati worldwide registrations, a measure of retail sales, were up 11% versus the first quarter of last year, in a market growing 3%, Ducati said. It reported registrations up 39% in the U.S., 26% in Italy and 8% in the UK. Decreases in registrations were recorded in France, down 7%; in Germany, down 10%; and in Japan, down 18%.
