May 27, 2010
Arctic Cat Gains Market Share
Our suspicions were confirmed recently after reviewing Arctic Cat’s Earnings Call Transcript dated May 13.
Here are excerpts of that transcript:
All of the following quotes come from Christ Twomey, chairman and CEO of Arctic Cat.
“Fiscal ’10 was another challenging year for the powersports industry including Arctic Cat. However, in spite of the challenges we were able to greatly improve operating results and return the company to profitability on a significantly lower sales level.
“During this fiscal year our ATV business gained one point of market share in North America and our dealer inventories declined by 24 percent over the prior year.”
“Industry-wide retail sales of snowmobiles in North America also declined this year. However, like last year, snowmobiles retail sales outperformed every other recreation vehicle category in North America. While retail sales of snowmobiles are certainly affected by the economic environment they are also impacted by snow conditions.”
“In the U.S., snow conditions were generally good for the third year in a row which helps snowmobiles retail sales outperform the other recreation of vehicle categories. Canada, on the other hand, experienced very poor snow conditions throughout most of the eastern half of the country, which had a significant negative impact on retail sales.”
“Retail sales of Arctic Cat snowmobiles outperformed the industry and we gained nearly three points of market share. At the same time we reduced the inventories by 20 percent. Dealer inventories reduction has been an ongoing part of our strategy for three years and during that time we have reduced dealer inventories by 54 percent. There is still room for further reduction and we have that in our plan for the upcoming year.”
“Arctic Cat’s retail sales performance this year was led by models which incorporated the powered-up 800cc engine. In fact, our 2010 M8 mountain sled was the No. 1 selling new model snowmobile in the mountain category in the U.S. We expect pent-up demand as well as customer and dealer enthusiasm to continue strong retail sales of this and other 800cc models again in 2011.”
“Ample snowfall in most of the European snowmobiling areas resulted in good overall wholesale and retail sales performance for Arctic Cat’s distributors and their dealers. With this sales performance and modest 2010 distributaries we believe distributor and dealer inventory is low and we expect to see improved distributor orders in fiscal year 2011.”
The following quotes come from Tim Delmore, Arctic Cat CFO and secretary.
“Net sales for the fourth quarter decreased as expected to $84 million versus $90.7 million for the same quarter last year. ATV sales were $55.8 million compared to $64.1 million. Snowmobiles sales improved to $597,000 due to increased sales compared to a negative $3.4 million in the prior year quarter.”
(ED—This transcript comes from www.SeekingAlpha.com.)
