arctic cat atv sales will surpass sled sales

For the first time in company history. sales of Arctic Cat Inc's ATVs will surpass sales of the company's snowmobiles. Cat's chief executive, Christopher A. Twomey said in an interview with Dow Jones Newswires that low snowfalls continue to plague the sales of snowmobiles, while the company's ATV business posts steady gains due in part to new product offerings.

Through the first six months of Cat's fiscal year, snowmobile sales increased 2% to $152,428 million while sales of ATVs increased 22% to $123,046 million.

But due to the seasonal nature of the snowmobile business, sales of ATVs will steadily gain ground by the end of the company's fiscal year in March, Twomey said.

Arctic Cat, of Thief River Falls, Minn., expects ATV sales to end the year up about 10%, while snowmobile sales will be flat to down 2%. The company's parts, garments and accessories business, which accounts for about 14% of sales and includes mostly snowmobile-related products, is expected to grow by about 4%, Twomey said.

The lack of snowfall has been one of the company's biggest pressures. After four consecutive years of below-normal snow, last year the situation improved somewhat with decent levels in the eastern and western U.S. But the Midwest, from the Dakotas to Michigan, still didn't live up to expectations, leaving dealers in those states strapped with inventory due to a lack of demand, Twomey said.
"We know that there's still a huge amount of interest out there," he said. " Just give us a normal snow year."

Sales of Arctic Cat's ATVs continue to outpace the industry average, driven by demand for two new, higher-power offerings. Many of the company's dealers have pre-sold these models before the equipment even arrives on showroom floors.

"The ATV side of the business looks good to me," Twomey said.