arctic cat posts lower sales earnings in second quarter
Amsnow
For the second quarter in a row, Arctic Cat Inc. has reported lower sales and earnings compared with the prior year figures, the result of scaling back production and shipping products later, due to a down market.
On Wednesday, the maker of Arctic Cat snowmobiles and ATVs said second-quarter sales (through Sept. 30) were $205.2 million, down from 285.3 million in the same quarter last year, a 28% drop. Year-to-date sales were $293.1 million compared with $381.7 million last year, a decline of 30.2%.
Likewise, earnings were lower. For the quarter, earnings were $13.9 million a drop of 30.2% from nearly $20 million a year earlier. For the first 6 months, earnings were down 56% from $15.4 million to $6.8 million.
Snowmobile sales were $97 million in the quarter, down from $121.5 million a year earlier. Sales for the 6-month period were $108.9 million down 23.5% from $142.4 million last year. Arctic Cat already had announced it was trimming sled production 30% for 2008 to reduce inventories and respond to the 10-year slump in sled sales. After this adjustment, the company said it expects dealers to "modestly increase" sled orders in fiscal 2009.
The news wasn't any better on the ATV side where quarterly sales were $77.5 million vs. $133.8 million a year earlier. In the first 6 months, ATV sales fell 29.2% from $194 million to $137.3 million. Again, the decline came from a production reduction and shift of ATV shipments into future quarters.
Arctic Cat's chairman and CEO, Christopher Twomey, said sales were as expected and earnings ahead of expectations. He said margins are better than the firm expected. He added that Arctic Cat will continue working to enhance its lean production systems and strategic sourcing.
In addition to production cuts, the company is reorganizing its sled, ATV and parts, garments and accessories (PG&A) units, each to have their own general managers. The Thief River Falls, Minn.-based firm also still plans to move its corporate offices to the Minneapolis area early next year. The site is expected to be announced by the end of December 2007.
Arctic Cat has also announced it has repurchased about 317,000 shares of its common stock and has $2.4 million remaining that it could use to buy more shares.