arctic cat releases fourthquarter 2007 financials

Sales were up, but profits were down for the fourth-quarter of 2007 compared to the fourth-quarter of 2006. At this quarter's end, March 31st, sales were up by 19.3 million from $153.3 million to $172.6 million. However, the company reported a net profit loss of 1.6 million compared to last year's fourth-quarter.

Total year-end sales numbers were also strong for Cat and were up 7% over last year, ending at $782.4 million. However, net earnings were down $1.6 million showing $22.1 million vs. last year's $23.7 million. Poor snow conditions were blamed for a needed increase in sales incentives for snowmobiles that ultimately crushed much of the profitability in the quarter.

Snowmobiles
Snowmobile sales in the fourth-quarter were negative $1.8 million due to huge sales incentives needed to reduce non-current inventory. Last year at this time snowmobile sales were a small, but positive, $140,000. The good news is that for the year, Arctic snowmobile sales were up $8.9 million. The 4% increase in overall snowmobile sales for 2007 was fueled by Cat's well-received new line of sleds.

The big news in the snowmobile department is that Cat has announced a one time 30% reduction in its sled production scheduled for this next fiscal year ending March 31st, 2008. This is again aimed at reducing inventory in the field and matching forecasted consumer demand with the correct supply of product. In addition, Arctic will be re-locating its corporate headquarters by the fall of 2007 to a new, undisclosed, location in the Minneapolis area. Manufacturing will still take place in Thief River and other existing plants.

ATVs and PG&A
Sales of ATVs continued to increase moving up 15% to $145.8 million from $126.8 last year at this time. Sales were also up a slightly lower 9% for the year on the ATV side of the business. Utilizing the new St. Cloud manufacturing facility and relying on solid sales of the Prowler UTV will drive profitability in the near future for the ATV business line.

Parts, garments and accessories also sold well in the last quarter increasing 9% over last year's fourth-quarter. Snowmobile related items were the catalyst for the jump from $26.4 million to $28.6 million. Total year-end sales for the PG&A department were also up 4% from $99.8 million to $103.9 million.

For the full release from Arctic Cat visit www.arcticcat.com.