Arctic Cat's first fiscal quarter of 2008 ended pretty much as its executives planned. Unfortunately, that meant a drop in sales from $96.4 million during last year's first quarter, to $87.9 million this year.
That's about a 9% drop, but Cat executives weren't too fazed by it.
"Our results were impacted by our previously announced plan to reduce snowmobile production by 30% this fiscal year beginning in our first quarter. Despite this action, sales and earnings were slightly better than anticipated due to increased sales of ATV-related parts and accessories," said CEO Chris Twomey.
The drop in snowmobile production and changing of ATV shipments to future fiscal quarters was done to "better align dealer inventory levels with anticipated consumer demand," the company said. Other Cat initiatives this year include separating the ATV, sled and PG&A (parts, garments and accessories) lines into three distinct business units each led by their own general manager. The company also plans to move its executive headquarters to the Minneapolis area.
The reduction in sled production was reflected in a big sales decrease. Sales dropped from $20.9 million in last year's first quarter, to $11.9 million this year. Cat has said it cut production due to lackluster snowfalls for several consecutive years and the buildup of non-current units in dealer inventories.
Total company sales are expected to be lower for the fiscal year as well. "This year, we anticipate that our revenue and earnings will be weighted more toward the second half of the fiscal year compared to previous years, as we produce and ship fewer snowmobiles during our June through December quarters, and fewer ATVs during our first two quarters," said Twomey.
Cat estimates sales in its second quarter will be between $190 and $210 million. That would be down from $285.3 million for the same period last year.
For the full financial report visit
www.arcticcat.com.