Arctic Cat Reports Fiscal 2012 First Quarter Results

Arctic Cat Inc. (NASDAQ:ACAT) today reported that net sales increased 18 percent to $74.9 million in the fiscal 2012 first quarter ended June 30, 2011, up from net sales of $63.4 million in the prior-year first quarter. The company’s first quarter net loss improved to $2.3 million, or $0.13 per diluted share, versus a net loss of $4.5 million, or $0.25 per diluted share, in the same quarter last year. Arctic Cat historically reports a net loss in its fiscal first quarter, due to the seasonal nature of its products; the majority of the company’s sales and earnings occur in its fiscal second and third quarters.

Commented Claude Jordan, Arctic Cat’s president and chief executive officer: “We are very pleased with Arctic Cat’s double-digit sales gains and improved profitability in the 2012 first quarter. Revenue grew across all product lines, with particularly strong sales of our Prowler side-by-side utility vehicles contributing to the quarter’s results. We continued to focus on our strategies to increase sales by offering innovative products featuring first-to-market technologies, and to improve profitability through a continued emphasis on operational excellence and a lower cost structure.”

Among the highlights of Arctic Cat’s 2012 first quarter financial results versus the same quarter last year:

• Net sales grew 18 percent;
• Gross margins increased 210 basis points;
• Operating expenses as a percent of sales declined to 24 percent compared to 28 percent in the prior-year quarter;
• Factory inventory fell 2 percent;
• Total cash and short-term investments at quarter end rose to $99.3 million, up from $58.6 million; and
• The company had no short- or long-term debt.

Business Line Results

All-terrain vehicle (ATV) sales rose 36 percent to $37.9 million in the first quarter versus $27.8 million in the same period last year. Contributing to ATV sales in the quarter were increased sales of Arctic Cat’s Prowler side-by-side utility vehicles and international ATV sales. Arctic Cat continued its strategy to match wholesale sales with actual retail demand, while introducing new models and features in the ATV segments with the greatest consumer demand.

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