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Arctic Cat Reports Record Earnings In Fiscal 2013 Second Quarter

Stocks in this article: ACAT

Arctic Cat’s fiscal 2013 outlook includes the following assumptions versus the prior fiscal year: ATV North America industry retail sales flat to up 5 percent; ROV North America industry retail sales up 10 to 20 percent; snowmobile North America industry retail sales flat to up 2 percent; Arctic Cat dealer inventories flat to down 5 percent; operating expense levels that are flat to down slightly as a percent of sales; and increasing cash flow from operations. The company expects gross margins to improve between 20 and 60 basis points in fiscal 2013.

For the fiscal year ending March 31, 2013, Arctic Cat is raising its full-year sales guidance to a range of $664 million to $684 million, an increase of approximately 13 percent to 17 percent versus fiscal 2012. Assuming diluted weighted average shares of 14 million, the company now estimates that fiscal 2013 earnings per diluted share will be in the range of $2.65 to $2.75, an increase of 54 percent to 60 percent compared to fiscal 2012. Previously, the company estimated fiscal 2013 earnings per diluted share of $2.55 to $2.65 on sales of $662 million to $682 million.

Conference CallArctic Cat will host a conference call to discuss the fiscal 2013 second quarter results today, October 25, 2012, at 11 a.m. CT (12 p.m. ET). To listen to the live call dial 1-800-762-8908. The live webcast and replay also may be accessed through the investor relations section of www.arcticcat.com/corporate. In addition, a telephone replay will be available through November 1, 2012, by dialing 1-800-406-7325, pass code 4571213.

About Arctic CatArctic Cat Inc. designs, engineers, manufactures and markets all-terrain vehicles (ATVs), recreational off-highway vehicles (ROVs) and snowmobiles under the Arctic Cat® brand name, as well as related parts, garments and accessories. Its common stock is traded on the Nasdaq Global Select Market under the ticker symbol “ACAT.” More information about Arctic Cat and its products is available at www.arcticcat.com.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. The Company’s Annual Report, as well as the Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission, the Company’s press releases and oral statements made with the approval of an authorized executive officer, contain forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. The words “aim,” “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions that indicate future events and trends identify forward-looking statements including statements related to our fiscal 2013 outlook. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to: product mix and volume; competitive pressure on sales, pricing and sales incentives; increase in material or production cost which cannot be recouped in product pricing; changes in the sourcing of engines; interruption of dealer floorplan financing; warranty expenses and product recalls; foreign currency exchange rate fluctuations; product liability claims and other legal proceedings in excess of reserves or insured amounts; environmental and product safety regulatory activity; effects of the weather; general economic conditions and political changes; interest rate changes; consumer demand and confidence; and those set forth in the Company’s Annual Report on Form 10-K for the year ended March 31, 2012, under heading “Item 1A. Risk Factors.” The Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 
 
ARCTIC CAT INC.
Financial Highlights
(000s omitted, except per share amounts)
 
(Unaudited)
    Three Months Ended     Six Months Ended
September 30,     September 30,
2012     2011 2012     2011
Net Sales
Snowmobile & ATV Units $ 198,274 $ 173,459 $ 289,227 $ 228,719
Parts, Garments & Accessories   30,756     31,370     51,114     51,040  
Total Net Sales 229,030 204,829 340,341 279,759
Cost of Goods Sold
Snowmobile & ATV Units 146,000 128,843 221,556 177,972
Parts, Garments & Accessories   19,000     18,837     32,276     30,363  
Total Cost of Goods Sold   165,000     147,680     253,832     208,335  
Gross Profit 64,030 57,149 86,509 71,424
Operating Expenses
Selling & Marketing 12,018 12,160 18,825 18,245
Research & Development 4,867 3,821 9,345 7,823
General & Administrative   8,391     8,245     16,465     16,029  
Total Operating Expenses   25,276     24,226     44,635     42,097  
Operating Profit 38,754 32,923 41,874 29,327
Other Income (Expense)
Interest Income 4 20 17 45
Interest Expense   (62 )   (4 )   (82 )   (6 )
Total Other Income (Expense)   (58 )   16     (65 )   39  
Earnings Before Income Taxes 38,696 32,939 41,809 29,366
Income Taxes   13,737     11,529     14,842     10,278  
Net Earnings $ 24,959   $ 21,410   $ 26,967   $ 19,088  
Net Earnings Per Share
Basic $ 1.90   $ 1.18   $ 2.06   $ 1.05  
Diluted $ 1.80   $ 1.15   $ 1.95   $ 1.02  
 
Weighted Average Shares Outstanding:
Basic   13,152     18,220     13,106     18,220  
Diluted   13,828     18,668     13,852     18,654  
 
September 30,
Selected Balance Sheet Data: 2012 2011
Cash and Short-term Investments $ 23,993 $ 96,564
Accounts Receivable, net 88,640 96,030
Inventories 144,736 103,649
Total Assets 318,536 357,162
Short-term Bank Borrowings 0 0
Total Current Liabilities 152,182 150,393
Long-term Debt 0 0
Shareholders' Equity 163,731 204,913
 
               
Three Months Ended Six Months Ended
September 30,           September 30,      
Product Line Data:     2012     2011     Change     2012     2011     Change
Snowmobiles $ 128,599     $ 114,670 12 % $ 146,586     $ 132,031 11 %
All-Terrain Vehicles 69,675 58,789 19 % 142,641 96,688 48 %
Parts, Garments & Accessories   30,756       31,370 -2 %   51,114       51,040 0 %
Total Sales $ 229,030     $ 204,829 12 % $ 340,341     $ 279,759 22 %




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