Arctic Cat Inc. (NASDAQ: ACAT) today reported that record net earnings rose 172 percent to $5.5 million, or $0.40 per diluted share, for the fiscal first quarter ended June 30, 2013, compared to net earnings of $2.0 million, or $0.14 per diluted share, in the prior-year quarter. Arctic Cat’s net sales for the fiscal 2014 first quarter grew approximately 9 percent to a record $120.8 million versus net sales of $111.3 million in the same quarter last year.
“We are pleased to begin the year with a strong first quarter, with increased revenues across all product lines,” said Claude Jordan, Arctic Cat’s chairman and chief executive officer. “Contributing to the quarter was continued growth in our ATV/side-by-side business, which rose 5 percent on top of a 93 percent sales increase in the same period last year. In addition, we benefited from late spring snowfall in North America that helped snowmobile parts sales. For the 2014 first quarter, EPS improvement was primarily due to higher sales volumes, a favorable product mix, and our continued success in enhancing operating efficiency and lowering our cost structure. As a result, Arctic Cat delivered record 2014 first-quarter sales and profits.”
Among the highlights of Arctic Cat’s fiscal 2014 first-quarter financial results compared with the prior-year quarter:
- Net sales growth of approximately 9 percent was fueled by gains across all product lines, with the highest dollar contributions coming from the recently launched Wildcat X side-by-side and snowmobiles.
- Gross margin improvement of nearly 4 percentage points was due to higher volumes, product mix and improved efficiency. The company expects gross margins to moderate in subsequent quarters, as it begins supplying lower margin snowmobile units to Yamaha in the fiscal 2014 second quarter.
- Operating expenses as a percent of sales declined approximately 30 basis points to 17.1 percent compared to 17.4 percent. The company continued to increase investment in research and development to ensure a strong pipeline of new products and technologies, while maintaining strict cost controls.
- Operating profit rose 172 percent to $8.5 million from $3.1 million.
- The company had no debt.
Arctic Cat ended the 2014 first quarter with cash and short-term investments totaling $48.9 million, up from $17.4 million a year ago. During the quarter, the company repurchased approximately 31,000 shares of the company’s stock at a cost of approximately $1.4 million.