Arctic Cat Reports Tougher Second Quarter
Arctic Cat Inc. of Thief River Falls, Minn. has reported a significant reduction in sales for the fiscal 2008 second quarter, ended Sept. 30, 2007.
The company had net sales of US$205.2 million for the quarter, compared to US$285.3 million for the same period last year. Net earnings were also down to US$13.9 million from US$20 million.
ATV sales in the second quarter accounted for US$77.5 million, down US$56.3 million from the previous year.
For the six-month period ended Sept. 30, 2007, Arctic Cat reported net sales of US$293.1 million and net earnings of US$6.8 million, compared to US$381.7 million and US$15.4 million over the same period the previous year.
ATV sales in that same six-month period totaled US$137.3 million versus US$194 million a year ago.
“Our revenues were in line with our guidance and earnings were above our expectations, due to the timing of parts, garments and accessory shipments and better margins than anticipated,” says Arctic Cat chairman and CEO Christopher A. Twomey. “We continue to adjust our fiscal 2008 production levels to reduce dealer inventory and align it with anticipated consumer demand this year.
“At the same time, we are committed to further enhancing our lean manufacturing and strategic sourcing capabilities. We made progress on our 2008 strategic initiatives during the quarter, in order to position the company for improved growth and profitability in the future.”
Arctic Cat’s initiatives include a shift in ATV shipments to future quarters when the company’s new models will be available.
“Although we’ve adjusted our ATV production schedule to realistically reflect the current market, we continued to see strong interest in several of our innovative, new ATV models,” says Twomey”
The company also plans to reorganize the ATV, snowmobile and parts, garments and accessories product lines into three separate business units. Each will be led by general managers with a focus on expanding each business.
Arctic Cat will also be relocating the company’s headquarters to the Minneapolis area early in the 2008 calendar year. Certain corporate executives, general managers and sales and marketing personnel will also make the move to Minneapolis.
Despite moving the company’s headquarters, Arctic Cat says its core manufacturing operations will remain in Thief River Falls and will not be affected.
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