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    Arctic Cat snowmobile sales jump 28%

    Posted by AmSnow
    on Thursday, May 28, 2009

    Overall sales dip 9% as ATV segment falls 29% for year

    Arctic Cat's annual snowmobile sales rose 28% to $207.3 million vs. $161.9 million the previous year, the snowmobile and ATV maker reported Thursday.

    That was the extent of the good news though as the nation's struggling economy and rising unemployment has hurt the entire recreational vehicle industry.

    Arctic Cat reported ATV sales down 29% to $247.3 million from $350.3 million a year earlier. Overall Arctic Cat's sales for the year were down 9% to $563.6 million from $621.5 million in 2008. The company's 2009 fiscal year ended March 31. To help reduce its operating costs, Arctic Cat also announced Thursday that it is trimming 60 jobs from its Thief River Falls, Minn., operation.

    Christopher A. Twomey, the company's chairman and chief executive officer said in a conference call that snowmobilers have shown great interest this year, noting that trail permit sales were up compared to the previous year. That along with buyers' interest in Cat's 2009 snowmobile lineup, lower dealer inventories and increased international sales helped propel the gains in the snowmobile segment, he said.

    In the fourth quarter though snowmobile sales were still negative $3.4 million, which is actually an improvement from negative $7.1 million in the year earlier period due to lower promotional sales incentives on dealer inventory.
    North American dealers ended the year with an inventory that was 13% lower than 2008. In addition, dealers' inventories are expected to decrease further this year, Twomey said. But expectations are that there will be a high demand for inventory for the 2011 season.

    While depressed ATV sales (down 55% in the fourth quarter to $64.1 million) and a non-cash goodwill write-down hurt Arctic Cat, its parts, garments and accessories business was flat in 2009. For the year they were $109.0 million compared with $109.3 million a year earlier. Fourth quarter sales dipped 9% to $30 million.

     Twomey said PG&A sales were helped by sales of snowmobile accessories. He added that Arctic Cat plans to increase production on garments and oil products for the snowmobile line to further help sales in the coming year.

    With lower sales, Arctic Cat's earnings also decreased, Cat reporting a $9.5 million loss compared with a loss of $3.3 million last year.
    For next year Arctic Cat's lowered its sales projections to a range of $425 million to $460 million. This is based on ATV sales ranging from $188 million to $203 million, snowmobile sales of $140 million to $152 million, and PG&A sales at $97 million to $105 million.

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