Third quarter profits up, sled sales decrease
Arctic Cat Inc. reports third quarter earnings were up, the Minnesota-based snowmobile and ATV maker posting earnings of $2.6 million compared to a loss of $2.7 million a year earlier.Earnings for the first nine months were $11.4 million compared to $7.2 million in the same period last year. While earnings were up, sales were down 22% in the first nine months of Cat's fiscal year. Sales were $366.7 million, down from $472.9 million in the same period last year. "We are successfully rescaling Arctic Cat's business to achieve improved profitability in the current lower-demand environment for recreational products," said Christopher Twomey, Cat's chairman and chief executive officer. Sales for the fiscal year, which ends March 31, are expected to be about $425 million, down from $460 million."A key part of our strategy this fiscal year has been to reduce dealer inventories, in order to position the company for future growth when the retail power sports market recovers," Twomey said. Dealer inventories have decreased 19% year-to-date, while Cat's inventories are down 29%. Snowmobile sales decreased 35% in the third quarter to $58.7 million, down from $90.9 million. For the 9-month period snowmobile sales dipped 22% from $210.7 million to $162.3 million. However, Arctic Cat says its retail snowmobile sales have outperformed the industry and increased Cat's market share.ATV segment sales also dipped 17% in the third quarter. Sales were $48.2 million compared with $57.8 million a year ago. For the nine months sales were off 28% to $132.1 million compared with $183.2 million a year earlier. The smallest sales decline was in Cat's parts, garments, and accessories unit, with a 7% decline, from $26.1 million to $24.2 million in the past quarter. For the 9-month period, sales slid 9% to $72.3 million, compared to $79.1 million the previous year. In its quarterly report Cat also noted that it has no long- or short-term debt and that its cash and short-term investments had risen substantially, from $5.4 million to $50.4 million. Cat will announce its 2011 snowmobile lineup early in March.