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Cat reports sales, earnings decline |
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Arctic Cat reports second quarter earnings of $14.8 million, down from $16.9 million last year, but total cash and short-term investments were up $7.5 million from last year's quarter.
"We continued to face difficult selling conditions during the second quarter, given the global economic environment," said Christopher A. Twomey, Arctic Cat's chairman and chief executive officer.
The Thief River Falls, Minn.,-based maker of snowmobiles and ATVs reports second quarter sales dipped 19% to $166.3 million from $200.3 million in the quarter a year ago. Year-to-date sales decreased 21% from $298.1 million a year earlier to $235.7 million.
Fiscal year sales are estimated to be in the range of $425 million to $460 million.
"We are also taking appropriate actions to preserve cash and maintain dealer health as well as developing select innovative products that position Arctic Cat to emerge as a stronger company once the economy recovers," Twomey said.
Inventories decreased 23% to $133.6 million from $172.3 million in the second quarter.
Snowmobile sales had the smallest decrease for Cat at 13% to $85.7 million from $98.4 million in 2008's second quarter. Year-to-date, snowmobile sales were $103.7 million vs. $119.8 million in the period last year. Arctic Cat expects lower worldwide snowmobile orders, but it is focusing on new technologies to boost sales. "We like the snow we see so far, and if that continues we see a positive snow season ahead," Twomey said, during the fiscal report conference call. ATV sales dipped 28% to $51.7 million compared to $71.6 million in 2008. Year-to-date sales have declined 33% to $83.9 million from $125.4 million a year ago. The Parts, Garments, and Accessories division saw sales drop 16% to $28.8 million from $34.3 million in last year's second quarter. Year-to-date sales fell 9% to $48.1 million from $53 million a year earlier. Arctic Cat recently recalled its' 2009 Arctic Cat Z1 Turbo, Z1 Turbo Sno Pro and TZ1 Turbo model snowmobiles due to a potential fire hazard. Timothy Delmore, Arctic Cat's chief financial officer, said he does not see the recall having any financial impact on the company. Most of the cost will be recovered through the vendor, Delmore said.
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