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Arctic Cat Fiscal 2012 Full-Year Results


(5/15/2012)

 

Arctic Cat Reports Fiscal 2012 Results

*Fiscal 2012 sales increased 26% to $585.3 million, driven by strong snowmobile and Wildcat™ ROV sales;

*Full-year diluted EPS up 146% to $1.72 versus $0.70 in fiscal 2011;

*Fiscal 2012 sales and EPS exceeded company guidance;

*Operating profit rose 153 percent to $45.9 million, up from $18.1 million;

*Company expects fiscal 2013 EPS to increase 40% to 45% and be in the range of $2.40 to $2.50 per diluted share

 

 

May. 15, 2012-- Arctic Cat Inc. (NASDAQ:ACAT) today reported net earnings for the fiscal year ended March 31, 2012, rose 130 percent to $29.9 million, or $1.72 per diluted share, up from prior-year net earnings of $13.0 million, or $0.70 per diluted share. Arctic Cat’s net sales for the fiscal 2012 full year grew 26 percent to $585.3 million versus net sales of $464.7 million last fiscal year.

“We are very pleased with the company’s continued strong sales and earnings performance in fiscal 2012,” said Claude Jordan, Arctic Cat’s president and chief executive officer. “Sales rose across all product lines for the full year. Double-digit gains in our snowmobile and all-terrain vehicle segments were fueled by the introduction of innovative products and technologies, such as our extensive new snowmobile line-up and the Wildcat sport side-by-side. Higher sales volumes, coupled with our focus on operational excellence and cost control, led to another year of outstanding financial results.”

Among the highlights of Arctic Cat’s fiscal 2012 full-year financial results versus last fiscal year:

*Net sales grew 26 percent, chiefly driven by increased snowmobile, Wildcat™ side-by-side, and international all-terrain vehicle (ATV) and recreational off-road vehicle (ROV) sales;

*Gross margins improved 47 basis points, due to higher volumes, selling prices and improved product mix;

*Operating expenses as a percent of sales declined to 14.5 percent compared to 17.9 percent;

*Operating profit rose 153 percent to $45.9 million, up from $18.1 million;

*The company ended the fiscal 2012 year with cash and short-term investments totaling $62.6 million versus $125.1 million at the end of fiscal 2011. During the fiscal 2012 third quarter, Arctic Cat used $79.3 million in cash to purchase all of Suzuki Motor Corporation’s 6.1 million shares of Arctic Cat Class B common stock;

*The company had no short- or long-term debt.

 

For the fiscal 2012 fourth quarter ended March 31, 2012, Arctic Cat reported an improved net loss of $6.2 million, or a loss of $0.49 per diluted share, on 34 percent net sales growth to $98.5 million. In the prior-year fourth quarter, Arctic Cat reported a net loss of $9.6 million, or a loss of $0.52 per diluted share, on net sales of $73.5 million. Due to the seasonality of Arctic Cat’s business, the company typically reports lower results in its fiscal first and fourth quarters, while its fiscal second and third quarters are historically its strongest.

Business Line Results

“Snowmobile sales in fiscal 2012 benefitted from the tremendous enthusiasm generated by the largest introduction of new models in Arctic Cat’s history,” said Jordan. Arctic Cat had five of the top 10-selling snowmobile models for the 2012 model year. In addition, two of Arctic Cat’s 2012 sleds were named snowmobile of the year – the XF1100 Turbo Sno Pro and the F1100 Turbo Sno Pro.

In the 2012 fourth quarter, Arctic Cat’s snowmobile sales were a negative $6.8 million, primarily due to sales incentives, versus negative sales of $4.5 million in the prior-year quarter. Full-year snowmobile sales rose 38 percent to $250.4 million compared to $182.0 million last fiscal year. Sales for the full year were driven by Arctic Cat’s extensive new 2012 model line-up, with 23 all-new snowmobiles representing 75 percent of the company’s offerings. In addition to producing the world’s fastest snowmobiles, Arctic Cat’s 2012 models featured two new chassis – the ProCross™ performance and ProClimb™ mountain platforms – as well as new suspension, drive and braking technologies.

Added Jordan, “We are continuing to build on our new chassis platforms with exciting new sleds for the 2013 model year. Looking ahead, we also remain committed to investing in research and development, in order to remain an industry innovation leader and in anticipation of manufacturing our own snowmobile engines.”

Among the new 2013 model year snowmobiles introduced to dealers in March 2012 are the ProCross F Sno Pro RR (race replica) sled that features high-performance trail racing suspension and styling. Also new is the Procross XF CrossTour, a crossover model that combines the best of snowmobile touring, trail and deep-snow capabilities. The CrossTour, available in either the 800 2-stroke or the 1100 turbo and non-turbo 4-stroke engine, offers riders trail performance and touring comfort with its wide ski stance, ample storage and a heavy-duty rear bumper that easily accepts accessories, such as an optional passenger seat. Arctic Cat’s ProClimb M Series mountain snowmobiles also received further enhancements to performance and handling. The turbocharged M1100 four-stroke mountain model, with 177 horsepower, remains the industry’s most powerful production engine available to date.

As previously announced, Suzuki is supplying snowmobile engines to Arctic Cat through the 2014 model year, as well as engine parts to service existing engines beyond that time. Beginning with the 2015 model year, Arctic Cat will manufacture its own snowmobile engines at its St. Cloud, Minn., facility, where the company has produced ATV engines since 2007.

In the fiscal 2012 fourth quarter, Arctic Cat’s ATV sales increased 58 percent to $75.8 million versus $48.0 million in the same period last year, chiefly due to strong dealer demand for the all-new Wildcat V-Twin 1000i H.O. sport recreational off-road vehicle (ROV). Full-year ATV sales rose 25 percent to $226.9 million driven by both Wildcat and international sales.

“We remain very pleased with the strong demand for our new Wildcat off-road sport vehicle,” commented Jordan. “We believe this segment presents a great growth opportunity.”

Sales of parts, garments and accessories (PG&A) in the fiscal 2012 fourth quarter were nearly flat at $29.5 million versus $29.9 million in the prior-year quarter. For the 2012 full-year, PG&A sales grew 6 percent to $107.9 million compared to $101.6 million last fiscal year. The growth was primarily due to accessories sales for ATVs/Wildcat and snowmobiles, as well as ATV parts and garments.

Company Issues Fiscal 2013 Outlook

In fiscal 2013, Arctic Cat anticipates continued gains in its ATV/ROV business, fueled by the growth potential for the Wildcat pure-sport ROV model and Prowler side-by-side offerings. Additionally, the company remains focused on further enhancing profitability through operational efficiencies.

Arctic Cat’s fiscal 2013 outlook includes the following assumptions versus the prior fiscal year: core ATV North America industry retail sales flat to down 5 percent; snowmobile North America industry retail sales flat to up 2 percent; Arctic Cat dealer inventories flat to down 5 percent; achieving flat operating expense levels as a percent of sales; and increasing cash flow from operations. The company expects gross margins to improve between 20 and 60 basis points in fiscal 2013.

For the fiscal year ending March 31, 2013, Arctic Cat anticipates sales in the range of $631 million to $650 million, an increase of approximately 8 percent to 11 percent versus fiscal 2012. Assuming diluted weighted average shares of 14 million, the company estimates that fiscal 2013 earnings per diluted share will be in the range of $2.40 to $2.50, an increase of 40 percent to 45 percent compared to fiscal 2012.

 

 

ARCTIC CAT INC.
Financial Highlights
(000s omitted, except per share amounts)
(Unaudited)

 
 


Three Months Ended
Years Ended


March 31,   March 31,


2012   2011
2012   2011
Net Sales

 


 
Snowmobile & ATV Units
$ 68,951

$ 43,530

$ 477,329

$ 363,015
Parts, Garments & Accessories
  29,536       29,927  
  107,939       101,636  
Total Net Sales

98,487


73,457


585,268


464,651
Cost of Goods Sold







Snowmobile & ATV Units

68,010


48,531


388,523


302,783
Parts, Garments & Accessories
  19,059       18,166  
  66,126       60,359  
Total Cost of Goods Sold
  87,069       66,697  
  454,649       363,142  
Gross Profit

11,418


6,760


130,619


101,509
Operating Expenses







Selling & Marketing

8,118


7,760


36,549


33,540
Research & Development

5,266


4,307


17,862


15,029
General & Administrative
  7,654       9,251  
  30,318       34,805  
Total Operating Expenses
  21,038       21,318  
  84,729       83,374  
Operating Profit

(9,620 )

(14,558 )

45,890


18,135

Other Income (Expense)









Interest Income

18


35


86


107
Interest Expense
  (1 )     -  
  (8 )     (11 )

Total Other Income (Expense)


  17       35  
  78       96  
Earnings (Loss) Before Income Taxes

(9,603 )

(14,523 )

45,968


18,231
Income Taxes (Benefits)
  (3,428 )     (4,937 )
  16,027       5,224  
Net Earnings (Loss)
$ (6,175 )   $ (9,586 )
$ 29,941     $ 13,007  
Net Earnings (Loss) Per Share







Basic
$ (0.49 )   $ (0.52 )
$ 1.79     $ 0.71  
Diluted
$ (0.49 )   $ (0.52 )
$ 1.72     $ 0.70  








 
Weighted Average Shares Outstanding:







Basic
  12,724       18,289  
  16,721       18,232  
Diluted
  12,724       18,289  
  17,458       18,539  
















 

 
  March 31,  
 
Selected Balance Sheet Data:


2012  
  2011



Cash and Short-term Investments


$ 62,597



$ 125,113



Accounts Receivable, net



28,073




23,732



Inventories



98,702




61,478



Total Assets



255,416




272,906



Short-term Bank Borrowings



0




0



Total Current Liabilities



114,036




87,444



Long-term Debt



0




0



Shareholders' Equity



138,471




183,036















 


Three Months Ended


Years Ended



March 31,       March 31,    
Product Line Data:   2012   2011   Change   2012   2011   Change
Snowmobiles
$ (6,820 )
$ (4,487 )
-52 %
$ 250,438
$ 181,965
38 %
All-Terrain Vehicles

75,771


48,017

58 %

226,891

181,050
25 %
Parts, Garments & Accessories
  29,536       29,927  
-1 %
  107,939     101,636
6 %
Total Sales
$ 98,487     $ 73,457  
34 %
$ 585,268   $ 464,651
26 %

 

 

Source: Arctic Cat Inc.

Conference Call

A conference call is scheduled for 10:30 a.m. CT (11:30 a.m. ET) today. To listen to the live call dial 1-877-941-9205. The webcast may be accessed through the investor relations section of www.arcticcat.com/corporate. In addition, a telephone replay will be available through May 22, 2012, by dialing 1-800-406-7325, passcode 4536051.

 



Comments (9):

krom says:
5/15/2012 2:43:00 PM

FWIW the stock is down more than 4 points after the call....

From the call:

Arctic Cat's (ACAT) fourth quarter beat analyst expectations Tuesday morning, but it forecast weak North American sales and guided fiscal 2013 earnings below Street estimates.

The ATV maker reported a Q4 loss of 49 cents per share vs. a loss of 52 cents last year. Analysts were expecting a loss of 56 cents. Sales rose 34% to $98.5 million, topping analysts' forecasts of $92.7 million.

The fourth quarter is typically the company's weakest.

View Enlarged Image

"Sales rose across all product lines for the full year. Double-digit gains in our snowmobile and all-terrain-vehicle segments were fueled by the introduction of innovative products and technologies, such as our extensive new snowmobile lineup and the Wildcat sport side-by-side," said CEO Claude Jordan.

For the year, total sales grew 26% on higher-than-expected snowmobile and international ATV sales. Gross margins widened 47 basis points on higher prices.

Despite the positive quarter, Arctic Cat sees North American ATV retail sales flat to down 5% and North American retail snowmobile sales to be flat to up 2%.

It sees 2013 EPS of $2.40-$2.50, well below analyst estimates of $2.70.
Kevin Hooper says:
5/15/2012 3:37:00 PM

I will feel better about AC's good financial reports once I know that the issues on the 2012 sleds are fully addressed. I hope the Wildcat's introduction is a positive one for customers.
Rusty says:
5/16/2012 9:35:00 AM

krom says:
5/15/2012 2:43:00 PM

FWIW the stock is down more than 4 points after the call....

From the call:

Arctic Cat's (ACAT) fourth quarter beat analyst expectations Tuesday morning, but it forecast weak North American sales and guided fiscal 2013 earnings below Street estimates.

The ATV maker reported a Q4 loss of 49 cents per share vs. a loss of 52 cents last year. Analysts were expecting a loss of 56 cents. Sales rose 34% to $98.5 million, topping analysts' forecasts of $92.7 million.

The fourth quarter is typically the company's weakest.

View Enlarged Image

"Sales rose across all product lines for the full year. Double-digit gains in our snowmobile and all-terrain-vehicle segments were fueled by the introduction of innovative products and technologies, such as our extensive new snowmobile lineup and the Wildcat sport side-by-side," said CEO Claude Jordan.

For the year, total sales grew 26% on higher-than-expected snowmobile and international ATV sales. Gross margins widened 47 basis points on higher prices.

Despite the positive quarter, Arctic Cat sees North American ATV retail sales flat to down 5% and North American retail snowmobile sales to be flat to up 2%.

It sees 2013 EPS of $2.40-$2.50, well below analyst estimates of $2.70.




Excellent job Trev'........ :thumbsup:
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