Minneapolis
- Arctic Cat ACAT -0.99% 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," Claude Jordan,
Arctic Cat's president and chief executive officer, said. "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 hp, 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, MN,
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.