Arctic Cat Posts $7.5 Million Q1 Loss

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Arctic Cat's sales for the fiscal 2008 first quarter ended June 30 totaled $87.9 million, down $8.5 million compared to sales of $96.4 million for the same period last year. The Minnesota-based manufacturer posted a first quarter net loss of $7.2 million, or 39 cents per diluted share, versus a net loss of $4.5 million, or 23 cents per diluted share, in the prior-year period.

Arctic Cat ATV sales declined 1 percent to $59.7 million in the 2008 first quarter versus $60.2 million in the same period last year; snowmobile sales were $11.9 million in the 2008 first quarter compared to $20.9 million in the prior-year quarter; and parts, garments and accessories (PG&A) sales grew 6 percent to $16.3 million versus $15.4 million in the year-ago period, benefiting primarily from ATV parts and accessories sales.

Arctic Cat Chairman and CEO Christopher A. Twomey says the results were primarily impacted by a previously announced shift in the timing of ATV shipments as well as a planned 30 percent reduction in snowmobile production in fiscal 2008.

"During the quarter, we continued to execute on our long-term strategic initiatives in order to better position the company for future growth and profitability," he says.

While that sounds promising, the benefits of those "strategic initiatives" apparently won't be felt for some time to come — Twomey says he expects Arctic Cat's second quarter net sales to come in between $190 million and $210 million, down from $285.3 million for the same three-month period last year, and says he plans for the company to end its fiscal year March 31, 2008, with sales in the range of $710 million to $736 million, well below the net sales total of $782.4 million last fiscal year.