Arctic Cat to Reorganize Business, Reduce Sled Production

Arctic Cat dropped its sales forecast for the coming year, but says it has a plan to reorganize its operations to ensure profitability in the future. That reorganization includes a corporate relocation and a reduction in snowmobile production.

Arctic Cat's net sales for the first quarter ending June 30 are estimated between $70 million and $80 million vs. net sales of $96.4 million during the same period last year. Company officials expect sales for the fiscal year ending March 31, 2008, to be between $710 million and $736 million, about $50 million lower than the company?s previous forecast.

Arctic Cat officials say they have a three-pronged plan to reorganize the company, relocate its headquarters and reduce snowmobile production.

First, the company plans to reorganize its business into three separate units -- ATVs, snowmobiles and PG&A. Each business unit will be led by a general manager responsible for bottom-line performance.

Second, Arctic Cat plans to relocate its headquarters, certain corporate executives, general managers and sales and marketing personnel from its current headquarters in Thief River Falls, Minn., 300 miles south to the Minneapolis area by this fall. The company's manufacturing operations will remain in their existing locations and will not be affected, according to executives.

Third, Arctic Cat plans a 30 percent reduction in its snowmobile production in an effort to lower dealer inventory levels.

Read more about this developing story in the June issue of Dealernews.