KTM Year-End Cycle Sales May Shrink 30%

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KTM anticipates motorcycle and ATV sales could fall 28.5 to 30 percent to between 64,000 and 66,000 units for its fiscal year ending Aug. 31. The company ended its 2007/2008 business year with sales of 92,385 units, up from 90,306 units sold during the 2006/2007 business year and 83,985 units sold in the 2005/2006 business year.

KTM motorcycle and ATV sales for the first nine months of its fiscal year, ended May 31, totaled 46,026 units, down 19,896 units compared to the same nine-month period in 2008. The Austrian manufacturer's vehicle sales dropped 27 percent in the United States and 19 percent in Europe during the comparable periods.

KTM obtains 68.3 percent of its sales revenue in Europe, 18.8 percent in North America and 12.9 percent in the remainder of the world.

Worldwide, the company's sportminicycle sales for the first nine months of the fiscal year totaled 6,132 units, up 791 units compared to the same period last year; full-size motorcycle sales totaled 38,928 units, down 18,777 units; and ATV sales totaled 966 units, down 1,910 units.

Motorcycle sales revenue for the nine-month period totaled €330.4 million ($474.8 million), down 25.4 percent compared to €443.2 million during the same period last year. Off-road segment sales revenue dropped 25 percent to €130.5 million ($187.5 million); sales revenue for the streetbike segment declined 36 percent to €96.6 million ($138.8 million).

KTM planned to cut production 25 percent this year compared to last year. The OEM earlier this year dismissed approximately 300 employees and, from May to August, installed shortened production shifts that impacted 733 of its 1,482 employees in Austria.

Operating profit before depreciation and amortization (EBITDA) and reorganization costs dropped to €6.2 million ($8.9 million) from €29.6 million in the comparable period last year as the company initiated the capacity adjustments. The OEM says those capacity adjustments also impacted finished good inventories, which decreased by 4,654 units or 22.1 percent in-house and by 3,893 units or 11.7 percent at dealerships.

—Submitted by Guido Ebert