Star Tribune
MINNEAPOLIS – Arctic Cat posted a net loss of $21.5 million in its fiscal fourth quarter, amid plunging sales of all-terrain vehicles and planned inventory reductions.
Sales of snowmobiles and vehicle parts and garments also fell during the quarter.
The total loss for the January through March quarter amounted to $1.66 a share. Adjusted for one-time costs, the company’s loss was $1.15 a share. Analysts had forecast a loss of $1.17.
The Minneapolis-area maker of ATVs and snowmobiles saw sales fall 32 percent to $99 million. Its shares fell 7 percent in early trading.
Results were impacted by the company’s planned reduction of non-core ATV inventory in dealerships as well as executive transition costs associated with assembling a new management team. Like many other U.S. manufacturers, Arctic Cat also suffered from unfavorable currency translation rates as the U.S. dollar remains quite high. The company, which sells a third of its products in Canada, saw currency woes snip profits $6.9 million during the quarter.
The company recently announced that it would expand a production plant, and Wednesday said that it will spend $27 million updating that plant and one in St. Cloud. The new plan means the company will hire at least 50 new employees.
Arctic Cat CEO Christopher Metz, who took the helm in November following the ouster of former CEO Claude Jordan, said in a statement that the company saw strong sales of its Wild ATVs. He also praised the “significant progress” the struggling manufacturer has made during the last few months.
“We added key finance, sales and marketing executives to our new management team, and expanded our high-performance garments and accessories offerings with the completion of the Motorfist acquisition,” he said. “Further, we initiated a successful promotional program to begin to reduce our North America dealers’ core ATV inventory; this effort also generated market share gains.”
Results fell considerably for the full 2015 year, which ended March 31. Arctic Cat reported 2015 revenues of $699 million and earnings of $4.9 million or 38 cents a share. That’s down from 2014 revenues of $730 million and 2014 earnings of $39.4 million (or 2.90 a share).
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