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    | Jan-05-2008 UPDATE 3-Arctic Cat sees wider loss, stock drops(topic overview)CONTENTS:
SOURCES
CHICAGO, Jan 4 (Reuters) - Arctic Cat Inc (ACAT.O: Quote, Profile, Research ) on Friday warned of a wider-than-expected quarterly loss and a drop in full-year earnings, citing a shortfall in sales of all-terrain vehicles (ATV), sending shares to their lowest level since 1999. Arctic Cat already expected a net loss in its third quarter ended Dec. 31 mainly due to reduced production of snowmobiles and widened that expected loss, citing an industrywide decline in ATV sales. The Thief River Falls, Minnesota-based company plans to cut annual ATV production by about 10 percent in its fiscal fourth quarter ending March 31 reflecting weaker demand. [1] Arctic Cat Inc. reduced its fiscal third-quarter and full-year outlooks on weaker-than-projected sales of its all-terrain vehicles. The company also announced plans to cut its annual ATV production by about 10% in current quarter due to the poor industry environment. The Thief River Falls, Minn., company, known for its all-terrain vehicles and snowmobiles, lowered its net sales estimate for the quarter ended Dec. 31 to $155 million to $160 million, down from its earlier forecast of $170 million to $180 million, and sharply below the year.[2] Snowmobile and all-terrain vehicle maker Arctic Cat Inc. lowered its fiscal third-quarter outlook Friday, citing lower-than-expected sales of its vehicles. For the quarter ended Dec. 31, the company now expects a loss of 55 cents to 60 cents per share, down from its prior outlook of a loss of 30 cents to 37 cents per share. Arctic Cat (nasdaq: ACAT - news - people ) also lowered its sales outlook to between $155 million and $160 million from its earlier forecast of $170 million to $180 million. This is well below the year-ago quarter's $228.1 million revenue.[3] Thief River falls-based Arctic Cat (NYSE: ACAT) which makes snowmobile and all-terrain vehicles, said that for the third quarter it expects a loss of 55 cents to 60 cents per share. That's down from its previous outlook of a loss of 30 cents to 37 cents per share. The company also lowered its sales outlook to $155 million and $160 million, down from an earlier estimate of $170 million to $180 million.[4] Shares of snowmobile and all-terrain vehicle maker Arctic Cat fell more than 24 percent Friday after company officials downgraded their earnings outlook for the third quarter because of lower-than-expected ATV sales. Officials said they now expect a net loss of 55 to 60 cents a share for the quarter. They previously predicted a 30- to 37-cent loss per share.[5] Arctic Cat ( ACAT - Cramer's Take - Stockpickr ) hits the skids as all-terrain vehicle sales tumble down a rough path. The Thief River Falls, Minn., snowmobile giant warned that its net loss for the quarter ended last week would be between 55 cents and 60 cents a share. That range is a much greater loss than the prior forecast for 30 cents to 37 cents.[6] Arctic Cat, which expects to report results on Jan. 23, said ATV retail sales were in line with the market overall, which has seen sales slow in all segments except for modest gains on large-displacement engines. The company expects a third-quarter net loss of 55 cents to 60 cents per share, compared with its prior net loss view of 30 cents to 37 cents per share. Third-quarter net sales are estimated at $155 million to $160 million, down from its earlier forecast of $170 million to $180 million, Arctic Cat said.[1] Arctic Cat now anticipates sales for the full year ending March 31, 2008, to be in the range of $645 million to $665 million, compared with record net sales in fiscal 2007 of $782.4 million. With the current overall industry environment, Arctic Cat is taking steps to produce fewer of its main products, ATV unit, by cutting its annual ATV production by approximately 10 percent during the fourth quarter ending March 31, 2008. The company expects to report its actual fiscal 2008 third-quarter results on January 23, 2008.[7] According to the company, the industry-wide retail ATV sales slowdown has hit all segments of the market, except the large-displacement engine segment, which reported modest gains. Arctic Cat's results are reflective of these trends, showing lower sales of ATVs with engines under 650cc's but sustained demand for large-displacement ATVs and Prowler utility vehicles. Looking ahead, Arctic Cat said that keeping the difficult industry conditions in mind, it has decided to produce lesser ATV units in its fourth March quarter. The company also plans to cut its annual ATV production by approximately 10% during the fourth quarter. Twomey said, 'This action is in keeping with our aim to vigilantly align production and inventory with consumer demand.' Arctic Cat remains in a strong financial position, with no long-term debt, the chief executive officer added. Separately, the company said that its Board of Directors authorized a new share repurchase program of up to $10 million of its common stock.[8] Industry-wide ATV sales were down 11 percent through September. Chairman and Chief Executive Christopher Twomey said on a conference call that Arctic Cat, whose shares dropped 24 percent Thursday afternoon, would cut ATV production by 10 percent to match a decline in demand, which he said accelerated toward the end of 2007. He said consumers' financial worries slowed their purchases of four-wheelers, and the decline was not a permanent shift away from ATV riding. "Their decision to buy a new ATV can be put on a back burner until they get more confidence, until their income increases," he said, adding, "I don't see it as people fleeing from the industry.[9] Arctic Cat said while the ATV market has been sluggish, sales of snowmobiles "remain on plan." Because of the weak market for all-terrain vehicles, the company added it plans to cut its annual ATV production by about 10 percent during the current quarter.[3] THIEF RIVER FALLS, Minn., Jan 04, 2008 (BUSINESS WIRE) -- Arctic Cat Inc. (Nasdaq:ACAT) today revised its sales and earnings outlook for the fiscal 2008 third quarter ended December 31, 2007, due to lower than anticipated sales of all-terrain vehicles (ATVs).[10] Arctic Cat Inc. (Nasdaq: ACAT ) this morning said it is lowering its sales and earnings outlook for its fiscal 2008 third quarter on account of lower-than-anticipated sales of all-terrain vehicles.[11] Arctic Cat Inc. said on Friday lowered its third quarter sales outlook, anticipating that retail sales of all-terrain vehicles (ATVs) will continue.[7] Commenting on the decision to revise third quarter and full-year outlook, Christopher Twomey, Arctic Cat chairman and chief executive officer, said, 'Our preliminary third-quarter results indicate that while retail sales of Arctic Cat ATVs were in line with the overall ATV marketplace, retail sales of ATVs industry-wide continued a year-long decline.[8] The company previously estimated net sales for the current fiscal year to be in the range of $710 million to $736 million, with full-year diluted earnings per share in the range of $0.89 to $0.95. "After reporting seven consecutive years of record sales, we are disappointed with these results and the sluggish ATV environment," said Christopher A. Twomey, Arctic Cat's chairman and chief executive officer.[10] "Arctic Cat remains in a strong financial position, with no long-term debt," Twomey said. The company expects to report its actual fiscal 2008 third-quarter results on January 23, 2008. Arctic Cat's board of directors has authorized a new share repurchase program of up to $10 million of its common stock.[10] The consensus of four analysts polled by Thomson Financial was for revenue of $174.78 million. For it's bottom line, Arctic Cat said it now expects a net loss of $0.55 to $0.60 per share, down from the previous forecast of a net loss of between $0.30 and $0.37 per share, primarily due to a reduction in snowmobile production during the current fiscal year.[11] Analysts, on average, are expecting a loss of 32 cents per share on sales of $174.8 million, according to a poll by Thomson Financial. The company is working on scaling back its snowmobile production, and had said in October it expected to post a third-quarter loss as a result. It had a profit of 43 cents per share in the year-ago quarter.[3] Analysts, on average, are predicting a profit of 71 cents per share on sales of $703.1 million. Arctic Cat expects to report its results on Jan. 23.[3] Arctic Cat said it now expects to lose 55 cents to 60 cents per share for the quarter that ended Dec. 31. That would be much worse than the loss of 30 cents to 37 cents per share it had projected earlier. It also sees full-year sales falling as much as 17.5 percent, to between $645 million and $665 million.[9] For the full year, Arctic Cat is expecting a profit of 1 cents to 7 cents per share on sales between $645 million to $665 million. Its prior outlook was for a profit of 89 cents to 95 cents per share, on sales of $710 million to $736 million.[4] For the full year, the company expects to post a profit of 1 cents to 7 cents per share on sales between $645 million to $665 million. Its prior outlook was for a profit of 89 cents to 95 cents per share.[3] Analysts are predicting a profit of 71 cents per share on sales of $703.1 million. The company also said its board authorized a share repurchase program for up to $10 million of its common stock.[4] Earlier, the company had projected full-year 2008 net sales in the range on earnings per share between $0.89 and $0.95.[8] Earnings from continuing operations are now expected in the range of $1.01-$1.06 per share, a 9% to 14% increase from last year, the company added. For full year 2007, Polaris now expects sales to grow in the 5%-6% range over the prior year and raised its earnings per share from continuing operations to $3.05- $3.10 per share from the earlier guidance of 2.95 - $3.05 per share.[8] For the fiscal year ending in March, Arctic Cat expects earnings of between a penny and 7 cents a share. That compares with a profit of $1.15 a share in fiscal 2007.[6] During the third quarter of last year, Arctic Cat reported earnings per share of $0.43, which included an income tax benefit of $0.03 per share.[8] Arctic Cat has bought back more than 12 million shares since 1996. In its second quarter, Arctic Cat reported earnings of $13.9 million or $0.76 per share, compared to $20.0 million or $1.03 per share in the corresponding quarter a year ago.[8] Arctic Cat expects a third-quarter net loss of $0.55 to $0.60 per diluted share.[10] The Thief River Falls, Minnesota-based company now expects a net loss of $0.55 to $0.60 per share for the third quarter.[8] Sales are expected to be $155 million to $160 million, down significantly from a record $228.1 million a year ago and from previous sales guidance for the quarter of $170 million to $180 million. "We are disappointed with these results and the sluggish ATV environment," said Christopher Twomey, CEO and chairman of the Thief River Falls, Minn. -based company.[5] Sales for the quarter will be somewhere between $155 million and $160 million, well below the $175 million the company had predicted and a big drop from the $228 million sales level in the year-ago quarter. "After reporting seven consecutive years of record sales, we are disappointed with these results and the sluggish ATV environment," CEO Chris Twomey said in a press release. The third-quarter shortfall caused the company to cut its fiscal 2008 guidance.[6] Third-quarter net sales are now estimated at $155 million to $160 million compared to a record $228.1 million in the prior-year third quarter, and versus the company's earlier forecast of $170 million to $180 million.[10] For the three months ended Dec. 31, 2007, the manufacturer of all-terrain vehicles said it anticipates net sales of $155 million to $160 million, down from the company's previous forecast of $170 million to $180 million.[11] Arctic Cat now anticipates 2008 third-quarter net sales in the range of $155-$160 million compared to the earlier forecast of $170-$180 million.[8] Arctic Cat now anticipates sales for the full year ending March 31, 2008, to be in the range of $645 million to $665 million, compared with record net sales in fiscal 2007 of $782.4 million.[10] Twomey said that sales for the full fiscal 2008, which ends in March, should be in the $645 million to $665 million range, down from $782.4 million in 2007 and from the most recent estimate for 2008 of $710 million to $736 million.[5] Fiscal year net income is projected between $0.01 - $0.07 a share and sales of $645 million - $665 million.[12] The company had earlier estimated a 2008 third-quarter net loss of between $0.30 and $0.37 per diluted share, primarily due to the previously disclosed reduction in snowmobile production during the current fiscal year.[10] The company had earlier projected a net loss of $0.30-$0.37 per share, mainly due to an earlier announced reduction in snowmobile production during the current year.[8] The consensus of six analysts polled by Thomson Financial was for a net loss of $0.32 per share.[11] On average, 6 analysts polled by First Call/Thomson Financial expect the company to report loss of $0.32 per share in the quarter.[8] Analysts, on average, expect the company to report earnings per share of $0.71 on revenues of $703.11 million in fiscal 2008.[8] For the full-year ended March 31, 2008, the company now looks forward to earnings per share in the range of $0.01 and $0.07, compared to $0.89-$0.95 projected earlier.[8] Last year, Artic Cat reported earnings per share of $1.15 and sales of $782.4 million.[8] Citing lower-than-expected ATV sales, Arctic Cat now expects a loss of 55 cents to 60 cents a share, wider that previous guidance of a loss of 30 cents to 37 cents a share.[13] While ATV sales are off, Twomey said that Arctic Cat's snowmobile sales "remain on plan" for the quarter.[5] Besides snowmobiles, one bright spot has been Arctic Cat's new "Prowler" ATV, where riders sit side-by-side, like a golf cart with knobby tires. Sales of similar machines have been strong both at Arctic Cat and Polaris. Twomey said he thinks that's because Prowler customers have larger incomes. Median household incomes for traditional ATV buyers is just over $62,000 he said. Prowler buyers on average make more than $100,000, and have not been as hurt by economic concerns as traditional ATV buyers, he said.[9] CEO Christopher Twomey, said in a conference call that sales of ATVs industry-wide continued a year-long decline, as consumers put off sales due to financial worries. He added that sales of Arctic Cat's snowmobiles remained "on plan," while sales of its snow-related parts, garments and accessories were "above plan, due to December snow accumulations in key regions." He also noted that the large-displacement engine segment of the ATV market has shown modest gains.[4] "Our preliminary third-quarter results indicate that while retail sales of Arctic Cat ATVs were in line with the overall ATV marketplace, retail sales of ATVs industrywide continued a year-long decline.[10] MINNEAPOLIS -- Arctic Cat Inc. got what all snowmobile makers covet _ a snowy December. On Friday it warned that its third-quarter loss could be twice as large as it previously thought because of declining sales of all-terrain vehicles, which are its other big product. Four-wheelers have been popular with hunters, recreational riders, and anyone who works outdoors such as ranchers and farmers.[9] Leading off the losers, Thief River Falls, Minn. -based Arctic Cat ( ACAT - Cramer's Take - Stockpickr ) fell through the ice after the snowmobile and all-terrain vehicle maker forecast lowered third-quarter 2008 earnings.[13] Arctic Cat Inc. designs, engineers, manufactures and markets all-terrain vehicles (ATVs) and snowmobiles under the Arctic Cat(R) brand name, as well as related parts, garments and accessories. Its common stock is traded on the Nasdaq Global Select Market under the ticker symbol "ACAT."[10] Arctic Cat's stock price fell $2.98 to $9.21, with about four times as many shares changing hands as on a typical day. The company also reported that its board of directors has authorized a new share-repurchase program of as much as $10 million of common stock, which at current prices would retire about 9 percent of the shares on the market.[5] The company also lowered its outlook for 2008. Arctic Cat announced additional share repurchase program for up to $10 million of its common shares.[8] Arctic Cat shares were down $3.01, or 25 percent, at $9.18 in late trading on the Nasdaq.[1] Arctic Cat shares fell $2.98, or 24.5 percent, to $9.21 Friday afternoon. That's their lowest price since 1999. They traded above $20 as recently as July.[9] Arctic Cat announced a $10 million share buyback, but that didn't mollify shareholders.[9] Arctic Cat says it now expects to lose 55 to 60 cents per share for the quarter that ended December 31st.[14] Chairman and Chief Executive Christopher Twomey says Arctic Cat would cut ATV production by ten percent to match a decline in demand.[14] Arctic Cat's main U.S. competitor, Polaris Industries Inc., had already cut ATV production in prior years.[9] More information about Arctic Cat and its products is available at www.arcticcat.com. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to: product mix and volume; competitive pressure on sales and pricing; increase in material or production cost which cannot be recouped in product pricing; changes in the sourcing of engines from Suzuki; warranty expenses; foreign currency exchange rate fluctuations; product liability claims and other legal proceedings in excess of insured amounts; environmental and product safety regulatory activity; effects of the weather; overall economic conditions; and consumer demand and confidence.[10] The snow came after years of generally declining snowfalls have hurt snowmobile sales. Arctic Cat had reduced snowmobile production for this winter because of those long-term declines.[9] Sales of Arctic Cat's snowmobiles remain on plan, while sales of our snow-related parts, garments and accessories are above plan, due to December snow accumulations in key regions."[10]  December's healthy snowfall across the nation helped lift snowmobile sales, which were up 20 percent from a year ago, as well as sales of parts, garments and accessories, Twomey said. Production is determined months in advance, so the snowfall doesn't mean the company will produce more machines this season. [5] Industrywide, ATV sales were down 11 percent through September, and the company will cut production by 10 percent to bring itself in line with the current trend.[5] The company will cut annual ATV production by about 10 percent during the current quarter.[4] The company recorded sales of $228.1 million in the prior year third quarter. [8] Third quarter net sales are now estimated at $160 million compared to a record $228.1 million in sales during the same period a year ago.[7] Net sales for the quarter were $205.2 million, down from $285.3 million in the previous-year quarter.[8] Analysts on average were looking for a third-quarter loss of 31 cents per share on sales of $176 million, according to Reuters Estimates. [1] Analysts polled by Thomson Financial were expecting, on average, a loss of 32 cents per share on sales of $174.8 million.[4] Earlier the net income was estimated at $0.89 - $0.95 a share and sales estimated at $710 million - $736 million.[12] The Thief River Falls-based company expects full-year sales to fall as much as 17.5%, to between $645 million and $665 million.[14] Twomey noted that sales of the higher-end Prowler model have done better than standard ATVs, but the company believes many less-affluent consumers are holding back from making a discretionary purchase that can cost from $3,500 to $10,000. "Their decision to buy a new ATV can be put on a back burner until they get more confidence, until their income increases," he said.[5] The company says full year sales are now expected to be about $655 million, a big drop from the $782.4 million last year, and well below the $703 million analysts had been looking for. Automakers GM Sales Sink; Toyota Drives Past Ford 1/3/2008 2:36 PM EST Detroit's companies show more declines for December, as Toyota becomes the nation's No. 2 auto seller.[6] The revised sales figures are in the range of $645- $665 million, compared to the earlier expected range of $710-$736 million.[8] Sales for the 4Q are projected at $155 million - $160 million down from an earlier estimate of $170 million - $180 million, compared to the same time last year sales of $228.1 million.[12] The company had previously predicted sales between $170 million to $180 million.[7] Industry-wide ATV sales were down eleven percent through September, and Twomey says it got worse as the year went on. He blamed the decline on consumers holding back on buying four-wheelers because of financial concerns, rather than a permanent shift away from ATV riding. [14] Raymond James analyst Joe Hovorka said some of the drop-off in ATV sales might just be a shift toward the more comfortable side-by-side ATVs as ATV buyers get older. "It's not that the ATV business is going away, but maybe it changes a bit," he said. An analyst asked Twomey whether the board is looking at bigger-picture, strategic options and he said they are, without giving specifics. Twomey replied, "It is not going lightly at all."[9] Analysts noted that ATV sales have generally peaked after years of intense growth.[5] In October 2007, one of the company's competitors Polaris Industries, Inc. (PII) revised fourth-quarter sales growth to the range of 12%-15%.[8] Twomey said December snowmobile sales rose 20 percent from a year ago. That will help clear out inventory that goes back as far as 2006 models still sitting on dealer floors, he said. With a three-month lead time to produce additional sleds, it's too late to make more snowmobiles to take advantage of this year's demand, he said.[9] The sharp drop-off in sales and profits came despite solid December snowfalls in the Northeast and Midwest _ just the kind of weather the snowmobile business needs to jump-start sales each year.[9] Earnings for the full fiscal year are expected to be 1 to 7 cents a share; earnings for 2007 were $1.15 a share. [5] Earnings per diluted share for the 2008 fiscal year are now estimated to be between $0.01 and $0.07 versus year-ago diluted earnings per share of $1.15.[10] Shares of North Pointe Holding ( NPTE - Cramer's Take - Stockpickr ), a Southfield, Mich. -based provider of commercial and personal insurance, vaulted 46% to $15.44 on news that Australian firm QBE Holdings would buy the company for $146 million, or $16 a share, in a cash deal expected to close during the first half of 2008.[13] The company has bought back more than 12 million common shares since 1996. "This share repurchase program supports the company's commitment to increase shareholder value and reflects our belief that the stock represents a good investment," said Twomey. Share repurchases under this program may be made through open market and privately negotiated transactions from time to time and in such amounts as management deems appropriate.[10] The company's stock dropped nearly 25 percent in late-day trading after the news, to $9.17 from closing the previous day at $12.19.[4] Arctic Cat has approximately 17.9 million common and Class B common shares outstanding. [10] SOURCES 1. UPDATE 3-Arctic Cat sees wider loss, stock drops | Reuters 2. Free Preview - WSJ.com 3. Arctic Cat Lowers 3Q Outlook - Forbes.com 4. Arctic Cat lowers Q3 outlook; stock plummets - Minneapolis / St. Paul Business Journal: 5. Arctic Cat slashes its earnings outlook 6. Arctic Cat Mauled by Shortfall - News & Analysis - Automakers - ACAT - PII 7. Arctic Cat Lowers Outlook on Dip in All-Terrain Vehicles Sales - International Business Times - 8. Arctic Cat Cuts Q3, FY08 View; To Buyback Additional $10 Mln Shares - Update [ACAT] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news . 9. Snowy Dec. Can't Rescue Arctic Cat Sales | Chron.com - Houston Chronicle 10. Arctic Cat Revises Fiscal 2008 Third-Quarter and Full-Year Outlook 11. SmallCapInvestor.com: Arctic Cat lowers outlook for Q3 on lackluster ATV sales 12. SmarTrend(R) DOWNTREND Alert: Arctic Cat Inc. (NASDQ:ACAT) 13. Friday's Small-Cap Winners & Losers - News & Analysis - Winners & Losers - AZZ - MCRL 14. WKBT La Crosse, WI-NewsChannel 8, La Crosse Weather, La Crosse News, La Crosse SportsSnowy Dec. can't rescue Arctic Cat sales |
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