Arctic Cat suffers fourth quarter losses
Minnesota-based manufacturer to cut 60 jobs
Story by Staff, Jun. 02, 2009Email a friend Print Friendly RSS
For the fiscal 2009 full year, Arctic Cat posted net sales of $563.6 million compared to $621.6 million last fiscal year. The company reported a fiscal 2009 net loss of $9.5 million, versus a net loss of $3.3 million in fiscal 2008.
Snowmobile sales improved to a negative $3.4 million in the 2009 fourth quarter due to lower promotional sales incentives on dealer inventory compared with a negative $7.1 million in the prior-year quarter. For the 2009 fiscal year, Arctic Cat’s snowmobile sales rose to $207.3 million versus $161.9 million in the previous year. Contributing to the full-year snowmobile sales growth were innovative new products, lower North American dealer inventories and increased international sales.
“Arctic Cat was profitable through the first nine months of fiscal 2009, due to increased snowmobile sales to dealers and distributors and lower operating expenses, but overall retail demand for recreational products remained weak in the fourth quarter as expected,” says Christopher A. Twomey, Arctic Cat’s chairman and chief executive officer. “In light of the difficult retail environment, we continued our plan to further reduce dealer inventories during the quarter, resulting in lower inventory levels across all product lines. However, this necessary action negatively impacted the company’s revenue and profitability for the fourth quarter and full year.”
In a response to the dip in demand for recreational vehicles, Arctic Cat announced the elimination of 60 jobs, or approximately 5 percent of the company’s 1,200 employees. This comes about four months after the Minnesota-based manufacturer cut 100 jobs in January.
“We do not expect any meaningful recovery in the recreational products market in the year ahead,” says Twomey. “Near-term, we are focused on rescaling the business and conservatively managing it to meet anticipated demand. We also are taking appropriate actions to preserve cash for operations and maintain dealer health, as well as developing select innovative products that position Arctic Cat to emerge as a stronger company as the economy recovers.”