Arctic Cat, veritably synonymous with the word snowmobile and maker of some of the best ATVs, parts, apparel and accessories worldwide, reported outstanding Q2 FY11 (ending Sept. 30, 2010) data:
• Zero short- or long-term debt
• Net Earnings up 20.3% to $17.8M, or $0.97/diluted share (up 51% over the 6-month)
• Net Sales up 5.7% to $175.8M
• Gross Margins up 200 basis points (350 points year-to-date)
• Operating Profits up 25% to $27.4M
• Factory Inventory down 28% to $95.9M
• Total of cash and short term investments up a whopping 622% to 80.9M
Q2 Sales by segment:
• Snowmobiles up 7% to $91.5M (5% year-to-date), bolstered by global distributors buying up ever more units
• ATVs up 9% to $56.6M (1% YTD), on exceptionally strong sales of the hot new Prowler HDX utility vehicle
• Parts/Garments/Accessories off 4% to $27.6M (4% YTD)
CEO of ACAT, Christopher A. Twomey, called the double-digit earnings and solid balance sheet a clear indicator of the health of the Company and the success of measures taken to improve overall profitability.
Twomey cited initiatives targeted at the key areas evinced by this Q2 data, from gross margins to operating expenses, market share and reduced inventory, ACAT stalked the bottom line, reaping rich rewards as the global market responded exceptionally well to their host of offerings.
A rise in global demand for ACAT’s vehicles and the clearly defined business strategy for FY2011 were the subjects of a conference call which is now archived at the company’s site.
The outlook for 2011 is good and will likely improve as the retail power sports market rebounds.
Projections based on extant data for FY11 (ending Mar. 31, 2011):
• Net Sales of $453-463M
• EPS $0.40-0.55 (diluted, up roughly 67-122% from earlier guidance calculations)
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