Arctic Cat Inc. (ACAT, Financial) filed Quarterly Report for the period ended 2010-09-30.
Arctic Cat Inc. has a market cap of $258.62 million; its shares were traded at around $14.2 with a P/E ratio of 41.76 and P/S ratio of 0.57. ACAT is in the portfolios of Arnold Van Den Berg of Century Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Based on our results year to date and expectations of future performance, the Company is raising its full-year fiscal 2011 sales and earnings guidance. The Company now estimates fiscal 2011 net sales in the range of $453 million to $463 million and anticipates that fiscal 2011 earnings will be in the range of $0.40 to $0.55 per diluted share, driven by increased international revenue as well as increased gross margins resulting from favorable commodity costs and lower than planned sales incentives. The Companys previous guidance anticipated fiscal 2011 earnings of $0.18 to $0.33 per diluted share on net sales of $447 million to $460 million.
During the second quarter of fiscal 2011, cost of sales increased 2.9% to $124.6 million from $121.1 million for the second quarter of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales increased 3.4% to $107.3 million from $103.8 million in line with increases in unit sales during the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010. The second quarter of fiscal 2011 cost of sales for PG&A is unchanged at $17.3 million. During the first six months of fiscal 2011 cost of sales decreased 3.1% to $177.2 million from $182.9 million for the first six months of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales for the first six months decreased 3.0% to $149.5 million from $154.1 million due to lower product and freight costs during the period compared to the same period of fiscal 2010. The cost of sales for PG&A decreased to $27.7 million in the first six months of fiscal 2011 compared to $28.8 million for the comparable period in fiscal 2010, in line with decreased sales.
Selling and Marketing expenses increased 8% to $10.4 million in the second quarter of fiscal 2011 from $9.6 million in the second quarter of fiscal 2010, primarily due to increased advertising expenses. Research and Development expenses increased 7% to $3.2 million in the second quarter of fiscal 2011 compared to $3.0 million in the second quarter of fiscal 2010 due primarily to higher development expenses. General and Administrative expenses decreased 4% to $10.3 million in the second quarter of fiscal 2011 from $10.7 million in the second quarter of fiscal 2010 due to lower international administration expenses. Selling and Marketing expenses increased 3% to $16.5 million in the first six months of fiscal 2011 from $16.0 million in the same period of fiscal 2010, primarily due to higher advertising expenses. Research and Development expenses increased 3% to $6.4 million in the first six months of fiscal 2011 compared to $6.2 million in the same period of fiscal 2010, due primarily to higher development expenses. General and Administrative expenses increased 8% to $18.7 million in the first six months of fiscal 2011 from $17.3 million in the same period of fiscal 2010, primarily due to higher compensation and legal costs offset by lower international administrative expenses and lower Canadian hedge costs.
The Company had $26,000 interest income in the second quarter of fiscal 2011 compared to $0 in the second quarter of fiscal 2010. Interest expense decreased to $7,000 in the second quarter of fiscal 2011 from $175,000 in the second quarter of fiscal 2010. Interest income increased to $44,000 in the first six months of fiscal 2011 from $4,000 in the same period of fiscal 2010. Interest expense decreased to $10,000 in the first six months of fiscal 2011 from $247,000 in the same period of fiscal 2010. Interest income was primarily affected by higher cash levels at the beginning of the fiscal year compared
The seasonality of the Companys snowmobile production cycle and the lead time between the commencement of snowmobile and ATV production and commencement of shipments late in the first quarter have resulted in significant fluctuations in the Companys working capital requirements. Historically, the Company has financed its working capital requirements out of available cash balances at the beginning and end of the production cycle and with short-term bank borrowings during the middle of the cycle. The Companys cash balances traditionally peak early in the fourth quarter and then decrease as working capital requirements increase when the Companys snowmobile and ATV production cycles begin in the spring. Accounts receivable increased to $70.5 million at September 30, 2010 from $68.3 million at September 30, 2009 in line with the Companys sales increase. The accounts receivable balance at March 31, 2010 was $ 29.2 million. The increase in the Companys receivable balance as of September 30, 2010 compared to March 31, 2010 is due to the seasonality of the Companys snowmobile, ATV and PG&A businesses. Inventory was $95.9 million at September 30, 2010 compared to $133.6 million at September 30, 2009 and $81.4 million on March 31, 2010, due primarily to decreased inventory for all product lines. During the six months ended September 30, 2010, the Company repurchased $1.5 million of its common shares. Cash and short-term investments were $80.9 million and $11.2 million at September 30, 2010 and 2009, respectively. The Companys investment objectives are first, safety of principal and second, rate of return.
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Arctic Cat Inc. has a market cap of $258.62 million; its shares were traded at around $14.2 with a P/E ratio of 41.76 and P/S ratio of 0.57. ACAT is in the portfolios of Arnold Van Den Berg of Century Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
For the second quarter ended September 30, 2010, the Company reported net sales of $175.8 million, net earnings of $17.8 million and net earnings per share of $0.97 compared to second quarter ended September 30, 2009 net sales of $166.3 million, net earnings of $14.8 million and net earnings per share of $0.81. A 200 basis point improvement in gross margins and a 40 basis point improvement in operating expenses contributed to improved quarterly results compared to the same period in the prior year. For the six month period ended September 30, 2010, the Company reported net sales of $239.2 million, net earnings of $13.3 million and earnings per share of $0.72 compared to net sales of $235.7 million, net earnings of $8.8 million and earnings per share of $0.48 for the same period last year.Based on our results year to date and expectations of future performance, the Company is raising its full-year fiscal 2011 sales and earnings guidance. The Company now estimates fiscal 2011 net sales in the range of $453 million to $463 million and anticipates that fiscal 2011 earnings will be in the range of $0.40 to $0.55 per diluted share, driven by increased international revenue as well as increased gross margins resulting from favorable commodity costs and lower than planned sales incentives. The Companys previous guidance anticipated fiscal 2011 earnings of $0.18 to $0.33 per diluted share on net sales of $447 million to $460 million.
During the second quarter of fiscal 2011, cost of sales increased 2.9% to $124.6 million from $121.1 million for the second quarter of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales increased 3.4% to $107.3 million from $103.8 million in line with increases in unit sales during the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010. The second quarter of fiscal 2011 cost of sales for PG&A is unchanged at $17.3 million. During the first six months of fiscal 2011 cost of sales decreased 3.1% to $177.2 million from $182.9 million for the first six months of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales for the first six months decreased 3.0% to $149.5 million from $154.1 million due to lower product and freight costs during the period compared to the same period of fiscal 2010. The cost of sales for PG&A decreased to $27.7 million in the first six months of fiscal 2011 compared to $28.8 million for the comparable period in fiscal 2010, in line with decreased sales.
Selling and Marketing expenses increased 8% to $10.4 million in the second quarter of fiscal 2011 from $9.6 million in the second quarter of fiscal 2010, primarily due to increased advertising expenses. Research and Development expenses increased 7% to $3.2 million in the second quarter of fiscal 2011 compared to $3.0 million in the second quarter of fiscal 2010 due primarily to higher development expenses. General and Administrative expenses decreased 4% to $10.3 million in the second quarter of fiscal 2011 from $10.7 million in the second quarter of fiscal 2010 due to lower international administration expenses. Selling and Marketing expenses increased 3% to $16.5 million in the first six months of fiscal 2011 from $16.0 million in the same period of fiscal 2010, primarily due to higher advertising expenses. Research and Development expenses increased 3% to $6.4 million in the first six months of fiscal 2011 compared to $6.2 million in the same period of fiscal 2010, due primarily to higher development expenses. General and Administrative expenses increased 8% to $18.7 million in the first six months of fiscal 2011 from $17.3 million in the same period of fiscal 2010, primarily due to higher compensation and legal costs offset by lower international administrative expenses and lower Canadian hedge costs.
The Company had $26,000 interest income in the second quarter of fiscal 2011 compared to $0 in the second quarter of fiscal 2010. Interest expense decreased to $7,000 in the second quarter of fiscal 2011 from $175,000 in the second quarter of fiscal 2010. Interest income increased to $44,000 in the first six months of fiscal 2011 from $4,000 in the same period of fiscal 2010. Interest expense decreased to $10,000 in the first six months of fiscal 2011 from $247,000 in the same period of fiscal 2010. Interest income was primarily affected by higher cash levels at the beginning of the fiscal year compared
The seasonality of the Companys snowmobile production cycle and the lead time between the commencement of snowmobile and ATV production and commencement of shipments late in the first quarter have resulted in significant fluctuations in the Companys working capital requirements. Historically, the Company has financed its working capital requirements out of available cash balances at the beginning and end of the production cycle and with short-term bank borrowings during the middle of the cycle. The Companys cash balances traditionally peak early in the fourth quarter and then decrease as working capital requirements increase when the Companys snowmobile and ATV production cycles begin in the spring. Accounts receivable increased to $70.5 million at September 30, 2010 from $68.3 million at September 30, 2009 in line with the Companys sales increase. The accounts receivable balance at March 31, 2010 was $ 29.2 million. The increase in the Companys receivable balance as of September 30, 2010 compared to March 31, 2010 is due to the seasonality of the Companys snowmobile, ATV and PG&A businesses. Inventory was $95.9 million at September 30, 2010 compared to $133.6 million at September 30, 2009 and $81.4 million on March 31, 2010, due primarily to decreased inventory for all product lines. During the six months ended September 30, 2010, the Company repurchased $1.5 million of its common shares. Cash and short-term investments were $80.9 million and $11.2 million at September 30, 2010 and 2009, respectively. The Companys investment objectives are first, safety of principal and second, rate of return.
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