Arctic Cat Inc. (ACAT, Financial) filed Quarterly Report for the period ended 2010-12-31.
Arctic Cat Inc. has a market cap of $284.6 million; its shares were traded at around $16.77 with a P/E ratio of 22.3 and P/S ratio of 0.6. Hedge Fund Gurus that owns ACAT: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns ACAT: Arnold Van Den Berg of Century Management, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates.
Based on our year-to-date results and expectations of fourth quarter financial performance, the Company is raising its full-year fiscal 2011 earnings guidance. The Company continues to estimate 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 $0.57 to $0.65 per diluted share, driven by increased gross margins including lower than planned sales incentives. The Companys previous guidance anticipated fiscal 2011 earnings of $0.40 to $0.55 per diluted share.
During the third quarter of fiscal 2011, cost of sales increased 10.0% to $119.2 million from $108.4 million for the third quarter of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales increased 10.2% to $104.7 million from $95.0 million directionally in line with increases in unit sales during the third quarter of fiscal 2011 compared to the third quarter of fiscal 2010. The third quarter of fiscal 2011 cost of sales for PG&A increased 8.2% to $14.5 million from $13.4 million in line with increased sales. During the first nine months of fiscal 2011 cost of sales increased 1.8% to $296.5 million from $291.4 million for the first nine months of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales for the first nine months increased 2.1% to $254.3 million from $249.1 million due to increased sales during the period compared to the same period of fiscal 2010. The first nine months of fiscal 2011 cost of sales for PG&A were essentially flat at $42.2 million in the first nine months of fiscal 2011 compared to $42.3 million for fiscal 2010.
Selling and Marketing expenses decreased 5% to $8.5 million in the third quarter of fiscal 2011 from $8.9 million in the third quarter of fiscal 2010, primarily due to timing of expenses. Research and Development expenses increased 13% to $3.4 million in the third quarter of fiscal 2011 compared to $3.0 million in the third quarter of fiscal 2010 due primarily to higher product development expenses. General and Administrative expenses decreased 14% to $8.6 million in the third quarter of fiscal 2011 from $10.0 million in the third quarter of fiscal 2010 due to lower Canadian hedge costs and lower international administration expenses, offset to a certain extent by higher compensation expenses. Selling and Marketing expenses were flat at $25.0 million in the first nine months of fiscal 2011 compared to the same period of fiscal 2010. Research and Development expenses increased 7% to $9.8 million in the first nine months of fiscal 2011 compared to $9.2 million in the same period of fiscal 2010, due primarily to higher product development expenses. General and Administrative expenses were flat at $27.3 million in the first nine months of fiscal 2011 compared to the same period of fiscal 2010; higher compensation and legal costs were offset by lower international administrative expenses and lower Canadian hedge costs.
The Company had $28,000 interest income in the third quarter of fiscal 2011 compared to $0 in the third quarter of fiscal 2010. Interest expense decreased to $1,000 in the third quarter of fiscal 2011 from $2,000 in the third quarter of fiscal 2010. Interest income increased to $72,000 in the first nine months of fiscal 2011 from $4,000 in the same period of fiscal 2010. Interest expense decreased to $11,000 in the first nine months of fiscal 2011 from $249,000 in the same period of fiscal 2010. Interest
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 $50.2 million at December 31, 2010 from $43.0 million at December 31, 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 accounts receivable balance as of December 31, 2010 compared to March 31, 2010 is due to the seasonality of the Companys snowmobile, ATV and PG&A businesses. Inventory was $77.2 million at December 31, 2010 compared to $106.3 million at December 31, 2009 and $81.4 million on March 31, 2010, due primarily to decreased inventory for all product lines. During the nine months ended December 31, 2010, the Company repurchased $2.4 million of its common shares. Cash and short-term investments were $107.1 million and $50.4 million at December 31, 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 $284.6 million; its shares were traded at around $16.77 with a P/E ratio of 22.3 and P/S ratio of 0.6. Hedge Fund Gurus that owns ACAT: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns ACAT: Arnold Van Den Berg of Century Management, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
For the third quarter ended December 31, 2010, the Company reported net sales of $152.0 million and, net earnings of $9.3 million or $0.50 per diluted share compared to third quarter ended December 31, 2009 net sales of $131.0 million and, net earnings of $2.6 million or $0.14 per diluted share. A 430 basis point improvement in gross margins and a 6.6% decrease in operating expenses contributed to improved quarterly results compared to the same period in the prior year. For the nine month period ended December 31, 2010, the Company reported net sales of $391.2 million and, net earnings of $22.6 million or $1.22 per diluted share compared to net sales of $366.7 million and, net earnings of $11.4 million or $0.63 per diluted share for the same period last year.Based on our year-to-date results and expectations of fourth quarter financial performance, the Company is raising its full-year fiscal 2011 earnings guidance. The Company continues to estimate 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 $0.57 to $0.65 per diluted share, driven by increased gross margins including lower than planned sales incentives. The Companys previous guidance anticipated fiscal 2011 earnings of $0.40 to $0.55 per diluted share.
During the third quarter of fiscal 2011, cost of sales increased 10.0% to $119.2 million from $108.4 million for the third quarter of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales increased 10.2% to $104.7 million from $95.0 million directionally in line with increases in unit sales during the third quarter of fiscal 2011 compared to the third quarter of fiscal 2010. The third quarter of fiscal 2011 cost of sales for PG&A increased 8.2% to $14.5 million from $13.4 million in line with increased sales. During the first nine months of fiscal 2011 cost of sales increased 1.8% to $296.5 million from $291.4 million for the first nine months of fiscal 2010. Fiscal 2011 snowmobile and ATV unit cost of sales for the first nine months increased 2.1% to $254.3 million from $249.1 million due to increased sales during the period compared to the same period of fiscal 2010. The first nine months of fiscal 2011 cost of sales for PG&A were essentially flat at $42.2 million in the first nine months of fiscal 2011 compared to $42.3 million for fiscal 2010.
Selling and Marketing expenses decreased 5% to $8.5 million in the third quarter of fiscal 2011 from $8.9 million in the third quarter of fiscal 2010, primarily due to timing of expenses. Research and Development expenses increased 13% to $3.4 million in the third quarter of fiscal 2011 compared to $3.0 million in the third quarter of fiscal 2010 due primarily to higher product development expenses. General and Administrative expenses decreased 14% to $8.6 million in the third quarter of fiscal 2011 from $10.0 million in the third quarter of fiscal 2010 due to lower Canadian hedge costs and lower international administration expenses, offset to a certain extent by higher compensation expenses. Selling and Marketing expenses were flat at $25.0 million in the first nine months of fiscal 2011 compared to the same period of fiscal 2010. Research and Development expenses increased 7% to $9.8 million in the first nine months of fiscal 2011 compared to $9.2 million in the same period of fiscal 2010, due primarily to higher product development expenses. General and Administrative expenses were flat at $27.3 million in the first nine months of fiscal 2011 compared to the same period of fiscal 2010; higher compensation and legal costs were offset by lower international administrative expenses and lower Canadian hedge costs.
The Company had $28,000 interest income in the third quarter of fiscal 2011 compared to $0 in the third quarter of fiscal 2010. Interest expense decreased to $1,000 in the third quarter of fiscal 2011 from $2,000 in the third quarter of fiscal 2010. Interest income increased to $72,000 in the first nine months of fiscal 2011 from $4,000 in the same period of fiscal 2010. Interest expense decreased to $11,000 in the first nine months of fiscal 2011 from $249,000 in the same period of fiscal 2010. Interest
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 $50.2 million at December 31, 2010 from $43.0 million at December 31, 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 accounts receivable balance as of December 31, 2010 compared to March 31, 2010 is due to the seasonality of the Companys snowmobile, ATV and PG&A businesses. Inventory was $77.2 million at December 31, 2010 compared to $106.3 million at December 31, 2009 and $81.4 million on March 31, 2010, due primarily to decreased inventory for all product lines. During the nine months ended December 31, 2010, the Company repurchased $2.4 million of its common shares. Cash and short-term investments were $107.1 million and $50.4 million at December 31, 2010 and 2009, respectively. The Companys investment objectives are first, safety of principal and second, rate of return.
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