Issue link: https://read.dmtmag.com/i/217512
10 • December 2, 2013 • Powersports Business FINANCE www.PowersportsBusiness.com Arctic Cat retail sales rise in Q2 behind sleds, UTVs Arctic Cat Inc. reported net earnings of $23.4 million, or $1.70 per diluted share, for the fiscal second quarter ended Sept. 30, 2013, compared to prior-year net earnings of $25.0 million, or $1.80 per diluted share. Net sales in the quarter were $238.5 million, up from net sales of $229.0 million in the same quarter last year. Commented Claude Jordan, Arctic Cat chairman and chief executive officer: "We had strong double-digit sales gains in side-by-sides and snowmobiles that led to record secondquarter sales, on top of a record prior-year period. However, ATV sales in North America and Europe fell short of our expectations in the quarter, and the lower volume reduced our profitability." Jordan added: "We are maintaining our full-year outlook for fiscal 2014, but expect a challenging second half of the year. Arctic Cat posted outstanding performance in the fiscal first quarter, which is reflected in first-half sales growth of 6 percent and earnings up 7 percent. We anticipate continued strong dealer demand for side-by-sides and snowmobiles, and the new CLAUDE JORDAN Wildcat models that we expect to introduce in our fiscal second half. In addition, we continue to focus on operational excellence and cost controls that will enhance our efficiency and profitability." Net sales grew approximately 4 percent, led by contributions from the Wildcat and Prowler HDX side-by-sides, and snowmobiles. North American retail sales increased 17 percent from the prior-year quarter, with retail sales gains in ATVs, side-by-sides and snowmobiles. Gross profit margins were 25.9 percent compared to 28.0 percent in the prior-year quarter, due to product mix, Canadian currency impact and increased sales incentives driven by double-digit retail sales increases in the ATV/side-by-side business. Including the lower-margin Yamaha sleds that Arctic Cat is supplying, combined with the Canadian currency impact, Arctic Cat expects fiscal 2014 gross margins to be approximately 80 basis points lower than the prior year. Sales of Arctic Cat's ATVs and side-bysides increased 4 percent to $72.7 million, up from $69.7 million in the same period last year, primarily due to strong orders for the Wildcat X and the four-seat Wildcat 4 pure sport side-by-sides. During fiscal year 2013, 45 percent of sales were in the ATV/side-by-side segment, up from 39 percent the previous year. The company continues to advance its growth strategy through new product introductions and international expansion. PSB ISO launches standardized bike program Motorcycle insurance program is first of its kind ISO announced that filings are underway for its new Motorcycle Program, the first such standardized program in the industry. The program consists of forms, rules, and loss costs tailored to fit the specific requirements for insuring a motorcycle. The base policy provides liability, medical payments, uninsured motorists and physical damage coverages. It also offers a wide array of endorsements. ISO is a member of the Verisk Insurance Solutions group at Verisk Analytics. The program also includes a Motorcycle Rating Code Supplement, which contains rating codes based on motorcycle type, engine size, MSRP, VIN, and make, model, and trim level for each model year back to 2004. The comprehensive motorcycle manual includes classification factors that recognize various exposures, such as age of operator, number of accidents, major and minor violations and years of riding experience. There are also discounts for motorcycle rider training, antitheft devices and antilock braking systems. "We developed the program in response to our customers' requests for a comprehensive program offering coverage for motorcycles and refinements to motorcycle rating," said Kevin Thompson, president of ISO Insurance Programs and Analytic Services. "Whether they currently write their own motorcycle program or want to enter the motorcycle market, insurers and agents will now have the opportunity to use a standardized policy form. ISO has included refined rating procedures in the program, so insurers don't have to spend time and money to develop their own rating procedures. Insurers with their own rating procedures can also find value using the information provided in the motorcycle program." He also noted that the new program's courttested policy language, adapted from ISO's Personal Auto Program, should simplify the acceptance of the program by U.S. regulators. ISO is submitting the Motorcycle Program for review to state insurance regulators throughout the remainder of 2013. The program will be available for insurer use as part of ISO's Personal Lines Specialty Programs, which also includes Personal Liability, Umbrella and Watercraft. Insurers participating in ISO's Personal Lines Specialty Programs have access to the new ISO Motorcycle Program. PSB P08x11-PSB15-Finance.indd 10 11/25/13 11:27 AM ww G d M G F w a Ir m si th h th ti tr m to n w e a p m d to c tr e a M c fi tr c sa m P E P P p P u th te p b b in c e sa m a ro p th fi ti m U c sn im X a p A F A re 3