Arctic Cat Quarterly Earnings & Analysis

Posted on May 21, 2015 by Marc Cesare

The 2015 Wildcat Sport XT, a recent addition to the Arctic Cat side-by-side lineup.

The 2015 Wildcat Sport XT, a more recent addition to the Arctic Cat side-by-side lineup which is a bright spot among Arctic Cat’s business segments.

Arctic Cat recently released their financial results for the fiscal fourth quarter ended March 31, 2015. Management reported a net loss of $21.5 million on net sales of $98.9 million for the fiscal 2015 fourth quarter. In the prior-year quarter, Arctic Cat reported a net loss of $1.6 million on net sales of $145.4 million. Full-year net sales were down approximately 4% to $698.8 million from $730.5 million in fiscal 2014. Net earnings decreased to $4.9 million. Full-year net sales include an unfavorable foreign currency impact that reduced net sales by approximately $18.1 million.

Highlights of the earnings call related to the utility vehicle market include:

ATV sales (includes ATVs and UTVs) for the year decreased 15% to $284.1 million from $333.2 million in the prior fiscal year.
Strong sales of Wildcat side-by-side models were offset by lower sales of core ATVs to North American dealers and in international regions, including Russia, as the company reduced bloated dealer inventory of core ATVs.
At the retail level ATV and side-by-side sales increased low 20s% for the fourth quarter.
Management reported gaining market share in the side-by-side segment
Management announced $27 million of investment in US manufacturing facilities and is investigating establishing a facility in a lower-cost region of the world
In the fourth quarter Arctic Cat began shipping UTVs to Toro under their OEM agreement
Arctic Cat ATV sales are expected to increase 9-12% at the wholesale level for the coming fiscal year, primarily from Wildcat sales. Retail sales are expected to be in the 15-20% range.
Dealer feedback on the newest Wildcat Trail models has been positive as well as the new 2016 Prowler HDX announced in Febuary

Learn more: Seekingalpha.com (earnings call transcript)

Analysis: The new CEO Christopher Metz is moving aggressively to improve the company. One of his first moves was to take a significant write down related to excess ATV inventory. He appears to be moving more quickly to clean up inventory in the ATV as well as other business segments than his predecessor. He also created a new position, Chief Marketing Officer and added a new NA sales executive. In addition they are investing $27 million in improving manufacturing facilities.

While there will be some new products in 2016, with launches in August, the year will be dedicated more to cleaning up inventory and laying the foundation for a more efficient and productive company. Fiscal year 2017 will feature a more robust slate of product introductions. Despite some difficulties overall for the company, Arctic Cat’s side-by-side business continues to be a growth area. Expect the company to continue to aggressively buildout their product offerings in this area, targeting both the recreational sub-segments with new Wildcat vehicles and trying to expand into more areas of the work/utility segment under the Prowler product line.

Arctic Cat To Invest $27 Million In Minnesota Facilities

Posted on May 20, 2015 by Marc Cesare

Arctic Cat recently announced that they plan to invest $27 million in their Thief River Falls and St. Cloud, Minnesota manufacturing facilities. The bulk of the investment will be in Thief River Falls where a new state-of-the-art paint line will be installed and other improvements made. In St. Cloud Arctic Cat’s engine manufacturing and assembly capabilities will be expanded. The paint line will be used for the company’s recreational off-road vehicles. The investment is expected to result in an additional 50 jobs. Learn more: Arcticcat.com

Comment: This is another sign of the aggressiveness of the new CEO Christopher Metz who came in at the end of last year. Previously, after some sales and inventory problems with their ATVs, he immediately took a write down and quickly moved to reduce inventory rather than slowly trying to reduce the inventory over the next year or more. With companies like Honda and Yamaha renewing their UTV efforts, strong competition from Chinese manufacturers like Kymco and CFMoto and continuing efforts by Polaris and Can Am, Arctic Cat needs to continue to invest in their UTV product line in order to just maintain their market position, let alone improve it.

Polaris Ranger To Be Used In DARPA Robotics Challenge

Posted on May 20, 2015 by Marc Cesare

Polaris is providing a modified Ranger XP 900 EPS for the DARPA Robotics Challenge

A Limited Edition DARPA Polaris Ranger XP 900 EPS will be used in part of the DARPA Robotics Challenge held June 5-6, at the Fairplex, in Pomona, CA.

This DARPA Robotics Challenge was created to spur development of robotic technology that can help humans to better respond to future disasters. The Challenge Finals will have robots perform a number of tasks in a continuous course, simulating what might be encountered in a real disaster situation. DARPA will use the RANGER XP 900 EPS in one of the most difficult tasks to help demonstrate a robot’s ability to operate and to egress from a vehicle, since they are among the tools commonly on hand in disaster zones.

The Ranger XP 900 EPS was modified for use in the event including:

A remote SafeStop electronic throttle kill
Brake actuation technology
A 1,000 lb. capacity bed for the robot’s power supply
Bench seat and tilt steering to create more room for a robotic driver
Terrainarmor airless tires

For Polaris the event is an opportunity to further develop a vehicle platform with which robotic companies can integrate their own products. Polaris is also providing GEM vehicles for robot, people and supply transport at the event. Learn more: Polaris.com

Comment: The Challenge is a good opportunity for Polaris to work on product development for autonomous vehicles for both disaster relief and military applications as well as creating a vehicle platform for robotics companies. Building vehicles for speciality applications with specific features and options is also an effective way to produce higher margins in an increasingly competitive UTV market.

Google To Begin Testing Self-Driving LSVs

Posted on May 18, 2015 by Marc Cesare

Google Prototype self-driving low-speed vehicle.

Google is planning on testing its own Google prototype self-driving vehicles on the roads of Mountain View, with safety drivers aboard. The vehicles will be low-speed vehicles (LSVs) produced by Roush Industries and will be on the road this summer. Roush provides services to move from concept to prototype to manufacturing and has experience in the automotive, motorsports and alternative fuel vehicle markets. The vehicles will have manual controls to conform with California autonomous vehicle code but Google has reported that it plans to make vehicles in the future without steering wheels or manual brakes. Learn more: Autoconnectedcar.com

Comment: Perhaps the next place to test the vehicles will be in gated communities where there is a defined and limited road network and all the traffic is low-speed.

Get Your Electric or Gas Golf Car Ready For The Season

Posted on May 18, 2015 by Marc Cesare

We’ve posted a pair of articles in our tech section on annual maintenance for electric and gas golf cars. It’s aimed at the owner who is pulling their vehicle out of storage for seasonal use but can also be used as an annual or semi-annual maintenance guide, if you use your vehicle year around. If you are a hands-on owner, most or all of the maintenance can be done by yourself. If not, some of the maintenance checks you can do yourself and the more complicated procedures can be handled by your local golf car dealer. In any case, the guides give you some knowledge about key areas of your electric or gas golf car that you should check at least once a year. The guides are courtesy of Jack Triolo of Mountaintop Golf Cars in Banner Elk, NC and www.golfcarcatalog.com.

How To Extend Battery Life

Posted on May 15, 2015 by Marc Cesare

An article from Battery Watering Technologies has been posted in our Buying Guides/Tech section. The article provides some tips on when and how to water your electric vehicle batteries and provides some information about their single point watering system and new i-Lite sensor which helps you keep track of water levels. Learn more: Smallvehicleresource.com

Polaris Chooses Design & Construction Firms For Huntsville Plant

Posted on May 13, 2015 by Marc Cesare

Rendering of the new Polaris facility in Huntsville, AL

Polaris Industries has chosen two Nashville, TN firms for the design and construction of their new manufacturing plant in Huntsville, AL. T.W. Frierson Contractor, Inc. and the architectural firm Design Constructors, Inc. were chosen for the $48 million, 775,000-square-foot plant that is scheduled to be operational within a year. The production facility is the first for Polaris in the southern half of the United States, and will initially be producing the Ranger side-by-side utility vehicles including vehicle assembly, chassis and body painting, welding, fabrication and injection molding. Learn more: Madisoncountyrecord.com

GPS Industries Reports Strong Start For Telematics In 2015

Posted on May 7, 2015 by Marc Cesare

One of the Visage system’s screen views. GPS Industries has partnered with Club Car to provide the Visage system for fleet management and content delivery.

GPS Industries reports that they have signed more than 100 installation contracts to date to provide telematics and fleet tracking technology. Properties now using the technology include The Phoenician (AZ), Turnberry Isle Resort (FL), Omni Interlocken (CO) and Journey at Pechanga (CA).

GPSI has an exclusive partnership with Club Car whose Connected Precedent i3 golf car showcases the Visage Mobile Golf Information System and recently-launched Visage Media Network. The mixture of technology and software allows properties from golf courses to master-planned communities to track, control and deliver promotional content.

According to GPSI, “The Visage system offers hole-by-hole graphics and flyovers, scoring and gaming, on-course food and beverage ordering, and addressable promotional messages on high-resolution 10-inch touch screens mounted to Club Car Precedent golf cars. Featuring in excess of 75 million-plus page views monthly, the Visage Media Network represents the largest connected global audience of golfers.” The company is also working on new applications to leverage the platform for social media and user generated content.

The appeal for golf courses and the like is that they can reduce costs through better fleet management, increase revenues from food service and promotions and provide a better experience for their customers. Learn more: GIuser.com

Value Priced UTVs & Cargo Capacity In The Work Segment

Posted on May 7, 2015 by Marc Cesare

A new UTV from Cub Cadet's new Challenger series.

UTVs from Cub Cadet’s new Challenger series are part of a cost/benefit analysis.

My colleague Stephen Metzger has performed a cost/benefit analysis of the light duty utility vehicle segment with a focus on price versus cargo box capacity for vehicles priced between $5,200 and $10,000. He used the mid-point in the price range to examine two sets of vehicles from a range of manufacturers. Comparing the two price ranges, vehicles in the lower price range had a slightly higher variation in price but a lower variation in cargo box capacity. The higher priced vehicles showed a significant variation in cargo box capacity. In conclusion he states:

In comparing the two sets of vehicles, it appears to be more difficult to place a superior cost/benefit value in the lower price range. The variation in the cost/benefit ratio is relatively small. Yet the opportunity lies in raising the cargo box capacity, while maintaining price. Then lower price range vehicles begin to encroach on capacity featured in the higher priced models.

To see the full analysis view the article.

Startups Aggregating Mini-trucks In India’s Local Delivery Market

Posted on May 1, 2015 by Marc Cesare

Some of the mini-trucks and owner-operators part of the LOTrucks.com network.

LOTrucks.com, an Indian startup, is using technology to aggregate the highly fragmented local delivery market in the country. Major cities such as Bangalore employ a hub and spoke delivery system where the last mile is handled by mini-trucks and other vehicles driven by owner-operators. The problem has been connecting the large number of owner-operators with potential clients in an efficient and cost-effective manner. LOTrucks joins similar companies such as The Porter, Blowhorn and Shippr who are operating in Mumbai and Bangalore. LOT stands for Logistics, Optimization and Transportation.

According to the founders “When we noticed some important issues like large idle time of vehicles, no standard pricing, customer-driver communication gap and billing problems, we thought this can be addressed using technology.” LOT has reduced the time from order booking to processing to 30 minutes, implemented a standard mileage based pricing system to eliminate negotiating and trains drivers for communicating in the diverse city. An online payment system using a mobile is in the works. LOT currently has over 500 trucks including the LOT MINI, aTata Ace with 800kg capacity, and the LOT MAX , a Tata 407 with 2.5ton capacity. The founders plan to perfect their system in Bangalore before expanding to other cities. Learn more: Yourstory.com

Small Vehicle Resource Blog

Information on the small, task-oriented vehicle market