Arctic Cat Lowers 2016 Outlook, Suspends Quarterly Dividend - Quick Facts

(RTTNews) - While reporting its financial results for the third quarter today, Arctic Cat Inc. (ACAT) lowered its outlook for fiscal 2016 and now expects a full-year loss, citing stronger currency headwinds and softer market conditions. The company also said it is suspending its quarterly cash dividends to continue investing for return to growth.

For fiscal 2016, Arctic Cat now estimates full-year net sales in the range of $645 million to $655 million, with a greater unfavorable foreign currency exchange impact in the range of $32 million to $35 million.

The company now expects full-year net loss of $0.25 to $0.30 per share, reflecting a worsening of unfavorable foreign currency exchange rates, particularly the Canadian dollar, as approximately 30 percent of Arctic Cat's annual sales are to Canada.

Foreign currency exchange headwinds are estimated to negatively impact gross profit and reduce net earnings in the range of $1.48 to $1.62 per share compared to fiscal 2015, which will be only partially offset by the company's hedging strategy.

Previously, the company estimated full-year net sales for fiscal 2016 in the range of $665 million to $675 million, with an unfavorable foreign currency exchange impact on sales in the range of $27 million to $30 million.

At that time, Arctic Cat expected full-year net earnings in the range of $0.05 to $0.15 per share, after factoring in negative foreign currency exchange impact on gross profit and reduced net earnings in the range of $1.25 to $1.39 per share.

On average, analysts polled by Thomson Reuters expect the company to earn $0.03 per share for full year on revenues of $658.22 million. Analysts' figures usually exclude special items.

In order to preserve cash for continued investment in returning the company to growth, Arctic Cat's board of directors has voted to suspend regular quarterly cash dividends on its common stock, effective immediately. The company noted that suspending the dividend will conserve approximately $6.5 million in cash annually.