May 29--With sales of its all-terrain vehicles and snowmobiles stuck in a rut, Arctic Cat Inc. reported a quarterly loss of $16.7 million Thursday.

The ongoing economic malaise has hit the big toys made by Arctic Cat especially hard, as consumers put off purchases of items often used for weekend fun.

The Plymouth-based company also said it is cutting another 60 jobs, or 5 percent of its 1,200-member work force. Earlier this year, the company eliminated 100 jobs.

"We do not expect any meaningful recovery in the recreational products market in the year ahead," CEO Christopher Twomey said Thursday. The company is focused on scaling back its business, preserving cash and managing dealers' inventories so that it can "emerge as a stronger company as the economy recovers," he said.

At the start of 2009, Arctic Cat hoped this would be a year of recovery, Twomey said. The industry has seen years of slow snowmobile sales because of poor snowfall, and all-terrain vehicle sales have been weak as well.

But the rebound didn't materialize.

The company was profitable through the first nine months of its fiscal 2009, Twomey said. "We could not have foreseen the incredible shrinking of the economy," he said, which occurred late in 2008 and early this year.

Quarterly sales totaled $90.7 million, down 46 percent from $168.9 million in the same period last year.

Looking ahead, Arctic Cat's projection for sales in fiscal year 2010 is between $425 million and $460 million.

That compares with a consensus projection from stock analysts of $515.8 million.

The company's stock lost 8 cents Thursday, or 1.8 percent, to $4.46.

The company lost ground in sales for both of its largest product lines in the quarter, though snowmobiles showed an uptick for the full year.

All-terrain vehicle sales in the quarter dropped 55 percent to $64.1 million. For the year ended March 31, all-terrain vehicle sales were down 29 percent.

Because of accounting rules and sales incentives paid to dealers in the quarter, Arctic Cat's snowmobile segment reported a negative $3.4 million in sales in the quarter. Still, that was an improvement from a negative $7 million in sales in the year-ago quarter.

For the fiscal year as a whole, though, Arctic Cat's snowmobile business was up 28 percent, with sales of $207 million. The company credits good snowfall this winter and an improvement in Canadian sales, which were up slightly in the last year.

Industrywide sales in the U.S. were down about 20 percent last year, Twomey said.

John Welbes can be reached at 651-228-2175.

-----

To see more of the Pioneer Press, or to subscribe to the newspaper, go to http://www.twincities.com.

Copyright (c) 2009, Pioneer Press, St. Paul, Minn.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:ACAT,

A service of YellowBrix, Inc.