Claude Jordan Steps Down as Arctic Cat CEO: Twomey Named Interim CEO

Things are looking up for the team from TRF. The stock may take a hit.. but quality and parts availability are sure to get better.

Hey Chris,
I’m your guy, I’ll be your puppet until your confident and you can finally retire. Don’t get someone who is a “great leader” and doesn’t know the business. Unlike most businesses this industry is dependent on customer loyalty and passion as well as innovation and performance. Whirlpool guys don’t get that.
You know where to find me.

So the poor guy needs a severance package after the 9.9 million he made last FY, and the 4.9 million the year before…..what a joke. Don’t let the door hit your hind end on the way out.

I guess its back to a 5 year plan of doing whatever Polaris does 5 years after they do it.

What I read into this is…They must have reached a impasse. You don’t have the best leader a/c has ever had in Chris Twomey come off the board of directors to “fill in”. If cat had planed this they would have a person lined up already. Also you don’t ask your cfo to not retire because it was some sort of calculated move. He got his ass handed to him for some reason. And he must have been doing something they REALLY did not like…. something possibly to do with “partnerships” possibly no knowledge just guessing what someone would have done to cause such action from the board.

Jordan didn’t fall into the “good ole boy” network.

Maybe they finally realize that claudes way of doing business: buying the cheapest crap from the lowest bidder, then pushing them hard to cut the price further, combined with shoving product down dealers throats, all while pissing off long term customers, isn’t the best way to run a snowmobile company

Krom I think if it was just a difference of doing business they would have it better planed out. This smells more of he did something really bad they caught wind of to me.

Todd,

I agree with that.

The Star Tribune said back in May that Cat had a poor fourth quarter due to a “weak Canadian currency and unfavorable product mix.” Have some/alot of the Arctic Cat faithful jumped ship due to the Yamaha merger? Is that what they’re talking about?

I’ll quit snowmobiling before I ever ride anything but Cat, but thats just me. I hope other faithful customers haven’t been so disgruntled that they’ve swapped their loyalty.

PS: Looking forward to the next CTEC 🙂 Looking forward to that SOB sitting in my garage.

Probably not going to be a smooth transition for the company, but for being someone that is invested in the company, this make me feel better about my future. Claude had no clue, what our customers meant to me and many of the people I know. He was so far away from making customers happy. I think he just thought we had to put things in crates and ship it out. I really hope CAT can rebuild some of the bridges burned. It wont be easy, but their customer’s satisfaction should be the most important thing. Everyone wins, with happy customers. It means more sales and more quality work for/from employees. And I’ll drink to that!

I am certainly no accountant, but the quote from the Strib being referenced is: “Full-year gross profit margins were lower, primarily as a result of product mix and the unfavorable Canadian currency impact, but within the company’s previously estimated range.”
To me that isnt referring to its “partnership” with Yamaha at all specifically, but I believe what it is getting at is that the operating costs are higher because of the mix of product (ie retooling, etc). So, when the Procross goes down the line with the suzuki mill, vs the yamaha vs the AC mill there is too much change over. That’s how I interpret it anyway. 🙂
The impact of the canadian dollar would reduce profitability as well because of a weaker US$ to CAN$ exchange rate in sales and if they used Canadian vendors, etc.

The lower profit margin generated by producing snowmobiles for Yamaha was specifically mentioned in the 3rd Quarter report. If you make 5000 sleds for another company and don’t make any money doing it, big problem. Obviously this unraveled quickly, and the board clearly felt the need to act quickly. The good news is that tomorrow is another day, the company is very solid financially, and I trust Chris Twomey.

Mike I would say you right about the Yamaha deal. But please people its far from a merger! a/c is a contract mfg. in this case. And I trust Chris more the anybody! He will do right by all.

What is troubling about the missed guidence for the 3rd and forth quarters is that this occured during one of the best snow winters in decades, can you imagine if last winter had been a poor snow year? Here is what i think some of the issues are:
1: Reports through out the season that Procross equiped Yamaha’s were faster than the Artic cat versions. Reason most likley due to clutching.
2: Yamaha’s sales of snowmobiles for the 2013/2014 winter were up over 20% , arctic cat’s were flat to down for the winter. Clearly Yamaha to this point has been the clear winner .
3: The 2015 snow check was a failure due giving customers no reason to upgrade as there was nothing new.
4: I’m guessing that there must be some other isues due to engine supply agreements as Cat had to extend their use of Suzuki power, this was not the original plan , i’m suprised that i have not heard more about this?

I have to end this in saying that i love Cat, it’s the last pure snowmobile company left, i could never ride anything else. I hope this is sorted out ASAP.

The last several years have not been the same for AC customers and most who have been around know that. Yes, cutting costs is always important – but not at the expense of turning off your die hard core customers. Quality and the customer need to become important again – as does the dealer. Chris Twomey is an AC legend and I couldn’t be happier than to hear the news of his return right now – welcome back Chris and please – please bring in someone who will get it right like you did.

Cat was the Only manufacturer to gain market share on sleds last year so where do you all come up with this stuff? Cat had the best selling 125 hp 600 class sled last year as well. Some of you need to go back to school because your learning curve has swung and missed horribly!

I’m sorry but where are you getting your info from? Cat was the ONLY manufacturer to gain market share last year ? That is completely false. Do some research please on just how sucessfull the chassis agreement has been for Yamaha over the past winter, so far this agrement has done virtually nothing for AC but lower their profitability.

Arctic Cat wasn’t the same Midwest company that cared about its customers (dealers and consumers) with the Minnesota nice attitude. They were doing business like a big chain retailer and not a small town hardware store that relies on catering to it’s community to keep them coming back in the door. I think the writing was seen on the wall just in time to get back to the roots. I wish them well and I am excited to see who they find to lead them. The industry has changed, they probably won’t go back entirely to the old ways, innovation, leading the market, growing and making money still has to be a priority and I hope they focus on making money because people hear how awesome Arctic Cat is to work with and that they make a solid reliable product that is backed by superior customer service. Claude certainly taught them how to make money the wrong way, but if the new leader can mix in a little bit of both (making money and friends), things will be better for everyone. Arctic Cat needs to embrace the loyalty of its customers. So, forget about all the 3rd qtr bs and lost margins with Canada currency. Boys and girls, of friends in Thief River are doing this for you. I think enough of the people who make decisions around there, didn’t like what they had become.

I’m not defending Claude, but he has to answer to the board of directors. He cannot do any drastic changes without their approval.
I have all faith in Chris and hope he and the board will hire someone with a snowmobile/atv back ground.

My information came directly from Cats 4th quarter report. Not to hard to find for most people there John K.

Jim you should learn how to read, cat CLAIMS they gained the most, not the ONLY manufacturer to gain market share, big difference.

CEO made 10 million last year I wonder if all the employees put together made 10 mil? Whats the difference if they make a lot money just the people at the top get it! Its BS with a golden parachute.

JimR — everyone who comes to this site is a diehard Cat person who WANTS to see AC be stronger and more successful – but they’ve seen the bigger picture of what’s happened during the last few years – you haven’t. Your posts over time – at times condescending toward others on here – have shown that.

Sven,

I think you said it better than anyone on here. You are spot on with everything you said.

Glad to see Chris back. They should have revealed him at HayDays

who owns the largest chunks of cat stock? thats who is calling the shots, period. the board or the ceo dont mean squat. the top share holders have all the power.

It is very tough to lie on a market report. Did Polaris object to it? Grow up Kevin. Cat has no debt and grew market share and help Yamaha out as well. Facts must be you’ve enemy I guess.

Come on guys..growing market share, really? Look at the financials and the total sled sales, and compare to PII for example. I find it very hard to believe that “limited edition” models like the El Tigre and RR outsold MXZ, Renegade 600e-Tec in 2014? Cat makes a good sled, but the reality is they are not executing to the level of the competition.

As a stockholder, I nominate SANDBERG FOR CEO!!!!!!!!!!!!!!!!!!!!!!!

Rides the products

Loves the products

Knows as much about the machines as anyone else

And you gotta admit, this is the COOLEST ARCTIC CAT SITE EVER!!!

Hell, he could even print up the brochures for the new model year and produce the videos

P.S.

Tucker and Roger for VP’s!!!!

Right from Arctic Cats Financials Read em and Weep non believers.

Snowmobile sales in the fiscal 2014 fourth quarter were $6.4 million, as Arctic Cat typically ships few snowmobiles in this period. Full-year snowmobile sales increased 7 percent to $282.4 million compared to $263.7 million for fiscal 2013.

Commented Jordan: “Our 2014 snowmobile line-up included exciting new models and engine choices that were well received by dealers and consumers. During the year, we gained the most market share in the industry, with our retail sales growing more than 19 percent versus 11 percent for the industry. Our significant increase in retail sales lowered dealer inventory by 9 percent, which positions us well for future snowmobile sales.”

Arctic Cat introduced its first designed and built snowmobile engine in model year 2014. Called the 6000 C-TEC2, it became the #1 selling snowmobile in the United States’ 125 horsepower performance segment. This powerful, lightweight and fuel-efficient 2-stroke engine enabled the company to enter the large 600cc snowmobile market segment that accounts for 18 percent of the snowmobile industry.

“So the poor guy needs a severance package after the 9.9 million he made last FY, and the 4.9 million the year before…..what a joke. Don’t let the door hit your hind end on the way out.”
_______________________

My thoughts exactly.

Mike, it “seems” that one of the many posting here isn’t aware of the massive “self appointed” bonus Claude wrote for himself following 2012’s sales report.

To say the least, it was ridiculous.

Russ, the 3.8 million severance package in addition to the 14.8 million from the previous 2 years should help ease the pain of getting canned. I wonder when his unemployment kicks in?????lol!

JimR: Read this….

https://finance.yahoo.com/news/weakness-seen-arctic-cat-inc-110342167.html

But stocks are up again and still no debt. Get over it! My facts beat you’ve speculation on a stock reader.

Jim, we all want to believe the best for the future of AC, but clearly there are severe issues with this company right now. The Q4 report does not match what is happening with the stock, share price is almost knocked in half, Claude Jordan stepped down/ fired , virtually all analysts have down graded the stock. All this while reporting that they gained more market share that anyone else? While having the number 1 selling 600cc snowmoble? Come on man, there is FOR SURE another shoe to drop , and i have no clue what it is, but a gurantee it’s bad. Jim your take on AC is the opposite of the entire stock market right now.

Stock up again today. No debt yet either. Must be doing something right with the most market share gain and the best selling 600 class sled in the U.S! John K. The sky is not falling. Everything will be fine. My take seems to be just fine. 3 straight days of a climb since the change and the from my checking most feel going to go up.

Bob: In fact I’ve been in TRF this week, soliciting votes from all shareholders in my bid to become the next CEO. Can I count on your vote?

Actually, while I’d love the perks of the job, I’d hate to really have to make some of the decisions that CEOs must confront. From my perspective, it seems like the race for companies to grow 10-15% annually often looks like a race to the bottom in some respects. But that’s a different topic for a different day.

One note on the market share topic: Notice WHERE the 6000 is/was the #1 selling machine in the 125 hp class. The U.S. (not the world).

Regarding stock price: Again, I’m the opposite of an expert on such things, but my view from the cheap seats is that stock price usually doesn’t reflect whether a company is profitable. Rather it reflects the level of growth (and perceived future growth).

S.K. LEPINIT’s idea of unveiling Chris Twomey at Hay Days is brilliant!

“stock price usually doesn’t reflect whether a company is profitable. Rather it reflects the level of growth (and perceived future growth).”
__________________

Exactly, I means nothing when it comes to putting out a better product that will keep loyalty within the same “bunk houses” it has resided in for so long.

A few corrections for you guys

Jim R. Yes the stock was up today it closed at 35.23 a share however you must keep in mind that it has been on a spiral down turn since late in 2013.
On 10/182013 it closed at 60.74 so it is still has a net loss of 25.51 cents.

Russ Your statement that it “means nothing when it comes to putting out a better product” does not make sence because if the stock does not turn around there will not be any product being made. Think back to 1982 and look what happened.

A few corrections for you guys

Jim R. Yes the stock was up today it closed at 35.23 a share however you must keep in mind that it has been on a spiral down turn since late in 2013.
On 10/18/2013 it closed at 60.74 so it is still has a net loss of 25.51.

Russ Your statement that it “means nothing when it comes to putting out a better product” does not make sence because if the stock does not turn around there will not be any product being made. Think back to 1982 and look what happened.

Scott I am a die hard CAT MAN so it hurts but very well said.
I can only hope that AC does not keep updating their PL statement to a lower number like they have prior times in the last few months. It would sure be nice to know the true financial condition of the company insted of these false profit and loss statements that have been submitted and now keep being updated.

It sure looks like cat should have stayed with the Suzuki engines until they were ready to use all cat engines. This is what is killing them! anyone with GMP (good manufacturing process) knowledge knows that in this day and age you can not manufacture products with such diffrence in product mix. Building sleds with Suzuki, Yamaha and Cat engines must be a nightmare retooling on the assembly line, not to say what a mess for the dealers and parts…………………….

“Think back to 1982 and look what happened.”
___________________

And you think back to 1984-on and look what they did when they weren’t cutting corners and had a CEO who concerned himself with satisfying both sides of the aisle. They built a very good following of fans, these days their quality aspect hasn’t been up kept due to holding costs as low as possible and using cheaper (read: JUNK) parts in critical applications.

Like said, really beginning with the 2012 MY, their lack of quality and reliability has taken a big hit while sled prices have soared.
Neither has been good for the consumers nor the dealer network.

Keep calm, and carry on…….tomorrow is another day

I was a HUGE CAT fan but after purchasing a 2012 & 2013 found huge issues with this new design.
Could not go riding anymore and enjoy myself, had to jump ship.

Had one of the most carefree winter in years… Love Cat but they really need to get things right and not expect cat loyalists to suck up bad engineering!!!

I personally know of LOTS of cat loyal customers who did the same

Cats stock is up again today. Surpassing where they were when this pretty much non news worthy story came up.

Just Ignoring More Reality, JIMR? Stock prices have been falling for months; then steeply fell on the news of Claude’s departure; and are now pricing back up to correct the reaction and the news is understood; and maybe it will keep going if the market now perceives the firing as good news. Most people perceive this news as a good thing.

I will keep you informed there Kevin. not ignoring reality one bit. Just stating that the sky over TRF is not falling. Say this with me. They have ZERO DEBT and about 90 million in the bank. they are just fine. Sled sales last year were better than the year before and gained market share along with helping Yamaha and keeping the work force busy the entire year. A win, win.

JimR and Kevin:

I guess that’s what’s so surprising to me about Cat letting Claude go. Arctic has a large monetary safety net. They have basically zero debt and are buying back shares. It seems to me that Claude (and the board) have gotten them to a very stable point (minus the stock prices, etc). And the Yamaha partnership….

…at first made me sick, but I now see it as brilliant and hope the relationship grows. When I used to look in the sled magazines I would see Arctic Cat, Yamaha, brand and brand. Now I see Actic Cat, Arctic Cat, brand and brand. Yes the second says Yamaha, but its a Cat. That Move alone just got Arctic Cat 25% more exposure…50% of the magazines photos are now built in Thief River Falls.

And Yamaha is finishing the fit and finish issues that some others have talked about on here. So I guess I’m kind of confused why they let him go in the first place, as he didn’t work alone. He has a board to report to (and yes, stockholders), he has staff, engineers and employees to answer to. He didn’t make all those decisions without telling anyone. I know there was a few bad quarters, but it makes me wonder if something personal didnt happen up there. Either way thats none of my business.

And I’m not getting between your spat on here, just wanted to share my opinion on the company that makes my life happy.

Later!

JimR: ‘thhhey aaarrre fine’ got it! Seriously though… they will be more than fine — they will be better.

I vote for cousin Joey Hallstrom to be the new CEO of Arctic Cat. He lives and breathes snowmobiles and he has been an Arctic Cat fan since he was in diapers. As an added plus, he could hold Board of Directors meetings at the Black Cat restaurant. Since he is part Norwegian he would fit right in as a Good Ol’ Boy in The Most Norwegian Community in America (according to the 2000 Census). He even loves lutefisk. Uffda!

For VP I nominate The Sandman. Like cousin Joey he is passionate about snowmobiles and Arctic Cat. He even has a good website called AntarcticInventor.com where one can see what is new and cool at Arctic Cat along with all the scuttlebutt from the Joey Hallstrom Fan Club.

Once Roger Skime retires (as if that will ever happen-they will have to carry him out in a pine box) I nominate Tucker Hibbert to be VP of Engineering. By then Tucker will be all washed up as a Snocross racer and will be looking for a more sane career. Meanwhile, on those long boring flights on American Airlines out of the Fargo, North Dakota, airport, Tucker continues to daydream about the new snowmobile he is designing which will feature a turbine engine fueled by Monster Energy.

I heard the Board of Directors is contemplating buying the Fourtown Store from Polly Dehnert. It will be the headquarters for the new swamp testing program with powder machines. The bar will be maintained for Happy Hour and Safety Meetings.

Who said they let him go? Claude just decided it was time to retire on top as Arctic Cat is the best position from a money stand point it has ever been in and he got them there!

I don’t understand were all you people are getting the idea he was fired? Can you not read? It says nothing about being fired. If you can’t read at least look at the picture of him with Chris and the retirment cake……..last time I checked you don’t get fired and then get a retirement cake!!!!!!!!!!!

Arctic Cat is in the worst position they have ever been in from a customer satisfaction/loyalty point, and claude put them there.

Cutting every possible corner, going to the cheapest vendors, regardless of quality, then pushing them even harder to cut price, reducing inventories to the point that nothing was ever available.

He got a short term spike in stock price, on the backs of now disgruntled customers.

I agree Krom. I like the product line AC developed but quality control issues are killing it. I don’t care how cool it looks if its not reliable customers are not going to buy it. That is the #1 reason I didn’t spring order a new sled this year from AC. Hopefully relieving Claude of his duties (weather it be forced retirement or firing) helps to solve a bunch of these issues and salvages Cats relationship with its customers and dealers.

krom and bulldog are spot on! Bring back some respect for the dealer and customer and see what happens!!! Arctic like every other snow mfg. has had issues. It has always been how they took care of them that was the difference . And it appears to everyone in the last fue years a/c took a washing machine approach. I mean if you have a prob. with a product today you call a 1-800 # and get someone in India who lacks the knowledge to even help out.

@fastcat

that picture is not a retirement cake for Claude. The picture was taken quite a few years ago. (Check out the models of sleds behind them) 2010 models.

I think the retirement picture was from when Chris Twomey gave way to Claude as Chairman and CEO. The cake was for Twomey not Claude.

Krom and Bulldog, let me thank you two (along with Todd and AC 09)

It’s good to know that there are many out there who still remember the “old AC” practices. I cannot get over the fact that Claude had cut so many corners during his tenure.

Thanks again guys.

FWIW….

http://tcbmag.com/News/Recent-News/2014/May/Arctic-Cat-s-Stock-Plummets-As-CEO-Steps-Down

“When the company announced Jordan’s departure on Monday, it didn’t disclose the reason for his exit, saying he “stepped down.” But a company spokesperson told Twin Cities Business that the exit was “involuntary, without cause.”

OUCH!! Lol, That says a LOT.

Thank You David.

To bad they did not have a reason for letting him go………….
Letting him go “without cause” means he did nothing wrong and now they need to pay him just under $4,000,000.00…………..
The 4 million could have been spent in a better way I would think……………………………

what it says to me is it was worth more to let him go and pay the big$$$ I wonder what someone would have to do to have the board turn on them…..hmmmm

I know this is an old thread, but this came across the wire:

http://www.dealernews.com/dealernews/article/baird-survey-arctic-cat-dealers-have-bleak-outlook

[quote]Baird survey: Arctic Cat dealers have bleak outlook
Publish Date:
Jul 10, 2014
By Vince Guerrieri

Arctic Cat dealers painted a bleak picture in the latest Baird/Dealernews research survey.

Dealers said that prices and inventory demands set by the original equipment manufacturer were too high, while demand and market share were dropping. Baird’s dealer sentiment index reported pessimistic outlooks for current conditions and 3-5 year outlook, as well as innovation and return on investment.

Dealers’ main complaint was about inventory, saying they’re forced to carry too much, and with the exception of the Wildcat Trail, none of it is in particularly high demand.

“They are forcing us to take more products in order to qualify for programs, but the sales have remained flat,” one dealer said. “This is making our inventory grow, but our sales trends have not followed.”

One dealer also noted that its margin on lawnmower sales is better than the margins offered by Arctic Cat.

“Need better margins on product,” another dealer said. “At least 12 percent.”

When Arctic Cat dealers talked about a competing product, it was usually Polaris.

“Arctic Cat needs to be more price competitive,” one dealer said. “We are getting killed by Polaris on all SxS product.”

Polaris is also offering better financing. One dealer said that Arctic Cat is 2 percent higher than Polaris.

“Polaris is blowing the prices out on their UTVs,” another said. “[We] need better rebates on UTVs and ATVs.”

Said another: “A constant comment I receive from customers is that Polaris outperforms Arctic Cat in the engine categories.”

Dealers thought the departure of CEO Claude Jordan was a positive development.

“Good move,” one dealer said. “Chris Twomey has good leadership.”

Twomey spent 24 years as CEO before Jordan took over as chairman and CEO in 2010. Prior to that, Jordan was company president for two years, and was hired from Home Depot. He had also worked as an executive at General Electric. The company has hired Spencer Stuart to help in the CEO search.

“We need someone who will be a dealer advocate, rather than dealer crusher,” another dealer said.

Another dealer suggested hiring someone from Polaris.

Baird also contacted former Arctic Cat dealers, who seemed satisfied with their parting of ways with the company. Former dealers seemed to agree that Arctic Cat products were overpriced. Several dealers who responded to the survey plan to drop Arctic Cat

“Arctic Cat expects dealers to over-order units,” one said.

“I flipped 20 people over to Polaris,” another said.

A total of 100 dealers responded.[/quote]