10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended March 31, 2014

or

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition period from             to            

Commission File Number: 0-18607

ARCTIC CAT INC.

(Exact name of registrant as specified in its charter)

Minnesota	41-1443470
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
505 Highway 169 North, Suite 1000 Plymouth, Minnesota	55441
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(763) 354-1800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.01 par value	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer                  ¨
Non-accelerated filer   ¨	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter was approximately: $738,464,727.

At May 21, 2014, the registrant had 12,896,873 shares of Common Stock outstanding.

Documents Incorporated by Reference:

Portions of the registrant’s Proxy Statement for its Annual Meeting of Shareholders currently scheduled to be held on August 7, 2014 are incorporated by reference into Part III of this Form 10-K.

ARCTIC CAT INC.

FORM 10-K

TABLE OF CONTENTS

PART I		1
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	10
ITEM 1B.	UNRESOLVED STAFF COMMENTS	12
ITEM 2.	PROPERTIES	13
ITEM 3.	LEGAL PROCEEDINGS	13
ITEM 4.	MINE SAFETY DISCLOSURES	13
PART II		14
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	14
ITEM 6.	SELECTED FINANCIAL DATA	16
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	25
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	25
ITEM 9A.	CONTROLS AND PROCEDURES	25
ITEM 9B.	OTHER INFORMATION	26
PART III		28
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	28
ITEM 11.	EXECUTIVE COMPENSATION	28
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	28
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	28
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	28
PART IV		29
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	29
SIGNATURES		30
CONSOLIDATED BALANCE SHEETS		31
CONSOLIDATED STATEMENTS OF OPERATIONS		32
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY		33
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		34
CONSOLIDATED STATEMENTS OF CASH FLOWS		35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		36
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		49

PART I

ITEM 1. BUSINESS

Arctic Cat Inc. (the “Company” or “Arctic Cat,” or “we,” “our” or “us”) is a Minnesota corporation with principal executive offices in Plymouth, Minnesota. We design, engineer, manufacture and market snowmobiles and all-terrain vehicles (“ATVs”) and recreational off-highway vehicles (“side-by-sides” or “ROVs”) under the Arctic Cat^® brand name, as well as related parts, garments and accessories (“PG&A”). We market our products through a network of independent dealers located throughout the United States, Canada, and Europe and through distributors representing dealers in Europe, Russia, South America, the Middle East, Asia and other international markets. The Arctic Cat brand name has existed for more than 50 years and is among the most widely recognized and respected names in the snowmobile, ATV and side-by-side industry. We were incorporated in 1982. Our common stock trades on the NASDAQ Global Select Market under the symbol ACAT.

Industry Background

Snowmobiles—The snowmobile, developed in the 1950s, was originally intended to be used as a utility vehicle, but today the overwhelming majority of the industry’s sales are for recreational use. Between the late 1950s and early 1970s, the industry expanded dramatically, reaching a peak of over 100 manufacturers and a high of nearly 495,000 units sold to retail customers in North America in 1971. Today the industry has consolidated to four major participants: Arctic Cat, Bombardier Recreational Products Inc. (“BRP”), Polaris Industries Inc. (“Polaris”) and Yamaha Motor Co., Ltd. (“Yamaha”). We believe there are currently more significant barriers to entry into the snowmobile market than existed in the 1970s. These barriers include increased brand loyalty, long-standing dealer and distributor networks and relationships, emission and safety regulations, four-stroke engine development costs, manufacturing and engineering expertise and higher initial start-up costs. Industry-wide snowmobile sales to retail customers in North America were approximately 102,763 units for the 2014 model year.

ATVs—The ATV industry evolved from the three-wheel model that was developed in the early 1970s to the four-wheel models that are sold today. The most popular ATV use is general recreation, followed by farming/ranching, hunting/fishing, hauling/towing, transportation, and commercial use. From 1970 to 1986, the number of ATVs sold in the United States continued to grow until reaching an initial peak of 535,000 units in 1986. From 1987 to 1991, the number of ATVs sold declined to a low of approximately 147,000 units. From 1991 to 2004, sales of ATVs by Arctic Cat and its major competitors grew to 814,000 units; however, ATV sales declined each year from 2005 to 2011, primarily driven by overall weak economic conditions and the shift to side-by-side vehicles. In 2012, the industry started to turn around and experienced its first increase in industry sales, with the industry increasing by 2.6%. For the 2013 calendar year, industry-wide sales were 279,858 units in the North America, up 0.3%, for its 2^nd straight increase in year-over-year retail sales. ATVs are sold in numerous markets including the United States, Canada, Europe, Russia, Australia, Middle East and Latin America. Major competitors in the industry include Yamaha, BRP, Polaris, Honda Motor Co., Ltd. (“Honda”), Kawasaki Motors Corp. (“Kawasaki”) and Suzuki Motor Corporation (“Suzuki”). In addition to these companies, multiple other companies, including numerous Chinese and Taiwanese manufacturers, sell ATVs.

Side-by-Side Recreational Off-highway Vehicles (“side-by-sides” or “ROVs”)—ROVs are multiple passenger off-highway all-terrain vehicles and, like ATVs, are used for general recreation, farming/ranching, hunting/fishing, hauling/towing, transportation, commercial and military use. We estimate that calendar year 2013industry side-by-side vehicle retail sales in the United States were 237,910 units, up 11% from the previous year. The main competitors for our side-by-side vehicles are Yamaha, BRP, Polaris, Kawasaki, Kubota, Deere & Company (“Deere”) and Honda.

Products

Snowmobiles—We produce a full line of snowmobiles, consisting of 60 models, marketed under the Arctic Cat brand name and designed to satisfy most market segments. The 2014Arctic Cat models carry suggested U.S.

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retail prices ranging from $7,299 to $15,649, excluding a youth model which is sold at a suggested U.S. retail price of $2,699. Arctic Cat snowmobiles are sold in the United States, Canada, Scandinavia, Russia and other international markets.

Our 2014 model year snowmobiles are categorized as Performance, Crossover, Mountain, Touring and Utility. We market: Performance models under the names ZR and Sno Pro; Crossover models under the name XF; Mountain models under the name M and HCR; Touring models under the name T; and Utility models under the name Bearcat. In addition, to encourage family involvement in snowmobiling, we offer a youth snowmobile marketed under the ZR 120 name.

In the more than 50 years of Arctic Cat snowmobiles, the basic framework of the snowmobile has stayed the same: two skis, an engine and drive system and a suspended chassis that supports the rider. Yet there has been a progression in performance, comfort, durability and capability achieved through a half century of innovative engineering and development.

Snowmobiles have advanced from 12-mph rear-engine farm implements to turbo-charged 4-stroke performance machines with advanced bump-soaking suspensions, electric heated seats, 150-mile fuel ranges and the ability to climb tall mountains.

In the sport of snowmobiling, where the customer demands continuous improvement in the vehicle’s ride, quality and performance, companies must progress through innovation. We believe we have a team of talented, driven-to-win people whose passion for snowmobiles is matched by their desire to innovate and improve, a major reason why Arctic Cat has delivered a stunning array of innovative, pioneering technology and products during the last half-century.

Awards—In the 2014 model year, more than 80% of our snowmobile sales were from models or model variations not available three years earlier. Some recent examples of the success of our new products include the following: SnowTrax Television and Supertrax Magazine Real World Sled of the year – 2014 ZR 6000 El Tigre; Sledhead 24-7 Television Editors Choice – 2014 ZR 6000 El Tigre; snowmobile.com Best Fun Snowmobile – 2014 ZR 70000 SP, Best Utility – 2014 Bearcat GS, Most Improved Mountain – 2014 M8 Sno Pro 153, Deep Powder Crossover Sled of the Year – 2014 XF 8000 High Country, 4-stroke Mountain Sled of the Year – M 9000 Sno Pro; and American Snowmobiler Magazine Best of Best Editors Choice – 2014 XF 7000 Snow Pro, Best of the Best Most Improved Mountain – 2014 M 8000 Sno Pro, Best of the Best 4-stroke – 2014 ZR 7000 LXR, Best of the Best Crossover – 2014 XF Cross Tour 9000, Best of the Best Engine – 6000-Series C-TEC2.

Team Arctic Racers upheld Arctic Cat’s racing tradition in Fiscal 2014. Tucker Hibbert became the winningest rider in snocross history on January 3, 2014 in Shakopee, Minnesota by surpassing Blair Morgan’s long-standing Pro National win record. He won his seventh-consecutive snocross gold medal at Winter X Games Aspen, won 15 of the 17 ISOC National Snocross Pro Open main events to clinch his eighth national snocross championship and was voted ISOC’s Fan Favorite Snocross Racer of the Year.

Team Arctic’s contingent of USXC cross-country racers led all other OEMs in the season championship point’s war, taking the title in 16 classes including eight podium sweeps and 42 out of 60 championship podium positions. Zach Herfindahl capped his remarkable sophomore season in the Pro class by winning the Pro Stock championship and taking a close second in the Pro Open chase. Jolene Bute won yet another Women’s class championship. Jon Arneson captured three class championships, including the tough-fought Semi Pro Stock and all-new Super Stock classes.

For the last three fiscal years ended 2014, 2013 and 2012, snowmobiles accounted for 39%, 39% and 43%, respectively, of our net sales.

ATVs—In December 1995, we introduced our first ATV. Since that time, our line has grown to 22 models. Features like fully independent front and rear suspensions, hydraulic disc brakes, hi-low range transmission, long

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travel suspension with high ground clearance, Speed Point accessory system, automatic transmissions, selectable 2WD/4WD shaft drive, locking differentials, EFI, a large fuel tank, and electronic power steering, all make our ATVs consumer friendly. We also have special two rider models that provide a proper alternative for customers that want to ride double on an ATV. In 2007, we introduced the industry’s first diesel ATV, capable of using biodiesel fuels and in 2008 we introduced the Thundercat 1000, the ATV with the largest displacement engine in the industry. We launched our new value line-up of ATVs in 2011 which included the 350 4X4 automatic and the 425 EFI 4X4 automatic. For model year 2013, we launched a new range of value models which included a 400 4X4 automatic ATV, 450 EFI 4X4 automatic ATV, 500 EFI 4X4 automatic ATV, 400 4X4 automatic TRV and 500 EFI 4X4 automatic TRV. For model year 2014, we launched 2 new value models including a new 500 EFI 4X4 automatic and a new TRV 500 4X4 automatic. The model year 2014 Arctic Cat ATV carry suggested U.S. retail prices ranging from $4,299 to $14,399, excluding youth models which are sold at suggested U.S. retail prices ranging from $2,699 to $3,599.

Side-by-Side Recreational Off-highway Vehicles (“side-by-sides” or “ROVs”)—We introduced our new Prowler utility side-by-side vehicle into the utility segment in 2006. The Prowler is configured with a variety of different engines that range in size from 550cc to 1000cc that are manufactured by us, and also includes a rear cargo box, dual bucket seats as well as our renowned long travel suspension and ride characteristics. In 2011, we launched our first heavy duty utility side-by-side vehicle, the Prowler HDX, with an extended chassis, extra-large cargo box, bench seating and electronic power steering standard. In fiscal 2012, we introduced the all-new Wildcat 1000 sport model ROV. This model is aimed at a rapidly growing segment of the ROV market where consumers are seeking a side-by-side designed vehicle that offers comfort & handling in rough off-highway terrain. In fiscal 2013, we expanded our Wildcat line-up to include a Wildcat 1000 Limited with factory installed accessories, a Wildcat 4 1000 which allows for seating of 4 full sized adults and a Wildcat X 1000 which increases the horse power to +90. In fiscal 2014, we further expanded the Wildcat line-up to include a Wildcat X 1000 Limited, Wildcat 4X 1000 and Wildcat 4X 1000 Limited, all with the high horsepower X engine. We also launched a narrower 50-inch wide, trail-legal platform that allows riders access to authorized ATV trails. In addition to its trail legal capabilities, the Wildcat Trail also offers industry-leading horsepower and suspension, coupled with the lowest price in the 50-plus horsepower segment. We also expanded our HDX utility line-up to include a Prowler HDX 500, which has many of the same features as the Prowler 700 HDX, only with a smaller engine. Currently, we offer a total of seventeen models with retail prices between $10,999 and $23,699. Side-by-side/ROV sales are included with ATV sales for financial reporting purposes.

Awards—We believe our ATVs and ROVs are recognized for their power, durability, utility, suspension and style. In 2010 and 2011 Dirt Trax Magazine named the Arctic Cat 450 4x4 Best-In-Class. Dirt Trax Television named the XC450 4x4 Best Crossover for 2011. ATV Action in May 2011 recognized the Arctic Cat 350 4x4 for “Big 4x4 Performance in a Mid-Size Package at a Small Price.” In December 2012, Dirt Trax magazine awarded the Wildcat 1000 the winner as the Best Extreme Performance side-by-side and also awarded the Prowler 700 HDX the Best Utility side-by-side. In January 2013 ATV & SxS Illustrated named the Prowler 700 HDX the Best Heavy Duty Side-by-Side and stated “Arctic Cat’s Prowler 700 HDX is Cat’s do-it-all machine for the hard working and hard playing crowd.” In September 2013, Dirt Trax Magazine named the Arctic Cat 500 the shoot-out winner over the Can-Am 500 and the Kymco 500.

For the last three fiscal years ended 2014, 2013, and 2012, ATVs and ROVs collectively accounted for 45%, 45%, and 39%, respectively, of our net sales.

International Markets—We have continued to expand into international markets by focusing on new product development, adding new distributors and dealers, entering new geographies, and developing new markets. In July 2005, we acquired a 100% interest in a European company to strengthen our European presence and further expand our ATV model offerings for on-road use, the most prevalent use in Europe. Our snowmobiles are currently sold in all major snowmobile markets.

Parts, Garments and Accessories—We are the exclusive provider of genuine Arctic Cat Snowmobile, ATV and ROV parts, garments and accessories. Replacement parts for all of our current and noncurrent models

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of Snowmobiles, ATVs and ROVs are an important part of our product mix along with maintenance supplies such as oil and fuel additives. We also sell a broad array of accessories such as bumpers, cabs, luggage racks, lights, snow plows, backrests, windshields, wheels, track systems and winch kits that consumers buy to increase their comfort factor, shorten their task or personalize their ride. We recently launched a new line of accessories specifically created for the new Wildcat Trail. During fiscal 2014, we added new accessory options for this exciting new vehicle. In addition to genuine Arctic Cat parts and accessories, we sell market leading brands in various categories such as Fox Float shocks, Speed point attachments and BCA Float Avalanche Airbags.

We offer a full range of snowmobile garments for adults and children under the “Arcticwear” brand. Jackets, coats, pants and casual sportswear items are produced and sold in a wide variety of styles and sizes combining fashion with function. The Arcticwear line of clothing encompasses wearables designed to keep the rider warm and dry during the most demanding snowmobile conditions (insulated outerwear, hats, mittens, helmets, boots) and comfortable relaxing after the ride (sweatshirts, T-shirts, casual wear). The snowmobile garment line includes multiple options with varying levels of performance (insulation warmth, waterproofing, breathability)—to answer consumers’ needs across a broad range of weather conditions.

Four years ago we introduced a second line of insulated outerwear under the “Drift Racing” brand to compete against the aftermarket outerwear manufacturers selling into the snowmobile market. The “Drift Racing” line of outerwear provides riders of multiple brands of snowmobiles a high performing, fashionable outerwear option. Over the last two years we have expanded our Drift Racing line (insulated jackets similar to those worn by the snowmobile racers), have added more general outerwear options to the Arcticwear line (down filled parkas) and expanded our sportswear wearables sold under the “Arcticwear” brand.

For ATV and ROV riders, we manufacture and sell garments under the “Arcticwear ATV Gear” label. This line of clothing is geared toward function and comfort and includes suits, jackets, gloves, helmets, gear bags, sweatshirts, T-shirts and hats. The trend to “wear what you ride” continues to be much stronger with snowmobile consumers than with ATV and ROV consumers. We continue to successfully expand our ATV and ROV clothing lines with more performance-geared clothing to provide more rider comfort.

For the last three fiscal years ended 2014, 2013 and 2012, parts, garments and accessories accounted for 16%, 16% and 18%, respectively, of our net sales.

Manufacturing, Engineering and Research and Development

Arctic Cat snowmobiles, ROVs and most ATVs are manufactured at our facilities in Thief River Falls, Minnesota. A Taiwanese company manufactures our 90cc to 450cc ATVs according to our specifications, and we have strategically identified specific core manufacturing competencies for vertical integration and have chosen outside suppliers to provide other parts. We have developed relationships with selected high quality suppliers in order to obtain access to particular capabilities and technologies outside the scope of our expertise. We often design component parts in cooperation with our suppliers, contract with them for the development of tooling, and then enter into agreements with these suppliers to purchase component parts manufactured utilizing the tooling. In our vertically integrated operations, we manufacture foam seats and machine, weld, and paint other components and then complete the total assembly of most of our products at our facilities in Thief River Falls, Minnesota. Manufacturing operations include robotics as well as digital and computer automated equipment to speed production, reduce costs and improve the quality, fit and finish of every product.

During late fiscal 2005, we began manufacturing select Arctic Cat designed ATV engines as part of a strategic first step in a new engine program. We believe that having the capability to design and manufacture our own ATV engines enables us to offer customers more choices, provide excellent value, lower Japanese yen currency exposure and enhance our long-term competitive position. In 2007, we transitioned our engine manufacturing from the Thief River Falls facility to our facility in St. Cloud, Minnesota.

We have expanded our snowmobile engine design capabilities and work with a variety of suppliers for various engine component parts. In February 2013, we announced an engine supply agreement with Yamaha

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through which we purchase select Yamaha 4-stroke engines. The first engine we received is a 135 horse power 4-stroke engine and was used in our new model year 2014 snowmobiles. We also announced our first snowmobile engine that we will manufacture in our St. Cloud, Minnesota facility. This engine is a 600cc 2-stroke engine and was produced for model year 2014. In addition to purchasing Yamaha engines, we also reached an agreement to build select 4-stroke Yamaha snowmobiles using Yamaha engines. These snowmobiles are built in our Thief River Falls, Minnesota facility and started production during fiscal year 2014.

Since we began snowmobile production, we have followed a build-to-order policy to control inventory levels. Under this policy, we only manufacture a number of snowmobiles equivalent to the orders received from our dealers and distributors, plus a number of uncommitted units used for dealer and market development, in-house testing and miscellaneous promotional purposes.

Most sales of snowmobiles to retail customers begin in the early fall and continue during the winter. Orders by dealers and distributors for each year’s production are placed in the spring following dealer and distributor meetings. Snowmobiles are built commencing in late spring and continuing through late autumn.

Retail sales of ATVs and ROVs occur throughout the year with seasonal highs occurring in the spring and fall. We build and purchase ATVs and build ROVs throughout the year to coincide with dealer and consumer demand.

We are committed to an ongoing engineering and research and development program dedicated to innovation and to continued improvements in the quality and performance of our products as well as new product introduction. We currently employ 160 individuals in the design and development of new and existing products, with an additional 23 individuals directly involved in the testing of snowmobiles, ATVs and ROVs in normal and extraordinary conditions. In addition, these units are tested in conditions and locations similar to those in which they are used. We use computer aided design and manufacturing systems to shorten the time between initial concept and final production. For the fiscal years ended 2014, 2013 and 2012, we spent approximately $23,998,000, $20,693,000 and $17,862,000, respectively, on engineering, research and development. In addition, utilizing their particular expertise, our suppliers regularly test and apply new technologies to the design and production of component parts.

Sales and Marketing

Our products are currently sold through an extensive network of independent dealers located throughout the United States, Canada, and Europe and through distributors representing dealers in Europe, Russia, South America, the Middle East, Asia and other international markets. To promote new dealerships and to service our existing North American dealer network, we also employ district sales managers throughout the United States, Canada and parts of Western Europe.

Our dealers enter into a three year contract and are required to maintain status as an authorized dealer in order to continue selling our products. To obtain and maintain such status, dealers are expected to order a sufficient number of snowmobiles, and/or ATVs and ROVs to adequately service their market area. In addition, the dealers must perform service on these units and maintain satisfactory service performance levels, and their mechanics are expected to complete special training provided by us. Dealers are also expected to carry adequate levels of inventory of genuine Arctic Cat parts, garments and accessories. As is typical in the industry, most of our dealers also sell some combination of motorcycles, marine products, lawn and garden products and other related products.

We utilize distributors in some countries outside the United States and Canada to take advantage of their knowledge and experience in their respective markets and to increase market penetration of our products. Canadian sales are made in Canadian dollars, nearly all of which are financed through a Canadian financial

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institution. Most sales to distributors outside North America are made in U.S. dollars and are supported to some extent by letters of credit or credit insurance. Our European subsidiary sales to its dealers and distributors are denominated in Euros and are supported by credit insurance.

Our sales and marketing efforts are comprised of dealer and consumer promotions, direct advertising and cooperative advertising programs with our dealers. We and many of our distributors conduct dealer shows or other sales events annually in order to introduce the upcoming year’s models and to promote dealer orders. Marketing activities are designed to promote directly to consumers. Products are advertised and promoted by us in consumer magazines, online and through other media. In addition, we engage in extensive dealer cooperative advertising, on a local and national level, whereby we and our dealers share advertising costs. Each season we produce product brochures, point of purchase displays, leaflets, posters and banners, and other promotional items for use by our dealers. We also participate in key regional consumer shows and rallies with dealers and sponsor independent racers who participate in snowmobile races throughout the world. In order for our dealers and distributors to remain price competitive and to reduce retail inventories, we will from time to time make available to them rebate programs, discounts, or other incentives. In order to build brand loyalty we publish online magazines called Pride (snowmobile) and Ride (ATV and ROV).

We place strong emphasis on identifying and addressing the specific needs of our customers by periodically conducting dealer and consumer surveys and focus group meetings. Additionally, we hold many demo rides throughout the year which also allows for direct consumer feedback. We warrant our snowmobiles, ATVs and ROVs under a limited warranty against defects in materials and workmanship for a period generally ranging from six months to one year from the date of retail sale or for a period of 90 days from the date of commercial or rental use. Repairs or replacements under warranty are administered through our dealers and distributors.

Competition

The snowmobile, ATV and ROV markets are highly competitive, based on a number of factors, including performance, ride, suspension, innovation, technology, styling, fit and finish, brand loyalty, reliability, durability, price and distribution. We believe Arctic Cat snowmobiles, ATVs and ROVs are highly regarded by consumers in all of these competitive categories. Certain of our competitors are more diversified and have financial and marketing resources which are substantially greater than ours. For a list of snowmobile and ATV competitors, please see “Industry Background” above.

Regulation

Both federal and state authorities have vigorous environmental control requirements relating to air, water and noise pollution that affect our manufacturing operations. We endeavor to insure that our facilities comply with all applicable environmental regulations and standards.

Certain materials used in snowmobile, ATV and ROV manufacturing that are toxic, flammable, corrosive or reactive are classified by federal and state governments as “hazardous materials.” Control of these substances is regulated by the Environmental Protection Agency (EPA) and various state pollution control agencies, which require reports and inspection of facilities to monitor compliance. Our manufacturing facilities are subject to the regulations promulgated by, and may be inspected by, the Occupational Safety and Health Administration.

The Consumer Product Safety Commission (“CPSC”) has federal oversight over product safety issues related to snowmobiles, ATVs and ROVs and from time to time promulgates rules related to safety. For example, in August 2006, the CPSC issued a Notice of Proposed Rulemaking to establish mandatory safety standards for ATVs. In October 2009, the CPSC issued an Advance Notice of Proposed Rulemaking to establish mandatory safety standards for ROVs. The CPSC has not issued final rules in either of these matters. Under the Consumer Product Safety Improvement Act passed by Congress in August 2008, the prior ATV voluntary standard and certain other safety requirements became a mandatory CPSC standard. Arctic Cat has been and remains in

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compliance with these standards. Various states have also promulgated safety regulations regarding snowmobiles, ATVs and ROVs, none of which have had a materially more burdensome impact on us than CPSC regulations.

The EPA adopted regulations affecting snowmobiles and ATVs for model years 2006 and beyond. We believe that we are and will continue to be in compliance with these regulations. We support balanced and appropriate programs that educate the customer on the safe use of our products and protect the environment.

When we sell our products outside the United States our products are also subject to international laws and regulations related to emissions and safety matters. Europe currently regulates ATV emissions and our products meet such requirements. The European Commission is developing substantial changes to the existing regulations. Although these changes have not been finalized, we anticipate the changes could take effect as early as model year 2016.

We are a member of the International Snowmobile Manufacturers Association (“ISMA”), a trade association formed to promote safety in the manufacture and use of snowmobiles, among other things. The ISMA is currently made up of Arctic Cat, BRP, Yamaha, and Polaris. The ISMA members are also members of the Snowmobile Safety and Certification Committee (“SSCC”), which promulgates voluntary safety standards for snowmobiles. The SSCC standards, which require testing and evaluation by an independent testing laboratory of each model category produced by participating snowmobile manufacturers, have been adopted by the Canadian Ministry of Transport. Following the development of the SSCC standards, the CPSC denied a petition to develop a mandatory federal safety standard for snowmobiles in light of the high degree of adherence to the SSCC standards in the United States. Since our inception, all of our models have complied with the SSCC standards.

We are a member of the Specialty Vehicle Institute of America (“SVIA”), a trade association organized to foster and promote the safe and responsible use of ATVs manufactured and/or distributed throughout the United States and which promulgates voluntary standards for ATVs. Additionally, we are a member of the Recreational Off-highway Vehicle Association (ROHVA), a trade association organized to foster and promote safe and responsible use of recreational off-highway vehicles and which promulgates voluntary standards for ROV’s. We are also a member of the Canadian Off-Highway Vehicle Distributors Council (“COHV”), as well as the All-Terrain Vehicle Industry European Association (“ATVEA”).

Effects of Weather

While from time to time lack of snowfall in a particular region may adversely affect snowmobile retail sales within that region, we work to mitigate this effect by taking snowmobile orders in the spring for the following winter season. In the past, weather conditions have materially affected snowmobile sales and weather conditions may materially affect our future sales of snowmobiles, ATVs, ROVs and parts, garments and accessories.

Employees

At March 31, 2014, we had 1,611 employees, including 319 salaried and 1,292 hourly and production personnel. Our employees are not represented by a union or subject to a collective bargaining agreement. We have never experienced a strike or work stoppage and consider our relations with our employees to be excellent.

Intellectual Property

We patent significant innovations that we consider patentable and we own numerous patents for our snowmobiles, ATVs, ROVs and other products. Additionally we vigorously defend any infringements of our patents. Trademarks are also important to our snowmobile, ATV and related parts, garments and accessories business activities. We believe that our “Arctic Cat” registered trademark is our most significant trademark. Additionally, we have numerous registered trademarks, trade names and logos, both in the United States and internationally.

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Financial Information about Geographic Areas

Financial information regarding domestic and geographic areas is included in Note J, Segment Reporting, of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Available Information

We are subject to the reporting requirements of the Securities Exchange Act of 1934 and its rules and regulations (the “1934 Act”). The 1934 Act requires us to file periodic reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”). Copies of these reports, proxy statements and other information can be read and copied at the SEC Public Reference Room, 100 F Street, N.E., Washington D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a Web site that contains reports, proxy statements, and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s Web site at http://www.sec.gov.

We maintain a Website at www.arcticcat.com, the contents of which are not part of or incorporated by reference into this Annual Report on Form 10-K. We make our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K (and amendments to those reports) available on our Website, free of charge, as soon as reasonably practicable after such reports have been filed with or furnished to the SEC. Our Code of Conduct, as well as any waivers from and amendments to the Code of Conduct that would otherwise be required to be reported on Form 8-K, are also posted on our Website.

8

EXECUTIVE OFFICERS OF REGISTRANT

Name	Age		Position
Claude J. Jordan		58	Chairman, President and Chief Executive Officer
Timothy C. Delmore		60	Chief Financial Officer and Corporate Secretary
Tracy J. Crocker		54	Vice President—General Manager, Parts, Garments and Accessories
Bradley D. Darling		48	Vice President—General Manager, Snowmobile
Paul A. Fisher		57	Vice President—Operations
William J. Nee		53	Vice President—Human Resources
Roger H. Skime		71	Vice President—Snowmobile Research and Development

Mr. Jordan has been our Chairman, President and Chief Executive Officer since September 1, 2012, our Chief Executive Officer and President since January 1, 2011 and was our President and Chief Operating Officer from August 2008 to December 31, 2010. Mr. Jordan has been a director of the Company since August 2010. Prior to joining us, Mr. Jordan worked for The Home Depot, Inc. in Atlanta, Georgia from 2003 to 2008, most recently serving as a Vice President, with responsibility for running the THD At-Home Services, Inc. business. Previously, Mr. Jordan held various management positions at General Electric Company.

Mr. Delmore has been our Chief Financial Officer since 1986 and has been our Corporate Secretary since 1989. Mr. Delmore, a C.P.A. with seven years of prior public accounting experience, joined us in 1985 as Controller.

Mr. Crocker has been our Vice President—General Manager, Parts, Garments and Accessories, since June 1, 2013. Prior to that, he was our Vice President—Special Projects from April 2013 to May 2013 and Vice President—General Manager, All-Terrain Vehicles from March 2012 to March 2013. Prior to joining us, Mr. Crocker worked for Ecolab from 2002 to 2011, serving as Senior Vice President of Ecolab’s Hospitality, Healthcare and Commercial markets businesses. Prior to that he served as Ecolab’s Senior Vice President and General Manager for Latin America and as a division Vice President of Marketing. Before joining Ecolab, he worked in sales and operating roles for Next Generation Network, Nabisco and Pepsi.

Mr. Darling has been our Vice President—General Manager, Snowmobile since January 2011. Prior to that, he was our North American Sales Director since July 2008 and National Sales Manager (Canada) since October 2004. He started with us in May 2000 as District Sales Manager.

Mr. Fisher has been our Vice President—Operations since May 2010. Prior to joining us, Mr. Fisher worked for Ingersoll Rand from 2005 to 2010, where he served as business leader of the Trane Residential Division operations for five years. Before joining Ingersoll Rand, Mr. Fisher was employed by Maytag Corporation for approximately 21 years, most recently as Vice President of Southwest Operations for Maytag’s Hoover Vacuum Division.

Mr. Nee has been our Vice President—Human Resources since August 2010. Prior to joining us, Mr. Nee worked for Express Scripts from September 2008 to April 2010, where he served as Vice President—Human Resources, Operations. Before joining Express Scripts, Mr. Nee was employed as Senior Vice President at Fiskars Brands, Inc. from October 2004 to September 2008. Prior to that, Mr. Nee spent 12 years with Newell Rubbermaid in senior human resources assignments.

Mr. Skime has been our Vice President—Snowmobile Research and Development since our inception in 1983 and has been employed in the snowmobile industry for over 52 years.

9

ITEM 1A. RISK FACTORS

The following are significant factors known to us that could adversely affect our business, financial condition, or operating results, as well as adversely affect the value of an investment in our common stock. These risks could cause our actual results to differ materially from our historical experience and from results predicted by forward-looking statements. All forward-looking statements made by us are qualified by the risks described below. There may be additional risks that are not presently material or known. You should carefully consider each of the following risks and all other information set forth in this Annual Report on Form 10-K.

General economic conditions and other external factors may adversely affect our industry and results of operations.

Companies within the snowmobile, ATV and ROV industries are subject to volatility in operating results due to external factors such as general economic conditions, including high unemployment and economic recession. Specific factors affecting the industry include:

• Overall consumer confidence and the level of discretionary consumer spending;

• Interest rates and related higher dealer floorplan costs;

• Sales incentives and promotional costs;

• Adverse impact on margins due to increases in raw material and transportation costs which companies are unable to pass on to dealers without negatively affecting sales; and

• Fluctuation in foreign currency exchange rates.

Our products are subject to extensive federal and state safety, environmental and other government regulations that may require us to incur expenses or modify product offerings in order to maintain compliance with regulations.

Our products are subject to extensive laws and regulations relating to safety, environmental and other regulations promulgated by the U.S. and Canadian federal governments and individual states and provinces as well as international regulatory authorities. Although we believe that our snowmobiles, ATVs and ROVs have always complied with applicable vehicle safety and emissions standards and related regulations, future regulations may require additional safety standards or emission reductions that would require additional expenses and/or modification of product offerings in order to maintain such compliance. We are unable to predict the ultimate impact of adopted or proposed regulations on our business and operating results.

A significant adverse determination in any material product liability or intellectual property claim against us could adversely affect our operating results or financial condition.

We are subject to legal proceedings and claims which arise in the ordinary course of business. Accidents involving personal injury and property damage may occur in the use of snowmobiles, ATVs and ROVs and claims have been made against us from time to time relating to these accidents. In addition, our products, and the products of our competitors, incorporate significant amounts of intellectual property developed by us and others and, from time to time, parties assert claims against us relating to their intellectual property. It is our policy to vigorously defend against these product liability and intellectual property claims. We have recorded a reserve based on our estimated range of potential exposures to the legal proceedings and claims of which we are aware. Should any judgment or settlement occur that exceeds our estimate, or a new claim arise, we may need to adjust our overall reserve and, depending on the amount, such adjustment could be material and adversely affect our operating results or financial condition.

10

Significant repair and/or replacement with respect to product warranty claims or product recalls could have a material adverse impact on our results of operations.

We provide a limited warranty for a period of six months for our ATVs and ROVs and one year for our snowmobiles. We may provide longer warranties in certain geographical markets as determined by local regulations and market conditions. Although we employ quality control procedures, sometimes a product is distributed which requires repair or replacement. Our standard warranties require us through our dealers to repair or replace defective products during such warranty periods at no cost to the consumer. Historically, product recalls have been administered through our dealers and distributors and have not had a material effect on our business.

Changing weather conditions may reduce demand for certain of our products and negatively impact net sales.

Lack of snowfall in any year in particular regions of North America and Northern Europe may adversely affect snowmobile retail sales and related parts, garments and accessories sales in that region. Weather conditions may materially affect our future sales of snowmobiles, ATVs, ROVs and parts, garments and accessories.

We face intense competition in all product lines, from competitors that have greater financial and marketing resources. Failure to compete effectively against competitors would negatively impact our business and operating results.

The snowmobile, ATV and ROV markets in the United States and Canada are highly competitive. Competition is based upon a number of factors, including performance, ride, suspension, innovation, technology, styling, fit and finish, brand loyalty, reliability, durability, price and distribution. At the dealer level, competition is based on a number of factors including sales and marketing support programs (such as sales incentives and cooperative advertising). Many of our competitors are more diversified and have financial and marketing resources which are substantially greater than ours. In addition, our products compete with other recreational products for the discretionary spending of consumers. If we are not able to effectively compete in this environment, our business and operating results will be negatively impacted.

Termination or interruption of engine and other supply arrangements could have a material adverse effect on our business or results of operations.

In the event that we need to obtain substitute supply arrangements for engine or other raw materials or components for which we rely upon limited sources of supply, alternate supply arrangements may not be available with comparable terms.

Fluctuations in foreign currency rates could result in declines in our reported net sales and net earnings

Our reported net sales and cost of goods sold are subject to fluctuations in foreign currency exchange rates. During fiscal 2014, sales to Canadian dealers comprised 29.5% of total net sales. Sales to European on-road ATV dealers and distributors are made in Euros with the Euro serving as the functional currency. During fiscal 2014, sales to European on-road ATV dealers comprised 5.2% of total net sales. During fiscal 2014, we utilized cash flow hedges to help mitigate the variability in Canadian exchange rate changes relating to Canadian dollar fund transfers to the United States. During fiscal 2014 approximately 10.1% of our total cost of goods sold was purchased from Japanese yen denominated suppliers. The majority of these purchases were made from Suzuki and Yamaha for engines for our snowmobiles. We have an agreement with Suzuki for snowmobile engine purchases to share the impact of fluctuations in the exchange rate between the U.S. dollar and the Japanese yen above and below a fixed range contained in the agreement. A change in foreign currency exchange rates could materially affect our business and operating results.

11

Interruption of dealer floorplan financing could have a material impact on our business operations.

We have agreements with GE Commercial Distribution Finance in the United States and TCF Commercial Finance Canada in Canada to provide snowmobile, ATV and ROV floorplan financing for our North American dealers. These agreements improve our liquidity by financing dealer purchases of our products without requiring substantial use of our working capital. We are paid by the floorplan companies shortly after shipment and as part of our marketing programs we pay the floorplan financing of our dealers for certain set time periods depending on the size of a dealer’s order. While we expect to continue with our current multi-year dealer floorplan arrangements, these arrangements may not remain available or the costs and other terms of new financing arrangements may be significantly less favorable to us than have historically been available.

Termination, interruption or nonrenewal of bank credit agreements could have a material adverse effect on our business or results of operations.

The seasonality of our snowmobile, ATV and ROV production cycles generates significant fluctuations in our working capital requirements during each year. Historically, we have financed our working capital requirements out of available cash balances at the beginning and end of the production cycle and with short-term bank borrowings during the middle of this cycle. While we expect to continue with our current multi-year working capital financing agreement from our lender, working capital financing arrangements may not remain available or the costs and other terms of new financing arrangements may be significantly less favorable to us than have historically been available. In addition, our current bank credit agreement contains covenants which we might be unable to meet in some future period requiring the need for waivers or alternate financing.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results and prevent fraud.

In connection with our annual evaluation of internal control for the fiscal year ended March 31, 2013, we identified a material weakness in our system of internal control. There were no material weaknesses identified in connection with our annual evaluation of internal control for the fiscal year ended March 31, 2014.

A material weakness is a control deficiency, or a combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual and interim financial statements will not be prevented or detected and corrected on a timely basis.

Our efforts to maintain our internal controls may not be successful, and we may be unable to maintain effective controls over our financial processes and reporting in the future and comply with the certification and reporting obligations under Sections 302 and 404 of the Sarbanes-Oxley Act. Further, our remediation efforts may not enable us to avoid material weaknesses in the future. Any failure to maintain effective controls could result in material misstatements that are not prevented or detected and corrected on a timely basis, which could potentially subject us to sanction or investigation by the SEC or other regulatory authorities. Ineffective internal controls could also cause investors to lose confidence in our reported financial information and adversely affect our business and our stock price.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

The following sets forth our material property holdings as of March 31, 2014.

Location	Facility Type / Use	Owned or Leased		Sq. Ft.
Thief River Falls, Minnesota	Manufacturing / Corporate Office		Owned		585,000
Thief River Falls, Minnesota	Warehouse		Owned		25,000
Thief River Falls, Minnesota	Warehouse		Leased		20,000
Bucyrus, Ohio	Distribution Center		Owned		202,000
Winnipeg, Manitoba	Service Center		Leased		9,929
Island Park, Idaho	Test & Development Facility		Owned		3,000
St. Johann, Austria	Administrative/Distribution		Leased		44,409
St. Cloud, Minnesota	Manufacturing		Owned		60,800
Plymouth, Minnesota	Corporate Office		Leased		11,420

The Company believes that the Company’s material property holdings are suitable for the Company’s current operations and purposes.

ITEM 3. LEGAL PROCEEDINGS

Accidents involving personal injury and property damage occur in the use of recreational products. Claims have been made against us from time to time relating to these accidents, and from time to time parties assert claims relating to their intellectual property. It is our policy to vigorously defend against these actions. We are not involved in any legal proceedings which we believe will have the potential for a materially adverse impact on our business or financial condition, results of operations or cash flows. We have recorded a reserve based on our estimated range of potential exposures based on the legal proceedings and claims of which we are aware. Should any settlement occur that exceeds our estimate or a new claim arise, we may need to adjust the overall reserve and, depending on the amount, such adjustment could be material.

We presently maintain product liability insurance on a “per occurrence” basis (with coverage being provided in respect of accidents which occurred during the policy year, regardless of when the related claim is made) in the amount of $10,000,000 in the aggregate, with a $10,000,000 self-insured retention. We believe such insurance is adequate.

ITEM 4. MINE SAFETY DISCLOSURES

None.

13

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on The NASDAQ Global Select Market under the NASDAQ symbol “ACAT.” Quotations below represent the high and low sale prices as reported by NASDAQ. Our stock began trading on NASDAQ on June 26, 1990.

Years ended March 31, Quarterly Prices	2014				2013
	High		Low		High		Low
First Quarter	$	48.84	$	38.19	$	47.46	$	31.42
Second Quarter		59.33		44.99		46.87		34.65
Third Quarter		61.13		47.50		42.77		32.12
Fourth Quarter		59.73		41.00		44.47		33.23

As of May 21, 2014, we had approximately 277 stockholders of record, including the nominee of Depository Trust Company which held 12,631,610 shares of common stock.

Cash Dividends Paid

Cash dividends were declared and paid quarterly from 1995 through the third quarter of fiscal year 2009. In response to the economic recession and to conserve cash, we suspended quarterly cash dividends in the fourth quarter of fiscal 2009. On May 15, 2013 we announced the reinstatement of a $0.10 per share quarterly cash dividend for each quarter of the 2014 fiscal year. On May 15, 2014, we announced the increase of the quarterly cash dividend to shareholders by 25 percent to $0.125 per share to shareholders of record as of May 30, 2014. The dividend is payable on or about June 13, 2014. We continually consider our cash position and projected cash needs in regards to our dividend policy.

Company Purchases of Company Equity Securities

On May 15, 2013, the Company’s Board of Directors approved a $30,000,000 common stock share repurchase program. The share repurchase program does not have an expiration date. The following table presents the total number of shares repurchased during the fourth quarter of fiscal 2014 by fiscal month, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase plan, and the approximate dollar value of shares that may yet be purchased pursuant to our stock repurchase program as of the end of fiscal 2014:

Period	Total Number of Shares Purchased(2)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs(1)
January 1, 2014 - January 31, 2014		235,206	$	42.51		235,206		366,117
February 1, 2014 - February 28, 2014		302,992		44.29		302,992		44,490
March 1, 2014 - March 31, 2014		518		49.48		0		43,587
Total		538,716	$	43.51		538,198		43,587

(1) The Maximum Number of Shares that May Yet Be Purchased for the periods represents the number of shares purchasable at the closing price of the Company’s common stock on the last day of the month under the share repurchase program.

(2) All shares purchased were under the share repurchase program, except 518 shares that were for the exercise and related income taxes for net-settled stock options.

14

We have historically purchased our common stock primarily to offset the dilution created by employee stock option exercises and because the Board of Directors believes investment in our common stock is a good use of our excess cash.

Performance Graph

In accordance with the rules of the SEC, the following performance graph compares the performance of our common stock on The NASDAQ Stock Market to the Standard & Poor’s 500 Index, and to the Recreational Vehicles Index prepared by Hemscott, Inc., of which we are a component. The graph compares on an annual basis the cumulative total shareholder return on $100 invested on March 31, 2009, assumes reinvestment of all dividends and has been adjusted to reflect stock splits. The performance graph is not necessarily indicative of future investment performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Arctic Cat Inc., the S&P 500 Index

and Hemscott—Recreational Vehicles Index

Assumes $100 invested on 3/31/09 in stock or index

Assumes Dividend Reinvested

Fiscal year ended March 31,

	2009		2010		2011		2012		2013		2014
Arctic Cat Inc.	$	100.00	$	283.29	$	406.01	$	1,118.54	$	1,140.99	$	1,257.70
S&P 500 Index		100.00		149.77		173.20		187.99		214.24		261.06
Hemscott—Recreational Vehicles Index		100.00		219.54		320.48		401.65		476.96		663.47

*$100 invested on 3/31/09 in stock or index, including reinvestment of dividends.

Fiscal year ending March 31.

Copyright^© 2014 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

15

ITEM 6. SELECTED FINANCIAL DATA

(In thousands, except per share amounts) Years ended March 31,	2014			2013			2012			2011			2010
OPERATING STATEMENT DATA:
Net sales
Snowmobile & ATV units	$	615,608		$	563,464		$	477,329		$	363,015		$	350,871
Parts, garments & accessories		114,883			108,124			107,939			101,636			99,857
Total net sales		730,491			671,588			585,268			464,651			450,728
Cost of goods sold
Snowmobile & ATV units		506,707			450,291			388,523			302,783			309,217
Parts, garments & accessories		72,705			70,401			66,126			60,359			58,275
Total cost of goods sold		579,412			520,692			454,649			363,142			367,492
Gross profit		151,079			150,896			130,619			101,509			83,236
Operating expenses
Selling & marketing		38,028			37,402			36,549			33,540			33,929
Research & development		23,998			20,693			17,862			15,029			12,926
General & administrative		28,557			32,087			30,318			34,805			35,045
Total operating expenses		90,583			90,182			84,729			83,374			81,900
Operating profit		60,496			60,714			45,890			18,135			1,336
Interest income		30			49			86			107			12
Interest expense		(122	)		(84	)		(8	)		(11	)		(250	)
Earnings before income taxes		60,404			60,679			45,968			18,231			1,098
Income tax expense (benefit)		21,000			20,934			16,027			5,224			(777	)
Net earnings	$	39,404		$	39,745		$	29,941		$	13,007		$	1,875
Net earnings per share
Basic	$	2.97		$	3.02		$	1.79		$	0.71		$	0.10
Diluted	$	2.90		$	2.89		$	1.72		$	0.70		$	0.10
Cash dividends per share	$	0.40		$	—		$	—		$	—		$	—
Weighted average shares outstanding
Basic		13,275			13,155			16,721			18,232			18,220
Diluted		13,598			13,761			17,458			18,539			18,291

As of March 31,	2014		2013		2012		2011		2010
BALANCE SHEET DATA (In thousands):
Cash and short-term investments	$	82,532	$	112,807	$	62,597	$	125,113	$	71,062
Working capital		136,755		132,052		98,825		144,596		125,695
Total assets		342,294		306,145		255,416		272,906		246,084
Long-term debt		—		—		—		—		—
Shareholders’ equity		185,043		174,472		138,472		183,036		167,339

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QUARTERLY FINANCIAL DATA (unaudited)

(In thousands, except per share amounts)	Total Year		First Quarter			Second Quarter		Third Quarter		Fourth Quarter
Net Sales
2014	$	730,491	$	120,768		$	238,525	$	225,790	$	145,408
2013		671,588		111,311			229,030		218,016		113,231
2012		585,268		74,930			204,829		207,021		98,488
Gross Profit
2014	$	151,079	$	29,160		$	61,674	$	40,213	$	20,032
2013		150,896		22,479			64,030		50,798		13,589
2012		130,619		14,275			57,149		47,776		11,419
Net Earnings (Loss)
2014	$	39,404	$	5,468		$	23,365	$	12,120	$	(1,549	)
2013		39,745		2,008			24,959		17,853		(5,075	)
2012		29,941		(2,323	)		21,410		17,028		(6,174	)
Net Earnings (Loss) Per Share
2014 Basic	$	2.97	$	0.41		$	1.75	$	0.90	$	(0.12	)
Diluted		2.90		0.40			1.70		0.89		(0.12	)
2013 Basic		3.02		0.15			1.90		1.35		(0.38	)
Diluted		2.89		0.14			1.80		1.30		(0.38	)
2012 Basic		1.79		(0.13	)		1.18		0.96		(0.49	)
Diluted		1.72		(0.13	)		1.15		0.92		(0.49	)

17

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.

Executive Level Overview

Fiscal 2014 net sales increased 8.8% to $730.5 million from $671.6 million in fiscal 2013. Fiscal 2014 net earnings decreased 0.9% to $39.4 million or $2.90 per diluted share compared to net earnings of $39.7 million or $2.89 per diluted share in fiscal 2013. The increase in net sales was driven by increased net sales in all three product lines. During the fiscal year, gross margins decreased as expected to 20.7% from 22.5% primarily as a result of product mix and unfavorable Canadian currency impact. Operating expenses as a percent of sales decreased to 12.4% and operating profits were $60.5 million versus $60.7 million last year.

During fiscal year 2014, snowmobile sales increased 7.1%, driven primarily by new snowmobile models we launched at the beginning of the year as well as snowmobiles supplied to Yamaha. Our 2014 snowmobile line-up included 10 exciting new models and 2 new engine choices that were well received by dealers and consumers. During the year, we gained the most market share in the industry as our retail sales grew at over 19 percent versus the industry growth rate of 11 percent. Our significant increase in retail sales lowered snowmobile dealer inventory by 9 percent, which should position 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

Our strategic co-branding partnership with Yamaha has exceeded our expectations and contributed to increased volumes and improved operating profits in fiscal 2014 compared to the prior year. We expect to realize greater benefits in the future from this collaboration.

For fiscal year 2015, we are expecting North American snowmobile industry retail sales to continue their growth and expect the market will grow up to 3%. With the launch of 13 new snowmobile models for model year 2015, our expectations are that we will outperform the industry and take market share during the model year 2015 snowmobile season.

During fiscal 2014, ATV/side-by-side sales rose 11.1% to $333.2 million, chiefly due to increased Wildcat sales. Arctic Cat remains focused on further increasing its ATV/side-by-side business as a percent of total sales. During the fiscal year this business accounted for approximately 46 percent of full-year sales. With the successful launch of our Wildcat Trail, we have entered a new growth segment of the sport side-by-side market. When we combine the Wildcat Trail with our other leading Wildcat models, we believe we have a winning proposition in the sport side-by-side market. Our 17% side-by-side retail sales growth, combined with our 3.5% ATV retail sales increase, resulted in North American market shares gains in both categories during fiscal year 2014. Regarding industry retail sales, core ATV industry retail sales for North America increased by 2.6% during fiscal year 2014 and the North American side-by-side market increased 10%. As we look forward to fiscal year 2015, we remain well positioned with new products that were introduced in the last quarter of fiscal year 2014, as well as a strong product pipeline of new products under development. For fiscal year 2015, we are expecting North American ATV industry retail sales will grow up to 2%, and the North American side-by-side industry will show growth in the 6% to 9% range.

Reviewing fiscal 2014 net sales: Snowmobile sales increased 7.1% in fiscal 2014 to $282.4 million from $263.7 million in fiscal 2013. Snowmobiles comprised 39% of our net sales in fiscal 2014. ATV and side-by-side

18

sales increased 11.1% in fiscal 2014 to $333.2 million from $299.8 million in fiscal 2013. ATV and side-by-side net sales comprised 45% of our net sales in fiscal 2014. Parts, garments and accessories sales increased 6.3% in fiscal 2014 to $114.9 million from $108.1 million in fiscal 2013, primarily due to increased snowmobile related parts, as well as Wildcat parts and accessories. Parts, garments and accessories sales were 16% of our net sales in fiscal 2014.

Given our strong cash position, our Board of Directors announced in May 2014 a 25% increase in our quarterly cash dividend to $0.125 from the current $0.10 per share. The increase in our quarterly dividend demonstrates our continuing commitment to increase shareholder value.

Results of Operations

Product Line Sales for the Fiscal Year Ended March 31,

($ in thousands)	2014		Percent of Net Sales			2013		Percent of Net Sales			Change 2014 vs.  2013			2012		Percent of Net Sales			Change 2013 vs.  2012
Snowmobile	$	282,442		38.7	%	$	263,693		39.3	%		7.1	%	$	250,438		42.8	%		5.3	%
ATV		333,166		45.6	%		299,771		44.6	%		11.1	%		226,891		38.8	%		32.1	%
Parts, garments & accessories		114,883		15.7	%		108,124		16.1	%		6.3	%		107,939		18.4	%		0.2	%
Net Sales	$	730,491		100.0	%	$	671,588		100.0	%		8.8	%	$	585,268		100.0	%		14.7	%

Product Line Sales. During fiscal 2014, net sales increased 8.8% to $730.5 million from $671.6 million in fiscal 2013. Snowmobile unit volume increased 13.7%, ATV unit volume increased 11.0%, and parts, garments and accessories sales increased $6.8 million or 6.3%. The increase in net sales was driven by increased net sales in all three product lines led by the sales of Wildcat Trail and Wildcat X side-by-sides. Although snowmobile unit volume increased 13.7%, snowmobile net sales increased only 7.1% due to lower selling prices on snowmobile models built for Yamaha and a weaker Canadian dollar. In addition, increased sales of parts contributed to the sales increase. During fiscal 2013, net sales increased 14.7% to $671.6 million from $585.3 million in fiscal 2012. Snowmobile unit volume increased 3.6%, ATV unit volume increased 22.6%, and parts, garments and accessories sales increased $185,000. The increase in fiscal 2013 net sales was mainly due to increased unit sales of snowmobiles, Wildcat side-by-sides and international ATVs, as well as increased sales of ATV parts and accessories for Wildcat side-by-sides and snowmobiles.

Cost of Goods Sold for the Fiscal Year Ended March 31,

($ in thousands)	2014		Percent of Net Sales			2013		Percent of Net Sales			Change 2014 vs. 2013			2012		Percent of Net Sales			Change 2013 vs. 2012
Snowmobiles & ATV units	$	506,707		69.3	%	$	450,291		67.0	%		12.5	%	$	388,523		66.4	%		15.9	%
Parts, garments & accessories		72,705		10.0	%		70,401		10.5	%		3.3	%		66,126		11.3	%		6.5	%
Total Cost of Goods Sold	$	579,412		79.3	%	$	520,692		77.5	%		11.3	%	$	454,649		77.7	%		14.5	%

Cost of Goods Sold. During fiscal 2014, cost of sales increased 11.3% to $579.4 million from $520.7 million for fiscal 2013. Fiscal 2014 snowmobile and ATV unit cost of sales increased 12.5% to $506.7 million from $450.3 million due primarily to increased sales. The unit cost of sales as a percentage of sales increased to 82.3% from 79.9% primarily due to anticipated lower selling prices on snowmobile models built for Yamaha, product mix and a weaker Canadian dollar. The fiscal 2014 cost of sales for parts, garments and accessories increased to $72.7 million from $70.4 million for fiscal 2013 due primarily to product mix and

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increased distribution costs. Fiscal 2013 cost of sales increased 14.5% to $520.7 million from $454.6 million for fiscal 2012. Fiscal 2013 snowmobile and ATV unit cost of sales increased 15.9% to $450.3 million from $388.5 million due primarily to increased sales. The unit cost of sales as a percentage of sales improved to 79.9% from 81.4% primarily due to increased unit volume, pricing and product mix. The fiscal 2013 cost of sales for parts, garments and accessories increased to $70.4 million from $66.1 million for fiscal 2012 due primarily to product mix and increased distribution costs.

Gross Profit for the Fiscal Year Ended March 31,

($ in thousands)	2014			2013			Change 2014 vs. 2013			2012			Change 2013 vs. 2012
Gross Profit Dollars	$	151,079		$	150,896			0.1	%	$	130,619			15.5	%
Percentage of Net Sales		20.7	%		22.5	%		(1.8	)%		22.3	%		0.2	%

Gross Profit. Gross profit increased 0.1% to $151.1 million in fiscal 2014 from $150.9 million in fiscal 2013. The gross profit percentage for fiscal 2014 decreased to 20.7% versus 22.5% in fiscal 2013. The decrease in the fiscal 2014 gross profit percentage was primarily due to anticipated lower gross margins on snowmobile models built for Yamaha, product mix and a weaker Canadian dollar. Gross profit increased 15.5% to $150.9 million in fiscal 2013 from $130.6 million in fiscal 2012. The gross profit percentage for fiscal 2013 increased to 22.5% versus 22.3% in fiscal 2012. The increase in the fiscal 2013 gross profit percentage was primarily due to increased unit volume, pricing and product mix.

Operating Expenses for the Fiscal Year Ended March 31,

($ in thousands)	2014			2013			Change 2014 vs.  2013			2012			Change 2013 vs.  2012
Selling & Marketing	$	38,028		$	37,402			1.7	%	$	36,549			2.3	%
Research & Development		23,998			20,693			16.0	%		17,862			15.8	%
General & Administrative		28,557			32,087			(11.0	)%		30,318			5.8	%
Total Operating Expenses	$	90,583		$	90,182			0.4	%	$	84,729			6.4	%
Percentage of Net Sales		12.4	%		13.4	%					14.5	%

Operating Expenses. Selling and Marketing expenses increased 1.7% to $38.0 million in fiscal 2014 from $37.4 million in fiscal 2013, primarily due to increased snowmobile and ATV selling and marketing expenses. Selling and Marketing expenses increased 2.3% to $37.4 million in fiscal 2013 from $36.5 million in fiscal 2012, primarily due to increased snowmobile and ATV selling and marketing expenses. Research and Development expenses increased 16.0% to $24.0 million in fiscal 2014 compared to $20.7 million in fiscal 2013, due primarily to higher compensation and development expenses. Research and Development expenses increased 15.8% to $20.7 million in fiscal 2013 compared to $17.9 million in fiscal 2012, due primarily to higher compensation and development expenses. General and Administrative expenses decreased 11.0% to $28.6 million in fiscal 2014 from $32.1 million in fiscal 2013, due primarily to increased Canadian hedge benefits and a $0.8 million reduction in our bad debt reserve. General and Administrative expenses increased 5.8% to $32.1 million in fiscal 2013 from $30.3 million in fiscal 2012, due primarily to decreased Canadian hedge benefits and higher compensation costs.

Net Earnings. Fiscal 2014 net earnings were $39.4 million, or $2.90 per diluted share, versus net earnings of $39.7 million, or $2.89 per diluted share, for fiscal 2013. Net earnings as a percentage of net sales were 5.4% and 5.9% in fiscal 2014 and 2013, respectively. The decreased earnings are attributable to lower gross margins, which are primarily a result of product mix and the unfavorable Canadian currency impact. However, earnings per share were up slightly due to lower outstanding shares driven by our share repurchase program. Fiscal 2013 net earnings were $39.7 million, or $2.89 per diluted share, compared to net earnings of $29.9 million, or $1.72 per share, for fiscal 2012. Net earnings as a percentage of net sales were 5.9% and 5.1% in fiscal 2013 and 2012, respectively. The increased earnings are attributable to improved gross margin and continued efforts to control operating expenses.

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Inflation

Inflation historically has not significantly impacted our business. We generally have been able to offset the impact of increasing costs through a combination of productivity gains and product price increases.

Critical Accounting Policies

The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. We reviewed the development and selection of the critical accounting policies and believe the following are the most critical accounting policies that could have an effect on our reported results. These critical accounting policies and estimates have been reviewed with the Audit Committee of the Board of Directors.

Revenue Recognition

We recognize revenue and provide for estimated marketing and sales incentive costs when products are shipped to dealers and distributors pursuant to their order, the price is fixed and collection is reasonably assured. We have agreements with dealer floorplan finance companies to repurchase products repossessed up to certain limits. Our financial exposure to repurchase products is limited to the difference between the amount paid to the finance company and the resale value of the repossessed products. No material losses have been incurred under these agreements; however, adverse changes in retail sales could cause this situation to change.

Marketing and Sales Incentive Costs

We provide for various marketing and sales incentive costs which are offered to our dealers and consumers at the later of when the revenue is recognized or when the marketing and sales incentive program is approved and communicated. Examples of these costs include: dealer and consumer rebates, dealer floorplan financing assistance and other incentive and promotion programs. Adverse market conditions resulting in lower than expected retail sales or the matching of competitor programs could cause accrued marketing and incentive costs to materially increase if we authorize and communicate new programs to our dealers. We estimate marketing and sales incentive costs based on expected usage and historical experience. The accrual for marketing and sales incentive costs at March 31, 2014 and 2013 was $11.7 million and $12.0 million, respectively, and is included in accrued expenses in our balance sheet. The decrease in this accrual was a result of announced and communicated marketing and sales incentive programs and retail market conditions. To the extent current experience differs with previous estimates the accrued liability for marketing and sales incentives is adjusted accordingly.

Product Warranties

We generally provide a limited warranty to the owner of snowmobiles for 12 months from the date of consumer registration and for six months from the date of consumer registration on ATVs and ROVs. We provide for estimated warranty costs at the time of sale based on historical rates and trends and make subsequent adjustments to this estimate as actual claims become known or the amounts are determinable. Adverse changes in actual warranty costs compared to our initial estimates could cause accrued warranty costs to materially change. The accrual for warranty costs was $19.4 million and $18.7 million at March 31, 2014 and 2013, respectively.

Inventories

We periodically assess inventories for obsolescence and potential excess. This assessment is based primarily on assumptions and estimates regarding future production demands, anticipated changes in technology or design, historical and expected future sales patterns. Our inventories consist of materials and products that are subject to

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changes in our planned production of future snowmobile and ATV products and competitive market conditions which may cause lower of cost or market adjustments to our finished goods inventory. If market conditions or future demand are less favorable than our current expectations, additional inventory write downs or reserves may be required, which could have an adverse effect on our reported results in the period the adjustments are made. Inventory items that are identified as obsolete or excess are reserved on our balance sheet.

Product Liability and Litigation

We are subject to product liability claims and other litigation in the normal course of business. We maintain insurance for product liability claims although we retain a self-insured retention accrual within the balance sheet caption “Insurance” within accrued expenses. The estimated costs resulting from any losses not covered by insurance are charged to operating expenses when it is probable a loss has been incurred and the amount of the loss is reasonably determinable.

We utilize historical trends and other analysis to assist in determining the appropriate loss estimate. Adverse changes in the final determination of product liability or other claims made against us could have a material impact on our financial condition.

Liquidity and Capital Resources

The seasonality of our snowmobile and ATV production cycles generates significant fluctuations in our working capital requirements during the year. The following table represents net sales and ending inventories by each quarter in the fiscal years ended March 31, 2014 and 2013.

($ in thousands)	First		Second		Third		Fourth			Total
2014 Net Sales
Snowmobile	$	22,574	$	135,425	$	118,061	$	6,382		$	282,442
ATV		76,340		72,651		78,234		105,941			333,166
PG&A		21,854		30,449		29,495		33,085			114,883
Total Net Sales	$	120,768	$	238,525	$	225,790	$	145,408		$	730,491
Inventories	$	149,736	$	171,174	$	137,189	$	140,652
2013 Net Sales
Snowmobile	$	17,987	$	128,599	$	122,425	$	(5,318	)	$	263,693
ATV		72,966		69,675		69,561		87,569			299,771
PG&A		20,358		30,756		26,030		30,980			108,124
Total Net Sales	$	111,311	$	229,030	$	218,016	$	113,231		$	671,588
Inventories	$	140,776	$	144,736	$	97,027	$	96,389

Historically, we have financed our working capital requirements out of available cash balances at the beginning and end of the production cycle and with short-term bank borrowings during the middle of the cycle. We believe current available cash and cash generated from operations together with working capital financing through our available line of credit will provide sufficient funds to finance operations on a short and long-term basis. However, there can be no assurance that adequate working capital financing arrangements will remain available or that the costs and other terms of such new financing arrangements will not be significantly less favorable to us than has historically been available.

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Cash and Short-Term Investments

Cash and short-term investments decreased to $82,532,000 at March 31, 2014 from $112,807,000 at March 31, 2013 because of common stock repurchases and increased working capital requirements. Our cash balances traditionally peak early in the fourth quarter and then decrease as working capital requirements increase when our snowmobile and spring ATV production cycles begin. Our investment objectives are first, safety of principal, and second, rate of return.

Financing Arrangements and Cash Flows

The Company entered into a $100,000,000 senior secured revolving credit agreement in November 2013 for documentary and stand-by letters of credit, working capital needs and general corporate purposes, which amended and restated the Company’s prior $60,000,000 senior secured revolving credit agreement. This agreement is scheduled to expire in November 2017. We may borrow up to $100,000,000 during May through November and up to $50,000,000 during all other months of the fiscal year. The total letters of credit issued at March 31, 2014 were $15,938,000.

We have agreements with GE Commercial Distribution Finance in the United States and TCF Commercial Finance Canada in Canada to provide snowmobile, ATV and ROV floorplan financing for our dealers. These agreements improve our liquidity by financing dealer purchases of products without requiring substantial use of our working capital. We are paid by the floorplan companies shortly after shipment and as part of our marketing programs, we pay the floorplan financing of our dealers for certain set time periods depending on the size of a dealer’s order.

The financing agreements require repurchase of repossessed new and unused units and set limits upon our potential liability for annual repurchases. The aggregate potential liability was approximately $62,964,000 at March 31, 2014. We have incurred no material losses under these agreements. We believe current available cash and cash generated from operations provide sufficient funding in the event there is a requirement to perform under these guarantee and repurchase agreements. The financing agreements also have loss sharing provisions should any dealer default whereby the Company shares certain losses with the floorplan finance companies. The maximum potential liability to the Company under these provisions is approximately $2,328,000 at March 31, 2014.

In fiscal 2014, we invested $24,377,000 in capital expenditures. We expect that capital expenditures will increase to approximately $31,000,000 in fiscal 2015. Since 1996, we have repurchased over 17,600,000 shares of our common stock. In May 2013, the Company’s Board of Directors authorized a share repurchase program of up to $30,000,000 of the Company’s common stock. There is approximately $2,083,000 remaining on the Board of Directors’ prior share repurchase program authorizations. We believe that cash generated from operations and available cash and short-term investments will be sufficient to meet our working capital, capital expenditure, and common stock repurchase requirements on a short and long-term basis.

Contractual Obligations

The following table summarizes our significant future contractual obligations at March 31, 2014 (in millions):

	Payment Due by Period
Contractual Obligations	Total		Less than 1 Year		1-3 years		3-5 Years		More than 5 years
Operating Lease Obligations		—		—		—		—		—
Purchase Obligations(1)	$	70.1	$	67.7	$	2.4		—		—
Total Contractual Obligations	$	70.1	$	67.7	$	2.4		—		—

(1) We have outstanding purchase obligations with suppliers and vendors at March 31, 2014 for raw materials and other supplies and services as part of the normal course of business.

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Certain Information Concerning Off-Balance Sheet Arrangements

As of March 31, 2014, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We are, therefore, not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. This Annual Report on Form 10-K, as well as our annual report to shareholders and future filings with the Securities and Exchange Commission, our press releases and oral statements made with the approval of an authorized executive officer, contain forward-looking statements that reflect our current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. The words “aim,” “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions that indicate future events and trends identify forward-looking statements, including statements related to our fiscal 2015 outlook, business strategy and product development. In particular, these include, among others, statements relating to our anticipated capital expenditures, research and development expenditures, product introductions, the effect of weather conditions and dealer ordering processes on our net sales, legal proceedings, the remediation of our material weakness, our expectations regarding financing arrangements, our wholesale and retail sales and market share expectations, inventory levels, industry wholesale and retail sales and demand expectations, depreciation and amortization expense, dividends, sufficiency of funds to finance our operations and capital expenditures, raw material and component supply expectations, adequacy of insurance, and the effect of regulations on us and our industry and our compliance with such regulations. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to the risk factors described in Item 1A of this Annual Report on Form 10-K. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Rates and Interest Rates

During fiscal 2014, approximately 10.1% of our total cost of goods sold was purchased from Japanese yen denominated suppliers. The majority of these purchases were made from Suzuki and Yamaha for engines for our snowmobiles. We have an agreement with Suzuki for snowmobile engine purchases to share the impact of fluctuations in the exchange rate between the U.S. dollar and the Japanese yen above and below a fixed range contained in the agreement. During fiscal 2014, the exchange rate fluctuation between the U.S. dollar and the Japanese yen had a modest positive impact on our operating results.

Sales to Canadian dealers are made in Canadian dollars with the U.S. dollar serving as the functional currency. During fiscal 2014, sales to Canadian dealers comprised 29.5% of total net sales. During fiscal 2014, the exchange rate fluctuation between the U.S. dollar and the Canadian dollar reduced operating income by approximately $6 million compared to an immaterial impact in fiscal 2013. During fiscal 2014, we utilized cash flow hedges to mitigate the variability in Canadian exchange rate changes relating to Canadian dollar fund transfers to the United States. At March 31, 2014, we have Canadian dollar forward exchange contracts outstanding with a notional amount of $89,649,000. Looking forward to fiscal year 2015, we expect the weakness of the Canadian dollar to negatively impact our sales and earnings.

To monitor our Canadian currency exchange rate risks, we use sensitivity analysis, which measures the effect of devaluation of the Canadian dollar. An average unhedged 10% devaluation in the Canadian dollar exchange rate during fiscal 2014 would have reduced our operating income by approximately $17 million.

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Sales to European on-road ATV dealers and distributors are made in Euros with the Euro serving as the functional currency. During fiscal 2014, sales to European on-road ATV dealers comprised 5.2% of total net sales. During fiscal 2014, the exchange rate fluctuation between the U.S. dollar and the Euro had no significant impact on operating profits.

Interest rate market risk is managed for cash and short-term investments by investing in a diversified frequently maturing portfolio consisting of municipal bonds and money market funds that experience minimal volatility. The carrying amount of our short-term investments approximate related fair value and the associated market risk is not deemed to be significant.

We are a party to a secured bank line of credit arrangement under which we currently may borrow an aggregate of up to $100,000,000. The total letters of credit issued, under this arrangement, at March 31, 2014 were $15,938,000. Interest is charged at variable rates based on either LIBOR or the prime rate. Because the interest rate risk related to the line of credit is not deemed to be significant, we do not actively manage this exposure.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements, Notes, and Report of Independent Registered Public Accounting Firm appear on pages 31 through 49. Quarterly financial data appears in Item 6.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures were effective as of March 31, 2014.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of March 31, 2014. In making this assessment, our management used the criteria for effective internal control over financial reporting described in the 1992 “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting was effective as of March 31, 2014.

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The Company’s internal control over financial reporting as of March 31, 2014 has been audited by Grant Thornton LLP, as stated in their report which is included elsewhere herein.

Remediation of Previously Identified Material Weakness over Financial Reporting

Management previously identified and disclosed a material weakness in our internal control over financial reporting as of March 31, 2013. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Deficiencies in internal controls were identified in the following areas: segregation of duties within the information technology environment; the financial reporting process primarily attributable to the adequacy of resources devoted to financial reporting and internal controls; the precision and sufficiency of reviews performed on reconciliations and manual journal entries; the absence of an effective risk assessment over financial reporting; and, ineffective monitoring controls. When considered in the aggregate, these deficiencies constituted a material weakness.

In response to the material weakness we developed and executed a plan with the oversight of the audit committee to remediate the material weakness. We improved the segregation of duties, by reassigning certain responsibilities within the finance department and engaged external experts to assess and improve our financial application security roles to optimize appropriate segregation of duties. We improved our internal control over journal entries by installing controls related to journal entry approval and redesigned processes and controls to ensure a more precise review is performed for manual journal entries and reconciliations. We engaged an independent internal audit firm who assisted us in strengthening our internal controls in the risk assessment area and monitoring, as well as internal control policy and review areas. We tested the implemented and improved controls and found them to be effectively designed and operating, leading us to conclude that the material weakness has been remediated as of March 31, 2014.

Changes in Internal Control over Financial Reporting

Other than with respect to the remediation efforts described above, there have been no changes in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders of

Arctic Cat Inc.

We have audited the internal control over financial reporting of Arctic Cat Inc. (a Minnesota corporation) and subsidiaries (the “Company”) as of March 31, 2014, based on criteria established in the 1992 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report of Internal Control Over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2014, based on criteria established in the 1992 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Company as of and for the year ended March 31, 2014, and our report dated May 30, 2014, expressed an unqualified opinion on those financial statements.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 30, 2014

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information included under the headings “Election of Directors,” “Corporate Governance,” “Audit Committee Report” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held August 7, 2014, is incorporated herein by reference.

Pursuant to instruction 3 to Item 401(b) of Regulation S-K, information as to our executive officers is set forth in Part I of this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information included under the headings “Compensation Discussion and Analysis,” “Corporate Governance—Compensation and Human Resources Committee Interlocks and Insider Participation” and “Executive Compensation and Other Information” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held August 7, 2014, is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information included under the heading “Beneficial Ownership of Capital Stock” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held August 7, 2014, is incorporated herein by reference.

Equity Compensation Plan Information

The following table provides information regarding our Common Stock that may be issued upon the exercise of options, warrants and rights under all of our existing compensation plans as of March 31, 2014, consisting of our 2002 Stock Plan, 2007 Omnibus Stock and Incentive Plan and 2013 Omnibus Stock and Incentive Plan.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options,  warrants and rights (b)		Number of securities remaining available for future issuance  under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		480,837	$	24.95		1,099,500
Equity compensation plans not approved by security holders		N/A		N/A		N/A
Total		480,837	$	24.95		1,099,500

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information included under the headings “Corporate Governance—Policies and Procedures Regarding Related Person Transactions” and “Corporate Governance—Director Independence” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August 7, 2014, is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information included under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm—Audit and Non Audit Fees” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August 7, 2014 is incorporated herein by reference.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of report

1. Financial Statements.

The following consolidated financial statements of the Company and its subsidiaries are filed as part of this Annual Report on Form 10-K:

		Form 10-K Reference Page
(i)	Consolidated Balance Sheets as of March 31, 2014 and 2013		31
(ii)	Consolidated Statements of Operations for the years ended March 31, 2014, 2013 and 2012		32
(iii)	Consolidated Statements of Shareholders’ Equity for the years ended March 31, 2014, 2013 and 2012		33
(iv)	Consolidated Statements of Comprehensive Income for the years ended March 31, 2014, 2013 and 2012.		34
(v)	Consolidated Statements of Cash Flows for the years ended March 31, 2014, 2013 and 2012		35
(vi)	Notes to Consolidated Financial Statements		36-48
(vii)	Report of Independent Registered Public Accounting Firm		49

2. Schedules filed as part of this Annual Report on Form 10-K.

The information required to be disclosed within Schedule II—Valuation and Qualifying Accounts is provided within the Consolidated Financial Statements of the Company, filed as part of this Form 10-K.

3. Exhibits

See Exhibit Index following the financial statements.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized,

	ARCTIC CAT INC.
Date: May 30, 2014	/s/ CLAUDE J. JORDAN Claude J. Jordan Chairman, President and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes Claude J. Jordan and D. Christian Koch as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature	Date
/s/ CLAUDE J. JORDAN	May 30, 2014
Claude J. Jordan President and Chief Executive Officer Chairman of the Board of Directors (Principal Executive Officer)
/s/ TIMOTHY C. DELMORE	May 30, 2014
Timothy C. Delmore Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ STAN ASKREN	May 30, 2014
Stan Askren, Director
/s/ TONY J. CHRISTIANSON	May 30, 2014
Tony J. Christianson, Director
/s/ D. CHRISTIAN KOCH	May 30, 2014
D. Christian Koch, Director
/s/ SUSAN LESTER	May 30, 2014
Susan Lester, Director
/s/ JOSEPH PUISHYS	May 30, 2014
Joseph Puishys, Director
/s/ KENNETH J. ROERING	May 30, 2014
Kenneth Roering, Director
/s/ CHRISTOPHER A. TWOMEY	May 30, 2014
Christopher A. Twomey, Director

30

ARCTIC CAT INC.

CONSOLIDATED BALANCE SHEETS

	March 31,
	2014			2013
ASSETS
Current Assets
Cash and cash equivalents	$	22,524,000		$	35,566,000
Short-term investments		60,008,000			77,241,000
Accounts receivable, less allowances		42,003,000			30,296,000
Inventories		140,652,000			96,389,000
Prepaid expenses		3,815,000			3,032,000
Income taxes receivable		1,323,000			—
Deferred income taxes		14,971,000			16,820,000
Total current assets		285,296,000			259,344,000
Property and Equipment
Machinery, equipment and tooling		181,028,000			160,674,000
Land, building and improvements		29,758,000			29,243,000
		210,786,000			189,917,000
Less accumulated depreciation		154,855,000			144,378,000
		55,931,000			45,539,000
Other assets		1,067,000			1,262,000
	$	342,294,000		$	306,145,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	93,882,000		$	66,599,000
Accrued expenses		54,659,000			55,736,000
Income taxes payable		—			4,957,000
Total current liabilities		148,541,000			127,292,000
Deferred income taxes		8,710,000			4,381,000
Commitments and Contingencies		—			—
Shareholders’ Equity
Preferred stock, par value $1.00; 2,050,000 shares authorized; none issued		—			—
Preferred stock—Series B Junior Participating, par value $1.00; 450,000 shares authorized; none issued		—			—
Common stock, par value $.01; 37,440,000 shares authorized; shares issued and outstanding: 12,882,705 at March 31, 2014 and 2013, 203,682 at March 31, 2013		129,000			132,000
Additional paid-in-capital		—			10,945,000
Accumulated other comprehensive loss		(2,110,000	)		(4,166,000	)
Retained earnings		187,024,000			167,561,000
Total shareholders’ equity		185,043,000			174,472,000
	$	342,294,000		$	306,145,000

The accompanying notes are an integral part of these statements.

31

ARCTIC CAT INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years ended March 31,
	2014			2013			2012
Net sales
Snowmobile & ATV units	$	615,608,000		$	563,464,000		$	477,329,000
Parts, garments, & accessories		114,883,000			108,124,000			107,939,000
Total net sales		730,491,000			671,588,000			585,268,000
Cost of goods sold
Snowmobile & ATV units		506,707,000			450,291,000			388,523,000
Parts, garments, & accessories		72,705,000			70,401,000			66,126,000
Total cost of goods sold		579,412,000			520,692,000			454,649,000
Gross profit		151,079,000			150,896,000			130,619,000
Operating expenses
Selling & marketing		38,028,000			37,402,000			36,549,000
Research & development		23,998,000			20,693,000			17,862,000
General & administrative		28,557,000			32,087,000			30,318,000
Total operating expenses		90,583,000			90,182,000			84,729,000
Operating profit		60,496,000			60,714,000			45,890,000
Other income (expense)
Interest income		30,000			49,000			86,000
Interest expense		(122,000	)		(84,000	)		(8,000	)
Total other income (expense)		(92,000	)		(35,000	)		78,000
Earnings before incomes taxes		60,404,000			60,679,000			45,968,000
Income tax expense		21,000,000			20,934,000			16,027,000
Net earnings	$	39,404,000		$	39,745,000		$	29,941,000
Net earnings per share
Basic	$	2.97		$	3.02		$	1.79
Diluted	$	2.90		$	2.89		$	1.72
Weighted average shares outstanding
Basic		13,275,000			13,155,000			16,721,000
Diluted		13,598,000			13,761,000			17,458,000

The accompanying notes are an integral part of these statements.

32

ARCTIC CAT INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Years ended March 31,	Common Stock						Class B Common Stock						Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
	Shares			Amount			Shares			Amount
Balances at March 31, 2011		12,199,271		$	122,000			6,102,000		$	61,000		$	7,280,000		$	(1,920,000	)	$	177,493,000		$	183,036,000
Exercise of stock options		1,915,071			20,000			—			—			20,210,000			—			—			20,230,000
Tax benefits from stock options exercised		—			—			—			—			10,576,000			—			—			10,576,000
Repurchase of common stock		(1,088,390	)		(11,000	)		—			—			(26,834,000	)		—			—			(26,845,000	)
Repurchase of common stock Class B		—			—			(6,102,000	)		(61,000	)		—			—			(79,618,000	)		(79,679,000	)
Restricted stock awards and units		31,685			—			—			—			—			—			—			—
Restricted stock forfeited		(1,750	)		—			—			—			—			—			—			—
Stock-based compensation expense		—			—			—			—			2,001,000			—			—			2,001,000
Net earnings		—			—			—			—			—			—			29,941,000			29,941,000
Unrealized gain on derivative instruments, net of tax		—			—			—			—			—			1,182,000			—			1,182,000
Foreign currency adjustment		—			—			—			—			—			(1,970,000	)		—			(1,970,000	)
Balances at March 31, 2012		13,055,887			131,000			—			—			13,233,000			(2,708,000	)		127,816,000			138,472,000
Exercise of stock options		554,854			6,000			—			—			5,967,000			—			—			5,973,000
Tax benefits from stock options exercised		—			—			—			—			6,971,000			—			—			6,971,000
Repurchase of common stock		(424,145	)		(5,000	)		—			—			(17,563,000	)		—			—			(17,568,000	)
Restricted stock awards and units		18,211			—			—			—			—			—			—			—
Restricted stock forfeited		(1,125	)		—			—			—			—			—			—			—
Stock-based compensation expense		—			—			—			—			2,337,000			—			—			2,337,000
Net earnings		—			—			—			—			—			—			39,745,000			39,745,000
Unrealized loss on derivative instruments, net of tax		—			—			—			—			—			(305,000	)		—			(305,000	)
Foreign currency adjustment		—			—			—			—			—			(1,153,000	)		—			(1,153,000	)
Balances at March 31, 2013		13,203,682			132,000			—			—			10,945,000			(4,166,000	)		167,561,000			174,472,000
Exercise of stock options		616,951			6,000			—			—			9,701,000			—			—			9,707,000
Tax benefits from stock options exercised		—			—			—			—			7,499,000			—			—			7,499,000
Repurchase of common stock		(958,559	)		(9,000	)		—			—			(30,729,000	)		—			(14,624,000	)		(45,362,000	)
Restricted stock awards and units		21,131			—			—			—			—			—			—			—
Restricted stock forfeited		(500	)		—			—			—			—			—			—			—
Stock-based compensation expense		—			—			—			—			2,584,000			—			—			2,584,000
Net earnings		—			—			—			—			—			—			39,404,000			39,404,000
Unrealized loss on derivative instruments, net of tax		—			—			—			—			—			(241,000	)		—			(241,000	)
Foreign currency adjustment		—			—			—			—			—			2,297,000			—			2,297,000
Dividends ($0.40 per share)		—			—			—			—			—			—			(5,317,000	)		(5,317,000	)
Balances at March 31, 2014		12,882,705		$	129,000			—			—		$	—		$	(2,110,000	)	$	187,024,000		$	185,043,000

The accompanying notes are an integral part of these statements.

33

ARCTIC CAT INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Years ended March 31,
	2014			2013			2012
Net earnings	$	39,404,000		$	39,745,000		$	29,941,000
Other comprehensive income:
Foreign currency translation adjustments		2,297,000			(1,153,000	)		(1,970,000	)
Unrealized gain (loss) on derivative instruments, net of tax		(241,000	)		(305,000	)		1,182,000
Comprehensive income	$	41,460,000		$	38,287,000		$	29,153,000

The accompanying notes are an integral part of these statements.

34

ARCTIC CAT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended March 31,
	2014			2013			2012
Cash flows from operating activities
Net earnings	$	39,404,000		$	39,745,000		$	29,941,000
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization		14,189,000			11,999,000			13,045,000
Loss on the disposal of assets		3,000			50,000			16,000
Deferred income tax expense		6,076,000			1,128,000			1,026,000
Stock-based compensation expense		2,584,000			2,337,000			2,001,000
Changes in operating assets and liabilities
Trading securities		17,232,000			(38,781,000	)		71,954,000
Accounts receivable, less allowances		(10,949,000	)		(3,010,000	)		(4,492,000	)
Inventories		(42,159,000	)		1,584,000			(38,547,000	)
Prepaid expenses		(774,000	)		138,000			864,000
Accounts payable		26,768,000			5,420,000			21,200,000
Accrued expenses		(1,264,000	)		3,020,000			8,585,000
Income taxes		(6,931,000	)		9,054,000			(4,864,000	)
Net cash provided by operating activities		44,179,000			32,684,000			100,729,000
Cash flows from investing activities
Purchases of property and equipment		(24,377,000	)		(16,276,000	)		(14,993,000	)
Proceeds from the sale of assets		36,000			—			201,000
Net cash used in investing activities		(24,341,000	)		(16,276,000	)		(14,792,000	)
Cash flows from financing activities
Proceeds from issuance of common stock		185,000			12,000			4,267,000
Payments for income taxes on net-settled option exercises		(7,652,000	)		(6,206,000	)		(8,973,000	)
Tax benefit from stock option exercises		7,499,000			6,971,000			10,576,000
Dividends paid		(5,317,000	)		—			—
Repurchase of common stock		(28,190,000	)		(5,401,000	)		(81,588,000	)
Net cash used in financing activities		(33,475,000	)		(4,624,000	)		(75,718,000	)
Effect of exchange rate changes on cash and cash equivalents		595,000			(356,000	)		(781,000	)
Net increase (decrease) in cash and cash equivalents		(13,042,000	)		11,428,000			9,438,000
Cash and cash equivalents at beginning of year		35,566,000			24,138,000			14,700,000
Cash and cash equivalents at end of year	$	22,524,000		$	35,566,000		$	24,138,000
Supplemental disclosure of cash payments for:
Income taxes	$	13,892,000		$	8,282,000		$	9,541,000
Interest	$	122,000		$	84,000		$	8,000

Supplemental disclosure of non-cash investing and financing activities:

As of March 31, 2014 and 2013, the unrealized loss on derivative instruments, net of tax was $241,000 and $305,000.

The accompanying notes are an integral part of these statements.

35

ARCTIC CAT INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014, 2013 and 2012

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Arctic Cat Inc. (the “Company”) designs, engineers, manufactures and markets snowmobiles and all-terrain vehicles (ATVs) and recreational off-highway vehicles (“side-by-sides” or “ROVs”) under the Arctic Cat^® brand name, and related parts, garments and accessories principally through its facilities in Thief River Falls, Minnesota. The Company’s products are sold through a network of independent dealers located throughout the United States, Canada, and Europe and through distributors in Europe, Russia, South America, the Middle East, Asia and other international markets.

Use of Estimates

Preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. Actual results could differ from the estimates used by management.

Principles of Consolidation

The consolidated financial statements include the accounts of Arctic Cat Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At times, certain bank deposits may be in excess of federally insured limits. As of March 31, 2014 and 2013, the Company had approximately $11,125,000 and $7,107,000, respectively, of cash located in foreign banks primarily in Europe and Canada.

Fair Values of Financial Instruments

Except where noted, the carrying value of current financial assets and liabilities approximates their fair value, due to their short-term nature.

Short-Term Investments

Short-term investments are reported at fair value. The Company utilizes the specific identification method in accounting for its short-term investments.

Accounts Receivable

The Company’s accounts receivable balance consists of amounts due from its dealers and finance companies. The Company extends credit to its dealers based on an evaluation of the dealers’ financial condition. The Company’s collection exposure relating to accounts receivable amounts due from dealer floorplan finance companies is limited due to the financial strength of the finance companies and provisions of its existing agreements. Accounts receivable is presented net of an allowance for estimated uncollectible amounts due from its dealers. The Company estimates the uncollectible amounts considering numerous factors, mainly historical trends as well as current available information. The Company’s allowance for uncollectible accounts was

36

$1,988,000 and $2,759,000 at March 31, 2014 and 2013, respectively. The activity within the allowance for uncollectible accounts for the three years ended March 31, 2014 was not significant. Accounts receivable amounts written off have been within management’s expectations.

The activity in the allowance for uncollectible accounts for accounts receivable is as follows:

	2014			2013
Balance at beginning of period	$	2,759,000		$	3,421,000
Provisions charged to expense		(872,000	)		621,000
Deductions for amounts written-off		101,000			(1,283,000	)
Balance at end of period	$	1,988,000		$	2,759,000

Inventories

Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method.

Derivative Instruments and Hedging Activities

The Company enters into forward exchange contracts to hedge the variability in foreign exchange rates related to transfers of Canadian dollar funds to the United States of America. The contracts are designated as, and meet the criteria for, cash flow hedges. The Company does not enter into forward contracts for the purpose of trading. Gains and losses on forward contracts are recorded in accumulated other comprehensive income (loss), net of tax, and subsequently reclassified into operating expense upon completing transfers of Canadian dollar funds.

As of March 31, 2014, the Company had open Canadian dollar forward exchange contracts, maturing through March 2014 with notional amounts totaling $89,649,000 and the total net fair value of $424,000 is included in accounts payable. As of March 31, 2013, the Company had open Canadian dollar forward exchange contracts, maturing through December 2013 with notional amounts totaling $39,063,000 and the total net fair value of $41,000 is included in accounts payable. The Company did not enter into any forward contracts in currencies other than the Canadian dollar, in the years ended March 31, 2014 or 2013.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy has been established which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of March 31, 2014 and 2013, the Company’s foreign currency contract fair value was a liability totaling $424,000 and $41,000, respectively, which are considered a Level 2 measurement. The Company utilizes the income approach to measure fair value of foreign currency contracts which is based on significant other observable inputs. The asset or liability is measured at fair value on a recurring basis each reporting period end.

37

Property and Equipment

Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using the straight-line method for all property, equipment and tooling. Repairs and maintenance cost that are considered not to extend the useful life of the property and equipment are expensed as incurred. Tooling is amortized over the life of the product, generally 3-5 years. Estimated service lives range from 15 - 39 years for buildings and improvements and 5 - 7 years for machinery and equipment. Accelerated and straight-line methods are used for income tax reporting.

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets, the carrying value is reduced to the estimated fair value as measured by the associated discounted cash flows. Based on impairment indicators not being present, the Company determined the carrying value of long-lived assets was not impaired.

Intangibles

Identified intangible assets are acquired customer relationships, homologation licenses, and a non-compete agreement. Intangible assets before accumulated amortization were $1,950,000 at March 31, 2014 and 2013. Accumulated amortization was $1,428,000 and $1,345,000 at March 31, 2014 and 2013, respectively. Amortization expense is expected to be approximately $83,000 in fiscal 2015, 2016, 2017, 2018 and 2019.

The changes in the carrying amount of identified intangibles included in other assets for the fiscal years ended March 31, 2014 and 2013 are as follows:

	2014			2013
Balance at beginning of period	$	605,000		$	688,000
Current year amortization		(83,000	)		(83,000	)
Balance at end of period	$	522,000		$	605,000

Product Warranties

The Company generally provides a limited warranty to the owner of snowmobiles for twelve months from the date of consumer registration and for six months on ATVs and ROVs. The Company provides for estimated warranty costs at the time of sale based on historical rates and trends and makes subsequent adjustments to its estimate as actual claims become known or the amounts are determinable. The following represents changes in the Company’s accrued warranty liability for the fiscal years ended March 31,

	2014			2013			2012
Balance at beginning of period	$	18,709,000		$	18,521,000		$	14,049,000
Warranty provision		16,770,000			19,449,000			14,675,000
Warranty claim payments		(16,122,000	)		(19,261,000	)		(10,203,000	)
Balance at end of period	$	19,357,000		$	18,709,000		$	18,521,000

Insurance

The Company is self-insured for employee medical, workers’ compensation, and product liability claims. Specific stop loss coverages are provided for catastrophic claims. Losses and claims are charged to operations when it is probable a loss has been incurred and the amount can be reasonably estimated.

38

Revenue Recognition

The Company recognizes revenue and provides for estimated marketing and sales incentive costs when products are shipped to dealers and distributors pursuant to their order, the price is fixed and collection is reasonably assured. Shipping and handling costs are recorded as a component of costs of goods sold and shipping charges to the dealers are recorded as revenue at the time products are shipped.

Return allowances for parts and accessories are recorded as a reduction of revenue when the products are sold based on the company’s return allowance program and historical experience.

Sales tax collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from the sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes.

Marketing and Sales Incentive Costs

At the time product revenue is recognized the Company provides for various marketing and sales incentive costs which are offered to its dealers and consumers. Examples of these costs, which are recognized as a reduction of revenue when the products are sold, include: dealer and consumer rebates, dealer floor plan financing assistance and other incentive and promotion programs. Generally, the Company records provisions for these marketing programs at the later of when the revenue is recognized or when the sales incentive or marketing program is approved and communicated for products previously shipped. Sales incentives that involve a free product or service delivered to the consumer are recorded as a component of cost of goods sold. The Company estimates the costs of these various incentive and marketing programs at the time of sale or subsequently when programs are approved and communicated based on historical experience. To the extent current experience differs with previous estimates the accrued liability for marketing and sales incentives is adjusted accordingly.

Dealer Holdback

The Company records a dealer holdback program liability at the time certain products are shipped to its dealers. If the products subject to the holdback program are sold within the program time period, the Company refunds a portion of the original sale price, referred to as dealer holdback, to the dealer within the program time period and refunds any remaining balances to its dealers when the program time periods end. The Company’s dealer holdback program liability, included within accounts payable, was $19,448,000 and $17,574,000 as of March 31, 2014 and 2013, respectively.

Research and Development

Research and development costs are expensed as incurred. Research and development expense was $23,998,000, $20,693,000 and $17,862,000 during fiscal 2014, 2013 and 2012, respectively.

Advertising

The Company expenses advertising costs as incurred, except for cooperative advertising obligations arising related to the sale of the Company’s products to its dealers. The estimated cost of cooperative advertising, which the dealer is required to support, is recorded as marketing expense at the time the product is sold. Cooperative advertising was $3,440,000, $3,556,000 and $2,900,000 in fiscal 2014, 2013 and 2012, respectively. Total advertising expense, including cooperative advertising, was $17,562,000, $17,232,000 and $17,225,000 in fiscal 2014, 2013 and 2012, respectively.

Net Earnings Per Share

The Company’s diluted weighted average shares outstanding include common shares and common share equivalents relating to stock options, when dilutive. No options outstanding were excluded from the computation

39

of common share equivalents because they were anti-dilutive during fiscal 2014. Options to purchase 70,470 and 1,131,732 shares of common stock with weighted average exercise prices of $43.79 and $19.99 were outstanding during fiscal 2013 and 2012, respectively, but were excluded from the computation of common share equivalents because they were anti-dilutive.

Weighted average shares outstanding consist of the following for the fiscal years ended March 31:

	2014		2013		2012
Weighted average number of common shares outstanding		13,275,000		13,155,000		16,721,000
Dilutive effect of option plan		323,000		606,000		737,000
Common and potential shares outstanding—diluted		13,598,000		13,761,000		17,458,000

Foreign Currency Translation

The Company’s activities with Canadian dealers are denominated in Canadian currency. The Company’s activities with European on-road ATV dealers and distributors are denominated in the Euro. Assets and liabilities denominated in Canadian currency and the Euro are translated using the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the average foreign exchange rates in effect for the period. Translation gains and losses relating to the Canadian currency are reflected in the results of operations and Euro currency are reflected as a component of other comprehensive income.

Comprehensive Income

Comprehensive income represents net earnings adjusted for the unrealized gain or loss on derivative instruments, and foreign currency translation adjustments and is shown in the consolidated financial statements of comprehensive income.

Segment Reporting

The Company’s operations constitute three operating segments based on its product lines—snowmobile; ATV; and parts, garments and accessories (“PG&A). For purposes of segment reporting the Company aggregates the snowmobile and ATV segments as the segments have similar economic characteristics. Detailed segment information is reported in Note J.

B. SHORT-TERM INVESTMENTS

Trading securities consists of $60,008,000 and $77,241,000, invested in various money market funds at March 31, 2014 and 2013, respectively. All of the trading securities are deemed to be level 1 investments.

C. INVENTORIES

Inventories consist of the following at March 31:

	2014		2013
Raw materials and sub-assemblies	$	52,580,000	$	29,310,000
Finished goods		55,327,000		41,084,000
Parts, garments and accessories		32,745,000		25,995,000
	$	140,652,000	$	96,389,000

40

D. ACCRUED EXPENSES

Accrued expenses consist of the following at March 31:

	2014		2013
Marketing	$	11,671,000	$	11,971,000
Compensation		9,338,000		10,682,000
Warranties		19,357,000		18,709,000
Insurance		7,026,000		9,254,000
Other		7,267,000		5,120,000
	$	54,659,000	$	55,736,000

E. FINANCING

The Company entered into a $100,000,000 senior secured revolving bank agreement in November 2013 for documentary and stand-by letters of credit, working capital needs and general corporate purposes, which amended and restated the Company’s prior $60,000,000 senior secured revolving credit agreement. This agreement is scheduled to expire in November of 2017. Under the agreement, the Company may borrow up to $100,000,000 during May through November and up to $50,000,000 during all other months of the fiscal year. Borrowings under the line of credit bear interest at the greater of the following rates; the prime rate plus 0.75%, the federal funds rate plus 0.50% or the LIBOR for a 30 day interest period plus 1.00%. As of March 31, 2014, the effective rate was 3.50%. All borrowings are collateralized by substantially all of the Company’s assets including all real estate, accounts receivable and inventory. No borrowings from the line of credit were outstanding at March 31, 2014 and 2013. The outstanding letters of credit balances were $15,938,000 and $17,275,000 at March 31, 2014 and 2013, respectively, and borrowings under the line are subject to certain covenants and restrictions on indebtedness, financial guarantees, business combinations and other related items. The Company was in compliance with the terms of the credit agreement as of March 31, 2014. Outstanding letters of credit will be repaid over the following six months in accordance with the credit agreement and any such renewal.

F. RETIREMENT SAVINGS PLAN

The Company’s 401(k) retirement savings plan covers substantially all eligible employees. Employees may contribute up to 50% of their compensation with the Company matching 50% of the employee contributions, up to a maximum of 4% of the employee’s cash compensation capped at $255,000. Matching contributions of $1,035,000 and $889,000 were made in fiscal 2014 and 2013, respectively. The Company match was suspended as of April 1, 2009 and reinstated as of July 1, 2012. The Company can elect to make additional contributions at its discretion. Discretionary contributions of $900,000 were made in fiscal 2012.

G. INCOME TAXES

Arctic Cat’s income before income taxes was generated from its United States and foreign operations as follows:

	For the years ended March 31,
	2014		2013		2012
United States	$	58,655,000	$	60,148,000	$	44,216,000
Foreign		1,749,000		531,000		1,752,000
Income before income taxes	$	60,404,000	$	60,679,000	$	45,968,000

41

Income tax expense consists of the following for the fiscal years ended March 31:

	2014		2013		2012
Current
Federal	$	13,345,000	$	18,624,000	$	14,089,000
State		900,000		937,000		575,000
Foreign		436,000		132,000		337,000
Deferred		6,319,000		1,241,000		1,026,000
	$	21,000,000	$	20,934,000	$	16,027,000

The following is a reconciliation of the federal statutory income tax rate to the effective tax rate for the fiscal years ended March 31:

	2014			2013			2012
Statutory income tax rate		35.0	%		35.0	%		35.0	%
State taxes		1.7			2.2			3.0
Research and other tax credit		(1.0	)		(2.0	)		(1.0	)
Domestic manufacturers deduction		(1.4	)		(1.2	)		(1.0	)
Uncertain tax positions		(0.1	)		(0.2	)		(0.7	)
US subpart F adjustments		0.4			0.4			0.5
Foreign tax rate difference		(0.2	)		(0.1	)		(0.4	)
Stock options		(0.1	)		0.1			(0.5	)
Other		0.5			0.3			—
		34.8	%		34.5	%		34.9	%

The cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes under the liability method are as follows at March 31:

	2014		2013
Current deferred income tax assets
Accrued expenses	$	5,976,000	$	7,907,000
Accrued warranty		6,199,000		6,525,000
Inventory related items		4,175,000		3,106,000
Other		441,000		981,000
Total assets		16,791,000		18,519,000
Current deferred income tax liability
Prepaid expenses		1,349,000		976,000
Other		471,000		723,000
Total liabilities		1,820,000		1,699,000
Net current deferred tax asset	$	14,971,000	$	16,820,000
Non-current deferred income tax liability
Property and equipment	$	8,710,000	$	4,381,000
Non-current deferred tax liability	$	8,710,000	$	4,381,000

At March 31, 2014, approximately $100,000 of the gross deferred tax asset relates to net operating loss carry forward of approximately $400,000 for our foreign subsidiaries. The net operating losses have an indefinite carry-forward period. We expect future taxable income in these jurisdictions to be sufficiently large enough that these carry forward items will be fully realized therefore no valuation allowance has been provided relating to these deferred tax assets.

42

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes potential interest and penalties related to income tax positions as a component of the provision for income taxes on the consolidated statements of operations. The Company had liabilities recorded related to unrecognized tax benefits totaling $2,025,000 and $1,617,000 at March 31, 2014 and 2013, including reserves related to potential interest and penalties of $318,000 and $233,000, respectively. The amount of the liability, net of federal benefits for uncertain state tax positions, at March 31, 2014, if recognized, would affect the Company’s effective tax rate. The Company currently anticipates approximately $143,000 of unrecognized tax benefits will be recognized during the next twelve months. With few exceptions, the Company is no longer subject to federal, state, or foreign income tax examinations for years prior to March 31, 2010. A reconciliation of the amount of unrecognized tax benefits excluding interest and penalties is as follows:

	2014			2013
Balance at beginning of period	$	1,384,000		$	1,381,000
Increases related to prior year tax positions		104,000			317,000
Decreases related to prior year tax positions		(88,000	)		(578,000	)
Increases related to current year tax positions		307,000			264,000
Settlements		—			—
Balance at end of period	$	1,707,000		$	1,384,000

The Company is subject to income taxes in the U.S. federal jurisdiction, and various state jurisdictions, as well as various European jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the relevant tax laws and regulations and require significant judgment to apply.

H. COMMITMENTS AND CONTINGENCIES

Dealer Financing

Finance companies provide the Company’s North American dealers with floorplan financing. The Company has agreements with these finance companies to repurchase certain repossessed products sold to its dealers. At March 31, 2014, the Company was contingently liable under these agreements for a maximum repurchase amount of approximately $62,964,000. The Company’s financial exposure under these agreements is limited to the difference between the amount paid to the finance companies for repurchases and the amount received upon the resale of the repossessed product. Losses incurred under these agreements during the periods presented have not been material. The financing agreements also have loss sharing provisions should any dealer default, whereby the Company shares certain losses with the finance companies. The maximum liability to the Company under these provisions is approximately $2,328,000 at March 31, 2014.

Litigation

The Company is subject to legal proceedings and claims which arise in the ordinary course of business. Accidents involving personal injury and property damage may occur in the use of snowmobiles, ATVs and ROVs. Claims have been made against the Company from time to time relating to these accidents, and from time to time, parties assert claims relating to their intellectual property. It is the Company’s policy to vigorously defend against these actions. The Company is not involved in any legal proceedings which it believes will have the potential for a materially adverse impact on the Company’s business or financial condition, results of operations or cash flows. The Company has recorded a reserve based on its estimated range of potential exposures based on the legal proceedings and claims that it is aware of. Should any settlement occur that exceeds the Company’s estimate or a new claim arise, the Company may need to adjust its overall reserve and, depending on the amount, such adjustment could be material.

43

Leases

The Company leases buildings and equipment under non-cancelable operating leases. Total rent expense under all lease agreements was $1,413,000, $1,111,000 and $875,000 for fiscal 2014, 2013 and 2012, respectively. Future minimum payments, exclusive of other costs required under non-cancelable operating leases at March 31, 2014 are approximately $30,000 in fiscal 2015.

I. SHAREHOLDERS’ EQUITY

Stock Option Plans

The Company has stock-based compensation plans, previously approved by the Company’s shareholders that provide for incentive and non-qualified stock options and restricted stock awards to be granted to directors, officers and other key employees. The stock options granted generally have a five to ten year life, vest over a period of one to three years, and have an exercise price equal to the fair market value of the stock on the date of grant. The stock options are generally subject to accelerated vesting if there is a change in control, as defined in the plans. The restricted stock awards generally vest over a period of two to three years and do not require cash payments from restricted stock award recipients. At March 31, 2014, the Company had 1,099,500 shares of common stock available for grant under the plans.

For the fiscal years ended March 31, 2014, 2013 and 2012, the Company recorded stock-based compensation expense of $2,584,000, $2,337,000 and $2,001,000, respectively, which have been included in general and administrative expenses. The Company’s total stock-based compensation related expense reduced both basic and diluted earnings per share by $0.12, $0.11 and $0.08 for the fiscal years ended March 31, 2014, 2013 and 2012, respectively. At March 31, 2014, the Company had $2,557,000 of unrecognized compensation costs related to non-vested stock options and restricted stock awards that are expected to be recognized over a weighted average period of approximately two years.

The fair value of each stock option award was estimated on the date of grant using the Black-Scholes options pricing model. The following assumptions were used to estimate the fair value of options:

	2014			2013			2012
Assumptions:
Dividend yield		1.0	%		1.0	%		1.0	%
Average term		5 years			5 years			5 years
Volatility		49	%		47	%		42	%
Risk-free rate of return		0.8	%		1.3	%		2.1	%

The weighted average fair value of options granted during each of the following years ended March 31:

	2014		2013		2012
Fair value of options granted	$	16.91	$	23.58	$	6.04

44

Transactions under the plans during each of the three years in the period ended March 31, are summarized as follows:

	Number of Shares under option			Weighted average  exercise price
Outstanding at March 31, 2011		3,300,453		$	14.65
Granted		254,295			15.71
Cancelled		(135,000	)		17.17
Exercised		(1,915,071	)		15.25
Outstanding at March 31, 2012		1,504,677			13.84
Granted		72,532			43.50
Cancelled		(11,705	)		17.78
Exercised		(554,854	)		10.76
Outstanding at March 31, 2013		1,010,650			17.61
Granted		96,209			42.99
Cancelled		(9,071	)		25.68
Exercised		(616,951	)		15.73
Outstanding at March 31, 2014		480,837		$	24.95
Options exercisable at March 31 are as follows:
2012		867,383		$	15.33
2013		648,103		$	16.46
2014		262,734		$	17.83

The following tables summarize information concerning currently outstanding and exercisable stock options at March 31, 2014:

Options Outstanding and Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$6.26 - 9.38		7,800		2.79 years	$	6.26		7,800	$	6.26
9.57 - 13.84		57,164		5.84 years		10.91		57,164		10.91
14.68 - 21.03		227,949		7.14 years		16.00		151,221		16.11
21.96 - 27.69		24,000		9.60 years		24.83		24,000		24.83
33.67 - 43.79		163,924		8.60 years		43.19		22,549		43.48
		480,837		7.54 years	$	24.95		262,734	$	17.83

In August 2013, the Company’s shareholders adopted the 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”). The 2013 Plan permits the granting of stock options, stock appreciation rights, restricted stock and restricted stock units, performance awards, other stock awards and dividend and dividend equivalents. At March 31, 2014, 1,099,500 shares of common stock remain available for issuance under the 2013 Plan.

In August 2007, the Company’s shareholders adopted the 2007 Omnibus Stock and Incentive Plan (the “2007 Plan”, and along with the 2013 Plan, “the Plans”). The terms of the 2007 Plan are substantially identical to those of the 2013 Plan. With the adoption of the 2013 Plan, the Company’s Board of Directors determined no further awards will be granted from the 2007 Plan.

45

Restricted Stock

The 2013 Plan provides for grants of restricted common stock and restricted stock units to executives and key employees of the Company. The restricted common stock and restricted stock units are valued based on the Company’s market value of common stock on the date of grant and the amount of any award is expensed over the requisite service period which approximates two to three years. If grantees are retirement eligible and awards would either fully vest upon retirement or continue to vest after retirement, the full amount of the related expense is recognized upon grant. At March 31, 2014, the Company had 15,700 shares of restricted common stock issued and outstanding and 40,103 unvested restricted stock units outstanding under the 2007 Plan and 500 shares of restricted common stock issued and outstanding under the 2013 Plan. The shares of restricted common stock awarded have voting rights and participate equally in all dividends and other distributions duly declared by the Company’s Board of Directors.

Compensation expenses associated with restricted stock awards totaled $395,000 and $486,000 for March 31, 2014 and 2013, respectively. Compensation expenses associated with restricted stock units totaled $643,000 and $490,000 for March 31, 2014 and 2013, respectively. The Company recognizes the expense for grants of restricted stock and restricted stock units on a straight-line basis in the statement of operations as general and administrative expense based on their fair value over their requisite service periods. At March 31, 2014, unamortized compensation expense of restricted stock totaled $369,000 and of restricted stock units totaled $748,000. The unamortized expense as of March 31, 2014 is expected to be recognized over a weighted-average period of 1.1 years for restricted stock and 1.6 years for restricted stock units.

Restricted stock and restricted stock unit award activity under the Plans for the fiscal years ended March 31, 2014 and 2013 is summarized as follows:

	2014					2013
Restricted Shares	Shares			Weighted- Average Grant  Date Fair Value		Shares			Weighted- Average Grant  Date Fair Value
Non-vested shares at March 31,		42,820		$	19.33		98,568		$	11.61
Awarded		8,000			53.91		8,700			33.73
Vested		(34,120	)		15.66		(63,323	)		9.42
Forfeited		(500	)		41.52		(1,125	)		12.45
Non-vested shares at March 31,		16,200		$	43.45		42,820		$	19.33

	2014					2013
Restricted Stock Units	Shares			Weighted- Average Grant  Date Fair Value		Shares			Weighted- Average Grant  Date Fair Value
Non-vested shares at March 31,		41,607		$	27.35		39,729		$	18.31
Granted		17,976			42.99		15,109			43.21
Vested		(18,263	)		25.16		(13,231	)		18.31
Forfeited		(1,217	)		27.60		—			—
Non-vested shares at March 31,		40,103		$	35.35		41,607		$	27.35

Preferred Stock

The Company’s Board of Directors is authorized to issue 2,500,000 shares of $1.00 par value preferred stock in one or more series, 450,000 shares of which were designated Series B Junior Participating preferred stock in connection with the previous Shareholder Rights Plan. The Board of Directors can determine voting, conversion, dividend and redemption rights and other preferences of each series. No shares have been issued.

46

Share Repurchase Authorization

The Company invested $28,188,000, $5,401,000, and $1,909,000 during fiscal 2014, 2013, and 2012, respectively, to repurchase and cancel 633,816, 149,424, and 119,087 shares of common stock, respectively, pursuant to the Board of Directors’ authorizations. At March 31, 2014, the Board’s authorization to repurchase $2,083,000, or approximately 43,587 shares of common stock, remains outstanding. On May 15, 2013, the Board authorized the repurchase of $30,000,000 or approximately 652,000 shares of common stock.

Class B Common Stock

On December 22, 2011, the Company purchased and cancelled all of the 6,102,000 shares of Arctic Cat Class B common stock outstanding for a purchase price of $79,326,000 from Suzuki Motor Corporation. The Company also incurred fees and related expenses of $353,000 for this purchase. Suzuki had owned all outstanding shares of the Company’s Class B common stock until December 22, 2011.

J. SEGMENT REPORTING

The Company manages each segment based on gross margin and there are no material transactions between the segments. Operating, tax and other expenses are not allocated to individual segments. Additionally, given the crossover of customers, manufacturing and asset management, the Company does not maintain separate balance sheets for each segment. Accordingly, the segment information presented below is limited to sales and margin data.

	Years ended March 31,
	2014		2013		2012
Net sales
Snowmobile & ATV units	$	615,608,000	$	563,464,000	$	477,329,000
Parts, garments, & accessories		114,883,000		108,124,000		107,939,000
Total net sales		730,491,000		671,588,000		585,268,000
Cost of goods sold
Snowmobile & ATV units		506,707,000		450,291,000		388,523,000
Parts, garments, & accessories		72,705,000		70,401,000		66,126,000
Total cost of goods sold		579,412,000		520,692,000		454,649,000
Gross profit
Snowmobile & ATV units		108,901,000		113,173,000		88,806,000
Parts, garments, & accessories		42,178,000		37,723,000		41,813,000
Total gross profit	$	151,079,000	$	150,896,000	$	130,619,000

	Years ended March 31,
	2014		2013		2012
Net sales by product line
Snowmobile units	$	282,442,000	$	263,693,000	$	250,438,000
ATV units		333,166,000		299,771,000		226,891,000
Parts, garments, & accessories		114,883,000		108,124,000		107,939,000
Total net sales	$	730,491,000	$	671,588,000	$	585,268,000

47

	Years ended March 31,
	2014		2013		2012
Net sales by geography, based on location of the customer
United States	$	404,347,000	$	337,250,000	$	292,049,000
Canada		215,631,000		215,569,000		180,608,000
Europe and other		110,513,000		118,769,000		112,611,000
Total net sales	$	730,491,000	$	671,588,000	$	585,268,000

The Company has identifiable long-lived assets with total carrying values of approximately $751,000, $1,533,000 and $1,414,000 at March 31, 2014, 2013 and 2012, respectively, outside the United States in Canada and Europe.

48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders of

Arctic Cat Inc.

We have audited the accompanying consolidated balance sheets of Arctic Cat Inc. (a Minnesota corporation) and subsidiaries (the “Company”) as of March 31, 2014 and 2013, and the related consolidated statements of operations, shareholders’ equity, comprehensive income, and cash flows for each of the three years in the period ended March 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Arctic Cat Inc. and subsidiaries as of March 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of March 31, 2014, based on criteria established in the 1992 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated May 30, 2014, expressed an unqualified opinion thereon.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 30, 2014

49

ARCTIC CAT INC.

EXHIBIT INDEX

Exhibit Number
3.1	Amended and Restated Articles of Incorporation of the Company—incorporated by reference to Exhibit 3(a) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 1997 filed with the SEC on June 30, 1997.
3.2	Amended and Restated By-Laws of the Company—incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 16, 2013.
4.1	Form of specimen common stock certificate—incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File Number 33-34984) filed with the SEC on May 21, 1990.
10.1*	Form of Employment Agreement between the Company and Timothy C. Delmore and Roger H. Skime—incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File Number 33-34984) filed with the SEC on May 21, 1990.
10.2+*	Form of Employment Agreement between the Company and Tracy J. Crocker, Bradley D. Darling, Paul A. Fisher and William J. Nee.
10.3*	2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC August 14, 2007.
10.4*	First Amendment to 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.1 the Registrant’s Current Report on Form 8-K filed with the SEC August 12, 2009.
10.5*	Second Amendment to 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.1 the Registrant’s Current Report on Form 8-K filed with the SEC April 5, 2011.
10.6*	Form of Restricted Stock Unit Agreement for Non-Employee Directors for 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.3 the Registrant’s Current Report on Form 8-K filed with the SEC April 5, 2011.
10.7*	Form of Restricted Stock Unit Agreement for Executive Officers for 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.4 the Registrant’s Current Report on Form 8-K filed with the SEC April 5, 2011.
10.8*	Form of Incentive Stock Option Agreement for 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC August 14, 2007.
10.9*	Form of Non-Qualified Stock Option Agreement for 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC August 14, 2007.
10.10*	Amended Form of Director Non-Qualified Stock Option Agreement for 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.2 the Registrant’s Current Report on Form 8-K filed with the SEC April 5, 2011.
10.11*	Form of Restricted Stock Agreement for 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 7, 2008.
10.12*	Form of Stock-Settled Appreciation Rights Agreement for 2007 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 7, 2008.
10.13*	The Arctic Cat Inc. 2013 Omnibus Stock and Incentive Plan—incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 12, 2013.
10.14*	Form of Director Non-Qualified Stock Option Agreement—incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2013.
10.15*	Form of Executive Officer Non-Qualified Stock Option Agreement—incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2013.

Exhibit Number
10.16*	Form of Executive Officer Incentive Stock Option Agreement—incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2013.
10.17*	Form of Registered Stock Unit Agreement for Non-Employee Directors—incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2013.
10.18*	Form of Restricted Stock Unit Agreement for Executive Officers—incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2013.
10.19*	Form of Stock-Settled Appreciation Rights Agreement—incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2013.
10.20	Vendor Agreement dated October 14, 2009, between the Company, Arctic Cat Sales Inc. and GE Commercial Distribution Finance Corporation—incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on October 20, 2009.
10.21	Amendment No. 1 dated October 20, 2009 to Vendor Agreement between the Company, Arctic Cat Sales, Inc., and GE Commercial Distribution Finance Corporation dated October 14, 2009—incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on October 20, 2009.
10.22	Amended and Restated Loan and Security Agreement, dated as of November 8, 2013, among the Company, certain financial institutions as lenders and Bank of America, N.A. as lender and administrative agent for the lenders—incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on November 15, 2013.
10.23*	Amended and Restated Employment Agreement dated October 27, 2010 between the Company and Claude J. Jordan—incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on October 28, 2010.
10.24	Amendment No. 3 dated September 30, 2010 to Vendor Agreement between the Company, Arctic Cat Sales, Inc., and GE Commercial Distribution Finance Corporation dated October 14, 2009—incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2010.
21.1+	Subsidiaries of the Registrant
23.1+	Consent of Independent Registered Public Accounting Firm
24.1+	Power of Attorney (see signature page)
31.1+	Section 302 Certification of Chief Executive Officer
31.2+	Section 302 Certification of Chief Financial Officer
32.1+	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2+	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101+	Financial statements from the annual report on Form 10-K of the Company for the year ended March 31, 2014, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Shareholders’ Equity, (iv) the Consolidated Statements of Comprehensive Income, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements.

* Management compensatory plan or arrangement

+ Filed with this Annual Report on Form 10-K

EX-10.2

EXHIBIT 10.2

Form of

EMPLOYMENT AGREEMENT

THIS AGREEMENT, is made and entered into as of this      day of             20    , by and between Arctic Cat Inc. (the “Company”) and             (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company desires to retain the services of Executive in the capacity of Vice President of                     , and Executive desires to accept such employment, subject to the supervision of the Chief Executive Officer of the Company and the further terms and conditions set forth herein.

WHEREAS, the Company and Executive acknowledge that they have also entered into a Change in Control Agreement of even date herewith, and that such Change in Control Agreement shall supersede this Agreement and understanding between the parties with respect to termination upon a “Change in Control” as defined therein and any compensation paid to Executive upon such termination.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE I.

DEFINITIONS

1.1 EXECUTIVE means                     .

1.2 COMPANY means Arctic Cat Inc. and all of its subsidiary and affiliated entities and their divisions which now exist or may exist in the future.

1.3 ARCTIC CAT PRODUCTS means any goods or services which the Executive or those under his direct or indirect supervision designed, developed, marketed, promoted, sold, serviced, or provided on behalf of the Company during the last two years in which the Executive was employed by the Company.

1.4 COMPETITIVE PRODUCTS means any product, product line or service (including any component thereof or research to develop information useful in connection with a product or service) that is being designed, developed, manufactured, marketed, or sold by the Company, or with respect to which the Company has acquired Confidential Information which it intends to use in the design, development, manufacture, marketing, or sale of a product or service.

1.5 CUSTOMER means any person or entity (regardless of the legal form of the entity) with whom or with which Executive or those under his direct or indirect supervision, had any direct or indirect contact on behalf of the Company in connection with Arctic Cat Products. Without limiting the generality of the foregoing, the term Customer includes, but is not limited to, dealers, vendors, suppliers, and sponsors.

1.6 CONFLICTING ORGANIZATION means any person or entity (regardless of its legal form) which is engaged in, or about to become engaged in, research or development, production, marketing or selling a Competitive Product, including the Executive if he is engaged in business for himself.

1.7 DISABILITY has two different meanings in this Agreement. For purposes of benefits due under any Company-sponsored disability insurance policy (whether short-term, long-term, or any applicable salary continuation policy provided during any elimination period), the definition of Disability shall conform to the definition provided in such policy. For purposes of any payment made to Executive in excess of the benefits due under any such Company-sponsored disability insurance policy, the definition of Disability shall be at least as restrictive as the applicable definition provided in Code Section 409A.

1.8 INVENTION means all inventions, discoveries, ideas, processes, writings, designs, developments, and improvements, whether or not protectable under the applicable patent, trademark or copyright statutes, of the Executive while employed by the Company.

1.9 CONFIDENTIAL INFORMATION means any information or compilation of information that the Executive learns or develops during the course of Executive’s employment by the Company that derives independent economic value from not being generally known, or readily ascertainable by proper means, by other persons who can obtain economic value from its disclosure or use. It includes, but is not limited to, trade secrets and may relate to such matters as research and development, engineering, drawings and specifications, strategic plans, business methods, non-public financial information, proprietary information pertaining to vendors and customers, product improvement efforts, manufacturing processes, management systems, sales and marketing plans and information, contracts, and pricing.

ARTICLE II.

EMPLOYMENT AND TERM

2.1 EMPLOYMENT. Upon the terms and subject to the conditions set forth in this Agreement, the Company hereby employs Executive as Vice President of                     or in such other capacity as may be determined from time to time by the Board of Directors of the Company, and Executive hereby accepts such employment.

2.2 TERM. Except as otherwise provided in this Agreement, the term of this Agreement shall commence on the date of this Agreement, and shall continue until this Agreement is terminated by either party pursuant to the terms hereof.

ARTICLE III.

COMPENSATION

3.1 BASE SALARY. As compensation for his services to the Company and as compensation for his confidentiality, non-competition and non-solicitation agreement provided in Article IV of this Agreement, Executive shall receive an annual base salary in the amount of                     Dollars ($        ) payable in accordance with the Company’s regular payroll processes (the “Base Salary”). Executive’s Base Salary shall be reviewed by the Compensation and Human Resources Committee of the Company’s Board of Directors on an annual basis, and such committee may (but shall not be obligated to) adjust Executive’s base salary by an amount as it deems appropriate based on a review of certain benchmarking information, including but not limited to, general industry as well as industry specific and other peer company compensation data, as well as recommendations from the Chief Executive Officer.

3.2 ANNUAL INCENTIVE AWARDS. In addition to the Base Salary, Executive shall be entitled to participate in the Company’s annual incentive program offered to the Company’s senior executives. Executive’s annual incentive payout shall range from zero percent (0%) to             (    %) of his Base Salary. The target incentive payout for Executive shall be             percent (    %) of his Base Salary. Payouts made pursuant to this Section 3.2 shall be paid no later than two and a half (2.5) months after the end of the Company’s fiscal year or as soon thereafter as practicable.

3.3 LONG-TERM INCENTIVE COMPENSATION. Effective upon the commencement of the term of this Agreement as set forth in Section 2.2, the Board of Directors has approved grants to Executive of: [specify Awards under 2013 Omnibus Stock and Incentive Plan]. Additional [Awards] may be awarded annually to Executive by the Compensation and Human Resources Committee of the Company’s Board of Directors.

3.4 BENEFITS. Except as the Board of Directors may otherwise provide, Executive shall be entitled to participate in any retirement savings plan, profit sharing plan, life insurance, health insurance, dental insurance, disability insurance or any other fringe benefit plan which the Company may from time to time make available to its salaried senior executives to the extent that Executive’s age, tenure, and title make him eligible to receive those benefits. In addition, Executive will be entitled to four weeks paid vacation and access to the Company’s products at the same or similar level as the Company’s other senior executives. Any of such benefits may be modified or withdrawn by the Company in its discretion during the term of this Agreement to the extent the same are withdrawn or modified or supplemented for other Executives similarly situated.

3.5 RELOCATION. The Company will make available to Executive relocation benefits and prerequisites generally provided to the Company’s senior executives other than the Chief Executive Officer.

3.6 EXPENSES. The Company shall reimburse Executive for all reasonable expenses properly incurred by Executive in the discharge of his duties hereunder upon production of evidence therefore.

ARTICLE IV.

DUTIES OF EXECUTIVE

4.1 SERVICES; DUTIES. Executive shall have the general duties, responsibilities and authority of a Vice President, subject to the power of the Chief Executive Officer and/or the Board of Directors to expand or limit such duties, responsibilities and authority. In addition, Executive will have specific responsibility for certain operations and departments of Company. Executive agrees to loyally perform the duties assigned to Executive from time to time, and all duties associated therewith, to the best of Executive’s abilities, to be familiar with the Company’s policies as they exist from time to time which relate to Executive’s duties, and to abide by the Company’s policies as they exist from time to time.

4.2 CONFIDENTIALITY AND GOOD WILL. Executive acknowledges that the Company has provided or will provide Executive with information concerning its business, products and customers and that the Company entrusts Executive with business relationships, good will and Confidential Information of great value to the Company. Executive assigns to the Company all good will which Executive has or develops with Customers while employed by the Company. Executive agrees that Executive shall treat all information, business relationships, and good will entrusted to Executive by the Company as a fiduciary, and Executive undertakes all of the obligations of a fiduciary to maintain, protect, and continue to develop such information, business relationships, and good will for the benefit of the Company. All documents and tangible items provided to Executive by the Company or created by the Executive for use in connection with Executive’s employment are the property of the Company and shall be held by Executive as a fiduciary on behalf of the Company. Upon termination of Executive’s employment for any reason, Executive shall promptly and without the requirement of a prior demand by the Company, return to the Company all such documents and tangible items, together with all copies, recordings, abstracts, notes, reproductions, or electronic versions of any kind made from or about the documents and tangible items or the information they contain. Executive agrees not to directly or indirectly use or disclose any Confidential Information belonging to the Company for the benefit of anyone other than the Company, either during or after employment, for as long as the information remains Confidential Information.

4.3 NON-SOLICITATION. In recognition of the importance to the Company of its personal relationships, during and for one (1) year following his termination of employment by the Company, for any reason, the Executive agrees that he will not directly or indirectly, on his own behalf or on behalf of any other person, solicit: (i) any Customer with whom he had contact during the two years preceding his termination of employment, for the purpose of directly or indirectly (a) marketing, promoting, or encouraging the use of a Competitive Product; (a) providing advice or assistance in connection with the marketing, promotion or use of a Competitive Product; or (c) attempting to interfere with, or preventing or diverting the sale or purchase of products being designed, developed, sold or marketed by the Company; (ii) the services of any person who is a Company employee or agent to terminate his or her employment or agency with the Company; or (iii) any vendor or supplier which provides an exclusive or unique service or product to the Company for the purpose of obtaining similar products or services.

4.4 NON-COMPETITION. Executive agrees that during the period of Executive’s employment with the Company and for one (1) year following the voluntary or involuntary termination of his employment with the Company for any reason, Executive shall not, directly or indirectly, on his own account or in the service of any other person, firm, corporation or other entity, be employed by, or permit his name to be used by, or engage in or carry on business with, or otherwise be associated in any way with, a Conflicting Organization as a partner, shareholder, director, officer, executive, principal, agent, associate, consultant, or in any other capacity. This Non-Competition Covenant is effective in each of the markets in which the Company markets, designs, develops, promotes, sells, services, or provides the Company products at any time during Executive’s employment with the Company.

4.5 INVENTIONS.

(a) Disclosure and Assignment. Executive agrees to promptly disclose in writing to the Company complete information concerning each and every Invention. Executive, to the extent that he has the legal right to do so, hereby acknowledges that any and all of said Inventions are the exclusive property of the Company and hereby assigns and agrees to assign to the Company any and all of Executive’s right, title and interest in and to any and all of such Inventions. If an Invention does not relate to the existing or reasonably foreseeable business interests of the Company, the Company may, in its sole and unreviewable discretion, release or license the Invention to the Executive upon written request by the Executive. No release or license shall be valid unless in writing signed by an officer of the Company.

(b) Future Inventions. As to any future Inventions made by Executive which relate to the business, products or practices of the Company and which are first conceived or reduced to practice during the term of this Agreement, but which are claimed for any reason to belong to an entity or person other than the Company, Executive agrees to promptly disclose the same in writing to the Company and shall not disclose the same to others if the Company, within twenty (20) days thereafter, shall claim ownership of such Inventions under the terms of this Agreement.

(c) Limitation on Sections 4.5(a) and (b). Pursuant to Minnesota Statute Section 181.78, the provisions of Sections 4.5(a) and (b) shall not apply to any Invention meeting the following conditions:

(i) such Invention was developed entirely on Executive’s own time;

(ii) such Invention was made without the use of any Company equipment, supplies, facility or trade secret information;

(iii) such Invention does not relate (a) directly to the business of the Company, or (b) to the Company’s actual or demonstrably anticipated research or development; and

(iv) such Invention does not result from any work performed by Executive for the Company.

(d) Assistance of Executive. Upon request and without further compensation therefore, but at no expense to Executive, and whether during the term of this Agreement or thereafter, Executive will do all lawful acts, including, but not limited to, the execution of papers and lawful oaths and the giving of testimony, that in the opinion of the Company, its successors and assigns, may be necessary or desirable in obtaining, sustaining, reissuing, extending and enforcing United States and foreign patents, including, but not limited to, design patents, on any and all of such Inventions, and for perfecting, affirming and recording the Company’s complete ownership and title thereto, and to cooperate otherwise in all proceedings and matters relating thereto.

(e) Records. Executive will keep complete, accurate and authentic accounts, notes, data and records of all Inventions in the manner and form requested by the Company. Such accounts, notes, data and records shall be the property of the Company, and, upon its request, Executive will promptly surrender same to it or, if not previously surrendered upon its request or otherwise, Executive will surrender the same, and all copies thereof, to the Company upon the conclusion of her employment.

4.6 UNDERSTANDINGS. Executive acknowledges and agrees that (a) the Company informed him, as part of the offer of employment and prior to his accepting employment with the Company, that a confidentiality, non-competition, and non-solicitation agreement would be required as part of the terms and conditions of his employment; (b) he has carefully considered the restrictions contained in this Agreement; (c) the restrictions in this Agreement are reasonable and will not unduly restrict him in securing other employment in the event of termination.

4.7 REMEDIES. Executive agrees and understands that any breach of any of the covenants or agreements set forth in Article IV of this Agreement will cause the Company irreparable harm for which there is no adequate remedy at law, and, without limiting whatever other rights and remedies the Company may have under this Agreement, Executive consents to the issuance of an injunction by any court of competent jurisdiction in favor of the Company enjoining the breach of any of the aforesaid covenants or agreements. If any or all of the aforesaid covenants or agreements are held to be unenforceable because of the scope or duration of such covenant or agreement, the parties agree that the court making such determination shall have the power to reduce or modify the scope and/or duration of such covenant to the extent that allows the maximum scope and/or duration permitted by applicable law.

4.8 SURVIVAL. The obligations of this Article IV shall survive the expiration or termination of this Agreement.

ARTICLE V.

TERMINATION

5.1 TERMINATION FOR CAUSE. Notwithstanding anything contained in this Agreement to the contrary, the Company shall have the right to immediately terminate the employment of Executive for “Cause” if the Executive shall:

(a) Willfully or materially breach this Agreement or continually fail to perform the duties that the Executive is required to perform under the terms of this Agreement;

(b) Willfully violate other reasonable and substantial rules governing Executive’s performance, including, without limitation, prohibitions against unauthorized use of drugs or alcohol without treatment;

(c) Violate or willfully refuse to obey reasonable instructions of the Chief Executive Officer, the President and Chief Operating Officer and/or the Board of Directors, provided that such instructions are not in violation of this Agreement;

(d) Willfully engage in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise;

(e) In the performance of Executive’s duties under this Agreement, engage in any act of misconduct, including misconduct involving moral turpitude, which is injurious to the Company; or

(f) Be convicted of or plead guilty to any criminal charge or indictment, the nature of which the Company determines, in its sole discretion, has a detrimental impact on the general reputation of the Company.

An act or failure to act is considered “willful” if done or not done with an absence of good faith and without a reasonable belief that the act or failure to act was in the best interests of the Company. In the event of termination for “Cause”, Executive shall not be entitled to any severance payments or any other payments under this Agreement. Executive shall not be terminated for Cause unless and until the Company shall have delivered to Executive a copy of a resolution duly adopted by the Board at a meeting of the Board called and held for such purpose (after reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, Executive’s conduct was Cause and specifying the particulars thereof in detail.

5.2 TERMINATION FOR ANY OTHER REASON. The Executive’s employment shall terminate on the occurrence of any one of the following events:

(a) The occurrence of circumstances that make it impossible or impracticable for the business of the Company to be continued;

(b) The death of the Executive;

(c) The Disability of the Executive unless waived by the Company, where the definition of Disability shall conform to the definition of disability set forth in any Company-sponsored disability insurance policy.

In the event of termination of employment for any reason set forth in Section 5.2 (b) or (c) above, no further compensation or benefits other than any applicable insurance benefits paid in accordance with any Company-sponsored insurance policy shall be paid to Executive. Any payment made to Executive in excess of those provided by any Company-sponsored disability insurance policy shall be paid in accordance with the requirements of and subject to the applicable definitions of Code Section 409A. Notwithstanding anything contained in this Agreement to the contrary, the Company shall have the right to terminate the employment of Executive for any reason, including reasons other than those described in Sections 5.1 or 5.2. In the event of termination by the Company for any reason not constituting Cause or described in Section 5.2, and not in connection with a Change in Control, Executive shall be entitled to the severance payments described in Section 5.5. In the event of a Change in Control, the Change in Control Agreement shall supersede this Agreement and understanding between the parties with respect to termination upon such Change in Control and any compensation paid to Executive upon such termination.

5.3 TERMINATION BY EXECUTIVE FOR GOOD REASON. Notwithstanding anything contained in the

Agreement to the contrary, Executive shall have the right to terminate his employment at any time for “Good Reason.” “Good Reason” shall exist if any of the following events or conditions occurs:

(a) a material change in Executive’s title, position or responsibilities which represents a substantial reduction of the title, position or responsibilities in effect immediately prior to the change; the assignment to Executive of any duties or responsibilities (other than due to a promotion) which are inconsistent with such title, position or responsibilities; any removal of Executive from or failure to reappoint or reelect Executive to any of such positions;

(b) any material breach by the Company of any provision of this Agreement; or

(c) any purported termination of Executive’s employment which is not made pursuant to a Notice of Termination satisfying the requirements Section 5.6 of this Agreement; for purposes of this Agreement, no such purported termination shall be effective.

(d) the relocation of the Company’s principal executive offices to a location more than one hundred miles from Minneapolis/St. Paul, Minnesota or the Company requiring Executive to be based anywhere other than the Company’s principal executive offices except for requiring travel on the Company’s business

In the event of termination of employment by Executive for Good Reason, Executive shall be entitled to the severance payments described in Section 5.5 of this Agreement subject to the limitations contained in Section 5.5.

5.4 TERMINATION BY EXECUTIVE. Executive shall have the right to terminate his employment under this Agreement for any reason. In the event of termination by Executive for any reason not constituting a termination for “Good Reason” (as defined above), the Executive shall not be entitled to any severance payment or any other payments under this Agreement.

5.5 SEVERANCE PAYMENTS. In the event of termination by the Company for any reason not constituting Cause or described in Section 5.2, and not in connection with a Change in Control, or, in the event that the Executive terminates his employment for Good Reason, the Company shall pay to Executive his base salary as defined by Section 3.1 through such date of termination, and, in lieu of any further compensation and benefits under this Agreement, Executive shall be entitled to the following benefits during the “Severance Period” (which Severance Period is defined herein to be the twelve-month period beginning on the date of such termination of Executive’s employment), subject to the limitations contained in this Section 5.5.

(a) During the Severance Period, the Company shall pay to Executive an amount equal to his average annual base salary (exclusive of any bonuses, incentive compensation or income associated with benefits, restricted stock, or stock options of Executive) over the three (3) year period immediately preceding the date of termination or such lesser period as Executive has been employed by the Company; provided that only the amount permitted by Section 409A of the Code, inclusive of Section 401(a)(17) of the Code, shall be paid in equal portions over the course of the first six (6) months of the Severance Period in accordance with the Company’s regular payroll practices, and the balance shall be paid in equal portions over the course of the remaining six (6) months of the Severance Period in accordance with the Company’s regular payroll practices; and

(b) During the Severance Period, the Company shall continue to pay benefits provided to Executive (and to Executive’s dependents and beneficiaries) by the Company immediately prior to the date of termination of employment; provided that if during such Severance Period another employer provides Executive any benefits which are substantially comparable to any of the benefits provided by the Company, the Company’s obligations with respect to such comparable benefits shall cease; and

(c) In the event Executive is entitled to severance benefits, all of Executive’s restricted stock and unexpired stock options, granted under this Agreement or pursuant to any future awards and held by Executive upon termination of employment, shall immediately vest with the options becoming immediately exercisable for one month, after which time the option(s) shall expire.

(d) Notwithstanding anything contained in this Agreement to the contrary, Executive shall be entitled to the

severance pay and benefits described in this Section 5.5 only if (i) on or within thirty (30) days following Executive’s last date of employment Employee signs and does not rescind a Release Agreement in a form prepared by the Company, to include but not be limited to a comprehensive release of all legal claims by Executive in favor of the Company, (ii) Executive fully complies with his confidentiality obligations under Section 4.2 herein, (iii) Executive fully complies with his non-solicitation obligations under Section 4.3 herein, (iv) Executive fully complies with his non-competition obligations under Section 4.4 herein, and (v) Executive fully complies with his disclosure and assignment obligations under Section 4.5 herein. Executive further understands and agrees that if he does not sign the required Release Agreement, if he rescinds the required Release Agreement after signing, or if he does not fully comply with the confidentiality, non-solicitation, non-competition, and/or disclosure and assignment requirements of Sections 4.2, 4.3, 4.4, and 4.5 herein, he will not be entitled to the severance pay or benefits described in this Section 5.5 and will be obligated to return any severance pay and/or benefits already received.

5.6 NOTICE OF TERMINATION. Any purported termination of Executive’s employment by the Company or by Executive shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 6.1. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth a summary of the facts and circumstances claimed to provide a basis for termination of Executive’s employment.

5.7 SURVIVING RIGHTS. Notwithstanding the termination of Executive’s employment, the parties shall be required to carry out any provisions hereof which contemplate performance subsequent to such termination; and such termination shall not affect any liability or other obligation which shall have accrued prior to such termination, including, but not limited to, any liability for loss or damage on account of a prior default.

ARTICLE VI.

GENERAL PROVISIONS

6.1 NOTICE. For the purpose of this Agreement, notices and all other communications provided for shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States first class mail, postage pre-paid, addressed to the last known residence address of Executive or in the case of the Company, to its principal office to the attention of its then Chief Executive Officer, with a copy to its Secretary, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

6.2 COMPLIANCE WITH CODE 409A. If and to the extent that any provision of this Agreement is required to comply with Code Section 409A, the Company shall have the authority, without the consent of the Executive to interpret and/or amend such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Code 409A.

6.3 NO CONFLICTING OBLIGATIONS. Executive represents and warrants to the Company that he is not under, or bound to be under in the future, any obligation to any person, firm, or corporation that is or would be inconsistent or in conflict with this Agreement or would prevent, limit, or impair in any way the performance by him of his obligations hereunder.

6.4 WAIVER, MODIFICATION OR AMENDMENT. No waiver, modification or amendment of any term, condition or provision of this Agreement shall be valid or of any effect unless made in writing, signed by the party to be bound or its duly authorized representative and specifying with particularity the nature and extent of such waiver, modification or amendment. Any waiver by any party of any default of the other shall not affect or impair any right arising from any subsequent default. Nothing herein shall limit the rights and remedies of the parties hereto under and pursuant to this Agreement, except as set forth above.

6.5 ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior agreements and understandings between the parties with respect to such subject matter, whether oral or written; provided that the parties acknowledge that they have also entered into a Change in Control Agreement of even date herewith and that the Change in Control Agreement shall supersede this Agreement and understanding between the parties with respect to termination upon a Change in Control and any compensation paid to Executive upon such termination. In all other respects, this Agreement shall remain in full force and effect in the event of a Change in Control.

6.6 INTERPRETATION. The provisions of this Agreement shall be applied and interpreted in a manner consistent with each other so as to carry out the purposes and intent of the parties hereto, but if for any reason any provision hereof is determined to be unenforceable or invalid, such provision or such part thereof as may be unenforceable or invalid shall be deemed severed from this Agreement and the remaining provisions shall be carried out with the same force and effect as if the severed provision or part thereof had not been a part of this Agreement.

6.7 GOVERNING LAW. This Agreement shall be construed and enforced in accordance with the laws of the State of Minnesota. Executive waives Executive’s rights, if any, to have the laws, including conflict of laws principles, of any jurisdiction other than the State of Minnesota apply to this Agreement. Any dispute arising out of or related to Executive’s employment by the Company or arising out of or related to this Agreement, or any breach or alleged breach hereof, shall be exclusively decided by a state or federal court sitting in the State of Minnesota. Executive hereby irrevocably consents to the personal jurisdiction of the state and federal courts sitting in the State of Minnesota for the purposes of any action arising out of or related to Executive’s employment or this Agreement. Executive waives Executive’s right, if any, to have any disputes between Executive and the Company arising out of or related to Executive’s employment or this Agreement decided in any jurisdiction or venue other than a state or federal court in the State of Minnesota. Executive agrees not to assist, aid, abet, encourage, or participate in any lawsuit or action by any third party arising out of or related to Executive’s employment or this Agreement in any jurisdiction or venue other than a state or federal court in the State of Minnesota.

6.8 SEVERABILITY. In the event that any provision of this Agreement is unenforceable under applicable law, that shall not affect the validity or enforceability of the remaining provisions. In the event that any provision of this Agreement is unenforceable because it is overbroad, vague or otherwise, that provision may be revised by a court sitting in the state of Minnesota to the extent required by applicable law, and may be enforced as revised by the court.

6.9 ASSIGNMENT. Executive acknowledges that Executive’s services are unique and personal. Accordingly, Executive may not assign Executive’s rights or delegate Executive’s duties or obligations under this Agreement. This Agreement shall inure to the benefit of and be enforceable by the Company and any successor or permitted assignee, and may be assigned by the Company to any purchaser of all or substantially all of the Company’s business or assets (by merger, sale of assets, consolidation, acquisition of stock or otherwise) without the consent of Executive, and may otherwise be assigned by the Company only with Executive’s consent.

6.10 CAPTIONS AND HEADINGS. The captions and section headings used in this Agreement are for convenience of reference only, and shall not affect the construction or interpretation of this Agreement or any of the provisions thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the date set forth in Section 2.2 of this Agreement.

COMPANY:
ARCTIC CAT INC.
By:
	Its:

EXECUTIVE:

EX-21.1

EXHIBIT 21.1

ARCTIC CAT INC.

Subsidiaries of the Company (all of which are 100% owned)

Arctic Cat Sales Inc.

Incorporated under the laws of

the State of Minnesota

Arctic Cat Production LLC

organized under the laws of

the State of Minnesota

Arctic Cat Production Support LLC

organized under the laws of

the State of Minnesota

Arctic Cat Shared Services LLC

organized under the laws of

the State of Minnesota

Arctic Cat GmbH

organized under the laws of Austria

Arctic Cat France SARL

organized under the laws of France

Arctic Cat Deutschland GmbH

organized under the laws of Germany

Arctic Cat Italia S.r.l.

organized under the laws of Italy

Arctic Cat Espana S.L.

organized under the laws of Spain

Arctic Cat UK Ltd

organized under the laws of United Kingdom

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated May 30, 2014, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of Arctic Cat Inc. and subsidiaries on Form 10-K for the year ended March 31, 2014. We hereby consent to the incorporation by reference of said reports in the Registration Statements of Arctic Cat Inc. on Forms S-8 (File No. 333-99253, File No. 333-145784, File No. 333-163209 and File No. 333-192195).

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 30, 2014

EX-31.1

EXHIBIT 31.1

302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Claude J. Jordan, certify that:

1. I have reviewed this annual report on Form 10-K of Arctic Cat Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 30, 2014 /s/ CLAUDE J. JORDAN   Claude J. Jordan, Chairman, President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

302 CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Timothy C. Delmore, certify that:

1. I have reviewed this annual report on Form 10-K of Arctic Cat Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 30, 2014 /s/ TIMOTHY C. DELMORE   Timothy C. Delmore, Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18U.S.C. Section 1350, as Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. §1350 (as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, Claude J. Jordan, the Chief Executive Officer of Arctic Cat Inc. (the “Company”), hereby certify that the Annual Report on Form 10-K of the Company for the year ended March 31, 2014(the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: May 30, 2014 /s/ CLAUDE J. JORDAN   Claude J. Jordan, Chairman, President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to 18U.S.C. Section 1350, as Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. §1350 (as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, Timothy C. Delmore, the Chief Financial Officer of Arctic Cat Inc. (the “Company”), hereby certify that the Annual Report on Form 10-K of the Company for the year ended March 31, 2014(the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: May 30, 2014 /s/ TIMOTHY C. DELMORE   Timothy C. Delmore, Chief Financial Officer

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Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate (Detail)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Income Tax Disclosure [Abstract]
Statutory income tax rate	35.00%	35.00%	35.00%
State taxes	1.70%	2.20%	3.00%
Research and other tax credit	(1.00%)	(2.00%)	(1.00%)
Domestic manufacturers deduction	(1.40%)	(1.20%)	(1.00%)
Uncertain tax positions	(0.10%)	(0.20%)	(0.70%)
US subpart F adjustments	0.40%	0.40%	0.50%
Foreign tax rate difference	(0.20%)	(0.10%)	(0.40%)
Stock options	(0.10%)	0.10%	(0.50%)
Other	0.50%	0.30%
Reconciliation of federal income tax rate, total	34.80%	34.50%	34.90%

XML

Summary of Information Concerning Currently Outstanding and Exercisable Stock Options (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding	480,837
Weighted Average Remaining Contractual Life	7 years 6 months 15 days
Weighted Average Exercise Price	$ 24.95
Number Exercisable	262,734	648,103	867,383
Weighted Average Exercise Price	$ 17.83	$ 16.46	$ 15.33
6.26-9.38
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 6.26
Range of Exercise Prices, Maximum	$ 9.38
Number Outstanding	7,800
Weighted Average Remaining Contractual Life	2 years 9 months 15 days
Weighted Average Exercise Price	$ 6.26
Number Exercisable	7,800
Weighted Average Exercise Price	$ 6.26
9.57-13.84
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 9.57
Range of Exercise Prices, Maximum	$ 13.84
Number Outstanding	57,164
Weighted Average Remaining Contractual Life	5 years 10 months 2 days
Weighted Average Exercise Price	$ 10.91
Number Exercisable	57,164
Weighted Average Exercise Price	$ 10.91
14.68-21.03
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 14.68
Range of Exercise Prices, Maximum	$ 21.03
Number Outstanding	227,949
Weighted Average Remaining Contractual Life	7 years 1 month 21 days
Weighted Average Exercise Price	$ 16.00
Number Exercisable	151,221
Weighted Average Exercise Price	$ 16.11
21.96-27.69
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 21.96
Range of Exercise Prices, Maximum	$ 27.69
Number Outstanding	24,000
Weighted Average Remaining Contractual Life	9 years 7 months 6 days
Weighted Average Exercise Price	$ 24.83
Number Exercisable	24,000
Weighted Average Exercise Price	$ 24.83
33.67-43.79
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 33.67
Range of Exercise Prices, Maximum	$ 43.79
Number Outstanding	163,924
Weighted Average Remaining Contractual Life	8 years 7 months 6 days
Weighted Average Exercise Price	$ 43.19
Number Exercisable	22,549
Weighted Average Exercise Price	$ 43.48

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Summary of Weighted Average Fair Value of Options Granted (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Fair value of options granted	$ 16.91	$ 23.58	$ 6.04

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Components of Inventories (Detail) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Inventories [Abstract]
Raw materials and sub-assemblies	$ 52,580,000	$ 29,310,000
Finished goods	55,327,000	41,084,000
Parts, garments and accessories	32,745,000	25,995,000
Inventory, Total	$ 140,652,000	$ 96,389,000

XML

SHAREHOLDERS' EQUITY (Tables)

12 Months Ended

Mar. 31, 2014

Assumptions Used to Determine Fair Value of Stock Options Issued

The following assumptions were used to estimate the fair value of options:

	2014			2013			2012
Assumptions:
Dividend yield		1.0	%		1.0	%		1.0	%
Average term		5 years			5 years			5 years
Volatility		49	%		47	%		42	%
Risk-free rate of return		0.8	%		1.3	%		2.1	%

Summary of Weighted Average Fair Value of Options Granted

The weighted average fair value of options granted during each of the following years ended March 31:

	2014		2013		2012
Fair value of options granted	$	16.91	$	23.58	$	6.04

Stock Option Activity

Transactions under the plans during each of the three years in the period ended March 31, are summarized as follows:

	Number of Shares under option			Weighted average  exercise price
Outstanding at March 31, 2011		3,300,453		$	14.65
Granted		254,295			15.71
Cancelled		(135,000	)		17.17
Exercised		(1,915,071	)		15.25
Outstanding at March 31, 2012		1,504,677			13.84
Granted		72,532			43.50
Cancelled		(11,705	)		17.78
Exercised		(554,854	)		10.76
Outstanding at March 31, 2013		1,010,650			17.61
Granted		96,209			42.99
Cancelled		(9,071	)		25.68
Exercised		(616,951	)		15.73
Outstanding at March 31, 2014		480,837		$	24.95
Options exercisable at March 31 are as follows:
2012		867,383		$	15.33
2013		648,103		$	16.46
2014		262,734		$	17.83

Outstanding and Exercisable Stock Options

Stock Option Activity

The following tables summarize information concerning currently outstanding and exercisable stock options at March 31, 2014:

Options Outstanding and Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$6.26 - 9.38		7,800		2.79 years	$	6.26		7,800	$	6.26
9.57 - 13.84		57,164		5.84 years		10.91		57,164		10.91
14.68 - 21.03		227,949		7.14 years		16.00		151,221		16.11
21.96 - 27.69		24,000		9.60 years		24.83		24,000		24.83
33.67 - 43.79		163,924		8.60 years		43.19		22,549		43.48
		480,837		7.54 years	$	24.95		262,734	$	17.83

Restricted Stock Award

Restricted Stock Activity

Restricted stock and restricted stock unit award activity under the Plans for the fiscal years ended March 31, 2014 and 2013 is summarized as follows:

	2014					2013
Restricted Shares	Shares			Weighted- Average Grant  Date Fair Value		Shares			Weighted- Average Grant  Date Fair Value
Non-vested shares at March 31,		42,820		$	19.33		98,568		$	11.61
Awarded		8,000			53.91		8,700			33.73
Vested		(34,120	)		15.66		(63,323	)		9.42
Forfeited		(500	)		41.52		(1,125	)		12.45
Non-vested shares at March 31,		16,200		$	43.45		42,820		$	19.33

Restricted Stock Units

Restricted Stock Activity

	2014					2013
Restricted Stock Units	Shares			Weighted- Average Grant  Date Fair Value		Shares			Weighted- Average Grant  Date Fair Value
Non-vested shares at March 31,		41,607		$	27.35		39,729		$	18.31
Granted		17,976			42.99		15,109			43.21
Vested		(18,263	)		25.16		(13,231	)		18.31
Forfeited		(1,217	)		27.60		—			—
Non-vested shares at March 31,		40,103		$	35.35		41,607		$	27.35

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Schedule of Segment Information (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Segment Reporting Information [Line Items]
Net sales	$ 730,491,000	$ 671,588,000	$ 585,268,000
Cost of goods sold	579,412,000	520,692,000	454,649,000
Gross profit	151,079,000	150,896,000	130,619,000
United States
Segment Reporting Information [Line Items]
Net sales	404,347,000	337,250,000	292,049,000
Canada
Segment Reporting Information [Line Items]
Net sales	215,631,000	215,569,000	180,608,000
Europe and other
Segment Reporting Information [Line Items]
Net sales	110,513,000	118,769,000	112,611,000
Snowmobile units - Product line
Segment Reporting Information [Line Items]
Net sales	282,442,000	263,693,000	250,438,000
ATV units - Product line
Segment Reporting Information [Line Items]
Net sales	333,166,000	299,771,000	226,891,000
Parts, garments & accessories - Product line
Segment Reporting Information [Line Items]
Net sales	114,883,000	108,124,000	107,939,000
Snowmobile & ATV units
Segment Reporting Information [Line Items]
Net sales	615,608,000	563,464,000	477,329,000
Cost of goods sold	506,707,000	450,291,000	388,523,000
Gross profit	108,901,000	113,173,000	88,806,000
Parts, garments & accessories
Segment Reporting Information [Line Items]
Net sales	114,883,000	108,124,000	107,939,000
Cost of goods sold	72,705,000	70,401,000	66,126,000
Gross profit	$ 42,178,000	$ 37,723,000	$ 41,813,000

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Schedule of Unrecognized Tax Benefits (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Reconciliation Of Unrecognized Tax Benefits Excluding Amounts Pertaining To Examined Tax Returns [Roll Forward]
Balance at beginning of period	$ 1,384,000	$ 1,381,000
Increases related to prior year tax positions	104,000	317,000
Decreases related to prior year tax positions	(88,000)	(578,000)
Increases related to current year tax positions	307,000	264,000
Settlements
Balance at end of period	$ 1,707,000	$ 1,384,000

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Schedule of Income Before Income Tax (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Income Tax Disclosure [Abstract]
United States	$ 58,655,000	$ 60,148,000	$ 44,216,000
Foreign	1,749,000	531,000	1,752,000
Earnings before incomes taxes	$ 60,404,000	$ 60,679,000	$ 45,968,000

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Option Transaction Under Plans (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Shares under option, Outstanding beginning balance	1,010,650	1,504,677	3,300,453
Number of Shares under option, Granted	96,209	72,532	254,295
Number of Shares under option, Cancelled	(9,071)	(11,705)	(135,000)
Number of Shares under option, Exercised	(616,951)	(554,854)	(1,915,071)
Number of Shares under option, Outstanding ending balance	480,837	1,010,650	1,504,677
Weighted average exercise price, Outstanding beginning balance	$ 17.61	$ 13.84	$ 14.65
Number of Shares under option, Options exercisable	262,734	648,103	867,383
Weighted average exercise price, Granted	$ 42.99	$ 43.50	$ 15.71
Weighted average exercise price, Cancelled	$ 25.68	$ 17.78	$ 17.17
Weighted average exercise price, Exercised	$ 15.73	$ 10.76	$ 15.25
Weighted average exercise price, Outstanding ending balance	$ 24.95	$ 17.61	$ 13.84
Weighted average exercise price, Options exercisable	$ 17.83	$ 16.46	$ 15.33

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Statement Of Cash Flows [Abstract]
Unrealized gain (loss) on derivative instruments, net of tax	$ (241,000)	$ (305,000)	$ 1,182,000

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Commitments and Contingencies - Additional Information (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Loss Contingencies [Line Items]
Maximum repurchase amount repossessed products sold to dealers	$ 62,964,000
Total rent expense under lease agreement	1,413,000	1,111,000	875,000
Future minimum payments, exclusive of other costs required under non-cancelable operating leases for fiscal year 2015	30,000
Loss Sharing Provisions
Loss Contingencies [Line Items]
Maximum repurchase amount repossessed products sold to dealers	$ 2,328,000

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Changes in Carrying Amount of Identified Intangibles (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Intangible Assets [Abstract]
Balance at beginning of period	$ 605,000	$ 688,000
Current year amortization	(83,000)	(83,000)
Balance at end of period	$ 522,000	$ 605,000

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Schedule of Allowance for Uncollectible Accounts for Accounts Receivable (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Receivables [Abstract]
Balance at beginning of period	$ 2,759,000	$ 3,421,000
Provisions charged to expense	(872,000)	621,000
Deductions for amounts written-off	101,000	(1,283,000)
Balance at end of period	$ 1,988,000	$ 2,759,000

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Shareholders' Equity - Additional Information (Detail) (USD $)	0 Months Ended	12 Months Ended							0 Months Ended	12 Months Ended					12 Months Ended							12 Months Ended
	May 15, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2014 2013 Omnibus Stock and Incentive Plan	Mar. 31, 2014 Preferred Stock	Mar. 31, 2014 Preferred Stock - Series B Junior Participating	Mar. 31, 2013 Preferred Stock - Series B Junior Participating	Dec. 22, 2011 Class B Common Stock	Mar. 31, 2014 Restricted Stock Award	Mar. 31, 2013 Restricted Stock Award	Mar. 31, 2012 Restricted Stock Award	Mar. 31, 2014 Restricted Stock Award 2013 Omnibus Stock and Incentive Plan	Mar. 31, 2014 Restricted Stock Award 2007 Omnibus Stock and Incentive Plan	Mar. 31, 2014 Stock Options and Restricted Stock Awards	Mar. 31, 2013 Stock Options and Restricted Stock Awards	Mar. 31, 2012 Stock Options and Restricted Stock Awards	Mar. 31, 2014 Restricted Stock Units	Mar. 31, 2013 Restricted Stock Units	Mar. 31, 2012 Restricted Stock Units	Mar. 31, 2014 Restricted Stock Units 2007 Omnibus Stock and Incentive Plan	Mar. 31, 2014 Minimum	Mar. 31, 2014 Minimum 2013 Omnibus Stock and Incentive Plan	Mar. 31, 2014 Minimum Restricted Stock Award	Mar. 31, 2014 Maximum	Mar. 31, 2014 Maximum 2013 Omnibus Stock and Incentive Plan	Mar. 31, 2014 Maximum Restricted Stock Award
Share Based Compensation [Line Items]
Number of shares available for grant		1,099,500
Stock option granted term																						5 years			10 years
Stock options and restricted stock awards granted, vesting period																						1 year		2 years	3 years		3 years
Stock-based compensation expense		$ 2,584,000	$ 2,337,000	$ 2,001,000						$ 395,000	$ 486,000				$ 2,584,000	$ 2,337,000	$ 2,001,000	$ 643,000	$ 490,000
Stock-based compensation related expense reduced in basic and diluted earnings per share		$ 0.12	$ 0.11	$ 0.08
Unrecognized compensation costs related to non-vested stock options and restricted stock awards		2,557,000
Compensation expense related to non-vested stock options, weighted average period of recognition		2 years								1 year 1 month 6 days								1 year 7 months 6 days
Shares of common stock available for issuance					1,099,500
Stock award requisite service period																							2 years			3 years
Restricted common stock issued and outstanding										16,200	42,820	98,568	500	15,700				40,103	41,607	39,729	40,103
Unamortized compensation expense										369,000								748,000
Preferred stock, authorized for issuance		2,050,000	2,050,000			2,500,000	450,000	450,000
Preferred stock, par value		$ 1.00	$ 1.00			$ 1.00	$ 1.00	$ 1.00
Value of shares repurchased and canceled		28,188,000	5,401,000	1,909,000
Number of shares repurchased and canceled		633,816	149,424	119,087					6,102,000
Stock repurchase program remaining authorized repurchase value	30,000,000	2,083,000
Remaining authorization common stock repurchase	652,000	43,587
Purchase price of share repurchased		28,190,000	5,401,000	81,588,000					79,326,000
Fees and related expense for repurchase									$ 353,000

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Changes in Accrued Warranty Liability (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Product Warranties Disclosures [Abstract]
Product Warranty Accrual, Beginning of period	$ 18,709,000	$ 18,521,000	$ 14,049,000
Warranty provision	16,770,000	19,449,000	14,675,000
Warranty claim payments	(16,122,000)	(19,261,000)	(10,203,000)
Product Warranty Accrual, End of period	$ 19,357,000	$ 18,709,000	$ 18,521,000

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Schedule of Weighted Average Shares Outstanding (Detail)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share [Abstract]
Weighted average number of common shares outstanding	13,275,000	13,155,000	16,721,000
Dilutive effect of option plan	323,000	606,000	737,000
Common and potential shares outstanding-diluted	13,598,000	13,761,000	17,458,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities
Net earnings	$ 39,404,000	$ 39,745,000	$ 29,941,000
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization	14,189,000	11,999,000	13,045,000
Loss on the disposal of assets	3,000	50,000	16,000
Deferred income tax expense	6,076,000	1,128,000	1,026,000
Stock-based compensation expense	2,584,000	2,337,000	2,001,000
Changes in operating assets and liabilities
Trading securities	17,232,000	(38,781,000)	71,954,000
Accounts receivable, less allowances	(10,949,000)	(3,010,000)	(4,492,000)
Inventories	(42,159,000)	1,584,000	(38,547,000)
Prepaid expenses	(774,000)	138,000	864,000
Accounts payable	26,768,000	5,420,000	21,200,000
Accrued expenses	(1,264,000)	3,020,000	8,585,000
Income taxes	(6,931,000)	9,054,000	(4,864,000)
Net cash provided by operating activities	44,179,000	32,684,000	100,729,000
Cash flows from investing activities
Purchases of property and equipment	(24,377,000)	(16,276,000)	(14,993,000)
Proceeds from the sale of assets	36,000		201,000
Net cash used in investing activities	(24,341,000)	(16,276,000)	(14,792,000)
Cash flows from financing activities
Proceeds from issuance of common stock	185,000	12,000	4,267,000
Payments for income taxes on net-settled option exercises	(7,652,000)	(6,206,000)	(8,973,000)
Tax benefit from stock option exercises	7,499,000	6,971,000	10,576,000
Dividends paid	(5,317,000)
Repurchase of common stock	(28,190,000)	(5,401,000)	(81,588,000)
Net cash used in financing activities	(33,475,000)	(4,624,000)	(75,718,000)
Effect of exchange rate changes on cash and cash equivalents	595,000	(356,000)	(781,000)
Net increase (decrease) in cash and cash equivalents	(13,042,000)	11,428,000	9,438,000
Cash and cash equivalents at beginning of year	35,566,000	24,138,000	14,700,000
Cash and cash equivalents at end of year	22,524,000	35,566,000	24,138,000
Supplemental disclosure of cash payments for:
Income taxes	13,892,000	8,282,000	9,541,000
Interest	$ 122,000	$ 84,000	$ 8,000

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Short-Term Investments - Additional Information (Detail) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Short Term Investments [Abstract]
Investment in money market funds	$ 60,008,000	$ 77,241,000

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Cumulative Temporary Differences Between Tax Bases of Assets and Liabilities and their Carrying Amounts (Detail) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Current deferred income tax assets
Accrued expenses	$ 5,976,000	$ 7,907,000
Accrued warranty	6,199,000	6,525,000
Inventory related items	4,175,000	3,106,000
Other	441,000	981,000
Total assets	16,791,000	18,519,000
Current deferred income tax liability
Prepaid expenses	1,349,000	976,000
Other	471,000	723,000
Total liabilities	1,820,000	1,699,000
Net current deferred tax asset	14,971,000	16,820,000
Non-current deferred income tax liability
Property and equipment	8,710,000	4,381,000
Non-current deferred tax liability	$ 8,710,000	$ 4,381,000

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CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Mar. 31, 2013
Current Assets
Cash and cash equivalents	$ 22,524,000	$ 35,566,000
Short-term investments	60,008,000	77,241,000
Accounts receivable, less allowances	42,003,000	30,296,000
Inventories	140,652,000	96,389,000
Prepaid expenses	3,815,000	3,032,000
Income taxes receivable	1,323,000
Deferred income taxes	14,971,000	16,820,000
Total current assets	285,296,000	259,344,000
Property and Equipment
Machinery, equipment and tooling	181,028,000	160,674,000
Land, building and improvements	29,758,000	29,243,000
Property, Plant and Equipment, Gross, Total	210,786,000	189,917,000
Less accumulated depreciation	154,855,000	144,378,000
Property, Plant and Equipment, Net, Total	55,931,000	45,539,000
Other assets	1,067,000	1,262,000
Assets, Total	342,294,000	306,145,000
Current Liabilities
Accounts payable	93,882,000	66,599,000
Accrued expenses	54,659,000	55,736,000
Income taxes payable		4,957,000
Total current liabilities	148,541,000	127,292,000
Deferred income taxes	8,710,000	4,381,000
Commitments and Contingencies
Shareholders' Equity
Preferred stock
Common stock, par value $.01; 37,440,000 shares authorized; shares issued and outstanding: 12,882,705 at March 31, 2014 and 2013, 203,682 at March 31, 2013	129,000	132,000
Additional paid-in-capital		10,945,000
Accumulated other comprehensive loss	(2,110,000)	(4,166,000)
Retained earnings	187,024,000	167,561,000
Total shareholders' equity	185,043,000	174,472,000
Liabilities and Equity, Total	342,294,000	306,145,000
Preferred Stock - Series B Junior Participating
Shareholders' Equity
Preferred stock

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Assumptions Used to Determine Fair Value of Stock Options Issued (Detail)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Dividend yield	1.00%	1.00%	1.00%
Average term	5 years	5 years	5 years
Volatility	49.00%	47.00%	42.00%
Risk-free rate of return	0.80%	1.30%	2.10%

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (Parenthetical) (USD $)	12 Months Ended
	Mar. 31, 2014
Statement Of Stockholders Equity [Abstract]
Dividends per share	$ 0.40

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Financing - Additional Information (Detail) (USD $)	12 Months Ended				12 Months Ended
	Mar. 31, 2014	Mar. 31, 2014 Senior Secured Revolving Credit Facility	Nov. 30, 2013 Senior Secured Revolving Credit Facility	Nov. 30, 2009 Senior Secured Revolving Credit Facility	Mar. 31, 2014 Senior Secured Revolving Credit Facility Prime Rate	Mar. 31, 2014 Senior Secured Revolving Credit Facility Federal Funds Rate	Mar. 31, 2014 Senior Secured Revolving Credit Facility Libor Rate	Mar. 31, 2014 Line of Credit	Mar. 31, 2013 Line of Credit	Mar. 31, 2014 Letter of Credit	Mar. 31, 2013 Letter of Credit	Mar. 31, 2014 June through November Senior Secured Revolving Credit Facility	Mar. 31, 2014 All other months Senior Secured Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity value			$ 100,000,000	$ 60,000,000								$ 100,000,000	$ 50,000,000
Senior secured revolving credit agreement description		This agreement is scheduled to expire in November of 2017. Under the agreement, the Company may borrow up to $10,000,000 during May through November and up to $50,000,000 during all other months of the fiscal year.
Line of credit, basis spread variable rate					0.75%	0.50%	1.00%
Borrowings under line of credit bear interest at effective rate	3.50%
Line of credit Interest rate description	Borrowings under the line of credit bear interest at the greater of the following rates; the prime rate plus 0.75%, the federal funds rate plus 0.50% or the LIBOR for a 30 day interest period plus 1.00%. As of March 31, 2014, the effective rate was 3.50%.
Outstanding letters of credit balances								$ 0	$ 0	$ 15,938,000	$ 17,275,000

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INVENTORIES (Tables)

12 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Components of Inventories

Inventories consist of the following at March 31:

	2014		2013
Raw materials and sub-assemblies	$	52,580,000	$	29,310,000
Finished goods		55,327,000		41,084,000
Parts, garments and accessories		32,745,000		25,995,000
	$	140,652,000	$	96,389,000

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Retirement Savings Plan - Additional Information (Detail) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Retirement Savings Plan [Abstract]
Employees contribution towards retirement plan, percentage		50.00%
Matching contribution by the employer, percentage		50.00%
Maximum percentage of employee compensation, that the employer may contribute towards the plan		4.00%
Maximum contribution by employees towards retirement plan	$ 255,000
Matching contribution by the employer		1,035,000	889,000
Discretionary contributions by the employer				$ 900,000

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INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Income Before Income Tax

Arctic Cat’s income before income taxes was generated from its United States and foreign operations as follows:

	For the years ended March 31,
	2014		2013		2012
United States	$	58,655,000	$	60,148,000	$	44,216,000
Foreign		1,749,000		531,000		1,752,000
Income before income taxes	$	60,404,000	$	60,679,000	$	45,968,000

Schedule of Income Tax Expense (Benefit)

Income tax expense consists of the following for the fiscal years ended March 31:

	2014		2013		2012
Current
Federal	$	13,345,000	$	18,624,000	$	14,089,000
State		900,000		937,000		575,000
Foreign		436,000		132,000		337,000
Deferred		6,319,000		1,241,000		1,026,000
	$	21,000,000	$	20,934,000	$	16,027,000

Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate

The following is a reconciliation of the federal statutory income tax rate to the effective tax rate for the fiscal years ended March 31:

	2014			2013			2012
Statutory income tax rate		35.0	%		35.0	%		35.0	%
State taxes		1.7			2.2			3.0
Research and other tax credit		(1.0	)		(2.0	)		(1.0	)
Domestic manufacturers deduction		(1.4	)		(1.2	)		(1.0	)
Uncertain tax positions		(0.1	)		(0.2	)		(0.7	)
US subpart F adjustments		0.4			0.4			0.5
Foreign tax rate difference		(0.2	)		(0.1	)		(0.4	)
Stock options		(0.1	)		0.1			(0.5	)
Other		0.5			0.3			—
		34.8	%		34.5	%		34.9	%

Cumulative Temporary Differences Between Tax Bases of Assets and Liabilities and their Carrying Amounts

The cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes under the liability method are as follows at March 31:

	2014		2013
Current deferred income tax assets
Accrued expenses	$	5,976,000	$	7,907,000
Accrued warranty		6,199,000		6,525,000
Inventory related items		4,175,000		3,106,000
Other		441,000		981,000
Total assets		16,791,000		18,519,000
Current deferred income tax liability
Prepaid expenses		1,349,000		976,000
Other		471,000		723,000
Total liabilities		1,820,000		1,699,000
Net current deferred tax asset	$	14,971,000	$	16,820,000
Non-current deferred income tax liability
Property and equipment	$	8,710,000	$	4,381,000
Non-current deferred tax liability	$	8,710,000	$	4,381,000

Schedule of Unrecognized Tax Benefits

Reconciliation of the amount of unrecognized tax benefits excluding interest and penalties is as follows:

	2014			2013
Balance at beginning of period	$	1,384,000		$	1,381,000
Increases related to prior year tax positions		104,000			317,000
Decreases related to prior year tax positions		(88,000	)		(578,000	)
Increases related to current year tax positions		307,000			264,000
Settlements		—			—
Balance at end of period	$	1,707,000		$	1,384,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 39,404,000	$ 39,745,000	$ 29,941,000
Other comprehensive income:
Foreign currency translation adjustments	2,297,000	(1,153,000)	(1,970,000)
Unrealized gain (loss) on derivative instruments, net of tax	(241,000)	(305,000)	1,182,000
Comprehensive income	$ 41,460,000	$ 38,287,000	$ 29,153,000

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	2,050,000	2,050,000
Preferred stock, shares issued
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	37,440,000	37,440,000
Common stock, shares issued	12,882,705	13,203,682
Common stock, shares outstanding	12,882,705	13,203,682
Preferred Stock - Series B Junior Participating
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	450,000	450,000
Preferred stock, shares issued

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2014

Commitments And Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

H. COMMITMENTS AND CONTINGENCIES

Dealer Financing

Finance companies provide the Company’s North American dealers with floorplan financing. The Company has agreements with these finance companies to repurchase certain repossessed products sold to its dealers. At March 31, 2014, the Company was contingently liable under these agreements for a maximum repurchase amount of approximately $62,964,000. The Company’s financial exposure under these agreements is limited to the difference between the amount paid to the finance companies for repurchases and the amount received upon the resale of the repossessed product. Losses incurred under these agreements during the periods presented have not been material. The financing agreements also have loss sharing provisions should any dealer default, whereby the Company shares certain losses with the finance companies. The maximum liability to the Company under these provisions is approximately $2,328,000 at March 31, 2014.

Litigation

The Company is subject to legal proceedings and claims which arise in the ordinary course of business. Accidents involving personal injury and property damage may occur in the use of snowmobiles, ATVs and ROVs. Claims have been made against the Company from time to time relating to these accidents, and from time to time, parties assert claims relating to their intellectual property. It is the Company’s policy to vigorously defend against these actions. The Company is not involved in any legal proceedings which it believes will have the potential for a materially adverse impact on the Company’s business or financial condition, results of operations or cash flows. The Company has recorded a reserve based on its estimated range of potential exposures based on the legal proceedings and claims that it is aware of. Should any settlement occur that exceeds the Company’s estimate or a new claim arise, the Company may need to adjust its overall reserve and, depending on the amount, such adjustment could be material.

Leases

The Company leases buildings and equipment under non-cancelable operating leases. Total rent expense under all lease agreements was $1,413,000, $1,111,000 and $875,000 for fiscal 2014, 2013 and 2012, respectively. Future minimum payments, exclusive of other costs required under non-cancelable operating leases at March 31, 2014 are approximately $30,000 in fiscal 2015.

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Document and Entity Information (USD $)	12 Months Ended
	Mar. 31, 2014	May 21, 2014	Sep. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Trading Symbol	ACAT
Entity Registrant Name	ARCTIC CAT INC
Entity Central Index Key	0000719866
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		12,896,873
Entity Public Float			$ 738,464,727

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SHAREHOLDERS' EQUITY

12 Months Ended

Mar. 31, 2014

Equity [Abstract]

SHAREHOLDERS' EQUITY

I. SHAREHOLDERS’ EQUITY

Stock Option Plans

The Company has stock-based compensation plans, previously approved by the Company’s shareholders that provide for incentive and non-qualified stock options and restricted stock awards to be granted to directors, officers and other key employees. The stock options granted generally have a five to ten year life, vest over a period of one to three years, and have an exercise price equal to the fair market value of the stock on the date of grant. The stock options are generally subject to accelerated vesting if there is a change in control, as defined in the plans. The restricted stock awards generally vest over a period of two to three years and do not require cash payments from restricted stock award recipients. At March 31, 2014, the Company had 1,099,500 shares of common stock available for grant under the plans.

For the fiscal years ended March 31, 2014, 2013 and 2012, the Company recorded stock-based compensation expense of $2,584,000, $2,337,000 and $2,001,000, respectively, which have been included in general and administrative expenses. The Company’s total stock-based compensation related expense reduced both basic and diluted earnings per share by $0.12, $0.11 and $0.08 for the fiscal years ended March 31, 2014, 2013 and 2012, respectively. At March 31, 2014, the Company had $2,557,000 of unrecognized compensation costs related to non-vested stock options and restricted stock awards that are expected to be recognized over a weighted average period of approximately two years.

The fair value of each stock option award was estimated on the date of grant using the Black-Scholes options pricing model. The following assumptions were used to estimate the fair value of options:

	2014			2013			2012
Assumptions:
Dividend yield		1.0	%		1.0	%		1.0	%
Average term		5 years			5 years			5 years
Volatility		49	%		47	%		42	%
Risk-free rate of return		0.8	%		1.3	%		2.1	%

The weighted average fair value of options granted during each of the following years ended March 31:

	2014		2013		2012
Fair value of options granted	$	16.91	$	23.58	$	6.04

Transactions under the plans during each of the three years in the period ended March 31, are summarized as follows:

	Number of Shares under option			Weighted average  exercise price
Outstanding at March 31, 2011		3,300,453		$	14.65
Granted		254,295			15.71
Cancelled		(135,000	)		17.17
Exercised		(1,915,071	)		15.25
Outstanding at March 31, 2012		1,504,677			13.84
Granted		72,532			43.50
Cancelled		(11,705	)		17.78
Exercised		(554,854	)		10.76
Outstanding at March 31, 2013		1,010,650			17.61
Granted		96,209			42.99
Cancelled		(9,071	)		25.68
Exercised		(616,951	)		15.73
Outstanding at March 31, 2014		480,837		$	24.95
Options exercisable at March 31 are as follows:
2012		867,383		$	15.33
2013		648,103		$	16.46
2014		262,734		$	17.83

The following tables summarize information concerning currently outstanding and exercisable stock options at March 31, 2014:

Options Outstanding and Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$6.26 - 9.38		7,800		2.79 years	$	6.26		7,800	$	6.26
9.57 - 13.84		57,164		5.84 years		10.91		57,164		10.91
14.68 - 21.03		227,949		7.14 years		16.00		151,221		16.11
21.96 - 27.69		24,000		9.60 years		24.83		24,000		24.83
33.67 - 43.79		163,924		8.60 years		43.19		22,549		43.48
		480,837		7.54 years	$	24.95		262,734	$	17.83

In August 2013, the Company’s shareholders adopted the 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”). The 2013 Plan permits the granting of stock options, stock appreciation rights, restricted stock and restricted stock units, performance awards, other stock awards and dividend and dividend equivalents. At March 31, 2014, 1,099,500 shares of common stock remain available for issuance under the 2013 Plan.

In August 2007, the Company’s shareholders adopted the 2007 Omnibus Stock and Incentive Plan (the “2007 Plan”, and along with the 2013 Plan, “the Plans”). The terms of the 2007 Plan are substantially identical to those of the 2013 Plan. With the adoption of the 2013 Plan, the Company’s Board of Directors determined no further awards will be granted from the 2007 Plan.

Restricted Stock

The 2013 Plan provides for grants of restricted common stock and restricted stock units to executives and key employees of the Company. The restricted common stock and restricted stock units are valued based on the Company’s market value of common stock on the date of grant and the amount of any award is expensed over the requisite service period which approximates two to three years. If grantees are retirement eligible and awards would either fully vest upon retirement or continue to vest after retirement, the full amount of the related expense is recognized upon grant. At March 31, 2014, the Company had 15,700 shares of restricted common stock issued and outstanding and 40,103 unvested restricted stock units outstanding under the 2007 Plan and 500 shares of restricted common stock issued and outstanding under the 2013 Plan. The shares of restricted common stock awarded have voting rights and participate equally in all dividends and other distributions duly declared by the Company’s Board of Directors.

Compensation expenses associated with restricted stock awards totaled $395,000 and $486,000 for March 31, 2014 and 2013, respectively. Compensation expenses associated with restricted stock units totaled $643,000 and $490,000 for March 31, 2014 and 2013, respectively. The Company recognizes the expense for grants of restricted stock and restricted stock units on a straight-line basis in the statement of operations as general and administrative expense based on their fair value over their requisite service periods. At March 31, 2014, unamortized compensation expense of restricted stock totaled $369,000 and of restricted stock units totaled $748,000. The unamortized expense as of March 31, 2014 is expected to be recognized over a weighted-average period of 1.1 years for restricted stock and 1.6 years for restricted stock units.

Restricted stock and restricted stock unit award activity under the Plans for the fiscal years ended March 31, 2014 and 2013 is summarized as follows:

	2014					2013
Restricted Shares	Shares			Weighted- Average Grant  Date Fair Value		Shares			Weighted- Average Grant  Date Fair Value
Non-vested shares at March 31,		42,820		$	19.33		98,568		$	11.61
Awarded		8,000			53.91		8,700			33.73
Vested		(34,120	)		15.66		(63,323	)		9.42
Forfeited		(500	)		41.52		(1,125	)		12.45
Non-vested shares at March 31,		16,200		$	43.45		42,820		$	19.33

	2014					2013
Restricted Stock Units	Shares			Weighted- Average Grant  Date Fair Value		Shares			Weighted- Average Grant  Date Fair Value
Non-vested shares at March 31,		41,607		$	27.35		39,729		$	18.31
Granted		17,976			42.99		15,109			43.21
Vested		(18,263	)		25.16		(13,231	)		18.31
Forfeited		(1,217	)		27.60		—			—
Non-vested shares at March 31,		40,103		$	35.35		41,607		$	27.35

Preferred Stock

The Company’s Board of Directors is authorized to issue 2,500,000 shares of $1.00 par value preferred stock in one or more series, 450,000 shares of which were designated Series B Junior Participating preferred stock in connection with the previous Shareholder Rights Plan. The Board of Directors can determine voting, conversion, dividend and redemption rights and other preferences of each series. No shares have been issued.

Share Repurchase Authorization

The Company invested $28,188,000, $5,401,000, and $1,909,000 during fiscal 2014, 2013, and 2012, respectively, to repurchase and cancel 633,816, 149,424, and 119,087 shares of common stock, respectively, pursuant to the Board of Directors’ authorizations. At March 31, 2014, the Board’s authorization to repurchase $2,083,000, or approximately 43,587 shares of common stock, remains outstanding. On May 15, 2013, the Board authorized the repurchase of $30,000,000 or approximately 652,000 shares of common stock.

Class B Common Stock

On December 22, 2011, the Company purchased and cancelled all of the 6,102,000 shares of Arctic Cat Class B common stock outstanding for a purchase price of $79,326,000 from Suzuki Motor Corporation. The Company also incurred fees and related expenses of $353,000 for this purchase. Suzuki had owned all outstanding shares of the Company’s Class B common stock until December 22, 2011.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Net sales
Net sales	$ 730,491,000	$ 671,588,000	$ 585,268,000
Cost of goods sold
Cost of goods sold	579,412,000	520,692,000	454,649,000
Gross profit	151,079,000	150,896,000	130,619,000
Operating expenses
Selling & marketing	38,028,000	37,402,000	36,549,000
Research & development	23,998,000	20,693,000	17,862,000
General & administrative	28,557,000	32,087,000	30,318,000
Total operating expenses	90,583,000	90,182,000	84,729,000
Operating profit	60,496,000	60,714,000	45,890,000
Other income (expense)
Interest income	30,000	49,000	86,000
Interest expense	(122,000)	(84,000)	(8,000)
Total other income (expense)	(92,000)	(35,000)	78,000
Earnings before incomes taxes	60,404,000	60,679,000	45,968,000
Income tax expense	21,000,000	20,934,000	16,027,000
Net earnings	39,404,000	39,745,000	29,941,000
Net earnings per share
Basic	$ 2.97	$ 3.02	$ 1.79
Diluted	$ 2.90	$ 2.89	$ 1.72
Weighted average shares outstanding
Basic	13,275,000	13,155,000	16,721,000
Diluted	13,598,000	13,761,000	17,458,000
Snowmobile & ATV units
Net sales
Net sales	615,608,000	563,464,000	477,329,000
Cost of goods sold
Cost of goods sold	506,707,000	450,291,000	388,523,000
Gross profit	108,901,000	113,173,000	88,806,000
Parts, garments & accessories
Net sales
Net sales	114,883,000	108,124,000	107,939,000
Cost of goods sold
Cost of goods sold	72,705,000	70,401,000	66,126,000
Gross profit	$ 42,178,000	$ 37,723,000	$ 41,813,000

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INVENTORIES

12 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

INVENTORIES

C. INVENTORIES

Inventories consist of the following at March 31:

	2014		2013
Raw materials and sub-assemblies	$	52,580,000	$	29,310,000
Finished goods		55,327,000		41,084,000
Parts, garments and accessories		32,745,000		25,995,000
	$	140,652,000	$	96,389,000

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SHORT-TERM INVESTMENTS

12 Months Ended

Mar. 31, 2014

Investments Debt And Equity Securities [Abstract]

SHORT-TERM INVESTMENTS

B. SHORT-TERM INVESTMENTS

Trading securities consists of $60,008,000 and $77,241,000, invested in various money market funds at March 31, 2014 and 2013, respectively. All of the trading securities are deemed to be level 1 investments.

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ACCRUED EXPENSES (Tables)

12 Months Ended

Mar. 31, 2014

Payables And Accruals [Abstract]

Components of Accrued Expenses

Accrued expenses consist of the following at March 31:

	2014		2013
Marketing	$	11,671,000	$	11,971,000
Compensation		9,338,000		10,682,000
Warranties		19,357,000		18,709,000
Insurance		7,026,000		9,254,000
Other		7,267,000		5,120,000
	$	54,659,000	$	55,736,000

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SEGMENT REPORTING

12 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

SEGMENT REPORTING

J. SEGMENT REPORTING

The Company manages each segment based on gross margin and there are no material transactions between the segments. Operating, tax and other expenses are not allocated to individual segments. Additionally, given the crossover of customers, manufacturing and asset management, the Company does not maintain separate balance sheets for each segment. Accordingly, the segment information presented below is limited to sales and margin data.

	Years ended March 31,
	2014		2013		2012
Net sales
Snowmobile & ATV units	$	615,608,000	$	563,464,000	$	477,329,000
Parts, garments, & accessories		114,883,000		108,124,000		107,939,000
Total net sales		730,491,000		671,588,000		585,268,000
Cost of goods sold
Snowmobile & ATV units		506,707,000		450,291,000		388,523,000
Parts, garments, & accessories		72,705,000		70,401,000		66,126,000
Total cost of goods sold		579,412,000		520,692,000		454,649,000
Gross profit
Snowmobile & ATV units		108,901,000		113,173,000		88,806,000
Parts, garments, & accessories		42,178,000		37,723,000		41,813,000
Total gross profit	$	151,079,000	$	150,896,000	$	130,619,000

	Years ended March 31,
	2014		2013		2012
Net sales by product line
Snowmobile units	$	282,442,000	$	263,693,000	$	250,438,000
ATV units		333,166,000		299,771,000		226,891,000
Parts, garments, & accessories		114,883,000		108,124,000		107,939,000
Total net sales	$	730,491,000	$	671,588,000	$	585,268,000

	Years ended March 31,
	2014		2013		2012
Net sales by geography, based on location of the customer
United States	$	404,347,000	$	337,250,000	$	292,049,000
Canada		215,631,000		215,569,000		180,608,000
Europe and other		110,513,000		118,769,000		112,611,000
Total net sales	$	730,491,000	$	671,588,000	$	585,268,000

The Company has identifiable long-lived assets with total carrying values of approximately $751,000, $1,533,000 and $1,414,000 at March 31, 2014, 2013 and 2012, respectively, outside the United States in Canada and Europe.

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RETIREMENT SAVINGS PLAN

12 Months Ended

Mar. 31, 2014

Compensation And Retirement Disclosure [Abstract]

RETIREMENT SAVINGS PLAN

F. RETIREMENT SAVINGS PLAN

The Company’s 401(k) retirement savings plan covers substantially all eligible employees. Employees may contribute up to 50% of their compensation with the Company matching 50% of the employee contributions, up to a maximum of 4% of the employee’s cash compensation capped at $255,000. Matching contributions of $1,035,000 and $889,000 were made in fiscal 2014 and 2013, respectively. The Company match was suspended as of April 1, 2009 and reinstated as of July 1, 2012. The Company can elect to make additional contributions at its discretion. Discretionary contributions of $900,000 were made in fiscal 2012.

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ACCRUED EXPENSES

12 Months Ended

Mar. 31, 2014

Payables And Accruals [Abstract]

ACCRUED EXPENSES

D. ACCRUED EXPENSES

Accrued expenses consist of the following at March 31:

	2014		2013
Marketing	$	11,671,000	$	11,971,000
Compensation		9,338,000		10,682,000
Warranties		19,357,000		18,709,000
Insurance		7,026,000		9,254,000
Other		7,267,000		5,120,000
	$	54,659,000	$	55,736,000

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FINANCING

12 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

FINANCING

E. FINANCING

The Company entered into a $100,000,000 senior secured revolving bank agreement in November 2013 for documentary and stand-by letters of credit, working capital needs and general corporate purposes, which amended and restated the Company’s prior $60,000,000 senior secured revolving credit agreement. This agreement is scheduled to expire in November of 2017. Under the agreement, the Company may borrow up to $100,000,000 during May through November and up to $50,000,000 during all other months of the fiscal year. Borrowings under the line of credit bear interest at the greater of the following rates; the prime rate plus 0.75%, the federal funds rate plus 0.50% or the LIBOR for a 30 day interest period plus 1.00%. As of March 31, 2014, the effective rate was 3.50%. All borrowings are collateralized by substantially all of the Company’s assets including all real estate, accounts receivable and inventory. No borrowings from the line of credit were outstanding at March 31, 2014 and 2013. The outstanding letters of credit balances were $15,938,000 and $17,275,000 at March 31, 2014 and 2013, respectively, and borrowings under the line are subject to certain covenants and restrictions on indebtedness, financial guarantees, business combinations and other related items. The Company was in compliance with the terms of the credit agreement as of March 31, 2014. Outstanding letters of credit will be repaid over the following six months in accordance with the credit agreement and any such renewal.

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INCOME TAXES

12 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

G. INCOME TAXES

Arctic Cat’s income before income taxes was generated from its United States and foreign operations as follows:

	For the years ended March 31,
	2014		2013		2012
United States	$	58,655,000	$	60,148,000	$	44,216,000
Foreign		1,749,000		531,000		1,752,000
Income before income taxes	$	60,404,000	$	60,679,000	$	45,968,000

Income tax expense consists of the following for the fiscal years ended March 31:

	2014		2013		2012
Current
Federal	$	13,345,000	$	18,624,000	$	14,089,000
State		900,000		937,000		575,000
Foreign		436,000		132,000		337,000
Deferred		6,319,000		1,241,000		1,026,000
	$	21,000,000	$	20,934,000	$	16,027,000

The following is a reconciliation of the federal statutory income tax rate to the effective tax rate for the fiscal years ended March 31:

	2014			2013			2012
Statutory income tax rate		35.0	%		35.0	%		35.0	%
State taxes		1.7			2.2			3.0
Research and other tax credit		(1.0	)		(2.0	)		(1.0	)
Domestic manufacturers deduction		(1.4	)		(1.2	)		(1.0	)
Uncertain tax positions		(0.1	)		(0.2	)		(0.7	)
US subpart F adjustments		0.4			0.4			0.5
Foreign tax rate difference		(0.2	)		(0.1	)		(0.4	)
Stock options		(0.1	)		0.1			(0.5	)
Other		0.5			0.3			—
		34.8	%		34.5	%		34.9	%

The cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes under the liability method are as follows at March 31:

	2014		2013
Current deferred income tax assets
Accrued expenses	$	5,976,000	$	7,907,000
Accrued warranty		6,199,000		6,525,000
Inventory related items		4,175,000		3,106,000
Other		441,000		981,000
Total assets		16,791,000		18,519,000
Current deferred income tax liability
Prepaid expenses		1,349,000		976,000
Other		471,000		723,000
Total liabilities		1,820,000		1,699,000
Net current deferred tax asset	$	14,971,000	$	16,820,000
Non-current deferred income tax liability
Property and equipment	$	8,710,000	$	4,381,000
Non-current deferred tax liability	$	8,710,000	$	4,381,000

At March 31, 2014, approximately $100,000 of the gross deferred tax asset relates to net operating loss carry forward of approximately $400,000 for our foreign subsidiaries. The net operating losses have an indefinite carry-forward period. We expect future taxable income in these jurisdictions to be sufficiently large enough that these carry forward items will be fully realized therefore no valuation allowance has been provided relating to these deferred tax assets.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes potential interest and penalties related to income tax positions as a component of the provision for income taxes on the consolidated statements of operations. The Company had liabilities recorded related to unrecognized tax benefits totaling $2,025,000 and $1,617,000 at March 31, 2014 and 2013, including reserves related to potential interest and penalties of $318,000 and $233,000, respectively. The amount of the liability, net of federal benefits for uncertain state tax positions, at March 31, 2014, if recognized, would affect the Company’s effective tax rate. The Company currently anticipates approximately $143,000 of unrecognized tax benefits will be recognized during the next twelve months. With few exceptions, the Company is no longer subject to federal, state, or foreign income tax examinations for years prior to March 31, 2010. A reconciliation of the amount of unrecognized tax benefits excluding interest and penalties is as follows:

	2014			2013
Balance at beginning of period	$	1,384,000		$	1,381,000
Increases related to prior year tax positions		104,000			317,000
Decreases related to prior year tax positions		(88,000	)		(578,000	)
Increases related to current year tax positions		307,000			264,000
Settlements		—			—
Balance at end of period	$	1,707,000		$	1,384,000

The Company is subject to income taxes in the U.S. federal jurisdiction, and various state jurisdictions, as well as various European jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the relevant tax laws and regulations and require significant judgment to apply.

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Components of Accrued Expenses (Detail) (USD $)	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2011
Accrued Liabilities Current [Abstract]
Marketing	$ 11,671,000	$ 11,971,000
Compensation	9,338,000	10,682,000
Warranties	19,357,000	18,709,000	18,521,000	14,049,000
Insurance	7,026,000	9,254,000
Other	7,267,000	5,120,000
Accrued Liabilities, Current, Total	$ 54,659,000	$ 55,736,000

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Segment Reporting - Additional Information (Detail) (Europe and Canada, USD $)	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Europe and Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets with carrying value	$ 751,000	$ 1,533,000	$ 1,414,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Schedule of Allowance for Uncollectible Accounts for Accounts Receivable

The activity in the allowance for uncollectible accounts for accounts receivable is as follows:

	2014			2013
Balance at beginning of period	$	2,759,000		$	3,421,000
Provisions charged to expense		(872,000	)		621,000
Deductions for amounts written-off		101,000			(1,283,000	)
Balance at end of period	$	1,988,000		$	2,759,000

Changes in Carrying Amount of Identified Intangibles

The changes in the carrying amount of identified intangibles included in other assets for the fiscal years ended March 31, 2014 and 2013 are as follows:

	2014			2013
Balance at beginning of period	$	605,000	)	$	688,000	)
Current year amortization		(83,000	)		(83,000	)
Balance at end of period	$	522,000	)	$	605,000	)

Changes in Accrued Warranty Liability

The following represents changes in the Company’s accrued warranty liability for the fiscal years ended March 31,

	2014			2013			2012
Balance at beginning of period	$	18,709,000	)	$	18,521,000	)	$	14,049,000	)
Warranty provision		16,770,000	)		19,449,000	)		14,675,000	)
Warranty claim payments		(16,122,000	)		(19,261,000	)		(10,203,000	)
Balance at end of period	$	19,357,000	)	$	18,709,000	)	$	18,521,000	)

Weighted Average Shares Outstanding

Weighted average shares outstanding consist of the following for the fiscal years ended March 31:

	2014		2013		2012
Weighted average number of common shares outstanding		13,275,000		13,155,000		16,721,000
Dilutive effect of option plan		323,000		606,000		737,000
Common and potential shares outstanding—diluted		13,598,000		13,761,000		17,458,000

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SEGMENT REPORTING (Tables)

12 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Schedule of Segment Information

Segment information presented below is limited to sales and margin data.

	Years ended March 31,
	2014		2013		2012
Net sales
Snowmobile & ATV units	$	615,608,000	$	563,464,000	$	477,329,000
Parts, garments, & accessories		114,883,000		108,124,000		107,939,000
Total net sales		730,491,000		671,588,000		585,268,000
Cost of goods sold
Snowmobile & ATV units		506,707,000		450,291,000		388,523,000
Parts, garments, & accessories		72,705,000		70,401,000		66,126,000
Total cost of goods sold		579,412,000		520,692,000		454,649,000
Gross profit
Snowmobile & ATV units		108,901,000		113,173,000		88,806,000
Parts, garments, & accessories		42,178,000		37,723,000		41,813,000
Total gross profit	$	151,079,000	$	150,896,000	$	130,619,000

	Years ended March 31,
	2014		2013		2012
Net sales by product line
Snowmobile units	$	282,442,000	$	263,693,000	$	250,438,000
ATV units		333,166,000		299,771,000		226,891,000
Parts, garments, & accessories		114,883,000		108,124,000		107,939,000
Total net sales	$	730,491,000	$	671,588,000	$	585,268,000

	Years ended March 31,
	2014		2013		2012
Net sales by geography, based on location of the customer
United States	$	404,347,000	$	337,250,000	$	292,049,000
Canada		215,631,000		215,569,000		180,608,000
Europe and other		110,513,000		118,769,000		112,611,000
Total net sales	$	730,491,000	$	671,588,000	$	585,268,000

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Restricted Stock Activity (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested shares, Beginning balance	41,607	39,729
Awarded	17,976	15,109
Vested	(18,263)	(13,231)
Forfeited	(1,217)
Non-vested shares, Ending balance	40,103	41,607
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning	$ 27.35	$ 18.31
Awarded	$ 42.99	$ 43.21
Vested	$ 25.16	$ 18.31
Forfeited	$ 27.60
Non-vested shares, Weighted-Average Grant Date Fair Value Ending	$ 35.35	$ 27.35
Restricted Stock Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested shares, Beginning balance	42,820	98,568
Awarded	8,000	8,700
Vested	(34,120)	(63,323)
Forfeited	(500)	(1,125)
Non-vested shares, Ending balance	16,200	42,820
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning	$ 19.33	$ 11.61
Awarded	$ 53.91	$ 33.73
Vested	$ 15.66	$ 9.42
Forfeited	$ 41.52	$ 12.45
Non-vested shares, Weighted-Average Grant Date Fair Value Ending	$ 43.45	$ 19.33

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Income Taxes - Additional Information (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Tax Disclosure [Abstract]
Deferred tax assets operating loss carry forwards	$ 100,000
Deferred tax assets operating loss carry forwards, foreign	400,000
Deferred tax assets, valuation allowance	0
Liabilities related to unrecognized tax benefits	2,025,000	1,617,000
Unrecognized tax benefits, potential interest and penalties	318,000	233,000
Anticipated recognized portion of unrecognized tax benefits	$ 143,000
Percentage of likelihood of tax benefit realized	50.00%

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (USD $)	Total	Common Stock	Class B Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Balance at Mar. 31, 2011	$ 183,036,000	$ 122,000	$ 61,000	$ 7,280,000	$ (1,920,000)	$ 177,493,000
Balance, Shares at Mar. 31, 2011		12,199,271	6,102,000
Exercise of stock options	20,230,000	20,000		20,210,000
Exercise of stock options, Shares	1,915,071	1,915,071
Tax benefits from stock options exercised	10,576,000			10,576,000
Repurchase of common stock	(26,845,000)	(11,000)		(26,834,000)
Repurchase of common stock, Shares		(1,088,390)
Repurchase of common stock Class B	(79,679,000)		(61,000)			(79,618,000)
Repurchase of common stock Class B, Shares			(6,102,000)
Restricted stock awards and units
Restricted stock awards and units, Shares		31,685
Restricted stock forfeited		(1,750)
Stock-based compensation expense	2,001,000			2,001,000
Net earnings	29,941,000					29,941,000
Unrealized gain (loss) on derivative instruments, net of tax	1,182,000				1,182,000
Foreign currency adjustment	(1,970,000)				(1,970,000)
Balance at Mar. 31, 2012	138,472,000	131,000		13,233,000	(2,708,000)	127,816,000
Balance, shares at Mar. 31, 2012		13,055,887
Exercise of stock options	5,973,000	6,000		5,967,000
Exercise of stock options, Shares	554,854	554,854
Tax benefits from stock options exercised	6,971,000			6,971,000
Repurchase of common stock	(17,568,000)	(5,000)		(17,563,000)
Repurchase of common stock, Shares		(424,145)
Restricted stock awards and units
Restricted stock awards and units, Shares		18,211
Restricted stock forfeited		(1,125)
Stock-based compensation expense	2,337,000			2,337,000
Net earnings	39,745,000					39,745,000
Unrealized gain (loss) on derivative instruments, net of tax	(305,000)				(305,000)
Foreign currency adjustment	(1,153,000)				(1,153,000)
Balance at Mar. 31, 2013	174,472,000	132,000		10,945,000	(4,166,000)	167,561,000
Balance, shares at Mar. 31, 2013		13,203,682
Exercise of stock options	9,707,000	6,000		9,701,000
Exercise of stock options, Shares	616,951	616,951
Tax benefits from stock options exercised	7,499,000			7,499,000
Repurchase of common stock	(45,362,000)	(9,000)		(30,729,000)		(14,624,000)
Repurchase of common stock, Shares		(958,559)
Restricted stock awards and units
Restricted stock awards and units, Shares		21,131
Restricted stock forfeited		(500)
Stock-based compensation expense	2,584,000			2,584,000
Net earnings	39,404,000					39,404,000
Unrealized gain (loss) on derivative instruments, net of tax	(241,000)				(241,000)
Foreign currency adjustment	2,297,000				2,297,000
Dividends ($0.40 per share)	(5,317,000)					(5,317,000)
Balance at Mar. 31, 2014	$ 185,043,000	$ 129,000			$ (2,110,000)	$ 187,024,000
Balance, shares at Mar. 31, 2014		12,882,705

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Arctic Cat Inc. (the “Company”) designs, engineers, manufactures and markets snowmobiles and all-terrain vehicles (ATVs) and recreational off-highway vehicles (“side-by-sides” or “ROVs”) under the Arctic Cat^® brand name, and related parts, garments and accessories principally through its facilities in Thief River Falls, Minnesota. The Company’s products are sold through a network of independent dealers located throughout the United States, Canada, and Europe and through distributors in Europe, Russia, South America, the Middle East, Asia and other international markets.

Use of Estimates

Preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. Actual results could differ from the estimates used by management.

Principles of Consolidation

The consolidated financial statements include the accounts of Arctic Cat Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At times, certain bank deposits may be in excess of federally insured limits. As of March 31, 2014 and 2013, the Company had approximately $11,125,000 and $7,107,000, respectively, of cash located in foreign banks primarily in Europe and Canada.

Fair Values of Financial Instruments

Except where noted, the carrying value of current financial assets and liabilities approximates their fair value, due to their short-term nature.

Short-Term Investments

Short-term investments are reported at fair value. The Company utilizes the specific identification method in accounting for its short-term investments.

Accounts Receivable

The Company’s accounts receivable balance consists of amounts due from its dealers and finance companies. The Company extends credit to its dealers based on an evaluation of the dealers’ financial condition. The Company’s collection exposure relating to accounts receivable amounts due from dealer floorplan finance companies is limited due to the financial strength of the finance companies and provisions of its existing agreements. Accounts receivable is presented net of an allowance for estimated uncollectible amounts due from its dealers. The Company estimates the uncollectible amounts considering numerous factors, mainly historical trends as well as current available information. The Company’s allowance for uncollectible accounts was $1,988,000 and $2,759,000 at March 31, 2014 and 2013, respectively. The activity within the allowance for uncollectible accounts for the three years ended March 31, 2014 was not significant. Accounts receivable amounts written off have been within management’s expectations.

The activity in the allowance for uncollectible accounts for accounts receivable is as follows:

	2014			2013
Balance at beginning of period	$	2,759,000		$	3,421,000
Provisions charged to expense		(872,000	)		621,000
Deductions for amounts written-off		101,000			(1,283,000	)
Balance at end of period	$	1,988,000		$	2,759,000

Inventories

Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method.

Derivative Instruments and Hedging Activities

The Company enters into forward exchange contracts to hedge the variability in foreign exchange rates related to transfers of Canadian dollar funds to the United States of America. The contracts are designated as, and meet the criteria for, cash flow hedges. The Company does not enter into forward contracts for the purpose of trading. Gains and losses on forward contracts are recorded in accumulated other comprehensive income (loss), net of tax, and subsequently reclassified into operating expense upon completing transfers of Canadian dollar funds.

As of March 31, 2014, the Company had open Canadian dollar forward exchange contracts, maturing through March 2014 with notional amounts totaling $89,649,000 and the total net fair value of $424,000 is included in accounts payable. As of March 31, 2013, the Company had open Canadian dollar forward exchange contracts, maturing through December 2013 with notional amounts totaling $39,063,000 and the total net fair value of $41,000 is included in accounts payable. The Company did not enter into any forward contracts in currencies other than the Canadian dollar, in the years ended March 31, 2014 or 2013.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy has been established which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of March 31, 2014 and 2013, the Company’s foreign currency contract fair value was a liability totaling $424,000 and $41,000, respectively, which are considered a Level 2 measurement. The Company utilizes the income approach to measure fair value of foreign currency contracts which is based on significant other observable inputs. The asset or liability is measured at fair value on a recurring basis each reporting period end.

Property and Equipment

Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using the straight-line method for all property, equipment and tooling. Repairs and maintenance cost that are considered not to extend the useful life of the property and equipment are expensed as incurred. Tooling is amortized over the life of the product, generally 3-5 years. Estimated service lives range from 15 - 39 years for buildings and improvements and 5 - 7 years for machinery and equipment. Accelerated and straight-line methods are used for income tax reporting.

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets, the carrying value is reduced to the estimated fair value as measured by the associated discounted cash flows. Based on impairment indicators not being present, the Company determined the carrying value of long-lived assets was not impaired.

Intangibles

Identified intangible assets are acquired customer relationships, homologation licenses, and a non-compete agreement. Intangible assets before accumulated amortization were $1,950,000 at March 31, 2014 and 2013. Accumulated amortization was $1,428,000 and $1,345,000 at March 31, 2014 and 2013, respectively. Amortization expense is expected to be approximately $83,000 in fiscal 2015, 2016, 2017, 2018 and 2019.

The changes in the carrying amount of identified intangibles included in other assets for the fiscal years ended March 31, 2014 and 2013 are as follows:

	2014			2013
Balance at beginning of period	$	605,000		$	688,000
Current year amortization		(83,000	)		(83,000	)
Balance at end of period	$	522,000		$	605,000

Product Warranties

The Company generally provides a limited warranty to the owner of snowmobiles for twelve months from the date of consumer registration and for six months on ATVs and ROVs. The Company provides for estimated warranty costs at the time of sale based on historical rates and trends and makes subsequent adjustments to its estimate as actual claims become known or the amounts are determinable. The following represents changes in the Company’s accrued warranty liability for the fiscal years ended March 31,

	2014			2013			2012
Balance at beginning of period	$	18,709,000		$	18,521,000		$	14,049,000
Warranty provision		16,770,000			19,449,000			14,675,000
Warranty claim payments		(16,122,000	)		(19,261,000	)		(10,203,000	)
Balance at end of period	$	19,357,000		$	18,709,000		$	18,521,000

Insurance

The Company is self-insured for employee medical, workers’ compensation, and product liability claims. Specific stop loss coverages are provided for catastrophic claims. Losses and claims are charged to operations when it is probable a loss has been incurred and the amount can be reasonably estimated.

Revenue Recognition

The Company recognizes revenue and provides for estimated marketing and sales incentive costs when products are shipped to dealers and distributors pursuant to their order, the price is fixed and collection is reasonably assured. Shipping and handling costs are recorded as a component of costs of goods sold and shipping charges to the dealers are recorded as revenue at the time products are shipped.

Return allowances for parts and accessories are recorded as a reduction of revenue when the products are sold based on the company’s return allowance program and historical experience.

Sales tax collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from the sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes.

Marketing and Sales Incentive Costs

At the time product revenue is recognized the Company provides for various marketing and sales incentive costs which are offered to its dealers and consumers. Examples of these costs, which are recognized as a reduction of revenue when the products are sold, include: dealer and consumer rebates, dealer floor plan financing assistance and other incentive and promotion programs. Generally, the Company records provisions for these marketing programs at the later of when the revenue is recognized or when the sales incentive or marketing program is approved and communicated for products previously shipped. Sales incentives that involve a free product or service delivered to the consumer are recorded as a component of cost of goods sold. The Company estimates the costs of these various incentive and marketing programs at the time of sale or subsequently when programs are approved and communicated based on historical experience. To the extent current experience differs with previous estimates the accrued liability for marketing and sales incentives is adjusted accordingly.

Dealer Holdback

The Company records a dealer holdback program liability at the time certain products are shipped to its dealers. If the products subject to the holdback program are sold within the program time period, the Company refunds a portion of the original sale price, referred to as dealer holdback, to the dealer within the program time period and refunds any remaining balances to its dealers when the program time periods end. The Company’s dealer holdback program liability, included within accounts payable, was $19,448,000 and $17,574,000 as of March 31, 2014 and 2013, respectively.

Research and Development

Research and development costs are expensed as incurred. Research and development expense was $23,998,000, $20,693,000 and $17,862,000 during fiscal 2014, 2013 and 2012, respectively.

Advertising

The Company expenses advertising costs as incurred, except for cooperative advertising obligations arising related to the sale of the Company’s products to its dealers. The estimated cost of cooperative advertising, which the dealer is required to support, is recorded as marketing expense at the time the product is sold. Cooperative advertising was $3,440,000, $3,556,000 and $2,900,000 in fiscal 2014, 2013 and 2012, respectively. Total advertising expense, including cooperative advertising, was $17,562,000, $17,232,000 and $17,225,000 in fiscal 2014, 2013 and 2012, respectively.

Net Earnings Per Share

The Company’s diluted weighted average shares outstanding include common shares and common share equivalents relating to stock options, when dilutive. No options outstanding were excluded from the computation of common share equivalents because they were anti-dilutive during fiscal 2014. Options to purchase 70,470 and 1,131,732 shares of common stock with weighted average exercise prices of $43.79 and $19.99 were outstanding during fiscal 2013 and 2012, respectively, but were excluded from the computation of common share equivalents because they were anti-dilutive.

Weighted average shares outstanding consist of the following for the fiscal years ended March 31:

	2014		2013		2012
Weighted average number of common shares outstanding		13,275,000		13,155,000		16,721,000
Dilutive effect of option plan		323,000		606,000		737,000
Common and potential shares outstanding—diluted		13,598,000		13,761,000		17,458,000

Foreign Currency Translation

The Company’s activities with Canadian dealers are denominated in Canadian currency. The Company’s activities with European on-road ATV dealers and distributors are denominated in the Euro. Assets and liabilities denominated in Canadian currency and the Euro are translated using the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the average foreign exchange rates in effect for the period. Translation gains and losses relating to the Canadian currency are reflected in the results of operations and Euro currency are reflected as a component of other comprehensive income.

Comprehensive Income

Comprehensive income represents net earnings adjusted for the unrealized gain or loss on derivative instruments, and foreign currency translation adjustments and is shown in the consolidated financial statements of comprehensive income.

Segment Reporting

The Company’s operations constitute three operating segments based on its product lines—snowmobile; ATV; and parts, garments and accessories (“PG&A). For purposes of segment reporting the Company aggregates the snowmobile and ATV segments as the segments have similar economic characteristics. Detailed segment information is reported in Note J.

XML

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2011
Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 22,524,000	$ 35,566,000	$ 24,138,000	$ 14,700,000
Allowance for uncollectible accounts	1,988,000	2,759,000	3,421,000
Forward exchange contract notional amount	89,649,000	39,063,000
Forward exchange contract fair value, net	424,000	41,000
Forward exchange contract maturity period	2014-03	2013-12
Intangible assets before accumulated amortization	1,950,000	1,950,000
Accumulated amortization	1,428,000	1,345,000
Amortization expense, 2015	83,000
Amortization expense, 2016	83,000
Amortization expense, 2017	83,000
Amortization expense, 2018	83,000
Amortization expense, 2019	83,000
Company's dealer holdback program liability	19,448,000	17,574,000
Research and development expense	23,998,000	20,693,000	17,862,000
Cooperate advertising expense	3,440,000	3,556,000	2,900,000
Total advertising expense	17,562,000	17,232,000	17,225,000
Anti-dilutive options to purchase shares of common stock excluded from computation of common share equivalents	0	70,470	1,131,732
Anti-dilutive options to purchase shares of common stock excluded from computation of common share equivalents, weighted average exercise price		$ 43.79	$ 19.99
Minimum | Buildings and Improvements
Significant Accounting Policies [Line Items]
Estimated service lives	15 years
Minimum | Machinery and equipment
Significant Accounting Policies [Line Items]
Estimated service lives	5 years
Minimum | Tooling
Significant Accounting Policies [Line Items]
Estimated service lives	3 years
Maximum | Buildings and Improvements
Significant Accounting Policies [Line Items]
Estimated service lives	39 years
Maximum | Machinery and equipment
Significant Accounting Policies [Line Items]
Estimated service lives	7 years
Maximum | Tooling
Significant Accounting Policies [Line Items]
Estimated service lives	5 years
Fair Value, Inputs, Level 2
Significant Accounting Policies [Line Items]
Foreign currency contract fair value liability	424,000	41,000
Allowance for Uncollectible Accounts
Significant Accounting Policies [Line Items]
Allowance for uncollectible accounts	1,988,000	2,759,000
Europe and Canada
Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 11,125,000	$ 7,107,000

XML

Schedule of Income Tax Expense (Benefit) (Detail) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Income Tax Disclosure [Abstract]
Federal	$ 13,345,000	$ 18,624,000	$ 14,089,000
State	900,000	937,000	575,000
Foreign	436,000	132,000	337,000
Deferred	6,319,000	1,241,000	1,026,000
Income tax expense (benefit)	$ 21,000,000	$ 20,934,000	$ 16,027,000

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

Preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. Actual results could differ from the estimates used by management.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Arctic Cat Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At times, certain bank deposits may be in excess of federally insured limits. As of March 31, 2014 and 2013, the Company had approximately $11,125,000 and $7,107,000, respectively, of cash located in foreign banks primarily in Europe and Canada.

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Except where noted, the carrying value of current financial assets and liabilities approximates their fair value, due to their short-term nature.

Short-Term Investments

Short-Term Investments

Short-term investments are reported at fair value. The Company utilizes the specific identification method in accounting for its short-term investments.

Accounts Receivable

Accounts Receivable

The Company’s accounts receivable balance consists of amounts due from its dealers and finance companies. The Company extends credit to its dealers based on an evaluation of the dealers’ financial condition. The Company’s collection exposure relating to accounts receivable amounts due from dealer floorplan finance companies is limited due to the financial strength of the finance companies and provisions of its existing agreements. Accounts receivable is presented net of an allowance for estimated uncollectible amounts due from its dealers. The Company estimates the uncollectible amounts considering numerous factors, mainly historical trends as well as current available information. The Company’s allowance for uncollectible accounts was $1,988,000 and $2,759,000 at March 31, 2014 and 2013, respectively. The activity within the allowance for uncollectible accounts for the three years ended March 31, 2014 was not significant. Accounts receivable amounts written off have been within management’s expectations.

The activity in the allowance for uncollectible accounts for accounts receivable is as follows:

	2014			2013
Balance at beginning of period	$	2,759,000		$	3,421,000
Provisions charged to expense		(872,000	)		621,000
Deductions for amounts written-off		101,000			(1,283,000	)
Balance at end of period	$	1,988,000		$	2,759,000

Inventories

Inventories

Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company enters into forward exchange contracts to hedge the variability in foreign exchange rates related to transfers of Canadian dollar funds to the United States of America. The contracts are designated as, and meet the criteria for, cash flow hedges. The Company does not enter into forward contracts for the purpose of trading. Gains and losses on forward contracts are recorded in accumulated other comprehensive income (loss), net of tax, and subsequently reclassified into operating expense upon completing transfers of Canadian dollar funds.

As of March 31, 2014, the Company had open Canadian dollar forward exchange contracts, maturing through March 2014 with notional amounts totaling $89,649,000 and the total net fair value of $424,000 is included in accounts payable. As of March 31, 2013, the Company had open Canadian dollar forward exchange contracts, maturing through December 2013 with notional amounts totaling $39,063,000 and the total net fair value of $41,000 is included in accounts payable. The Company did not enter into any forward contracts in currencies other than the Canadian dollar, in the years ended March 31, 2014 or 2013.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy has been established which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of March 31, 2014 and 2013, the Company’s foreign currency contract fair value was a liability totaling $424,000 and $41,000, respectively, which are considered a Level 2 measurement. The Company utilizes the income approach to measure fair value of foreign currency contracts which is based on significant other observable inputs. The asset or liability is measured at fair value on a recurring basis each reporting period end.

Property and Equipment

Property and Equipment

Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using the straight-line method for all property, equipment and tooling. Repairs and maintenance cost that are considered not to extend the useful life of the property and equipment are expensed as incurred. Tooling is amortized over the life of the product, generally 3-5 years. Estimated service lives range from 15 - 39 years for buildings and improvements and 5 - 7 years for machinery and equipment. Accelerated and straight-line methods are used for income tax reporting.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets, the carrying value is reduced to the estimated fair value as measured by the associated discounted cash flows. Based on impairment indicators not being present, the Company determined the carrying value of long-lived assets was not impaired.

Intangibles

Intangibles

Identified intangible assets are acquired customer relationships, homologation licenses, and a non-compete agreement. Intangible assets before accumulated amortization were $1,950,000 at March 31, 2014 and 2013. Accumulated amortization was $1,428,000 and $1,345,000 at March 31, 2014 and 2013, respectively. Amortization expense is expected to be approximately $83,000 in fiscal 2015, 2016, 2017, 2018 and 2019.

The changes in the carrying amount of identified intangibles included in other assets for the fiscal years ended March 31, 2014 and 2013 are as follows:

	2014			2013
Balance at beginning of period	$	605,000		$	688,000
Current year amortization		(83,000	)		(83,000	)
Balance at end of period	$	522,000		$	605,000

Product Warranties

Product Warranties

The Company generally provides a limited warranty to the owner of snowmobiles for twelve months from the date of consumer registration and for six months on ATVs and ROVs. The Company provides for estimated warranty costs at the time of sale based on historical rates and trends and makes subsequent adjustments to its estimate as actual claims become known or the amounts are determinable. The following represents changes in the Company’s accrued warranty liability for the fiscal years ended March 31,

	2014			2013			2012
Balance at beginning of period	$	18,709,000		$	18,521,000		$	14,049,000
Warranty provision		16,770,000			19,449,000			14,675,000
Warranty claim payments		(16,122,000	)		(19,261,000	)		(10,203,000	)
Balance at end of period	$	19,357,000		$	18,709,000		$	18,521,000

Insurance

Insurance

The Company is self-insured for employee medical, workers’ compensation, and product liability claims. Specific stop loss coverages are provided for catastrophic claims. Losses and claims are charged to operations when it is probable a loss has been incurred and the amount can be reasonably estimated.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue and provides for estimated marketing and sales incentive costs when products are shipped to dealers and distributors pursuant to their order, the price is fixed and collection is reasonably assured. Shipping and handling costs are recorded as a component of costs of goods sold and shipping charges to the dealers are recorded as revenue at the time products are shipped.

Return allowances for parts and accessories are recorded as a reduction of revenue when the products are sold based on the company’s return allowance program and historical experience.

Sales tax collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from the sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes.

Marketing and Sales Incentive Costs

Marketing and Sales Incentive Costs

At the time product revenue is recognized the Company provides for various marketing and sales incentive costs which are offered to its dealers and consumers. Examples of these costs, which are recognized as a reduction of revenue when the products are sold, include: dealer and consumer rebates, dealer floor plan financing assistance and other incentive and promotion programs. Generally, the Company records provisions for these marketing programs at the later of when the revenue is recognized or when the sales incentive or marketing program is approved and communicated for products previously shipped. Sales incentives that involve a free product or service delivered to the consumer are recorded as a component of cost of goods sold. The Company estimates the costs of these various incentive and marketing programs at the time of sale or subsequently when programs are approved and communicated based on historical experience. To the extent current experience differs with previous estimates the accrued liability for marketing and sales incentives is adjusted accordingly.

Dealer Holdback

Dealer Holdback

The Company records a dealer holdback program liability at the time certain products are shipped to its dealers. If the products subject to the holdback program are sold within the program time period, the Company refunds a portion of the original sale price, referred to as dealer holdback, to the dealer within the program time period and refunds any remaining balances to its dealers when the program time periods end. The Company’s dealer holdback program liability, included within accounts payable, was $19,448,000 and $17,574,000 as of March 31, 2014 and 2013, respectively.

Research and Development

Research and Development

Research and development costs are expensed as incurred. Research and development expense was $23,998,000, $20,693,000 and $17,862,000 during fiscal 2014, 2013 and 2012, respectively.

Advertising

Advertising

The Company expenses advertising costs as incurred, except for cooperative advertising obligations arising related to the sale of the Company’s products to its dealers. The estimated cost of cooperative advertising, which the dealer is required to support, is recorded as marketing expense at the time the product is sold. Cooperative advertising was $3,440,000, $3,556,000 and $2,900,000 in fiscal 2014, 2013 and 2012, respectively. Total advertising expense, including cooperative advertising, was $17,562,000, $17,232,000 and $17,225,000 in fiscal 2014, 2013 and 2012, respectively.

Net Earnings Per Share

Net Earnings Per Share

The Company’s diluted weighted average shares outstanding include common shares and common share equivalents relating to stock options, when dilutive. No options outstanding were excluded from the computation of common share equivalents because they were anti-dilutive during fiscal 2014. Options to purchase 70,470 and 1,131,732 shares of common stock with weighted average exercise prices of $43.79 and $19.99 were outstanding during fiscal 2013 and 2012, respectively, but were excluded from the computation of common share equivalents because they were anti-dilutive.

Weighted average shares outstanding consist of the following for the fiscal years ended March 31:

	2014		2013		2012
Weighted average number of common shares outstanding		13,275,000		13,155,000		16,721,000
Dilutive effect of option plan		323,000		606,000		737,000
Common and potential shares outstanding—diluted		13,598,000		13,761,000		17,458,000

Foreign Currency Translation

Foreign Currency Translation

The Company’s activities with Canadian dealers are denominated in Canadian currency. The Company’s activities with European on-road ATV dealers and distributors are denominated in the Euro. Assets and liabilities denominated in Canadian currency and the Euro are translated using the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the average foreign exchange rates in effect for the period. Translation gains and losses relating to the Canadian currency are reflected in the results of operations and Euro currency are reflected as a component of other comprehensive income.

Comprehensive Income

Comprehensive Income

Comprehensive income represents net earnings adjusted for the unrealized gain or loss on derivative instruments, and foreign currency translation adjustments and is shown in the consolidated financial statements of comprehensive income.

Segment Reporting

Segment Reporting

The Company’s operations constitute three operating segments based on its product lines—snowmobile; ATV; and parts, garments and accessories (“PG&A). For purposes of segment reporting the Company aggregates the snowmobile and ATV segments as the segments have similar economic characteristics. Detailed segment information is reported in Note J.