10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

for the quarterly period ended December 31, 2014

or

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

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 Hwy 169 North, Suite 1000 Plymouth, Minnesota	55441
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(763) 354-1800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed 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 Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) 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 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

At January 30, 2015, the registrant had 12,946,809 shares of Common Stock outstanding.

ARCTIC CAT INC.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
	UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS	3
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	4
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	6
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 4.	CONTROLS AND PROCEDURES	20
PART II OTHER INFORMATION
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	22
ITEM 5.	OTHER INFORMATION	22
ITEM 6.	EXHIBITS	23

2

Part I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Arctic Cat Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

	December 31, 2014			March 31, 2014
ASSETS
Current Assets
Cash and cash equivalents	$	57,484,000		$	22,524,000
Short-term investments		10,008,000			60,008,000
Accounts receivable, less allowances		59,102,000			42,003,000
Inventories		144,577,000			140,652,000
Prepaid expenses		2,284,000			3,815,000
Income taxes receivable		—			1,323,000
Deferred income taxes		19,128,000			14,971,000
Total current assets		292,583,000			285,296,000
Property and Equipment
Machinery, equipment and tooling		194,072,000			181,028,000
Land, buildings and improvements		30,000,000			29,758,000
		224,072,000			210,786,000
Less accumulated depreciation		165,542,000			154,855,000
		58,530,000			55,931,000
Other Assets		900,000			1,067,000
	$	352,013,000		$	342,294,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	69,217,000		$	93,882,000
Accrued expenses		58,276,000			54,659,000
Income taxes payable		9,398,000			—
Total current liabilities		136,891,000			148,541,000
Deferred Income Taxes		8,926,000			8,710,000
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: 12,946,809 at December 31, 2014 and 12,882,705 at March 31, 2014		129,000			129,000
Additional paid-in-capital		1,785,000			—
Accumulated other comprehensive loss		(4,322,000	)		(2,110,000	)
Retained earnings		208,604,000			187,024,000
Total shareholders’ equity		206,196,000			185,043,000
	$	352,013,000		$	342,294,000

The accompanying notes are an integral part of these condensed consolidated statements.

3

Arctic Cat Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2014			2013			2014			2013
Net sales
Snowmobile & ATV units	$	165,453,000		$	196,295,000		$	512,813,000		$	503,285,000
Parts, garments & accessories		28,282,000			29,495,000			87,040,000			81,798,000
Total net sales		193,735,000			225,790,000			599,853,000			585,083,000
Cost of goods sold
Snowmobile & ATV units		140,158,000			166,994,000			422,923,000			402,650,000
Parts, garments & accessories		18,664,000			18,583,000			56,135,000			51,386,000
Total cost of goods sold		158,822,000			185,577,000			479,058,000			454,036,000
Gross profit		34,913,000			40,213,000			120,795,000			131,047,000
Operating expenses
Selling & marketing		11,757,000			9,726,000			30,812,000			28,836,000
Research & development		6,496,000			5,723,000			18,463,000			17,291,000
General & administrative		10,797,000			6,372,000			36,026,000			21,802,000
Total operating expenses		29,050,000			21,821,000			85,301,000			67,929,000
Operating profit		5,863,000			18,392,000			35,494,000			63,118,000
Other income (expense)
Interest income		8,000			6,000			18,000			22,000
Interest expense		(97,000	)		(96,000	)		(346,000	)		(136,000	)
Total other expense		(89,000	)		(90,000	)		(328,000	)		(114,000	)
Earnings before income taxes		5,774,000			18,302,000			35,166,000			63,004,000
Income tax expense (benefit)		(1,713,000	)		6,182,000			8,721,000			22,051,000
Net earnings	$	7,487,000		$	12,120,000		$	26,445,000		$	40,953,000
Net earnings per share
Basic	$	0.58		$	0.90		$	2.05		$	3.07
Diluted	$	0.57		$	0.89		$	2.02		$	2.99
Weighted average shares outstanding
Basic		12,941,000			13,420,000			12,920,000			13,338,000
Diluted		13,062,000			13,657,000			13,072,000			13,698,000

The accompanying notes are an integral part of these condensed consolidated statements.

4

Arctic Cat Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended December 31,					Nine Months Ended December 31,
	2014			2013		2014			2013
Net earnings	$	7,487,000		$	12,120,000	$	26,445,000		$	40,953,000
Other comprehensive income (loss):
Foreign currency translation adjustments		(1,109,000	)		545,000		(4,016,000	)		2,271,000
Unrealized gain (loss) on derivative instruments, net of tax		700,000			303,000		1,804,000			934,000
Comprehensive income	$	7,078,000		$	12,968,000	$	24,233,000		$	44,158,000

The accompanying notes are an integral part of these condensed consolidated statements.

5

Arctic Cat Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended December 31,
	2014			2013
Cash flows from operating activities:
Net earnings	$	26,445,000		$	40,953,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		12,241,000			12,230,000
Deferred income tax expense		(5,000,000	)		4,432,000
Stock-based compensation expense		3,341,000			2,193,000
Loss on disposal of fixed assets		51,000			1,000
Changes in operating assets and liabilities:
Trading securities		50,000,000			70,736,000
Accounts receivable, less allowances		(16,086,000	)		(41,744,000	)
Inventories		(5,860,000	)		(39,153,000	)
Prepaid expenses		1,522,000			278,000
Accounts payable		(24,028,000	)		(4,825,000	)
Accrued expenses		3,925,000			(1,461,000	)
Income taxes		10,915,000			(1,231,000	)
Net cash provided by operating activities		57,466,000			42,409,000
Cash flows from investing activities:
Purchases of property and equipment		(14,847,000	)		(13,712,000	)
Net cash used in investing activities		(14,847,000	)		(13,712,000	)
Cash flows from financing activities:
Checks written in excess of bank balances		—			143,000
Proceeds from issuance of common stock		34,000			18,000
Payments for income taxes on net-settled option exercises		(1,335,000	)		(7,627,000	)
Tax benefit from stock options exercises		752,000			7,495,000
Dividends paid		(4,865,000	)		(4,023,000	)
Repurchase of common stock		(1,007,000	)		(4,771,000	)
Net cash used in financing activities		(6,421,000	)		(8,765,000	)
Effect of exchange rate changes on cash and cash equivalents		(1,238,000	)		534,000
Net increase in cash and cash equivalents		34,960,000			20,466,000
Cash and cash equivalents at beginning of period		22,524,000			35,566,000
Cash and cash equivalents at end of period	$	57,484,000		$	56,032,000
Supplemental disclosure of cash payments for:
Income taxes	$	2,616,000		$	11,088,000
Interest	$	344,000		$	127,000

The accompanying notes are an integral part of these condensed consolidated statements.

6

Arctic Cat Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE A–BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Arctic Cat Inc. (the “Company”) have been prepared in accordance with Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.

In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position as of December 31, 2014, results of operations for the three-month and nine-month periods ended December 31, 2014 and 2013 and cash flows for the nine-month periods ended December 31, 2014 and 2013. Results of operations for the interim periods are not necessarily indicative of results for the full year. The condensed consolidated balance sheet as of March 31, 2014 is derived from the audited balance sheet as of that date.

Preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses. Actual results could differ from those estimates.

NOTE B–STOCK-BASED COMPENSATION

Stock Option Plans

The Company has outstanding equity awards under a 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”) and a 2007 Omnibus Stock and Incentive Plan (the “2007 Plan,” and along with the 2013 Plan, the “Plans”), previously approved by the Company’s shareholders. The Plans provide for incentive and non-qualified stock options, restricted stock and restricted stock unit awards and other incentive awards to be granted to directors, officers, other key employees and consultants. 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 December 31, 2014, the Company had 916,008 shares of common stock available for grant under the plans.

For the three months ended December 31, 2014 and 2013, the Company recorded stock-based compensation expense for stock options and restricted stock awards of $543,000 and $272,000, respectively, and for the nine months ended December 31, 2014 and 2013, the Company recorded stock-based compensation expense for stock options and restricted stock awards of $3,341,000 and $2,193,000, 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 $0.03 and $0.01 for each of the three months ended December 31, 2014 and 2013, respectively, and by $0.19 and $0.10 for both basic and diluted earnings per share for the nine months ended December 31, 2014 and 2013, respectively.

At December 31, 2014, the Company had $7,756,000 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.

7

The Company accounts for stock option based compensation by estimating the fair value of options granted using a Black-Scholes option valuation model. For stock options issued during the nine months ended December 31, 2014 and 2013, the following assumptions were used to determine fair value:

	Nine Months Ended December 31,
Assumptions used:	2014			2013
Expected term (in years)		6 years			5 years
Expected volatility		49.0	%		49.0	%
Risk free interest rate		0.8	%		0.8	%
Expected dividend		1.0	%		1.0	%
Fair Value	$	14.90		$	17.71

Option transactions under the plans during the nine months ended December 31, 2014, are summarized as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Contractual Life		Aggregate Intrinsic Value
Outstanding at March 31, 2014		480,837		$	24.95
Granted		257,890			35.12
Exercised		(95,345	)		15.23
Forfeited		(2,104	)		47.52
Cancelled		(68,936	)		43.28
Outstanding at December 31, 2014		572,342		$	28.86		8.18 years	$	4,969,000
Exercisable at December 31, 2014		266,806		$	20.30		6.62 years	$	4,404,000

The aggregate intrinsic value is based on the difference between the exercise price and the Company’s December 31, 2014 common share market value for in-the-money options.

The following tables summarize information concerning currently outstanding and exercisable stock options at December 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		3,800		4.60 years	$	6.26		3,800	$	6.26
	9.57-13.84		54,287		5.25 years		10.79		54,287		10.79
	14.68-21.03		139,421		6.49 years		16.18		139,421		16.18
	21.96-27.69		24,000		8.85 years		24.83		24,000		24.83
	32.93-47.79		350,834		9.29 years		37.22		45,298		43.16
			572,342		8.18 years	$	28.86		266,806	$	20.30

The expected term of options granted is the safe harbor period. The volatility is based on historic volatilities from the traded shares of the Company over the past two and one-half years. The risk-free interest rate for periods matching the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend is based on the historic dividend of the Company. The Company has analyzed the forfeitures of stock and option grants and has used a ten percent forfeiture rate in the expense calculation.

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 December 31, 2014, the Company had 7,300 shares of restricted common stock issued

8

and outstanding and 13,231 unvested restricted stock units outstanding under the 2007 Plan and 17,700 shares of restricted common stock issued and outstanding and 34,219 unvested restricted stock units outstanding under the 2013 Plan and 60,734 unvested restricted stock units outstanding under a Board of Directors authorized executive inducement 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.

Restricted stock and restricted stock unit award activity under the Plans during the nine months ended December 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,		16,200		$	43.45		42,820		$	19.33
Awarded		20,200			33.67		8,000			53.91
Vested		(8,400	)		33.74		(34,120	)		15.66
Forfeited		(3,000	)		37.60		(500	)		41.52
Non-vested shares at December 31,		25,000		$	39.51		16,200		$	43.45

	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,		40,103		$	35.35		41,607		$	27.35
Granted		120,973			34.39		17,976			42.99
Vested		(50,959	)		32.85		(16,931	)		23.92
Forfeited		(1,933	)		43.81		(1,217	)		27.60
Non-vested shares at December 31,		108,184		$	35.30		41,435		$	35.53

NOTE C–NET EARNINGS PER SHARE

The Company’s basic net earnings per share is computed by dividing net earnings by the weighted average number of outstanding common shares. The Company’s diluted net earnings per share is computed by dividing net earnings by the weighted average number of outstanding common shares and common share equivalents relating to stock options, when dilutive. Options to purchase 131,738 and 154,725 shares of common stock with a weighted average exercise price of $44.42 and $44.38 outstanding during the three and nine month periods ended December 31, 2014, were excluded from the computation of common share equivalents because they were anti-dilutive as the per share exercise prices exceeded the per share market value. No options outstanding were excluded from the computation of common share equivalents because they were anti-dilutive during the three and nine month periods ended December 31, 2013.

Weighted average shares outstanding consist of the following for the three and nine months ended December 31, 2014 and 2013:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Weighted average number of common shares outstanding		12,941,000		13,420,000		12,920,000		13,338,000
Dilutive effect of option plan		121,000		237,000		152,000		360,000
Common and potential shares outstanding—diluted		13,062,000		13,657,000		13,072,000		13,698,000

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NOTE D–SHORT-TERM INVESTMENTS

Trading securities consisted of $10,008,000 and $60,008,000, invested in various money market funds at December 31, 2014 and March 31, 2014, respectively. All of the trading securities are deemed to be Level 1 investments.

NOTE E–INVENTORIES

Inventories consist of the following:

	December 31, 2014		March 31, 2014
Raw materials and sub-assemblies	$	37,059,000	$	52,580,000
Finished goods		71,048,000		55,327,000
Parts, garments and accessories		36,470,000		32,745,000
	$	144,577,000	$	140,652,000

NOTE F–LINE OF CREDIT

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. 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 LIBOR for a 30 day interest period plus 1.00%. As of December 31, 2014, the effective rate was 3.5%. 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 December 31, 2014 and March 31, 2014. The outstanding letters of credit balances were $3,581,000 and $4,074,000 at December 31, 2014 and 2013, 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 December 31, 2014.

NOTE G–ACCRUED EXPENSES

Accrued expenses consist of the following:

	December 31, 2014		March 31, 2014
Marketing	$	10,072,000	$	11,671,000
Compensation		7,579,000		9,338,000
Warranties		27,794,000		19,357,000
Insurance		6,334,000		7,026,000
Other		6,497,000		7,267,000
	$	58,276,000	$	54,659,000

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NOTE H–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 from the date of consumer registration on all-terrain vehicles (“ATVs”) and recreational off-highway vehicles (“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, including costs associated with safety recalls, which may occur after the standard warranty period. The following represents changes in the Company’s accrued warranty liability for the nine-month periods ended December 31:

	2014			2013
Balance at beginning of period	$	19,357,000		$	18,709,000
Warranty provision		19,409,000			12,369,000
Warranty claim payments		(10,972,000	)		(9,059,000	)
Balance at end of period	$	27,794,000		$	22,019,000

NOTE I–SHAREHOLDERS’ EQUITY

Share Repurchase Authorization

During the nine months ended December 31, 2014 and 2013, the Company invested $1,007,000 and $4,771,000, respectively, to repurchase and cancel 26,951 and 95,618 shares of common stock, respectively, pursuant to the Board of Directors’ prior share repurchase program authorizations. At December 31, 2014 and 2013, the Company has remaining authorization to repurchase up to $26,076,000 and $25,499,000 of its common stock, or approximately 735,000 and 448,000 shares based on the per share closing price of $35.50 and $56.98 as of December 31, 2014 and 2013, respectively.

Additional Paid-in-Capital

The components of the changes in additional paid-in-capital during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	—		$	10,945,000
Proceeds from issuance of common stock		34,000			18,000
Payment for income taxes on net-settled option exercises		(1,335,000	)		(7,629,000	)
Tax benefits from stock options exercised		752,000			7,495,000
Repurchase of common stock		(1,007,000	)		(4,771,000	)
Stock-based compensation expense		3,341,000			2,193,000
Balance at end of period	$	1,785,000		$	8,251,000

Accumulated Other Comprehensive Loss

The components of the changes in accumulated other comprehensive loss during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	(2,110,000	)	$	(4,166,000	)
Unrealized gain (loss) on derivative instruments, net of tax		1,804,000			934,000
Foreign currency translation adjustment		(4,016,000	)		2,271,000
Balance at end of period	$	(4,322,000	)	$	(961,000	)

11

Retained Earnings

The components of the changes in retained earnings during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	187,024,000		$	167,561,000
Net earnings		26,445,000			40,953,000
Dividends paid		(4,865,000	)		(4,023,000	)
Balance at end of period	$	208,604,000		$	204,491,000

NOTE J–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 December 31, 2014, the Company was contingently liable under these agreements for a maximum repurchase amount of approximately $68,850,000. 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 potential liability to the Company under these provisions is approximately $2,455,000 at December 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 practice to vigorously defend against these actions. The Company is not involved in any legal proceedings which it believes will have 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 probable exposures based on the legal proceedings and claims of which it is aware. 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.

NOTE K–FAIR VALUE MEASUREMENTS

As of December 31, 2014, we have notional Canadian dollar denominated cash flow hedges of approximately $47,202,000 (USD) with a weighted average contract exchange rate of 1.1017 CAD to USD. The Company’s foreign currency contract fair value was an asset totaling $2,439,000 and considered a Level 2 measurement as of December 31, 2014. As of March 31, 2014, the Company’s foreign currency contract fair value was a liability totaling $424,000 and considered a Level 2 measurement. See Note L for additional information regarding the Company’s Derivative Instruments and Hedging Activities.

NOTE L–DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to certain risks relating to its ongoing business operations. Foreign currency risk is the primary risk that is managed. Forward contracts are entered into in order to manage the foreign exchange risk associated with the forecasted revenue denominated in a foreign currency.

The Company’s foreign currency management objective is to reduce earnings volatility related to movements in foreign exchange rates and limit the risk of loss in value of certain of its foreign currency-denominated cash flows. The Company actively manages certain forecasted foreign currency exposures, principally its exports sales to Canada. To protect against the reduction in value of forecasted foreign currency cash flows resulting from export sales, the Company hedges portions of its forecasted revenue denominated in foreign currencies with forward contracts. When the dollar strengthens against the foreign currency, the decline in present value of future foreign currency revenue is offset by gains in the fair value of the forward contracts designated as hedges. Conversely, when the dollar weakens, the increase in the present value of future foreign currency cash flows is offset by losses in the

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fair value of the forward contracts. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company does not use any financial contracts for trading purposes.

At December 31, 2014, the Company had the following open foreign currency contracts:

Foreign Currency	Notional Amounts (in US Dollars)		Net Unrealized Gain (Loss)
Canadian Dollar	$	47,202,000	$	2,439,000

These contracts, with maturities through March 31, 2015, met the criteria for cash flow hedges and the unrealized gains or losses, after tax, are recorded as a component of accumulated other comprehensive income in shareholders’ equity.

The table below summarizes the carrying values of derivative instruments as of December 31, 2014 and March 31, 2014:

	Carrying Values of Derivative Instruments as of December 31, 2014
Derivatives designated as hedging instruments	Fair Value Assets		Fair Value (Liabilities)		Derivative Net Carrying Value
Foreign exchange contracts (1)	$	2,439,000	$	—	$	2,439,000

	Carrying Values of Derivative Instruments as of March 31, 2014
Derivatives designated as hedging instruments	Fair Value Assets		Fair Value (Liabilities)		Derivative Net Carrying Value
Foreign exchange contracts (1)	$	—	$	424,000	$	424,000

(1) Assets are included in Accounts Receivable and liabilities are included in Accounts Payable on the accompanying consolidated balance sheets.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income and reclassified into the income statement in the same period during which the hedged transaction affects the income statement. Gains and losses on the derivative representing hedge ineffectiveness are recognized in the current income statement. The table below provides data about the amount of gains and losses, net of tax, related to derivative instruments designated as cash flow hedges included in accumulated other comprehensive income for the three and nine months ended December 31, 2014 and 2013:

Derivatives in Cash Flow Hedging Relationships	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Foreign currency contracts	$	700,000	$	303,000	$	1,804,000	$	934,000

The ineffective portion of foreign currency contracts was not material for the three and nine month periods ended December 31, 2014 and 2013.

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NOTE M–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.

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales
Snowmobile & ATV units	$	165,453,000	$	196,295,000	$	512,813,000	$	503,285,000
Parts, garments, & accessories		28,282,000		29,495,000		87,040,000		81,798,000
Total net sales		193,735,000		225,790,000		599,853,000		585,083,000
Cost of goods sold
Snowmobile & ATV units		140,158,000		166,994,000		422,923,000		402,650,000
Parts, garments, & accessories		18,664,000		18,583,000		56,135,000		51,386,000
Total cost of goods sold		158,822,000		185,577,000		479,058,000		454,036,000
Gross profit
Snowmobile & ATV units		25,295,000		29,301,000		89,890,000		100,635,000
Parts, garments, & accessories		9,618,000		10,912,000		30,905,000		30,412,000
Total gross profit	$	34,913,000	$	40,213,000	$	120,795,000	$	131,047,000

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales by product line
Snowmobile units	$	81,523,000	$	118,061,000	$	295,466,000	$	276,060,000
ATV units		83,930,000		78,234,000		217,347,000		227,225,000
Parts, garments, & accessories		28,282,000		29,495,000		87,040,000		81,798,000
Total net sales	$	193,735,000	$	225,790,000	$	599,853,000	$	585,083,000

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales by geography, based on location of the customer
United States	$	122,412,000	$	151,966,000	$	361,607,000	$	319,355,000
Canada		56,104,000		49,684,000		166,865,000		173,851,000
Europe and other		15,219,000		24,140,000		71,381,000		91,877,000
Total net sales	$	193,735,000	$	225,790,000	$	599,853,000	$	585,083,000

The Company has identifiable long-lived assets with total carrying values of approximately $466,000 and $751,000 at December 31, 2014 and March 31, 2014, respectively, outside the United States in Canada and Europe.

NOTE N – RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition that supersedes existing revenue recognition guidance (but does not apply to nor supersede accounting guidance for lease contracts). The ASU’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in

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exchange for those goods or services. The ASU also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is effective for reporting periods beginning after December 15, 2016, and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application. The Company is currently in the process of evaluating the impact of the adoption of this ASU on the Company’s consolidated results.

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Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

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, 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.

Executive Overview

For the third quarter ended December 31, 2014, we reported net sales of $193.7 million and net earnings of $7.5 million, or $0.57 per diluted share, compared to third quarter ended December 31, 2013 net sales of $225.8 million and net earnings of $12.1 million, or $0.89 per diluted share. We continued to see strong growth in sales of our Wildcat side-by-side models and gained further market share in this category. Gross profit margins rose slightly to 18.0% compared to 17.8% in the prior-year quarter, primarily due to improved product mix. For the nine months ended December 31, 2014, we reported net sales of $599.9 million and net earnings of $26.4 million, or $2.02 per diluted share, compared to net sales of $585.1 million and net earnings of $41.0 million, or $2.99 per diluted share, for the same period last year.

Our snowmobile sales in the fiscal 2015 third quarter decreased 30.9% to $81.5 million, down from $118.1 million in the prior-year third quarter. The decrease in snowmobile sales during the quarter was negatively impacted by the timing of shipments to our OEM partner that moved to the fiscal 2015 second quarter. Following strong retail sales and market share gains in fiscal 2014, we continue to anticipate higher snowmobile sales to our dealers in the current fiscal year. We continue to expect our fiscal 2015 North American industry retail snowmobile sales to be flat to up 3%.

Our ATV/side-by-side sales for the third quarter increased 7.3% to $83.9 million versus $78.2 million in the prior-year quarter. Contributing to sales was growth in Wildcat side-by-side models, while core ATV sales were down. During the quarter, we continued our efforts to lower core ATV inventory at our North American dealers. We expect fiscal 2015 North American core ATV industry retail sales will be flat to slightly down and the side-by-side industry will continue to show growth in the 10% to 12% range.

Third quarter PG&A sales decreased 4.1% to $28.3 million versus $29.5 million in the prior-year quarter. All areas of our PG&A business performed well in the quarter with the exception of snow-related parts, which were impacted by lack of snow. Year-to-date, ATV/side-by-side accessories sales increased 14.0% led by the launch of the successful Wildcat Trail. We continue to expect our PG&A business to grow in fiscal 2015 through the expansion of our Wildcat accessories and continued growth of the parts business.

Fiscal 2015 remains a challenging year. We are working to further reduce dealer inventory levels by lowering the Company’s previously planned core ATV sales to North America dealers in the current fiscal year. To accelerate our core ATV inventory reduction plan, we will take a $7 million charge in the 2015 fourth quarter that we expect will enable us to reduce dealers’ non-current inventory at a much faster pace than previously planned. Similarly, due to increased international dealer and distributor inventory levels, we now expect lower international sales, including sales to Russia. As a result of these factors, combined with charges recorded in the first nine months, we are adjusting the Company’s outlook for fiscal 2015 full-year sales and earnings. Going forward, we remain focused on positioning the Company for improved long-term financial performance. For the fiscal year ending March 31, 2015, Arctic Cat now estimates fiscal 2015 full-year sales in the range of $705 to $715 million and net earnings of $0.36 to $0.44 per diluted share. Arctic Cat’s revised outlook includes an executive severance charge of $0.08 per diluted share recorded in the first quarter, a warranty expense charge of $0.26 per diluted share recorded in

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the second quarter, executive transition costs of $0.11 per diluted share in the third quarter and $0.03 per diluted share in the fourth quarter, and an estimated dealer inventory reduction charge of $0.40 per diluted share during the fourth quarter. Excluding these charges, the Company anticipates fiscal 2015 earnings in the range of $1.24 to $1.32 per diluted share, as adjusted. The new earnings guidance excludes any new CFO transition costs that could be incurred in the fourth quarter of fiscal 2015. Previously, Arctic Cat anticipated net earnings of $1.55 to $1.65 per diluted share on net sales in the range of $745 million to $755 million.

Results of Operations

Product Line Sales

	Three Months Ended December 31,													Nine Months Ended December 31,
($ in millions)	2014		Percent of Net Sales			2013		Percent of Net Sales			Change 2014 vs. 2013			2014		Percent of Net Sales			2013		Percent of Net Sales			Change 2014 vs. 2013
Snowmobile	$	81.5		42.1	%	$	118.1		52.3	%		(31.0	)%	$	295.5		49.3	%	$	276.1		47.2	%		7.0	%
ATV		83.9		43.3	%		78.2		34.6	%		7.3	%		217.3		36.2	%		227.2		38.8	%		(4.3	)%
PG&A		28.3		14.6	%		29.5		13.1	%		(4.1	)%		87.1		14.5	%		81.8		14.0	%		6.5	%
Net Sales	$	193.7		100.0	%	$	225.8		100.0	%		(14.2	)%	$	599.9		100.0	%	$	585.1		100.0	%		2.5	%

During the third quarter of fiscal 2015, net sales decreased 14.2% to $193.7 million from $225.8 million in the third quarter of fiscal 2014, mainly due to timing of shipments in previous quarters to our OEM partner that negatively impacted snowmobiles. Snowmobile unit volume decreased 29.5%, ATV unit volume increased 2.3%, and PG&A sales decreased $1.2 million or 4.1%. The Company continued to see strong retail growth in sales of our Wildcat side-by-side models and all areas of our PG&A business performed well in the quarter with the exception of snow-related parts, which were impacted by lack of snow. Net sales for the nine months ended December 31, 2014 increased 2.5% to $599.9 million from $585.1 million for the same period in fiscal 2014. Snowmobile unit volume increased 8.6%, ATV unit volume decreased 1.1%, and PG&A sales increased $5.3 million or 6.4%. The increase in net sales was driven by higher snowmobile sales to our OEM partner, in addition to increased sales from our PG&A business, due to the increase in sales of newly developed accessories for the expanding line of Wildcat models and snowmobile parts, garments and accessories. Sales of ATVs and side-by-sides are lower year-to-date, as planned to reduce dealer inventories.

Cost of Goods Sold

	Three Months Ended December 31,													Nine Months Ended December 31,
($ in millions)	2014		Percent of Net Sales			2013		Percent of Net Sales			Change 2014 vs. 2013			2014		Percent of Net Sales			2013		Percent of Net Sales			Change 2014 vs. 2013
Snowmobile & ATV units	$	140.1		72.3	%	$	167.0		74.0	%		(16.1	)%	$	422.9		70.5	%	$	402.6		68.8	%		5.0	%
PG&A		18.7		9.7	%		18.6		8.2	%		0.5	%		56.2		9.4	%		51.4		8.8	%		9.3	%
Total Cost of Goods Sold	$	158.8		82.0	%	$	185.6		82.2	%		(14.4	)%	$	479.1		79.9	%	$	454.0		77.6	%		5.5	%

During the third quarter of fiscal 2015, cost of sales decreased 14.4% to $ 158.8 million from $185.6 million for the third quarter of fiscal 2014. Fiscal 2015 snowmobile and ATV unit cost of sales decreased 16.1% to $140.1 million from $167.0 million, which was directionally in line with decreases in unit sales during the third quarter of fiscal 2015 compared to the third quarter of fiscal 2014. The third quarter of fiscal 2015 cost of sales for PG&A increased 0.5% to $18.7 million from $18.6 million for the third quarter of fiscal 2014 due to product mix. During the nine months of fiscal 2015, cost of sales increased 5.5% to $479.1 million from $454.0 million for the first nine months of fiscal 2014. Fiscal 2015 snowmobile and ATV unit cost of sales for the first nine months increased 5.0% to $422.9 million from $402.6 million, which was directionally in line with increases in unit sales for the nine months of fiscal 2015 compared to the same period of fiscal 2014, and the Company recorded a $5.4 million charge for ATV warranty expense in the second quarter. The first nine months of fiscal 2015 cost of sales for PG&A increased 9.3% to $56.2 million from $51.4 million for the nine months of fiscal 2014 due to increased sales.

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Gross Profit

	Three Months Ended December 31,									Nine Months Ended December 31,
($ in millions)	2014			2013			Change 2014 vs. 2013			2014			2013			Change 2014 vs. 2013
Gross Profit Dollars	$	34.9		$	40.2			(13.2	)%	$	120.8		$	131.1			(7.9	)%
Percentage of Net Sales		18.0	%		17.8	%		0.2	%		20.1	%		22.4	%		(2.3	)%

Gross profit decreased 13.2% to $34.9 million in the third quarter of fiscal 2015 from $40.2 million in the third quarter of fiscal 2014. The gross profit percentage for the third quarter of fiscal 2015 increased to 18.0% versus 17.8% in fiscal 2014. The increase in the third quarter of fiscal 2015 gross profit percentages was primarily due to improved product mix. Gross profit decreased 7.9% to $120.8 million in the first nine months of fiscal 2015 from $131.1 million in the first nine months of fiscal 2014. The gross profit percentage for the first nine months of fiscal 2015 decreased to 20.1% versus 22.4% in fiscal 2014. The decrease in the first nine months of fiscal 2015 gross profit percentages was primarily due to increased sales of lower margin OEM snowmobiles, ATV warranty expense, and unfavorable Canadian currency exchange compared to the same period of fiscal 2014.

Operating Expenses

	Three Months Ended December 31,									Nine Months Ended December 31,
($ in millions)	2014			2013			Change 2014 vs. 2013			2014			2013			Change 2014 vs. 2013
Selling & Marketing	$	11.8		$	9.7			21.6	%	$	30.8		$	28.8			6.9	%
Research & Development		6.5			5.7			14.0	%		18.5			17.3			6.9	%
General & Administrative		10.8			6.4			68.8	%		36.0			21.8			65.1	%
Total Operating Expenses	$	29.1		$	21.8			33.5	%	$	85.3		$	67.9			25.6	%
Percentage of Net Sales		15.0	%		9.7	%					14.2	%		11.6	%

Selling and Marketing expenses increased 21.6% to $11.8 million in the third quarter of fiscal 2015 compared to $9.7 million in the third quarter of fiscal 2014, primarily due to increased PG&A advertising and racing support. Research and Development expenses increased 14.0% to $6.5 million in the third quarter of fiscal 2015 compared to $5.7 million in the third quarter of fiscal 2014, primarily due to higher product development expenses. General and Administrative expenses increased 68.8% to $10.8 million in the third quarter of fiscal 2015 from $6.4 million in the third quarter of fiscal 2014, primarily due to higher legal expenses, higher Canadian hedge costs, and executive transition costs. Selling and Marketing expenses increased 6.9% to $30.8 million in the first nine months of fiscal 2015 compared to $28.8 million in the first nine months of fiscal 2014, primarily due to increased PG&A advertising and service and warranty. Research and Development expenses increased 6.9% to $18.5 million in the first nine months of fiscal 2015 compared to $17.3 million in the first nine months of fiscal 2014, primarily due to higher product development expenses. General and Administrative expenses increased 65.1% to $36.0 million in the first nine months of fiscal 2015 from $21.8 million in the first nine months of fiscal 2014, primarily due to higher legal expenses, higher Canadian hedge costs, a severance charge relating to the departure of our former CEO in May 2014, and executive transition costs.

Other Income / Expense

We had $8,000 in interest income in the third quarter of fiscal 2015 compared to $6,000 in the third quarter of fiscal 2014. Interest expense increased to $97,000 in the third quarter of fiscal 2015 from $96,000 in the third quarter of fiscal 2014. Interest income decreased to $18,000 in the first nine months of fiscal 2015 from $22,000 in the same period of fiscal 2014. Interest expense increased to $346,000 in the first nine months of fiscal 2015 from $136,000 in the same period of fiscal 2014. Interest expense was higher due to increased borrowing levels resulting primarily from lower cash levels at the beginning of the fiscal year compared to last year.

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Liquidity and Capital Resources

The seasonality of our snowmobile production cycle and the lead time between the commencement of snowmobile and ATV production and commencement of shipments late in the first quarter create significant fluctuations in our working capital requirements. 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. Our cash balances traditionally peak early in the fourth quarter and then decrease as working capital requirements increase when our snowmobile and ATV production cycles begin in the spring. Accounts receivable decreased to $59.1 million at December 31, 2014 from $74.1 million at December 31, 2013, primarily due to timing of snowmobile and ATV/side-by-side shipments. The accounts receivable balance at March 31, 2014 was $42.0 million. Inventory increased to $144.6 million at December 31, 2014 from $137.2 million at December 31, 2013. Inventory was $140.7 million at March 31, 2014. The increases in our inventory balances as of December 31, 2014 compared to March 31, 2014 are due to the seasonality of our snowmobile, ATV and PG&A businesses. During the nine months ended December 31, 2014, we repurchased 26,951 shares of our common stock at a total cost of $1.0 million under the share repurchase program previously approved by the Board of Directors in May 2013, and we repurchased an additional 70,987 shares of our common stock at a total cost of $2.8 million for the exercise and related income taxes for net-settled stock options and restricted stock units. Cash and short-term investments were $67.5 million and $62.5 million at December 31, 2014 and 2013, respectively, and $82.5 million at March 31, 2014. Cash and short-term investments decreased from March 31, 2014, due to the seasonality of our business. Our investment objectives are first, safety of principal, and second, rate of return. No short-term bank borrowings were outstanding at December 31, 2014 and 2013 and March 31, 2014.

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 and for at least the next 12 months.

Line of Credit

We 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 our prior $60,000,000 senior secured revolving credit agreement. 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. We were in compliance with the terms of the credit agreement as of December 31, 2014. See Note F of the notes to condensed consolidated financial statements herein for further discussion.

Dealer Floorplan Financing

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.

Certain Information Concerning Off-Balance Sheet Arrangements

As of December 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.

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Critical Accounting Policies

See our most recent Annual Report on Form 10-K for the year ended March 31, 2014 for a discussion of our critical accounting policies.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. This Quarterly Report on Form 10-Q, 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 expected product and industry demand. 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, 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 following: product mix and volume; competitive pressure on sales, pricing and sales incentives; increases in material or production cost which cannot be recouped in product pricing; changes in the sourcing of engines; interruption of dealer floorplan financing; warranty expenses and product recalls; foreign currency exchange rate fluctuations; product liability claims and other legal proceedings in excess of reserves or insured amounts; environmental and product safety regulatory activity; effects of the weather; general economic conditions and political changes; interest rate changes; consumer demand and confidence; and those factors set forth in the Company’s Annual Report on Form 10-K for the year ended March 31, 2014, under heading “Item 1A. Risk Factors.” 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 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to certain market risks relating to changes in inflation, foreign currency exchange rates and interest rates. These market risks have not changed significantly since March 31, 2014. As of December 31, 2014, we have notional Canadian dollar denominated cash flow hedges of approximately $47,202,000 (USD) with a weighted average contract exchange rate of 1.1017 CAD to USD. The fair values of the Canadian dollar contracts at December 31, 2014 represent an unrealized gain of $2,439,000. A ten percent fluctuation in the currency rates as of December 31, 2014 would have resulted in a change in the fair value of the Canadian dollar hedge contracts of approximately $4,720,000. However, since these contracts hedge foreign currency denominated transactions, any change in the fair value of the contracts would be offset by changes in the underlying value of the transactions being hedged.

Information regarding inflation, foreign currency exchange rates and interest rates is discussed within “Quantitative and Qualitative Disclosures About Market Risk-Foreign Exchange Rates and Interest Rates” and Footnote A to the Financial Statements in the Company’s 2014 Annual Report on Form 10-K. 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 and are not deemed to be significant.

Item 4. Controls and Procedures

Our management, including the person serving as our Chief Executive Officer and Acting Principal Financial Officer, has conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) pursuant to Rule 13a-15 under the Exchange Act as of December 31, 2014. Based on that evaluation, the person serving as our Chief Executive Officer and Acting Principal Financial Officer concluded that our disclosure controls and procedures are effective.

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There have been no changes in internal control over financial reporting during the fiscal quarter ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II – OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Company Purchases of Company Equity Securities

On August 8, 2014, the Company’s Board of Directors approved a $25,000,000 common stock share repurchase program, which supplements the program previously approved in May 2013. The share repurchase program does not have an expiration date. The following table presents the total number of shares repurchased during the third quarter of fiscal 2015 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 the third quarter of fiscal 2015:

Period	Total Number of Shares Purchased (1)		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 (2)
October 1, 2014 – October 31, 2014		0	$	0		0		774,697
November 1, 2014 – November 30, 2014		0		0		0		788,996
December 1, 2014 – December 31, 2014		988		35.50		0		734,544
Total		988	$	35.50		0		734,544

(1) 988 shares were withheld for the exercise and related income taxes for net-settled stock options and restricted stock units.

(2) 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.

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.

Item 5. Other Information

Indemnification Agreements

On December 15, 2014, the Board of Directors of the Company approved a form of indemnification agreement (the “Indemnification Agreement”) and authorized the Company to enter into an Indemnification Agreement with each of the Company’s current and future directors and officers (each an “Indemnitee”). The Indemnification Agreement clarifies the process and conditions under which the Company will advance expenses and indemnify each Indemnitee against costs incurred in connection with a proceeding to which an Indemnitee is made party to, or threatened to be made party to, by reason of anything done or not done by the Indemnitee in his or her official capacity, or in which he or she serves as a witness by reason of such official capacity. The indemnification rights provided for in the Indemnification Agreement supplement the indemnification and advancement rights provided by the Company’s Articles of Incorporation, Bylaws and applicable law.

This foregoing description of the material terms of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Indemnification Agreement, which is attached as Exhibit 10.5 hereto and is incorporated herein by reference.

Promotions and Compensatory Arrangements of Certain Officers

On November 17, 2014, we promoted Tracy J. Crocker, our Vice President/General Manager—Parts Garments and Accessories, to the position of Vice President/General Manager—ATV and Parts Garments and Accessories, and Bradley D. Darling, our Vice President/General Manager—Snowmobiles, to the position of Vice President/General Manager—Snowmobiles and North American Sales. In connection with his promotion on November 17, 2014, Mr. Crocker executed an employment agreement that substantially conforms to the terms of our Form of Executive Employment Agreement, which we previously filed with the Securities and Exchange Commission on May 30, 2014 as Exhibit 10.2 to our Annual Report on Form 10-K for fiscal 2014. Mr. Darling’s employment agreement remains unchanged. The employment agreements provide that the executives are eligible for annual incentive awards and long-term incentive compensation at the discretion of the Board, as well as for severance agreements if the executive is terminated without “cause” and complies with certain confidentiality, non-solicitation and release of claims conditions.

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Item 6. Exhibits

Exhibit Number	Description
3.1	Amended and Restated Articles of Incorporation of the Company	(1	)
3.2	Amended and Restated By-Laws of the Company	(2	)
4.1	Form of specimen common stock certificate	(3	)
10.1	Employment Agreement, dated November 10, 2014 between the Company and Christopher T. Metz.	(4	)
10.2	Change in Control Agreement, dated November 10, 2014, between the Company and Christopher T. Metz.	(4	)
10.3	Inducement Non-Qualified Stock Option Agreement between the Registrant and Christopher T. Metz.	(5	)
10.4	Inducement Restricted Stock Unit Agreement between the Registrant and Christopher T. Metz.	(5	)
10.5	Form of Indemnification Agreement	(5	)
31.1	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002	(5	)
32.1	Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002	(5	)
101	Financial statements from the quarterly report on Form 10-Q of the Company for the quarter and nine months ended December 31, 2014, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Financial Statements.	(5	)

(1) Incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1997 and the Company’s Current Report on Form 8-K filed August 11, 2014.

(2) Incorporated herein by reference to the Company’s Current Report on Form 8-K filed January 16, 2013 and the Company’s Current Report on Form 8-K filed August 11, 2014.

(3) Incorporated herein by reference to the Company’s Form S-1 Registration Statement. (File Number 33-34984)

(4) Incorporated herein by reference to the Company’s Current Report on Form 8-K filed November 14, 2014.

(5) Filed with this Quarterly Report on Form 10-Q.

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SIGNATURES

Pursuant to the requirements 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:	February 6, 2015	By	/s/ Christopher T. Metz
			Christopher T. Metz
			President, Chief Executive Officer and Acting Principal Financial Officer

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EX-10.3

Exhibit 10.3

ARCTIC CAT INC.

INDUCEMENT NON-QUALIFIED STOCK OPTION AGREEMENT

FOR EXECUTIVE OFFICER

THIS INDUCEMENT NON-QUALIFIED STOCK OPTION AGREEMENT is made as of the 3rd day of December, 2014 (the “Option Date”), between ARCTIC CAT INC., a Minnesota corporation (the “Company”), and Christopher T. Metz, an employee of the Company or one or more of its subsidiaries (the “Optionee”).

WHEREAS, the Company desires, by affording the Optionee an opportunity to purchase shares of its Common Stock, $.01 par value (the “Common Stock”), as hereinafter provided, to enable the Company and its Subsidiaries to induce the employment of the Optionee and to enable such individual to participate in the long-term success and growth of the Company by giving him a proprietary interest in the Company, thereby aligning the interests of such person with the Company’s shareholders;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed, and do hereby agree, as follows:

1. Grant of Option. The Company hereby grants to the Optionee the right and option (hereinafter called the “Option”) to purchase from the Company all or any part of an aggregate amount of 151,837 shares of the Common Stock of the Company on the terms and conditions herein set forth. The number of shares granted under this Stock Option is calculated to equate to a value of two million dollars ($2,000,000) based on the closing price of the Company’s stock (represented by symbol “ACAT” on the NASDAQ Exchange) on the Option Date and on an assumed Black-Scholes ratio of forty percent (40%). This grant does not qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended.

2. Purchase Price. The purchase price of the shares of the Common Stock covered by this Option shall be $32.93 per share, which is equal to 100% of the Fair Market Value of a Share on the Option Date.

3. Term of Option. The term of the Option shall be for a period of ten (10) years from the Option Date, subject to earlier termination as hereinafter provided. In no event shall the Option be exercisable after the expiration of the term of the Option.

4. Exercise of Option. During the first year the Option is outstanding it may not be exercised with respect to any of the shares covered thereby. Subject to the provisions of Sections 6 and 7 hereof, the Option may thereafter be exercised during the term specified in Section 3 as follows:

a. from and after 12 months from the Option Date, the Option may be exercised as to 50,612 (1/3 of the total grant) shares;

b. from and after 24 months from the Option Date, the Option may be exercised as to an additional 50,613 (1/3 of the total grant) shares;

c. from and after 36 months from the Option Date, the Option may be exercised as to an additional 50,612 (1/3 of the total grant) shares.

5. Non-Transferability. The Option shall not be transferable otherwise than by will or the laws of descent and distribution, and the Option may be exercised, during the lifetime of the Optionee, only by the Optionee or, if permissible under applicable law, by the Optionee’s guardian or legal representative; provided, that the Committee, in its discretion and subject to such additional terms and conditions as it determines, may permit Optionee to transfer the Option to any “family member” (as such term is defined in the General Instructions to Form S-8 (or any successor to such Instructions or such Form) under the Securities Act of 1933, as amended) at any time that Optionee holds such Option, provided that such transfers may not be for value (i.e., the transferor may not receive any consideration therefore) and the family member may not make any subsequent transfers other than by will or by the laws of descent and distribution. More particularly (but without limiting the generality of the foregoing), the Option may not be assigned, transferred (except as provided above), pledged, or hypothecated in any way; shall not be assignable by operation of law; and shall not be subject to execution, attachment, or similar process. Any attempted assignment, transfer, pledge, hypothecation, or other disposition of the Option contrary to the provisions hereof, and the levy of any execution, attachment, or similar process upon the Option, shall be null and void and without effect. The Committee may establish procedures as it deems appropriate for Optionee to designate a Person or Persons, as beneficiary or beneficiaries, to exercise the rights of Optionee and receive any property distributable with respect to the Option in the event of Optionee’s death.

6. Termination of Employment. In the event the employment of the Optionee shall be terminated for any reason whatsoever, the Option may be exercised by the Optionee at any time (i) until expiration of the term specified in Section 3, if such termination was by reason of Retirement at any time following the first anniversary of the date of this Agreement, (ii) within one (1) month after such termination if such termination was for any reason other than Retirement following the first anniversary of the date of this Agreement, Cause (as defined in the Optionee’s Employment Agreement (the “Employment Agreement”)) or due to death or Disability (as defined in the Employment Agreement), and (iii) no later than the date of termination if such termination was for Cause; provided, however, that in no event may the Option be exercised later than the expiration of the term specified in Section 3; and provided further, that (A) upon termination by reason of Retirement at any time following the first anniversary of the date of this Agreement, all outstanding Options then held by the Optionee that have not vested will continue to vest in accordance with their terms, (B) upon termination by the Company without Cause, or resignation by Optionee for Good Reason (as defined in the Employment Agreement), or due to death or Disability, all Options immediately will become vested as of the date of such termination, resignation or separation event, and (C) upon termination by the Company for Cause or resignation by Optionee other than for Good Reason, all Options held by the Optionee shall be exercisable only to the extent the Optionee shall have been entitled to do so at the date of his or her termination of employment.

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7. Death or Permanent Disability of Optionee; Change in Control. If the Optionee shall die while still employed by the Company or one or more of its subsidiaries, or shall become permanently and totally disabled (as determined by the Committee) while still employed by the Company or one or more of its subsidiaries, the Option may be exercised by the Optionee, his or her legal representative or the person to whom the Option is transferred by will or the applicable laws of descent and distribution, at any time within twelve (12) months after the Optionee’s death or termination by reason of permanent and total disability, but in no event later than the expiration of the term specified in Section 3 hereof. If a Change in Control (as defined in the Employment Agreement) occurs, all outstanding Options which have not otherwise vested, shall immediately vest in full and become exercisable.

8. Method of Exercising Option. Subject to the terms and conditions of this Option Agreement, the Option may be exercised by written notice to the Chief Financial Officer of the Company at the principal office of the Company. Such notice shall state the election to exercise the Option and the number of shares in respect of which it is being exercised, and shall be signed by the person so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such shares which payment shall be made (i) in cash or by certified check or bank draft payable to the Company, (ii) by any other form of legal consideration deemed sufficient by the Company and consistent with the purpose of this Agreement and applicable law, (iii) in the sole discretion of the Company, by delivery of shares of Common Stock of the Company having a Fair Market Value equal to the purchase price, or (iv) by a combination of cash and shares of Common Stock, whose Fair Market Value shall equal the purchase price. For purposes of this Section 8, the “Fair Market Value” of the Common Stock of the Company shall be established in the manner set forth in Section 20 of this Agreement. The certificate or certificates for the shares as to which the Option shall have been so exercised shall be registered in the name of the person so exercising the Option, or if the Optionee so elects, in the name of the Optionee or one other person as joint tenants, and shall be delivered as soon as practicable after the notice shall have been received. The Option and rights thereunder shall be exercisable during the Optionee’s lifetime only by the Optionee (except as provided herein) or, if permissible under applicable law, by the Optionee’s guardian or legal representative. In the event the Option shall be exercised by any person other than the Optionee, such notice shall be accompanied by appropriate proof of the right of such person to exercise the Option. All shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and nonassessable.

9. Withholding Requirements. Upon exercise of the Option by the Optionee and prior to the delivery of shares purchased pursuant to such exercise, the Company shall have the right to require the Optionee to remit to the Company cash in an amount sufficient to satisfy applicable federal and state tax withholding requirements. The Company shall inform the Optionee as to whether it will require the Optionee to remit cash for withholding taxes in accordance with the preceding sentence within two (2) business days after receiving from the Optionee notice that such Optionee intends to exercise, or has exercised, all or a portion of the Option. Alternatively, in order to assist Optionee with paying all or a portion of applicable taxes to be withheld or collected upon exercise, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Optionee to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the shares otherwise to be delivered upon exercise of the Option having a Fair Market Value (determined in the manner set

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forth in Section 20 of this Agreement) equal to the amount of such taxes, provided that the maximum amount shall not exceed the amount of the required withholding, or (ii) delivering to the Company shares of Common Stock other than shares issuable upon exercise having a Fair Market Value (determined in the manner set forth in Section 20 of this Agreement) equal to the amount of such taxes.

10. Administration.

a. Power and Authority of the Committee. The Agreement shall be administered by the Committee. Subject to the express provisions of the Agreement and to applicable law, the Committee shall have full power and authority to: (i) accelerate the exercisability or waive any restrictions relating to the Option; (ii) extend the exercise period; (iii) determine whether, to what extent and under what circumstances the Option may be exercised in cash, Shares, other securities, other Company equity awards held by Optionee or other property, or canceled, forfeited or suspended; (iv) interpret and administer the Agreement; (v) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of this Option and this Agreement; (vi) delegate to one or more executive officers of the Company the authority to administer this Option and this Agreement or any aspect of them; and (vii) make any other determination and take any other action, prospectively or retrospectively, that the Committee deems necessary or desirable for the administration of this Option and this Agreement. Unless otherwise expressly provided herein, all designations, determinations, interpretations and other decisions under or with respect to this Option and this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon the Optionee and any holder or beneficiary of the Option.

b. Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, exercise the powers and duties of the Committee hereunder without any further action of the Committee, and in that event, any reference to Committee shall also refer to the Board.

11. Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or any other similar corporate transaction, equity restructuring or event affects the Shares underlying the Option, then the Committee shall make an appropriate adjustment that will equalize the fair value of such Shares or Options before and after the transaction, restructuring or event, including but not limited to making adjustment to any or all of (i) the number and type of Shares (or other securities or other property) subject to this Option, and (ii) the purchase price or exercise price with respect to this Option.

12. General. The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Option Agreement, shall pay all original issue and transfer taxes with

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respect to the issue and transfer of shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith, and will from time to time use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

13. Investment Certificate. Prior to the receipt of the certificates pursuant to the exercise of the Option granted hereunder, the Optionee shall, if required in the Company’s discretion, demonstrate an intent to hold the shares acquired by exercise of the Option for investment and not with a view to resale or distribution thereof to the public by delivering to the Company an investment certificate or letter in such form as the Company may require.

14. Restrictions: Securities Exchange Listing. All Shares or other securities delivered under the Agreement pursuant to the Option or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Agreement, applicable federal or state securities laws and regulatory requirements, and the Committee may direct appropriate stop transfer orders and cause other legends to be placed on the certificates for such Shares or other securities to reflect such restrictions. The Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been and continue to be admitted for trading on the NASDAQ Exchange.

15. Status. Neither the Optionee nor the Optionee’s executor, administrator, heirs, or legatees shall be or have any rights or privileges of a shareholder of the Company in respect of the shares transferable upon exercise of the Option granted hereunder, unless and until certificates representing such shares shall be endorsed, transferred, and delivered and the transferee has caused the Optionee’s name to be entered as the shareholder of record on the books of the Company.

16. Company Authority. The existence of the Option herein granted shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock of the Company or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

17. No Employment Rights. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the employ of the Company or of any of its subsidiaries or interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Optionee at any time with or without Cause.

18. Income Tax Compliance.

a. “Deferred Compensation” means the Option, to the extent it provides for the “deferral of compensation” under a “nonqualified deferred compensation plan” (as those terms are defined under Code Section 409A) and that would be subject to the taxes

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specified in Code Section 409A(a)(l) if and to the extent that this Agreement does not meet or is not operated in compliance with the requirements of Code Section 409A(a)(2), (3) and (4) and the regulations promulgated thereunder, Deferred Compensation shall not include any amount that is otherwise exempt from the requirements of Code Section 409A and the regulations promulgated thereunder. Nothing in this Section 18 shall prohibit the Company from establishing a deferred compensation plan that allows for the deferral of salary, bonuses or other cash-based performance awards.

b. “Specified Employee” means the Optionee, so long as he is a key employee as described in Code Section 416(i)(l) (A)(i), (ii) and (iii) (and disregarding paragraph (5) thereof) at any time during the 12 months ending on each December 31, or such other “identification date” that applies consistently for all plans that provide “deferred compensation” that is subject to the requirements of Code Section 409A and regulations promulgated thereunder. The Optionee will be identified as a Specified Employee in accordance with the regulations promulgated under Code Section 409A, including with respect to the spin-off or merger of the company with any other company, and such identification shall apply for the twelve (12) month period commencing on the first day of the fourth month following the identification date. Notwithstanding the foregoing, the Optionee shall not be a Specified Employee unless the stock of the Company (or other member of a “controlled group of corporations” as determined under Code Section 1563) is publicly traded on an established securities market as of the date of Optionee’s “separation from service” as defined in Code Section 409A and the regulations promulgated thereunder.

c. Except to the extent such acceleration or deferral is permitted or complies with the requirements of Code Section 409A and the regulations promulgated thereunder, neither the Committee nor Optionee may accelerate or defer the time or schedule of any payment of, or the amount scheduled to be paid under, the Option to the extent that it constitutes Deferred Compensation; provided, however, that payment shall be permitted if it is in accordance with a fixed date or schedule or on account of “separation from service,” “disability,” “death,” “change in control” or “unforeseeable emergency” as those items are defined under Code Section 409A and the regulations promulgated thereunder.

d. Except as specifically provided otherwise herein, the Committee may not make payment to a Specified Employee of any portion of the Option that constitutes Deferred Compensation earlier than six (6) months following the Optionee’s “separation from service” as defined for purposes of Code Section 409A (or if earlier, upon the Specified Employee’s death), except as permitted under Code Section 409A. Any payments that otherwise would be payable to the Specified Employee during the foregoing six (6) month period will be accumulated and payment will be delayed until the first date after the six (6) month period.

e. The Committee may reform any provision in the Option to the extent it is intended to be exempt from Code Section 409A to maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Code Section 409A and to preserve the economic benefits intended by the Award.

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19. Amendment. The Board and the Committee may amend this Agreement, but no amendment shall be made (i) which would impair the rights of Optionee with respect to the Option, without Optionee’s consent, or (ii) which without the approval of the shareholders of the Company would cause the Agreement to no longer comply with Rule 16b-3 or any other regulatory requirements. Further, the Board and the Committee may, with Optionee’s consent, correct any defect, supply any omission or reconcile any inconsistency in the Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the Options or the Agreement.

20. Definitions. As used herein, the following terms shall have the meanings set forth below:

a. “Cause” shall have the meaning set forth in the Employment Agreement.

b. “Change in Control” shall have the meaning set forth in the Employment Agreement.

c. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.

d. “Committee” shall mean the Compensation and Human Resources Committee of the Board of Directors of the Company (each a “Director” and collectively the “Board”) or any other committee of the Board designated by the Board to administer this Agreement or any portion hereof.

e. “Deferred Compensation” shall have the meaning set forth in Section 18 of this Agreement.

f. “Disability” shall have the meaning set forth in the Employment Agreement.

g. “Early Retirement” shall mean retirement, with consent of the Committee at the time of retirement, from active employment with the Company and any Subsidiary or Parent Corporation of the Company.

h. “Fair Market Value” shall mean the value of the Shares on a given date as determined by the Committee that, if applicable, will result in the Option being exempt from the requirements of a “deferred compensation plan” under Section 409A of the Code.

i. “Good Reason” shall have the meaning set forth in the Employment Agreement.

j. “Normal Retirement” shall mean retirement from active employment with the Company and any Subsidiary or Parent Corporation of the Company on or after (i) age 65 or (ii) age 55 if the Optionee has ever served the Company as a full-time employee for at least 15 years.

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k. “Parent Corporation” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of the corporations (other than the Company) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

l. “Person” shall mean any individual or entity, including a corporation, partnership, limited liability company, association, joint venture or trust.

m. “Retirement” shall mean Normal Retirement or Early Retirement.

n. “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation.

o. “Share” or “Shares” shall mean the common stock, $.01 par value per share, of the Company (the “Common Stock”) or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 11 of this Agreement.

p. “Specified Employee” shall have the meaning set forth in Section 18(b) hereof.

q. “Subsidiary” shall mean any current or future corporation which would be a “subsidiary corporation” of the Company, as that term is defined in Section 424 of the Internal Revenue Code of 1986, as amended.

r. “Total Market Value” shall have the meaning set forth in Section 17(b) hereof.

21. General Provisions.

a. Governing Law. The validity, construction and effect of this Option and this Agreement, and any rules and regulations relating to this Option and this Agreement, shall be determined in accordance with the internal laws, and not the law of conflicts, of the State of Minnesota.

b. Severability. If any provision of this Option or this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify this Option or this Agreement under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of this Option or this Agreement, such provision shall be stricken as to such jurisdiction or Option, and the remainder of this Option or this Agreement shall remain in full force and effect.

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c. No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Option or this Agreement, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

d. Headings. Headings are given to the Sections and subsections of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.

e. No Trust or Fund Created. The Agreement is intended to constitute an “unfunded” plan for incentive and deferred compensation. Neither this Option nor this Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary and Optionee or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary pursuant to the Option, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created hereunder to deliver Shares or payments in lieu of or with respect to the Option granted hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Agreement.

f. Disputes. As a condition of the granting of the Option herein granted, the Optionee agrees, for the Optionee and the Optionee’s personal representatives, that any dispute or disagreement which may arise under or as a result of or pursuant to this Option Agreement shall be determined by the Board of Directors of the Company, in its sole discretion, and that any interpretation by the Board of the terms of this Option Agreement shall be final, binding and conclusive; provided, however, that any dispute over the reason for the Optionee’s termination of employment shall be determined in accordance with the provisions of the Employment Agreement.

g. Binding Effect. This Option Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Option Agreement to be duly executed by an officer thereunto duly authorized, and the Optionee has hereunto set his hand, all as of the day and year first above written.

ARCTIC CAT INC.
By:	/s/ CHRISTOPHER A. TWOMEY
	Christopher A. Twomey
	Its Chairman of the Board
By:	/s/ CHRISTOPHER T. METZ
	Christopher T. Metz, Optionee

EX-10.4

Exhibit 10.4

ARCTIC CAT INC.

INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT

FOR EXECUTIVE OFFICER

This INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT (“Agreement”) made as of the 3rd day of December, 2014 between ARCTIC CAT INC., a Minnesota corporation (the “Company”), and Christopher T. Metz, an employee of the Company or one or more of its subsidiaries (“Employee”).

WHEREAS, the Company desires, by granting Employee certain restricted stock units of the Company, as hereinafter provided, to enable the Company and its Subsidiaries to induce the employment of Employee and to enable such individual to participate in the long-term success and growth of the Company by giving him a proprietary interest in the Company, thereby aligning the interests of such person with the Company’s shareholders.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto have agreed, and do hereby agree, as follows:

1. Award.

a. Restricted Stock Units. Pursuant to this Agreement, 60,734 Restricted Stock Units (“RSUs”), each RSU representing the right to receive one Share, shall be issued as hereinafter provided in Employee’s name subject to certain restrictions thereon.

b. Issuance of RSUs. The RSUs shall be issued upon acceptance hereof by Employee and upon satisfaction of the conditions of this Agreement.

2. Rights of Employee with Respect to the Restricted Stock Units.

a. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle the Employee to any rights of a holder of Shares. The rights of Employee with respect to the RSUs shall remain forfeitable at all times prior to the date on which such rights become vested and the restrictions with respect to the RSUs lapse, in accordance with Section 3.

b. Conversion of Restricted Stock Units; Issuance of Shares. No Shares shall be issued to Employee prior to the date on which the RSUs vest and the restrictions with respect to the RSUs lapse, in accordance with Section 3. Neither this Section 2(b) nor any action taken pursuant to or in accordance with this Section 2(b) shall be construed to create a trust of any kind. After all restrictions with respect to RSUs lapse pursuant to Section 3, the Company shall cause to be issued no later than 2.5 months after the end of the Company’s fiscal year (subject to Section 5), in payment for such RSUs that number of Shares equal to the number of RSUs with respect to which the restrictions have lapsed.

3. Restrictions on RSUs. Employee hereby accepts the RSUs and agrees with respect thereto as follows:

a. Forfeiture Restrictions. The RSUs may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, and in the event of termination of Employee’s employment with the Company or employing subsidiary for Cause (as defined in Employee’s Employment Agreement (the “Employment Agreement”) or by Employee for any reason other than death, Disability (as defined in the Employment Agreement) or for Good Reason (as defined in the Employment Agreement) then, except as otherwise provided in the last sentence of Section 3(b) of this Agreement, Employee shall, for no consideration, forfeit to the Company all RSUs to the extent then subject to the Forfeiture Restrictions. The Committee may establish procedures as it deems appropriate for Employee to designate a Person or Persons, as beneficiary or beneficiaries, to exercise the rights of Employee and receive any property distributable with respect to the RSUs in the event of Employee’s death. The RSUs and rights thereunder shall be exercisable during the Employee’s lifetime only by the Employee (except as provided herein) or, if permissible under applicable law, by the Employee’s guardian or legal representative. The RSUs and rights thereunder may not be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Subsidiary.

The prohibition against transfer and the obligation to forfeit and surrender RSUs to the Company upon termination of employment are herein referred to as “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any purported transferee of RSUs.

b. Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to thirty-three and one-third percent (33 1/3%) of the RSUs on each of the first three anniversaries of the date of this Agreement provided that Employee has been continuously employed by the Company from the date of this Agreement through the lapse date. Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all of the RSUs on the earlier of (i) the occurrence of a Change in Control (as defined in the Employment Agreement), or (ii) the date Employee’s employment with the Company is terminated by reason of death, Disability or in the event of the Employee’s termination by the Company without Cause or resignation by Employee for Good Reason. Lapse of Forfeiture Restrictions under (i) or (ii) of this Section 3(b) shall be allowed only to the extent that the applicable Change in Control or termination events are at least as restrictive as the definitions set forth in Section 409A of the Code and the Treasury Regulations relating thereto. In the event Employee’s employment by the Company and any Subsidiary or Parent Corporation is terminated for Cause or Employee resigns without Good Reason, no further vesting shall occur and all RSUs then held by Employee that have not vested as of such termination or resignation will be terminated and forfeited to the Company for no consideration. In the event Employee’s employment is terminated by reason of resignation for Good Reason, the Committee which administers this Agreement or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the lapse of Forfeiture Restrictions as to any or all RSUs still subject to such Restrictions, such lapse to be effective on the date of such approval or Employee’s termination date, if later.

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4. Tax Matters.

a. Election to Defer Distribution. If the distribution of Shares upon lapsing of Forfeiture Restrictions applicable to the RSUs granted by this Agreement is subject to U.S. tax law, Employee may elect to defer the distribution of some or all of such Shares. Such deferral election shall be in accordance with the rules as established by the Committee and in general must be received in writing by the Company no later than the last day of the fiscal year preceding the fiscal year in which the RSU is granted.

b. Payment of Tax. To the extent that the receipt of the RSUs or the lapse of any Forfeiture Restrictions results in income to Employee for federal, state, local or foreign income tax laws or regulations, Employee shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money or Shares with a fair market value equal to the amount of such taxes, in each case as the Company may require to meet its withholding obligation under applicable tax laws or regulations (provided that the maximum amount shall not exceed the amount of the required withholding). If Employee fails to deliver the foregoing money or Shares, the Company is authorized to withhold from any cash or Shares remuneration then or thereafter payable to Employee any tax required to be withheld by reason of such resulting compensation income.

c. 409A Compliance. Notwithstanding anything to the contrary herein, and unless otherwise agreed by the Company and Employee in writing, if Employee is a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code as of the date of any termination, payment of deferred compensation subject to Section 409A of the Code shall be made to Employee in one lump sum no earlier than six months following the date of termination; provided, however, that any payment or portion thereof which is subject to an exemption for separation pay to specified employees as provided under Section 409A of the Code and the relevant Treasury Regulations thereunder, or is subject to any other exemption provided under Section 409A of the Code and the relevant Treasury Regulations thereunder allowing for payment to a specified employee prior to the date that is six months following the date of termination of employment, may be paid to Employee the later of twenty (20) days following such date of termination or the date Employee fulfills any conditions to receipt of such payment or portion thereof (which conditions must be capable of being satisfied within two and one-half months of the date of termination).

5. Delivery of Shares. The Company shall not be required to deliver any Shares upon vesting or lapse of restrictions of any RSUs until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied. Employee agrees that such Shares will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws. Employee also agrees (i) that the certificates representing such Shares may bear such legend or legends as the Company deems

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appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of such Shares on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the Shares. The Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been and continue to be admitted for trading on the NASDAQ Exchange.

6. No Right To Continued Employment. Nothing in this Agreement shall confer upon the Employee any right to continue in the employ of the Company or of any of its subsidiaries or interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Employee at any time, with or without Cause.

7. Administration.

a. Power and Authority of the Committee. The Agreement shall be administered by the Committee. Subject to the express provisions of the Agreement and to applicable law, the Committee shall have full power and authority to: (i) waive any restrictions relating to the RSUs; (iii) interpret and administer the Agreement; (iv) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of these RSUs and this Agreement; (v) delegate to one or more executive officers of the Company the authority to administer these RSUs and this Agreement or any aspect of them; and (vi) make any other determination and take any other action, prospectively or retrospectively, that the Committee deems necessary or desirable for the administration of these RSUs and this Agreement. Unless otherwise expressly provided herein, all designations, determinations, interpretations and other decisions under or with respect to these RSUs and this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon Employee and any holder or beneficiary of the RSUs. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of this Agreement or resolutions adopted in furtherance of hereof, including, without limitation, the right to make certain determinations and elections with respect to the RSUs.

b. Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, exercise the powers and duties of the Committee hereunder without any further action of the Committee, and in that event, any reference to Committee shall also refer to the Board.

8. Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or any

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other similar corporate transaction, equity restructuring or event affects the Shares underlying the RSUs, then the Committee shall make an appropriate adjustment that will equalize the fair value of such Shares or RSUs before and after the transaction, restructuring or event, including but not limited to making adjustment to any or all of the number and type of Shares (or other securities or other property) subject to these RSUs.

9. Company Authority. The existence of the RSUs herein granted shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the common stock of the Company or its rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

10. [Reserved]

11. Income Tax Compliance.

a. “Deferred Compensation” means the RSUs, to the extent it provides for the “deferral of compensation” under a “nonqualified deferred compensation plan” (as those terms are defined under Code Section 409A) and that would be subject to the taxes specified in Code Section 409A(a)(l) if and to the extent that this Agreement does not meet or is not operated in compliance with the requirements of Code Section 409A(a)(2), (3) and (4) and the regulations promulgated thereunder, Deferred Compensation shall not include any amount that is otherwise exempt from the requirements of Code Section 409A and the regulations promulgated thereunder. Nothing in this Section 11 shall prohibit the Company from establishing a deferred compensation plan that allows for the deferral of salary, bonuses or other cash-based performance awards.

b. “Specified Employee” means Employee, so long as he is a key employee as described in Code Section 416(i)(l)(A)(i), (ii) and (iii) (and disregarding paragraph (5) thereof) at any time during the 12 months ending on each December 31, or such other “identification date” that applies consistently for all plans that provide “deferred compensation” that is subject to the requirements of Code Section 409A and regulations promulgated thereunder. The Employee will be identified as a Specified Employee in accordance with the regulations promulgated under Code Section 409A, including with respect to the spin-off or merger of the company with any other company, and such identification shall apply for the twelve (12) month period commencing on the first day of the fourth month following the identification date. Notwithstanding the foregoing, Employee shall not be a Specified Employee unless the stock of the Company (or other member of a “controlled group of corporations” as determined under Code Section 1563) is publicly traded on an established securities market as of the date of Employee’s “separation from service” as defined in Code Section 409A and the regulations promulgated thereunder.

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c. Except to the extent such acceleration or deferral is permitted or complies with the requirements of Code Section 409A and the regulations promulgated thereunder, neither the Committee nor the Employee may accelerate or defer the time or schedule of any payment of, or the amount scheduled to be paid under, the RSUs to the extent that they constitutes Deferred Compensation; provided, however, that payment shall be permitted if it is in accordance with a fixed date or schedule or on account of “separation from service,” “disability,” “death,” “change in control” or “unforeseeable emergency” as those items are defined under Code Section 409A and the regulations promulgated thereunder.

d. Except as specifically provided otherwise herein, the Committee may not make payment to a Specified Employee of any portion of the RSUs that constitute Deferred Compensation earlier than six (6) months following the Employee’s “separation from service” as defined for purposes of Code Section 409A (or if earlier, upon the Specified Employee’s death), except as permitted under Code Section 409A. Any payments that otherwise would be payable to the Specified Employee during the foregoing six (6) month period will be accumulated and payment will be delayed until the first date after the six (6) month period.

e. The Committee may reform any provision in this Agreement to the extent the RSUs are intended to be exempt from Code Section 409A to maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Code Section 409A and to preserve the economic benefits intended by the Award.

12. Amendment. The Board and the Committee may amend this Agreement, but no amendment shall be made (i) which would impair the rights or economic benefit of Employee with respect to the RSUs, without Employee’s consent, or (ii) which without the approval of the shareholders of the Company would cause the Agreement to no longer comply with Rule 16b-3 or any other regulatory requirements. Further, the Board and the Committee, with the Employee’s consent, may correct any defect, supply any omission or reconcile any inconsistency in the Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the RSUs or the Agreement.

13. Definitions. Capitalized terms not defined herein shall have the meaning set forth in Employment Agreement, unless the context clearly requires otherwise. The following terms shall have the meanings set forth below:

a. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.

b. “Committee” shall mean the Compensation and Human Resources Committee of the Board of Directors of the Company (each a “Director” and collectively the “Board”) or any other committee of the Board designated by the Board to administer this Agreement or any portion hereof.

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c. “Deferred Compensation” shall have the meaning set forth in Section 11(a) of this Agreement.

d. “Parent Corporation” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of the corporations (other than the Company) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

e. “Person” shall mean any individual or entity, including a corporation, partnership, limited liability company, association, joint venture or trust.

f. “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation.

g. “Share” or “Shares” shall mean the common stock, $.01 par value per share, of the Company (the “Common Stock”) or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 8 of this Agreement.

h. “Specified Employee” shall have the meaning set forth in Section 11(b) hereof.

i. “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

14. General Provisions.

a. Governing Law. The validity, construction and effect of these RSUs and this Agreement, and any rules and regulations relating to these RSUs and this Agreement, shall be determined in accordance with the internal laws, and not the law of conflicts, of the State of Minnesota.

b. Severability. If any provision of these RSUs or this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify these RSUs or this Agreement under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of these RSUs or this Agreement, such provision shall be stricken as to such jurisdiction or RSUs, and the remainder of these RSUs or this Agreement shall remain in full force and effect.

c. No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to these RSUs or this Agreement, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

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d. Headings. Headings are given to the Sections and subsections of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.

e. No Trust or Fund Created. The Agreement is intended to constitute an “unfunded” plan for incentive and deferred compensation. Neither these RSUs nor this Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary and Employee or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary pursuant to the RSUs, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created hereunder to deliver Shares or payments in lieu of or with respect to the RSUs granted hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Agreement.

f. Disputes. As a condition of the granting of the RSUs herein granted, Employee agrees, for Employee and Employee’s personal representatives, that any dispute or disagreement which may arise under or as a result of or pursuant to this RSU Agreement shall be determined by the Board of Directors of the Company, in its sole discretion, and that any interpretation by the Board of the terms of this RSU Agreement shall be final, binding and conclusive; provided, however, that any dispute over the reason for the Employee’s termination of employment shall be determined in accordance with the provisions of the Employment Agreement.

g. Binding Effect. This RSU Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Employee has executed this Agreement, all as of the date first above written.

ARCTIC CAT INC.
By:	/s/ CHRISTOPHER A. TWOMEY
	Christopher A. Twomey
	Its Chairman of the Board
By:	/s/ CHRISTOPHER T. METZ
	Christopher T. Metz, Employee

EX-10.5

Exhibit 10.5

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of                      by and between Arctic Cat Inc., a Minnesota corporation (the “Company”), and                      (“Indemnitee”).

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers, or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The Amended and Restated Bylaws of the Company, as they may be amended from time to time (the “Bylaws”), provide that the Company shall indemnify and advance expenses to all directors and officers of the Company in the manner set forth therein and to the fullest extent permitted by applicable law. The Restated Articles of Incorporation of the Company, as they may be amended from time to time (the “Articles”), provide for the limitation of liability for directors. In addition, Indemnitee may also be entitled to indemnification pursuant to the Minnesota Business Corporation Act (“MBCA”). The Articles and the MBCA expressly provide that the liability limitation and indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent, and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and in furtherance of the Articles and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

WHEREAS, Indemnitee does not regard the protection available under the Company’s Articles, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer, director, or in other capacities without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve, and to take on additional service for or on behalf of the Company on the condition that he or she be so indemnified; and

NOW, THEREFORE, in consideration of the premises and covenants contained herein, the Company and Indemnitee covenant and agree as follows:

1. Service by Indemnitee. Indemnitee shall serve or continue to serve as a director or officer of the Company faithfully and to the best of Indemnitee’s ability so long as Indemnitee is duly elected or appointed or until Indemnitee tenders his or her resignation or is removed or terminated.

2. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 2(a) if, by reason of his or her Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 2(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined) and Liabilities (as hereinafter defined) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 2(b) if, by reason of his or her Corporate Status, Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 2(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent a federal or state court in the State of Minnesota shall determine that such indemnification may be made.

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(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he or she shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with each successfully resolved claim, issue, or matter. For purposes of this Section 2(c) and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue, or matter.

3. Contribution.

(a) Whether or not the indemnification provided in Sections 2 hereof is available, in respect of any threatened, pending or completed action, suit, or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b) Without diminishing or impairing the obligations of the Company set forth in Section 3(a), if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses and Liabilities actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors, or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such expenses, judgments, fines, or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all

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officers, directors, or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for Liabilities and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.

5. Notification and Defense of Claim. As a condition precedent to Indemnitee’s right to be indemnified, Indemnitee must notify the Company in writing as soon as practicable of any Proceeding involving such Indemnitee for which indemnity will or could be sought. With respect to any Proceeding of which the Company is so notified, the Company will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to Indemnitee. After notice from the Company to Indemnitee of its election so to assume such defense, the Company shall not be liable to Indemnitee for any legal or other expense subsequently incurred by Indemnitee in connection with such action, suit, proceeding, or investigation, other than as provided below in this Section 5. Indemnitee shall have the right to employ his or her own counsel in connection with such action, suit, proceeding, or investigation, but the fees the expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the Company, (ii) counsel to Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Company and Indemnitee in the conduct of the defense of such Proceeding or (iii) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and expenses of counsel for Indemnitee, shall be at the expense of the Company, except as otherwise

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expressly provided by this Agreement. The Company shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company or as to which counsel for Indemnitee shall have reasonably made the conclusion provided for in Section 5(ii) above. The Company shall not be required to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent. The Company shall not settle any Proceeding in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee will unreasonably withhold or delay its consent to any proposed settlement.

6. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances shall be made without regard to Indemnitee’s ability to repay such amounts and without regard to Indemnitee’s ultimate entitlement to indemnification under other provisions of this Agreement. Any advances and undertakings to repay pursuant to this Section 6 shall be unsecured and interest free.

7. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the MBCA and public policy of the State of Minnesota. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Chief Financial Officer of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 7(a) hereof, as soon as practicable (but in any event not later than sixty (60) days) after final disposition of the relevant Proceeding, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change of Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by

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majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel (as hereinafter defined) in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee.

(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 7(b)(ii) hereof, such Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 7(b)(i)(C) (or if Indemnitee requests that such selection be made by the Board), such Independent Counsel shall be selected by the Company in which case the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected. In any event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been received, deliver to the Company or Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 7(a) hereof and final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a federal or state court in the State of Minnesota or other court of competent jurisdiction for resolution of any objection which shall have been made by Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 7(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 7(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 7(c), regardless of the manner in which such Independent Counsel was selected or appointed. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days of such determination.

(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because

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Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 7(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(f) If the person, persons or entity empowered or selected under Section 7 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within the sixty (60) day period referred to in Section 7(b), the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such sixty (60) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto.

(g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel or member of the Board shall act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons, or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay,

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distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

8. Remedies of Indemnitee.

(a) In the event that (i) a determination is made pursuant to Section 7 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 7(b) of this Agreement within the sixty (60) day period referred to in Section 7(b), or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 7 of this Agreement, Indemnitee shall be entitled to an adjudication in any federal or state court in the State of Minnesota of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within one hundred and eighty (180) days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 8(a). The Company shall not oppose Indemnitee’s right to seek any such adjudication.

(b) In the event that a determination shall have been made pursuant to Section 7(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 8 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 7(b).

(c) If a determination shall have been made pursuant to Section 7(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 8, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law, as such may be amended from time to time.

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(d) In the event that Indemnitee, pursuant to this Section 8, seeks a judicial adjudication of his or her rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his or her behalf, in advance, any and all expenses of the types described in the definition of Expenses in Section 13 of this Agreement actually and reasonably incurred by him or her in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 8 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all expenses of the types described in the definition of Expenses in Section 13 of this Agreement and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

9. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Articles, the Bylaws, any agreement, a vote of stockholders, a resolution of directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the MBCA, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Articles, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for any director, officer, trustee, general partner, managing

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member, fiduciary, board of directors’ committee member, employee, or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee, or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(c) The Company hereby acknowledges that Indemnitee has or may from time to time obtain certain rights to indemnification, advancement of expenses and/or insurance provided by one or more third parties (collectively, the “Third-Party Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Third-Party Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses and Liabilities to the extent legally permitted and as required by the terms of this Agreement and the Articles or Bylaws (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Third-Party Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Third-Party Indemnitors from any and all claims against the Third-Party Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Third-Party Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Third-Party Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company.

(d) Except as provided in Section 9(c) above, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee (other than against the Third-Party Indemnitors), who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(e) Except as provided in Section 9(c) above, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement, or otherwise.

(f) Except as provided in Section 9(c) above, the Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member,

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fiduciary, board of directors’ committee member, employee, or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise.

10. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision, provided, that the foregoing shall not affect the rights of Indemnitee or the Third-Party Indemnitors set forth in Section 9(c); or

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as hereinafter defined) or similar provisions of state statutory law or common law; or

(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

11. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee, or agent of another corporation, partnership, joint venture, trust or other Enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 8 hereof) by reason of his or her Corporate Status, whether or not he or she is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

12. Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement between the parties hereto with respect to the subject matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are superseded by this Agreement, provided that this Agreement is a supplement to and in furtherance of the Articles and Bylaws and applicable law, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder.

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13. Definitions. For purposes of this Agreement:

(a) “Change of Control” means any one of the follow circumstances occurring after the date hereof: (i) there shall have occurred an event required to be reported with respect to the Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item or any similar schedule or form) under the Exchange Act, regardless of whether the Company is then subject to such reporting requirement; (ii) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) shall have become, without prior approval of the Company’s Board by approval of at least two-thirds of the Continuing Directors, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities (provided that, for the purpose of this Section 13(a)(ii), the term “person” shall exclude (x) the Company, (y) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (z) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company); (iii) there occurs a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty-one percent (51%) if the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; (iv) all or substantially all of the assets of the Company are sold or disposed of in a transaction or series of related transactions; (v) the approval of the stockholders of the Company of a complete liquidation of the Company; or (vi) the Continuing Directors cease for any reason to constitute at least a majority of the members of the Board.

(b) “Continuing Director” means (i) each director on the Board on the date hereof or (ii) any new director whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors on the date hereof or whose election or nomination was approved.

(c) “Corporate Status” means the status of a person who is or was a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee, or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise that such person is or was serving at the express written request of the Company.

(d) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

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(e) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(f) “Enterprise” means the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee, or agent.

(g) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(h) “Expenses” means all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include any Liabilities.

(i) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(j) “Liabilities” means any losses or liabilities, including any judgments, fines, ERISA excise taxes and penalties, penalties and amounts paid in settlement, arising out of or in connection with any Proceeding (including all interest, assessments, and other charges paid or payable in connection with or in respect of any judgments, fines, ERISA excise taxes and penalties, penalties or amounts paid in settlement).

(k) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry,

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administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of his or her Corporate Status, by reason of any action taken by him or her or of any inaction on his or her part while acting in his or her Corporate Status; in each case whether or not he or she is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 8 of this Agreement to enforce his or her rights under this Agreement.

14. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

15. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

17. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

(a) To Indemnitee at the address set forth below Indemnitee signature hereto.

(b) To the Company at:

505 Highway 169 North, Suite 1000

Plymouth, MN 55441

Attention: Chief Executive Officer

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or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

20. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Minnesota, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the federal or state courts in the State of Minnesota (the “Minnesota Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Minnesota Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Minnesota Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Minnesota Court has been brought in an improper or inconvenient forum.

SIGNATURE PAGE TO FOLLOW

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

ARCTIC CAT INC.
By:
	Name:
	Its:
INDEMNITEE
Name:
Address:

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Christopher T. Metz, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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. I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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. I have disclosed, based on my 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: February 6, 2015	/s/ Christopher T. Metz
	Christopher T. Metz,
	President, Chief Executive Officer and Acting Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.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, the undersigned President, Chief Executive Officer and Acting Principal Financial Officer of Arctic Cat Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarterly period ended December 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: February 6, 2015	/s/ Christopher T. Metz
	Christopher T. Metz,
	President, Chief Executive Officer and Acting Principal Financial Officer

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Accrued Expenses - Components of Accrued Expenses (Detail) (USD $)	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013
Accrued Liabilities, Current [Abstract]
Marketing	$ 10,072,000	$ 11,671,000
Compensation	7,579,000	9,338,000
Warranties	27,794,000	19,357,000	22,019,000	18,709,000
Insurance	6,334,000	7,026,000
Other	6,497,000	7,267,000
Accrued Liabilities, Current, Total	$ 58,276,000	$ 54,659,000

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Derivative Instruments and Hedging Activities - Schedule of Foreign Currency Contracts (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional Amounts	$ 47,202,000
Foreign Currency Canadian Dollar
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional Amounts	47,202,000
Net Unrealized Gain (Loss)	$ 2,439,000

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Commitments and Contingencies - Additional Information (Detail) (USD $)	Dec. 31, 2014
Loss Contingencies [Line Items]
Maximum repurchase amount repossessed products sold to dealers	$ 68,850,000
Loss Sharing Provisions
Loss Contingencies [Line Items]
Maximum repurchase amount repossessed products sold to dealers	$ 2,455,000

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Stock-Based Compensation - Restricted Stock Activity (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Restricted Stock Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested shares, Beginning balance	16,200	42,820
Awarded	20,200	8,000
Vested	(8,400)	(34,120)
Forfeited	(3,000)	(500)
Non-vested shares, Ending balance	25,000	16,200
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning	$ 43.45	$ 19.33
Awarded	$ 33.67	$ 53.91
Vested	$ 33.74	$ 15.66
Forfeited	$ 37.60	$ 41.52
Non-vested shares, Weighted-Average Grant Date Fair Value Ending	$ 39.51	$ 43.45
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested shares, Beginning balance	40,103	41,607
Awarded	120,973	17,976
Vested	(50,959)	(16,931)
Forfeited	(1,933)	(1,217)
Non-vested shares, Ending balance	108,184	41,435
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning	$ 35.35	$ 27.35
Awarded	$ 34.39	$ 42.99
Vested	$ 32.85	$ 23.92
Forfeited	$ 43.81	$ 27.60
Non-vested shares, Weighted-Average Grant Date Fair Value Ending	$ 35.30	$ 35.53

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PRODUCT WARRANTIES (Tables)

9 Months Ended

Dec. 31, 2014

Guarantees [Abstract]

Changes in Accrued Warranty Liability

The following represents changes in the Company’s accrued warranty liability for the nine-month periods ended December 31:

	2014			2013
Balance at beginning of period	$	19,357,000		$	18,709,000
Warranty provision		19,409,000			12,369,000
Warranty claim payments		(10,972,000	)		(9,059,000	)
Balance at end of period	$	27,794,000		$	22,019,000

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Derivative Instruments and Hedging Activities - Summary of Carrying Values of Derivative Instruments (Detail) (Designated as Hedging Instrument, USD $)	Dec. 31, 2014	Mar. 31, 2014
Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Fair Value Assets	$ 2,439,000
Fair Value (Liabilities)		424,000
Derivative Net Carrying Value	$ 2,439,000	$ 424,000

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Shareholders' Equity - Additional Information (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Stockholders' Equity Note [Abstract]
Value of shares repurchased and canceled	$ 1,007,000	$ 4,771,000
Number of shares repurchased and canceled	26,951	95,618
Stock repurchase program remaining authorized repurchase value	$ 26,076,000	$ 25,499,000
Remaining authorization common stock repurchase	735,000	448,000
Remaining authorization common stock repurchase per share closing price	$ 35.50	$ 56.98

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Inventories - Components of Inventories (Detail) (USD $)	Dec. 31, 2014	Mar. 31, 2014
Inventories [Abstract]
Raw materials and sub-assemblies	$ 37,059,000	$ 52,580,000
Finished goods	71,048,000	55,327,000
Parts, garments and accessories	36,470,000	32,745,000
Inventory, Total	$ 144,577,000	$ 140,652,000

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Segment Reporting - Schedule of Segment Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Net sales	$ 193,735,000	$ 225,790,000	$ 599,853,000	$ 585,083,000
Cost of goods sold	158,822,000	185,577,000	479,058,000	454,036,000
Gross profit	34,913,000	40,213,000	120,795,000	131,047,000
United States
Segment Reporting Information [Line Items]
Net sales	122,412,000	151,966,000	361,607,000	319,355,000
Canada
Segment Reporting Information [Line Items]
Net sales	56,104,000	49,684,000	166,865,000	173,851,000
Europe and other
Segment Reporting Information [Line Items]
Net sales	15,219,000	24,140,000	71,381,000	91,877,000
Snowmobile units - Product line
Segment Reporting Information [Line Items]
Net sales	81,523,000	118,061,000	295,466,000	276,060,000
ATV units - Product line
Segment Reporting Information [Line Items]
Net sales	83,930,000	78,234,000	217,347,000	227,225,000
Parts, garments & accessories - Product line
Segment Reporting Information [Line Items]
Net sales	28,282,000	29,495,000	87,040,000	81,798,000
Snowmobile & ATV units
Segment Reporting Information [Line Items]
Net sales	165,453,000	196,295,000	512,813,000	503,285,000
Cost of goods sold	140,158,000	166,994,000	422,923,000	402,650,000
Gross profit	25,295,000	29,301,000	89,890,000	100,635,000
Parts, garments & accessories
Segment Reporting Information [Line Items]
Net sales	28,282,000	29,495,000	87,040,000	81,798,000
Cost of goods sold	18,664,000	18,583,000	56,135,000	51,386,000
Gross profit	$ 9,618,000	$ 10,912,000	$ 30,905,000	$ 30,412,000

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Fair Value Measurements - Additional Information (Detail) (USD $)	Dec. 31, 2014	Mar. 31, 2014
Fair Value Measurements Disclosure [Line Items]
Denominated cash flow hedges notional amount	$ 47,202,000
Weighted average contract exchange rate	1.1017
Fair Value, Inputs, Level 2
Fair Value Measurements Disclosure [Line Items]
Foreign currency contract fair value liability	$ 2,439,000	$ 424,000

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NET EARNINGS PER SHARE

9 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

NET EARNINGS PER SHARE

NOTE C–NET EARNINGS PER SHARE

The Company’s basic net earnings per share is computed by dividing net earnings by the weighted average number of outstanding common shares. The Company’s diluted net earnings per share is computed by dividing net earnings by the weighted average number of outstanding common shares and common share equivalents relating to stock options, when dilutive. Options to purchase 131,738 and 154,725 shares of common stock with a weighted average exercise price of $44.42 and $44.38 outstanding during the three and nine month periods ended December 31, 2014, were excluded from the computation of common share equivalents because they were anti-dilutive as the per share exercise prices exceeded the per share market value. No options outstanding were excluded from the computation of common share equivalents because they were anti-dilutive during the three and nine month periods ended December 31, 2013.

Weighted average shares outstanding consist of the following for the three and nine months ended December 31, 2014 and 2013:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Weighted average number of common shares outstanding		12,941,000		13,420,000		12,920,000		13,338,000
Dilutive effect of option plan		121,000		237,000		152,000		360,000
Common and potential shares outstanding—diluted		13,062,000		13,657,000		13,072,000		13,698,000

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Shareholders' Equity - Components of Changes in Additional Paid-in-Capital (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Equity [Abstract]
Additional paid-in-capital, Beginning Balance		$ 10,945,000
Proceeds from issuance of common stock	34,000	18,000
Payment for income taxes on net-settled option exercises	(1,335,000)	(7,629,000)
Tax benefits from stock options exercised	752,000	7,495,000
Repurchase of common stock	(1,007,000)	(4,771,000)
Stock-based compensation expense	3,341,000	2,193,000
Additional paid-in-capital, Ending Balance	$ 1,785,000	$ 8,251,000

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Stock-Based Compensation - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	916,008		916,008
Stock-based compensation expense			$ 3,341,000	$ 2,193,000
Stock-based compensation related expense reduced in basic and diluted earnings per share	$ 0.03	$ 0.01	$ 0.19	$ 0.10
Unrecognized compensation costs related to non-vested stock options and restricted stock awards	7,756,000		7,756,000
Compensation expense related to non-vested stock options and restricted stock awards, weighted average period of recognition			2 years
Volatility look back period			2 years 6 months
Stock and option grants, forfeiture rate			10.00%
Restricted Stock Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock issued and outstanding	25,000	16,200	25,000	16,200	16,200	42,820
Restricted Stock Award | 2013 Omnibus Stock and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock issued and outstanding	17,700		17,700
Restricted Stock Award | 2007 Omnibus Stock and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock issued and outstanding	7,300		7,300
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock issued and outstanding	108,184	41,435	108,184	41,435	40,103	41,607
Restricted Stock Units | 2013 Omnibus Stock and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock issued and outstanding	34,219		34,219
Restricted Stock Units | 2007 Omnibus Stock and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock issued and outstanding	13,231		13,231
Restricted Stock Units | Executive Inducement Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock issued and outstanding	60,734		60,734
Stock Options and Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 543,000	$ 272,000	$ 3,341,000	$ 2,193,000
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted term			5 years
Stock options and restricted stock awards granted, vesting period			1 year
Minimum | 2013 Omnibus Stock and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock award requisite service period			2 years
Minimum | Restricted Stock Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options and restricted stock awards granted, vesting period			2 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted term			10 years
Stock options and restricted stock awards granted, vesting period			3 years
Maximum | 2013 Omnibus Stock and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock award requisite service period			3 years
Maximum | Restricted Stock Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options and restricted stock awards granted, vesting period			3 years

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SEGMENT REPORTING (Tables)

9 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Schedule of Segment Information

Accordingly, the segment information presented below is limited to sales and margin data.

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales
Snowmobile & ATV units	$	165,453,000	$	196,295,000	$	512,813,000	$	503,285,000
Parts, garments, & accessories		28,282,000		29,495,000		87,040,000		81,798,000
Total net sales		193,735,000		225,790,000		599,853,000		585,083,000
Cost of goods sold
Snowmobile & ATV units		140,158,000		166,994,000		422,923,000		402,650,000
Parts, garments, & accessories		18,664,000		18,583,000		56,135,000		51,386,000
Total cost of goods sold		158,822,000		185,577,000		479,058,000		454,036,000
Gross profit
Snowmobile & ATV units		25,295,000		29,301,000		89,890,000		100,635,000
Parts, garments, & accessories		9,618,000		10,912,000		30,905,000		30,412,000
Total gross profit	$	34,913,000	$	40,213,000	$	120,795,000	$	131,047,000

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales by product line
Snowmobile units	$	81,523,000	$	118,061,000	$	295,466,000	$	276,060,000
ATV units		83,930,000		78,234,000		217,347,000		227,225,000
Parts, garments, & accessories		28,282,000		29,495,000		87,040,000		81,798,000
Total net sales	$	193,735,000	$	225,790,000	$	599,853,000	$	585,083,000

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales by geography, based on location of the customer
United States	$	122,412,000	$	151,966,000	$	361,607,000	$	319,355,000
Canada		56,104,000		49,684,000		166,865,000		173,851,000
Europe and other		15,219,000		24,140,000		71,381,000		91,877,000
Total net sales	$	193,735,000	$	225,790,000	$	599,853,000	$	585,083,000

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Shareholders' Equity - Components of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Equity [Abstract]
Balance at beginning of period			$ (2,110,000)	$ (4,166,000)
Unrealized gain (loss) on derivative instruments, net of tax	700,000	303,000	1,804,000	934,000
Foreign currency translation adjustment	(1,109,000)	545,000	(4,016,000)	2,271,000
Balance at end of period	$ (4,322,000)	$ (961,000)	$ (4,322,000)	$ (961,000)

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Stock-Based Compensation - Assumptions Used to Determine Fair Value of Stock Option Issued (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected term (in years)	6 years	5 years
Expected volatility	49.00%	49.00%
Risk free interest rate	0.80%	0.80%
Expected dividend	1.00%	1.00%
Fair Value	$ 14.90	$ 17.71

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Stock-Based Compensation - Option Transactions Under Plans (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of Shares under option, Outstanding beginning balance	480,837
Number of Shares under option, Granted	257,890
Number of Shares under option, Exercised	(95,345)
Number of Shares under option, Forfeited	(2,104)
Number of Shares under option, Cancelled	(68,936)
Number of Shares under option, Outstanding ending balance	572,342
Number of Shares under option, Options exercisable	266,806
Weighted-Average Exercise Price, Outstanding beginning balance	$ 24.95
Weighted-Average Exercise Price, Granted	$ 35.12
Weighted-Average Exercise Price, Exercised	$ 15.23
Weighted-Average Exercise Price, Forfeited	$ 47.52
Weighted-Average Exercise Price, Cancelled	$ 43.28
Weighted-Average Exercise Price, Outstanding ending balance	$ 28.86
Weighted-Average Exercise Price, Options exercisable	$ 20.30
Weighted-Average Contractual Life Years, Outstanding ending balance	8 years 2 months 5 days
Weighted-Average Contractual Life Years, Exercisable ending balance	6 years 7 months 13 days
Aggregate Intrinsic Value, Outstanding ending balance	$ 4,969,000
Aggregate Intrinsic Value, Exercisable ending balance	$ 4,404,000

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STOCK-BASED COMPENSATION

9 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

NOTE B–STOCK-BASED COMPENSATION

Stock Option Plans

The Company has outstanding equity awards under a 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”) and a 2007 Omnibus Stock and Incentive Plan (the “2007 Plan,” and along with the 2013 Plan, the “Plans”), previously approved by the Company’s shareholders. The Plans provide for incentive and non-qualified stock options, restricted stock and restricted stock unit awards and other incentive awards to be granted to directors, officers, other key employees and consultants. 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 December 31, 2014, the Company had 916,008 shares of common stock available for grant under the plans.

For the three months ended December 31, 2014 and 2013, the Company recorded stock-based compensation expense for stock options and restricted stock awards of $543,000 and $272,000, respectively, and for the nine months ended December 31, 2014 and 2013, the Company recorded stock-based compensation expense for stock options and restricted stock awards of $3,341,000 and $2,193,000, 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 $0.03 and $0.01 for each of the three months ended December 31, 2014 and 2013, respectively, and by $0.19 and $0.10 for both basic and diluted earnings per share for the nine months ended December 31, 2014 and 2013, respectively.

At December 31, 2014, the Company had $7,756,000 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 Company accounts for stock option based compensation by estimating the fair value of options granted using a Black-Scholes option valuation model. For stock options issued during the nine months ended December 31, 2014 and 2013, the following assumptions were used to determine fair value:

	Nine Months Ended December 31,
Assumptions used:	2014			2013
Expected term (in years)		6 years			5 years
Expected volatility		49.0	%		49.0	%
Risk free interest rate		0.8	%		0.8	%
Expected dividend		1.0	%		1.0	%
Fair Value	$	14.90		$	17.71

Option transactions under the plans during the nine months ended December 31, 2014, are summarized as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Contractual Life		Aggregate Intrinsic Value
Outstanding at March 31, 2014		480,837		$	24.95
Granted		257,890			35.12
Exercised		(95,345	)		15.23
Forfeited		(2,104	)		47.52
Cancelled		(68,936	)		43.28
Outstanding at December 31, 2014		572,342		$	28.86		8.18 years	$	4,969,000
Exercisable at December 31, 2014		266,806		$	20.30		6.62 years	$	4,404,000

The aggregate intrinsic value is based on the difference between the exercise price and the Company’s December 31, 2014 common share market value for in-the-money options.

The following tables summarize information concerning currently outstanding and exercisable stock options at December 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		3,800		4.60 years	$	6.26		3,800	$	6.26
	9.57-13.84		54,287		5.25 years		10.79		54,287		10.79
	14.68-21.03		139,421		6.49 years		16.18		139,421		16.18
	21.96-27.69		24,000		8.85 years		24.83		24,000		24.83
	32.93-47.79		350,834		9.29 years		37.22		45,298		43.16
			572,342		8.18 years	$	28.86		266,806	$	20.30

The expected term of options granted is the safe harbor period. The volatility is based on historic volatilities from the traded shares of the Company over the past two and one-half years. The risk-free interest rate for periods matching the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend is based on the historic dividend of the Company. The Company has analyzed the forfeitures of stock and option grants and has used a ten percent forfeiture rate in the expense calculation.

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 December 31, 2014, the Company had 7,300 shares of restricted common stock issued and outstanding and 13,231 unvested restricted stock units outstanding under the 2007 Plan and 17,700 shares of restricted common stock issued and outstanding and 34,219 unvested restricted stock units outstanding under the 2013 Plan and 60,734 unvested restricted stock units outstanding under a Board of Directors authorized executive inducement 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.

Restricted stock and restricted stock unit award activity under the Plans during the nine months ended December 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,		16,200		$	43.45		42,820		$	19.33
Awarded		20,200			33.67		8,000			53.91
Vested		(8,400	)		33.74		(34,120	)		15.66
Forfeited		(3,000	)		37.60		(500	)		41.52
Non-vested shares at December 31,		25,000		$	39.51		16,200		$	43.45

	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,		40,103		$	35.35		41,607		$	27.35
Granted		120,973			34.39		17,976			42.99
Vested		(50,959	)		32.85		(16,931	)		23.92
Forfeited		(1,933	)		43.81		(1,217	)		27.60
Non-vested shares at December 31,		108,184		$	35.30		41,435		$	35.53

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Stock-Based Compensation - Summary of Information Concerning Currently Outstanding and Exercisable Stock Option (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding	572,342
Weighted Average Remaining Contractual Life	8 years 2 months 5 days
Weighted Average Exercise Price	$ 28.86
Number Exercisable	266,806
Weighted Average Exercise Price	$ 20.30
6.26
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices, Maximum	$ 6.26
Number Outstanding	3,800
Weighted Average Remaining Contractual Life	4 years 7 months 6 days
Weighted Average Exercise Price	$ 6.26
Number Exercisable	3,800
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	54,287
Weighted Average Remaining Contractual Life	5 years 3 months
Weighted Average Exercise Price	$ 10.79
Number Exercisable	54,287
Weighted Average Exercise Price	$ 10.79
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	139,421
Weighted Average Remaining Contractual Life	6 years 5 months 27 days
Weighted Average Exercise Price	$ 16.18
Number Exercisable	139,421
Weighted Average Exercise Price	$ 16.18
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	8 years 10 months 6 days
Weighted Average Exercise Price	$ 24.83
Number Exercisable	24,000
Weighted Average Exercise Price	$ 24.83
32.93-47.79
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 32.93
Range of Exercise Prices, Maximum	$ 47.79
Number Outstanding	350,834
Weighted Average Remaining Contractual Life	9 years 3 months 15 days
Weighted Average Exercise Price	$ 37.22
Number Exercisable	45,298
Weighted Average Exercise Price	$ 43.16

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Product Warranties - Additional Information (Detail)	9 Months Ended
	Dec. 31, 2014
Snowmobiles
Product Warranty [Line Items]
Product warranty term from date of consumer registration	12 months
ATV And ROV Units
Product Warranty [Line Items]
Product warranty term from date of consumer registration	6 months

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Segment Reporting - Additional Information (Detail) (Europe and Canada, USD $)	Dec. 31, 2014	Mar. 31, 2014
Europe and Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets with carrying value	$ 466,000	$ 751,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (USD $)	Dec. 31, 2014	Mar. 31, 2014
Current Assets
Cash and cash equivalents	$ 57,484,000	$ 22,524,000
Short-term investments	10,008,000	60,008,000
Accounts receivable, less allowances	59,102,000	42,003,000
Inventories	144,577,000	140,652,000
Prepaid expenses	2,284,000	3,815,000
Income taxes receivable		1,323,000
Deferred income taxes	19,128,000	14,971,000
Total current assets	292,583,000	285,296,000
Property and Equipment
Machinery, equipment and tooling	194,072,000	181,028,000
Land, buildings and improvements	30,000,000	29,758,000
Property, Plant and Equipment, Gross, Total	224,072,000	210,786,000
Less accumulated depreciation	165,542,000	154,855,000
Property, Plant and Equipment, Net, Total	58,530,000	55,931,000
Other Assets	900,000	1,067,000
Assets, Total	352,013,000	342,294,000
Current Liabilities
Accounts payable	69,217,000	93,882,000
Accrued expenses	58,276,000	54,659,000
Income taxes payable	9,398,000
Total current liabilities	136,891,000	148,541,000
Deferred Income Taxes	8,926,000	8,710,000
Commitments and Contingencies
Shareholders' Equity
Preferred stock
Common stock, par value $.01; 37,440,000 shares authorized; shares issued and outstanding: 12,946,809 at December 31, 2014 and 12,882,705 at March 31, 2014	129,000	129,000
Additional paid-in-capital	1,785,000
Accumulated other comprehensive loss	(4,322,000)	(2,110,000)
Retained earnings	208,604,000	187,024,000
Total shareholders' equity	206,196,000	185,043,000
Liabilities and Equity, Total	352,013,000	342,294,000
Preferred Stock - Series B Junior Participating
Shareholders' Equity
Preferred stock

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Shareholders' Equity - Components of Changes in Retained Earnings (Detail) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Equity [Abstract]
Balance at beginning of period			$ 187,024,000	$ 167,561,000
Net earnings	7,487,000	12,120,000	26,445,000	40,953,000
Dividends paid			(4,865,000)	(4,023,000)
Balance at end of period	$ 208,604,000	$ 204,491,000	$ 208,604,000	$ 204,491,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net earnings	$ 26,445,000	$ 40,953,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	12,241,000	12,230,000
Deferred income tax expense	(5,000,000)	4,432,000
Stock-based compensation expense	3,341,000	2,193,000
Loss on disposal of fixed assets	51,000	1,000
Changes in operating assets and liabilities:
Trading securities	50,000,000	70,736,000
Accounts receivable, less allowances	(16,086,000)	(41,744,000)
Inventories	(5,860,000)	(39,153,000)
Prepaid expenses	1,522,000	278,000
Accounts payable	(24,028,000)	(4,825,000)
Accrued expenses	3,925,000	(1,461,000)
Income taxes	10,915,000	(1,231,000)
Net cash provided by operating activities	57,466,000	42,409,000
Cash flows from investing activities:
Purchases of property and equipment	(14,847,000)	(13,712,000)
Net cash used in investing activities	(14,847,000)	(13,712,000)
Cash flows from financing activities:
Checks written in excess of bank balances		143,000
Proceeds from issuance of common stock	34,000	18,000
Payments for income taxes on net-settled option exercises	(1,335,000)	(7,627,000)
Tax benefit from stock options exercises	752,000	7,495,000
Dividends paid	(4,865,000)	(4,023,000)
Repurchase of common stock	(1,007,000)	(4,771,000)
Net cash used in financing activities	(6,421,000)	(8,765,000)
Effect of exchange rate changes on cash and cash equivalents	(1,238,000)	534,000
Net increase in cash and cash equivalents	34,960,000	20,466,000
Cash and cash equivalents at beginning of period	22,524,000	35,566,000
Cash and cash equivalents at end of period	57,484,000	56,032,000
Supplemental disclosure of cash payments for:
Income taxes	2,616,000	11,088,000
Interest	$ 344,000	$ 127,000

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Net Earnings Per Share - Schedule of Weighted Average Shares Outstanding (Detail)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share [Abstract]
Weighted average number of common shares outstanding	12,941,000	13,420,000	12,920,000	13,338,000
Dilutive effect of option plan	121,000	237,000	152,000	360,000
Common and potential shares outstanding-diluted	13,062,000	13,657,000	13,072,000	13,698,000

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NET EARNINGS PER SHARE (Tables)

9 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of Weighted Average Shares Outstanding

Weighted average shares outstanding consist of the following for the three and nine months ended December 31, 2014 and 2013:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Weighted average number of common shares outstanding		12,941,000		13,420,000		12,920,000		13,338,000
Dilutive effect of option plan		121,000		237,000		152,000		360,000
Common and potential shares outstanding—diluted		13,062,000		13,657,000		13,072,000		13,698,000

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Short-Term Investments - Additional Information (Detail) (USD $)	Dec. 31, 2014	Mar. 31, 2014
Short-term Investments [Abstract]
Investment in money market funds	$ 10,008,000	$ 60,008,000

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ACCRUED EXPENSES (Tables)

9 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Components of Accrued Expenses

Accrued expenses consist of the following:

	December 31, 2014		March 31, 2014
Marketing	$	10,072,000	$	11,671,000
Compensation		7,579,000		9,338,000
Warranties		27,794,000		19,357,000
Insurance		6,334,000		7,026,000
Other		6,497,000		7,267,000
	$	58,276,000	$	54,659,000

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BASIS OF PRESENTATION

9 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

BASIS OF PRESENTATION

NOTE A–BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Arctic Cat Inc. (the “Company”) have been prepared in accordance with Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.

In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position as of December 31, 2014, results of operations for the three-month and nine-month periods ended December 31, 2014 and 2013 and cash flows for the nine-month periods ended December 31, 2014 and 2013. Results of operations for the interim periods are not necessarily indicative of results for the full year. The condensed consolidated balance sheet as of March 31, 2014 is derived from the audited balance sheet as of that date.

Preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses. Actual results could differ from those estimates.

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) (USD $)	Dec. 31, 2014	Mar. 31, 2014
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	2,050,000	2,050,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	37,440,000	37,440,000
Common stock, shares issued	12,946,809	12,882,705
Common stock, shares outstanding	12,946,809	12,882,705
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	0	0

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FAIR VALUE MEASUREMENTS

9 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE K–FAIR VALUE MEASUREMENTS

As of December 31, 2014, we have notional Canadian dollar denominated cash flow hedges of approximately $47,202,000 (USD) with a weighted average contract exchange rate of 1.1017 CAD to USD. The Company’s foreign currency contract fair value was an asset totaling $2,439,000 and considered a Level 2 measurement as of December 31, 2014. As of March 31, 2014, the Company’s foreign currency contract fair value was a liability totaling $424,000 and considered a Level 2 measurement. See Note L for additional information regarding the Company’s Derivative Instruments and Hedging Activities.

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Document and Entity Information	9 Months Ended
	Dec. 31, 2014	Jan. 30, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	ACAT
Entity Registrant Name	ARCTIC CAT INC
Entity Central Index Key	0000719866
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		12,946,809

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

9 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE L–DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to certain risks relating to its ongoing business operations. Foreign currency risk is the primary risk that is managed. Forward contracts are entered into in order to manage the foreign exchange risk associated with the forecasted revenue denominated in a foreign currency.

The Company’s foreign currency management objective is to reduce earnings volatility related to movements in foreign exchange rates and limit the risk of loss in value of certain of its foreign currency-denominated cash flows. The Company actively manages certain forecasted foreign currency exposures, principally its exports sales to Canada. To protect against the reduction in value of forecasted foreign currency cash flows resulting from export sales, the Company hedges portions of its forecasted revenue denominated in foreign currencies with forward contracts. When the dollar strengthens against the foreign currency, the decline in present value of future foreign currency revenue is offset by gains in the fair value of the forward contracts designated as hedges. Conversely, when the dollar weakens, the increase in the present value of future foreign currency cash flows is offset by losses in the fair value of the forward contracts. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company does not use any financial contracts for trading purposes.

At December 31, 2014, the Company had the following open foreign currency contracts:

Foreign Currency	Notional Amounts (in US Dollars)		Net Unrealized Gain (Loss)
Canadian Dollar	$	47,202,000	$	2,439,000

These contracts, with maturities through March 31, 2015, met the criteria for cash flow hedges and the unrealized gains or losses, after tax, are recorded as a component of accumulated other comprehensive income in shareholders’ equity.

The table below summarizes the carrying values of derivative instruments as of December 31, 2014 and March 31, 2014:

	Carrying Values of Derivative Instruments as of December 31, 2014
Derivatives designated as hedging instruments	Fair Value Assets		Fair Value (Liabilities)		Derivative Net Carrying Value
Foreign exchange contracts (1)	$	2,439,000	$	—	$	2,439,000

	Carrying Values of Derivative Instruments as of March 31, 2014
Derivatives designated as hedging instruments	Fair Value Assets		Fair Value (Liabilities)		Derivative Net Carrying Value
Foreign exchange contracts (1)	$	—	$	424,000	$	424,000

(1) Assets are included in Accounts Receivable and liabilities are included in Accounts Payable on the accompanying consolidated balance sheets.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income and reclassified into the income statement in the same period during which the hedged transaction affects the income statement. Gains and losses on the derivative representing hedge ineffectiveness are recognized in the current income statement. The table below provides data about the amount of gains and losses, net of tax, related to derivative instruments designated as cash flow hedges included in accumulated other comprehensive income for the three and nine months ended December 31, 2014 and 2013:

Derivatives in Cash Flow Hedging Relationships	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Foreign currency contracts	$	700,000	$	303,000	$	1,804,000	$	934,000

The ineffective portion of foreign currency contracts was not material for the three and nine month periods ended December 31, 2014 and 2013.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Net sales
Net sales	$ 193,735,000	$ 225,790,000	$ 599,853,000	$ 585,083,000
Cost of goods sold
Cost of goods sold	158,822,000	185,577,000	479,058,000	454,036,000
Gross profit	34,913,000	40,213,000	120,795,000	131,047,000
Operating expenses
Selling & marketing	11,757,000	9,726,000	30,812,000	28,836,000
Research & development	6,496,000	5,723,000	18,463,000	17,291,000
General & administrative	10,797,000	6,372,000	36,026,000	21,802,000
Total operating expenses	29,050,000	21,821,000	85,301,000	67,929,000
Operating profit	5,863,000	18,392,000	35,494,000	63,118,000
Other income (expense)
Interest income	8,000	6,000	18,000	22,000
Interest expense	(97,000)	(96,000)	(346,000)	(136,000)
Total other expense	(89,000)	(90,000)	(328,000)	(114,000)
Earnings before income taxes	5,774,000	18,302,000	35,166,000	63,004,000
Income tax expense (benefit)	(1,713,000)	6,182,000	8,721,000	22,051,000
Net earnings	7,487,000	12,120,000	26,445,000	40,953,000
Net earnings per share
Basic	$ 0.58	$ 0.90	$ 2.05	$ 3.07
Diluted	$ 0.57	$ 0.89	$ 2.02	$ 2.99
Weighted average shares outstanding
Basic	12,941,000	13,420,000	12,920,000	13,338,000
Diluted	13,062,000	13,657,000	13,072,000	13,698,000
Snowmobile & ATV units
Net sales
Net sales	165,453,000	196,295,000	512,813,000	503,285,000
Cost of goods sold
Cost of goods sold	140,158,000	166,994,000	422,923,000	402,650,000
Gross profit	25,295,000	29,301,000	89,890,000	100,635,000
Parts, garments & accessories
Net sales
Net sales	28,282,000	29,495,000	87,040,000	81,798,000
Cost of goods sold
Cost of goods sold	18,664,000	18,583,000	56,135,000	51,386,000
Gross profit	$ 9,618,000	$ 10,912,000	$ 30,905,000	$ 30,412,000

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LINE OF CREDIT

9 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

LINE OF CREDIT

NOTE F–LINE OF CREDIT

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. 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 LIBOR for a 30 day interest period plus 1.00%. As of December 31, 2014, the effective rate was 3.5%. 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 December 31, 2014 and March 31, 2014. The outstanding letters of credit balances were $3,581,000 and $4,074,000 at December 31, 2014 and 2013, 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 December 31, 2014.

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INVENTORIES

9 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

INVENTORIES

NOTE E–INVENTORIES

Inventories consist of the following:

	December 31, 2014		March 31, 2014
Raw materials and sub-assemblies	$	37,059,000	$	52,580,000
Finished goods		71,048,000		55,327,000
Parts, garments and accessories		36,470,000		32,745,000
	$	144,577,000	$	140,652,000

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INVENTORIES (Tables)

9 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Components of Inventories

Inventories consist of the following:

	December 31, 2014		March 31, 2014
Raw materials and sub-assemblies	$	37,059,000	$	52,580,000
Finished goods		71,048,000		55,327,000
Parts, garments and accessories		36,470,000		32,745,000
	$	144,577,000	$	140,652,000

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SEGMENT REPORTING

9 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE M–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.

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales
Snowmobile & ATV units	$	165,453,000	$	196,295,000	$	512,813,000	$	503,285,000
Parts, garments, & accessories		28,282,000		29,495,000		87,040,000		81,798,000
Total net sales		193,735,000		225,790,000		599,853,000		585,083,000
Cost of goods sold
Snowmobile & ATV units		140,158,000		166,994,000		422,923,000		402,650,000
Parts, garments, & accessories		18,664,000		18,583,000		56,135,000		51,386,000
Total cost of goods sold		158,822,000		185,577,000		479,058,000		454,036,000
Gross profit
Snowmobile & ATV units		25,295,000		29,301,000		89,890,000		100,635,000
Parts, garments, & accessories		9,618,000		10,912,000		30,905,000		30,412,000
Total gross profit	$	34,913,000	$	40,213,000	$	120,795,000	$	131,047,000

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales by product line
Snowmobile units	$	81,523,000	$	118,061,000	$	295,466,000	$	276,060,000
ATV units		83,930,000		78,234,000		217,347,000		227,225,000
Parts, garments, & accessories		28,282,000		29,495,000		87,040,000		81,798,000
Total net sales	$	193,735,000	$	225,790,000	$	599,853,000	$	585,083,000

	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Net sales by geography, based on location of the customer
United States	$	122,412,000	$	151,966,000	$	361,607,000	$	319,355,000
Canada		56,104,000		49,684,000		166,865,000		173,851,000
Europe and other		15,219,000		24,140,000		71,381,000		91,877,000
Total net sales	$	193,735,000	$	225,790,000	$	599,853,000	$	585,083,000

The Company has identifiable long-lived assets with total carrying values of approximately $466,000 and $751,000 at December 31, 2014 and March 31, 2014, respectively, outside the United States in Canada and Europe.

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SHAREHOLDERS' EQUITY

9 Months Ended

Dec. 31, 2014

Equity [Abstract]

SHAREHOLDERS' EQUITY

NOTE I–SHAREHOLDERS’ EQUITY

Share Repurchase Authorization

During the nine months ended December 31, 2014 and 2013, the Company invested $1,007,000 and $4,771,000, respectively, to repurchase and cancel 26,951 and 95,618 shares of common stock, respectively, pursuant to the Board of Directors’ prior share repurchase program authorizations. At December 31, 2014 and 2013, the Company has remaining authorization to repurchase up to $26,076,000 and $25,499,000 of its common stock, or approximately 735,000 and 448,000 shares based on the per share closing price of $35.50 and $56.98 as of December 31, 2014 and 2013, respectively.

Additional Paid-in-Capital

The components of the changes in additional paid-in-capital during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	—		$	10,945,000
Proceeds from issuance of common stock		34,000			18,000
Payment for income taxes on net-settled option exercises		(1,335,000	)		(7,629,000	)
Tax benefits from stock options exercised		752,000			7,495,000
Repurchase of common stock		(1,007,000	)		(4,771,000	)
Stock-based compensation expense		3,341,000			2,193,000
Balance at end of period	$	1,785,000		$	8,251,000

Accumulated Other Comprehensive Loss

The components of the changes in accumulated other comprehensive loss during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	(2,110,000	)	$	(4,166,000	)
Unrealized gain (loss) on derivative instruments, net of tax		1,804,000			934,000
Foreign currency translation adjustment		(4,016,000	)		2,271,000
Balance at end of period	$	(4,322,000	)	$	(961,000	)

Retained Earnings

The components of the changes in retained earnings during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	187,024,000		$	167,561,000
Net earnings		26,445,000			40,953,000
Dividends paid		(4,865,000	)		(4,023,000	)
Balance at end of period	$	208,604,000		$	204,491,000

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ACCRUED EXPENSES

9 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

ACCRUED EXPENSES

NOTE G–ACCRUED EXPENSES

Accrued expenses consist of the following:

	December 31, 2014		March 31, 2014
Marketing	$	10,072,000	$	11,671,000
Compensation		7,579,000		9,338,000
Warranties		27,794,000		19,357,000
Insurance		6,334,000		7,026,000
Other		6,497,000		7,267,000
	$	58,276,000	$	54,659,000

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PRODUCT WARRANTIES

9 Months Ended

Dec. 31, 2014

Guarantees [Abstract]

PRODUCT WARRANTIES

NOTE H–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 from the date of consumer registration on all-terrain vehicles (“ATVs”) and recreational off-highway vehicles (“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, including costs associated with safety recalls, which may occur after the standard warranty period. The following represents changes in the Company’s accrued warranty liability for the nine-month periods ended December 31:

	2014			2013
Balance at beginning of period	$	19,357,000		$	18,709,000
Warranty provision		19,409,000			12,369,000
Warranty claim payments		(10,972,000	)		(9,059,000	)
Balance at end of period	$	27,794,000		$	22,019,000

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE J–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 December 31, 2014, the Company was contingently liable under these agreements for a maximum repurchase amount of approximately $68,850,000. 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 potential liability to the Company under these provisions is approximately $2,455,000 at December 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 practice to vigorously defend against these actions. The Company is not involved in any legal proceedings which it believes will have 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 probable exposures based on the legal proceedings and claims of which it is aware. 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.

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Net Earnings Per Share - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share [Abstract]
Anti-dilutive options to purchase shares of common stock excluded from computation of common share equivalents	131,738	0	154,725	0
Anti-dilutive options to purchase shares of common stock excluded from computation of common share equivalents, weighted average exercise price	$ 44.42	$ 0.00	$ 44.38	$ 0.00

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Derivative Instruments and Hedging Activities - Schedule of Gains and Losses, Net of Tax, Related to Derivative Instruments Designated as Cash Flow Hedges (Detail) (Derivative in Cash Flow Hedging Relationships, USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Derivative in Cash Flow Hedging Relationships
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency contracts	$ 700,000	$ 303,000	$ 1,804,000	$ 934,000

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Dec. 31, 2014

Assumptions Used to Determine Fair Value of Stock Options Issued

For stock options issued during the nine months ended December 31, 2014 and 2013, the following assumptions were used to determine fair value:

	Nine Months Ended December 31,
Assumptions used:	2014			2013
Expected term (in years)		6 years			5 years
Expected volatility		49.0	%		49.0	%
Risk free interest rate		0.8	%		0.8	%
Expected dividend		1.0	%		1.0	%
Fair Value	$	14.90		$	17.71

Stock Option Activity

Option transactions under the plans during the nine months ended December 31, 2014, are summarized as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Contractual Life		Aggregate Intrinsic Value
Outstanding at March 31, 2014		480,837		$	24.95
Granted		257,890			35.12
Exercised		(95,345	)		15.23
Forfeited		(2,104	)		47.52
Cancelled		(68,936	)		43.28
Outstanding at December 31, 2014		572,342		$	28.86		8.18 years	$	4,969,000
Exercisable at December 31, 2014		266,806		$	20.30		6.62 years	$	4,404,000

Options Outstanding and Exercisable

Stock Option Activity

The following tables summarize information concerning currently outstanding and exercisable stock options at December 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		3,800		4.60 years	$	6.26		3,800	$	6.26
	9.57-13.84		54,287		5.25 years		10.79		54,287		10.79
	14.68-21.03		139,421		6.49 years		16.18		139,421		16.18
	21.96-27.69		24,000		8.85 years		24.83		24,000		24.83
	32.93-47.79		350,834		9.29 years		37.22		45,298		43.16
			572,342		8.18 years	$	28.86		266,806	$	20.30

Restricted Stock Award

Restricted Stock Activity

Restricted stock and restricted stock unit award activity under the Plans during the nine months ended December 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,		16,200		$	43.45		42,820		$	19.33
Awarded		20,200			33.67		8,000			53.91
Vested		(8,400	)		33.74		(34,120	)		15.66
Forfeited		(3,000	)		37.60		(500	)		41.52
Non-vested shares at December 31,		25,000		$	39.51		16,200		$	43.45

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,		40,103		$	35.35		41,607		$	27.35
Granted		120,973			34.39		17,976			42.99
Vested		(50,959	)		32.85		(16,931	)		23.92
Forfeited		(1,933	)		43.81		(1,217	)		27.60
Non-vested shares at December 31,		108,184		$	35.30		41,435		$	35.53

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SHAREHOLDERS' EQUITY (Tables)

9 Months Ended

Dec. 31, 2014

Equity [Abstract]

Components of Changes in Additional Paid-in-Capital

The components of the changes in additional paid-in-capital during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	—		$	10,945,000
Proceeds from issuance of common stock		34,000			18,000
Payment for income taxes on net-settled option exercises		(1,335,000	)		(7,629,000	)
Tax benefits from stock options exercised		752,000			7,495,000
Repurchase of common stock		(1,007,000	)		(4,771,000	)
Stock-based compensation expense		3,341,000			2,193,000
Balance at end of period	$	1,785,000		$	8,251,000

Components of Changes in Accumulated Other Comprehensive Loss

The components of the changes in accumulated other comprehensive loss during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	(2,110,000	)	$	(4,166,000	)
Unrealized gain (loss) on derivative instruments, net of tax		1,804,000			934,000
Foreign currency translation adjustment		(4,016,000	)		2,271,000
Balance at end of period	$	(4,322,000	)	$	(961,000	)

Components of Changes in Retained Earnings

The components of the changes in retained earnings during the following periods were as follows:

	Nine Months Ended December 31,
	2014			2013
Balance at beginning of period	$	187,024,000		$	167,561,000
Net earnings		26,445,000			40,953,000
Dividends paid		(4,865,000	)		(4,023,000	)
Balance at end of period	$	208,604,000		$	204,491,000

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Derivative Instruments and Hedging Activities - Additional Information (Detail) (Maximum)	9 Months Ended
	Dec. 31, 2014
Maximum
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Maturity of foreign currency derivatives	Mar. 31, 2015

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Product Warranties - Changes in Accrued Warranty Liability (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Product Warranties Disclosures [Abstract]
Product Warranty Accrual, Beginning of period	$ 19,357,000	$ 18,709,000
Warranty provision	19,409,000	12,369,000
Warranty claim payments	(10,972,000)	(9,059,000)
Product Warranty Accrual, End of period	$ 27,794,000	$ 22,019,000

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
Net earnings	$ 7,487,000	$ 12,120,000	$ 26,445,000	$ 40,953,000
Other comprehensive income (loss):
Foreign currency translation adjustments	(1,109,000)	545,000	(4,016,000)	2,271,000
Unrealized gain (loss) on derivative instruments, net of tax	700,000	303,000	1,804,000	934,000
Comprehensive income	$ 7,078,000	$ 12,968,000	$ 24,233,000	$ 44,158,000

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SHORT-TERM INVESTMENTS

9 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

SHORT-TERM INVESTMENTS

NOTE D–SHORT-TERM INVESTMENTS

Trading securities consisted of $10,008,000 and $60,008,000, invested in various money market funds at December 31, 2014 and March 31, 2014, respectively. All of the trading securities are deemed to be Level 1 investments.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

9 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Foreign Currency Contracts

At December 31, 2014, the Company had the following open foreign currency contracts:

Foreign Currency	Notional Amounts (in US Dollars)		Net Unrealized Gain (Loss)
Canadian Dollar	$	47,202,000	$	2,439,000

Summary of Carrying Values of Derivative Instruments

The table below summarizes the carrying values of derivative instruments as of December 31, 2014 and March 31, 2014:

	Carrying Values of Derivative Instruments as of December 31, 2014
Derivatives designated as hedging instruments	Fair Value Assets		Fair Value (Liabilities)		Derivative Net Carrying Value
Foreign exchange contracts (1)	$	2,439,000	$	—	$	2,439,000

	Carrying Values of Derivative Instruments as of March 31, 2014
Derivatives designated as hedging instruments	Fair Value Assets		Fair Value (Liabilities)		Derivative Net Carrying Value
Foreign exchange contracts (1)	$	—	$	424,000	$	424,000

(1) Assets are included in Accounts Receivable and liabilities are included in Accounts Payable on the accompanying consolidated balance sheets.

Schedule of Gains and Losses, Net of Tax, Related to Derivative Instruments Designated as Cash Flow Hedges

The table below provides data about the amount of gains and losses, net of tax, related to derivative instruments designated as cash flow hedges included in accumulated other comprehensive income for the three and nine months ended December 31, 2014 and 2013:

Derivatives in Cash Flow Hedging Relationships	Three Months Ended December 31,				Nine Months Ended December 31,
	2014		2013		2014		2013
Foreign currency contracts	$	700,000	$	303,000	$	1,804,000	$	934,000

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Line of Credit - Additional Information (Detail) (USD $)	9 Months Ended
	Dec. 31, 2014	Nov. 30, 2013	Nov. 30, 2009	Mar. 31, 2014	Dec. 31, 2013
Line of Credit Facility [Line Items]
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 LIBOR for a 30 day interest period plus 1.00%. As of December 31, 2014, the effective rate was 3.5%.was 3.5%.
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
Senior secured revolving credit agreement description	This agreement is scheduled to expire in November 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.
Senior Secured Revolving Credit Facility | Prime Rate
Line of Credit Facility [Line Items]
Line of credit, basis spread variable rate	0.75%
Senior Secured Revolving Credit Facility | Libor Rate
Line of Credit Facility [Line Items]
Line of credit, basis spread variable rate	1.00%
Senior Secured Revolving Credit Facility | Federal Funds Rate
Line of Credit Facility [Line Items]
Line of credit, basis spread variable rate	0.50%
Line of Credit
Line of Credit Facility [Line Items]
Outstanding letters of credit balances	0			0
Letter of Credit
Line of Credit Facility [Line Items]
Outstanding letters of credit balances	3,581,000				4,074,000
May through November | Senior Secured Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity value	100,000,000
All other months | Senior Secured Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity value	50,000,000

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RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Dec. 31, 2014

Accounting Changes and Error Corrections [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

NOTE N – RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition that supersedes existing revenue recognition guidance (but does not apply to nor supersede accounting guidance for lease contracts). The ASU’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is effective for reporting periods beginning after December 15, 2016, and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application. The Company is currently in the process of evaluating the impact of the adoption of this ASU on the Company’s consolidated results.