SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                            FORM 10-K

      X   Annual report pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934 for the fiscal year ended March 31, 1997 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                     (I.R.S. Employer
     of incorporation or organization)                 Identification No.)

601 Brooks Avenue South, Thief River Falls, Minnesota        56701
     (Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code: (218)681-8558
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.01 par value.  Preferred Stock Purchase Rights.



Indicate by check mark whether the registrant (1) has filed all reports 
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 
during the preceding 12 months (or for such shorter period that the registrant 
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                             Yes  X     No    

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

The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of June 20, 1997 (based on the closing sale price of the Common
Stock on such date) was approximately $222,994,262.

At June 20, 1997, 21,628,649 shares of Common Stock and 7,560,000 shares of
Class B Common Stock of the Registrant were outstanding.

Documents Incorporated by Reference:

Portions of the Company's Proxy Statement for its Annual Meeting of 
Shareholders currently scheduled to be held on August 14, 1997 is 
incorporated by reference into Part III of this Form 10-K.



                              PART I

Item 1.Business

     Arctic Cat Inc., based in Thief River Falls, Minnesota, designs, engineers
, manufactures and markets snowmobiles and all-terrain vehicles (ATVs) under
the Arctic Cat brand name, and personal watercraft (PWC) under the Tigershark 
brand name, as well as related parts, garments and accessories. The Company 
markets its products through a network of independent dealers located 
throughout the contiguous United States and Canada, and through distributors
representing dealers in Alaska, Europe, the Middle East, Asia and other 
international markets.  The Arctic Cat brand name has existed for more than 30
years and is among the most widely recognized and respected names in the 
snowmobile industry.  The Company trades on the Nasdaq Stock Market under the 
symbol ACAT.

Industry Background

     Snowmobiles. The snowmobile, developed in the 1950's, was originally 
intended to be used as a utility vehicle, but today the overwhelming majority
of the industry's sales are for recreational use.  Between the late 1950's and
early 1970's, the industry expanded dramatically reaching a peak of over 100 
manufacturers and a high of almost 495,000 units sold to retail customers in 
North America in 1971.  Gasoline shortages, significant gasoline price 
increases, high interest rates and recessions in the middle to late 1970's 
through the early 1980's contributed to a significant industry downsizing.  
Today the number of major industry participants has decreased to four.

     Since 1983, snowmobile sales to retail customers in North America have
grown to approximately 243,000 units for the 1997 model year.  The Company 
believes this growth was due, in part, to a number of factors such as an 
expanded system of public and private snowmobile trails, a rapidly growing 
market among the "baby boomer" generation, product innovations that have 
improved ride, performance and handling, organized snowmobile clubs which 
promote the sport and ongoing snowmobile replacement.  Since 1971, 
approximately 5,300,000 snowmobiles have been sold in North America, and the
Company estimates that over 85 percent of current industry sales are to retail
customers who own, or previously owned, a snowmobile.

     The industry consolidation that occured in the mid-1970's through the 
early 1980's has left four major participants in the North American market:
Arctic Cat, Bombardier (Ski-Doo), Polaris and Yamaha.  The Company believes the
industry consolidation has contributed to improved industry profit margins and
closer monitoring of industry inventory levels.  The Company believes there are
currently more significant barriers to entry into the snowmobile market than 
existed in the 1970's.  These barriers include increased brand loyalty, 
long-standing dealer and distributor networks and relationships, limited engine
sources, manufacturing and engineering expertise and higher initial start-up 
costs.

     Information in this document regarding the worldwide and North American
snowmobile market is derived from independent sources.  Non-North  American 
sales for the industry are estimated to account for less than 6% of worldwide 
sales; specific yearly information, with respect to worldwide sales, is not 
considered by the Company as sufficiently consistent or reliable for 
presentation in this report.  All industry information is based on a model year
ending March 31, which is the same as the Company's fiscal year-end, unless
otherwise stated.

     Personal Watercraft (PWC).  The PWC and the related industry evolved from
the one person stand-up craft that was developed in the mid 1960's to the two
and three person sit-down models that are most popular today.  PWC are craft of
up to ten feet in length that are propelled by jet pumps.  They are ridden for
leisure on lakes, rivers, oceans and major waterways.  In 1996, U. S. retail 
sales were approximately 191,000 units, with the popularity of PWC continuing 
to rise both in North America and internationally.  The most rapidly growing 
segment of personal watercraft models are the 3-person models, designed to 
accomodate a driver and up to two passengers.  These PWC can pull skiers or 
water toys.  Currently the two-person watercraft is still the most widely owned
model type comprising of approximately 56 percent of the market.  The three- 
person watercraft and one person watercraft comprise approximately 42 percent
and 2 percent of the market, respectively.  Major competitors in the industry 
include Yamaha, Bombardier (Sea-Doo), Polaris and Kawasaki.
 
     All-Terrain Vehicles (ATVs).  The ATV industry evolved from the 
three-wheel model that was developed in the early 1970s to the four-wheel 
models that are sold today.  ATVs are one person vehicles with oversized tires
used for a variety of off-road uses.  The most popular ATV use is general 
recreation, followed by hunting/fishing, farm/ranch use, hauling/towing, 
transportation, and commercial uses.  From 1970 to 1986, the number of three 
and four-wheel ATVs sold in the United States continued to grow until peaking 
in 1986 with approximately 535,000 units sold during that calendar year. From 
1987 to 1991, the number of ATVs sold declined to a low of approximately 
151,000 units.  Since 1992, sales have gradually climbed until reaching 
approximately 318,000 units in 1996.  Major competitors in the industry 
include Honda, Yamaha, Kawasaki, Polaris and Suzuki.

Products

     Snowmobiles.  The Company produces a full line of snowmobiles, currently
consisting of 34 models, all marketed under the Arctic Cat brand name, and 
designed to satisfy various market niches.  The 1997 Arctic Cat models carry
suggested U.S. retail prices ranging from $3,249 to $9,399, excluding a 
children's model which is sold at a suggested U.S. retail price of $1,269.  
Arctic Cat snowmobiles are sold in the United States, Canada, Scandinavia and 
other international markets.

     The Company's snowmobiles are categorized as High Performance, Trail 
Performance, Mountain Performance, Family/Touring and Utility.  The Company 
markets:  High Performance Arctic Cat snowmobiles under the names Thundercat, 
ZRT, ZR, ZL and Z; Trail Performance Arctic Cat snowmobiles under the names  
EXT and Cougar; Mountain Performance Arctic Cat snowmobiles under the names 
Powder Extreme, Powder Special, Thundercat Mountain Cat and Cougar Mountain Cat
; Family/Touring models under the names EXT, Panther, Pantera and Jag; and 
Utility models under the name Bearcat.  In addition, to encourage family 
involvement in snowmobiling, the Company offers the only snowmobile in the 
industry designed especially for small children, marketed under the Kitty Cat
name.

     The Company believes the Arctic Cat brand name enjoys a premier image among
snowmobile enthusiasts and that its snowmobiles have a long-standing reputation 
for quality, performance, style, comfort, ride and handling.  Arctic Cat 
snowmobiles offer a wide range of standard and optional features which enhance 
the operation, riding comfort and performance.  Such features include 
hydraulic disc brakes, a technologically advanced front suspension, and an 
electronic fuel injection (EFI) system.  Additional features on certain models
include electronic engine gauges and indicator lights, electric starters, 
handlebar and thumb warmers, reverse gears, 2-up seats, mirrors, custom 
windshields, hitches and luggage racks as well as other features.  These 
features may also be purchased separately from independent Arctic Cat dealers
as accessories.

     Arctic Cat's on-going commitment to both high performance and 
its customers has led the Company in a series of "firsts."  In 1988, the 
Company and Suzuki introduced a new line of compact, lightweight, liquid-cooled
twin cylinder engines.  In 1990, the Prowler was the first snowmobile to offer
a new double-wishbone suspension. With its high performance 1991 Wildcat model,
the Company became the first in the industry to offer a 700cc electronic fuel 
injection engine. In 1992, the Arctic FasTrack, extra-long travel rear 
suspension was introduced on several high performance models.  In 1993, the 
Company became the first to offer a 900cc, 3 cylinder snowmobile, called the 
Thundercat.  In 1997, Arctic Cat offered the first batteryless EFI system.  
Arctic Cat believes that its leadership in innovation, technology, style and
performance has been demonstrated by its models being voted "Snowmobile of the
Year" with respect to the El Tigre 6000 in 1984, the Wildcat 650 in 1988, the 
Prowler in 1990, the EXT Special in 1991, the ZR 440 in 1994, and the Powder 
Special EFI in the 1998 model year.

     Arctic Cat believes that it has been able to grow in the worldwide 
snowmobile retail sales due to a Company emphasis on new product development.  
A new model has been introduced by the Company nearly each year since its 
formation, and in recent years new models have been among the Company's best 
sellers.  In the 1997 model year, approximately 85 percent of the Company's 
snowmobiles sales were from models or model variations not available three 
years earlier.

     Personal Watercraft (PWC). Similar to Arctic Cat snowmobiles, Tigershark 
PWC are a blend of performance, durability and style, with attention to comfort
and economy.  In fiscal 1997, the Company offered seven models to cover major 
market segments in the current PWC market ranging in price from $4,499 to 
$7,599.  For the high performance market, the Company offers the Daytona 1000 
and Daytona 770, two-passenger models designed for superior performance and 
optimum power.  Three family touring models are available, including the Monte 
Carlo 1000, Monte Carlo 770 and Monte Carlo 640, three-passenger machines 
designed for ample power and handling with the capacity to tow skiers or water
toys.  For the economy market the Company offers the Montego and Montego Deluxe
both two-passenger machines built for exceptional quality and stability.

     The Company believes Tigersharks have been well received in the market and
believes the Tigershark brand continues to maintain its reputation as the  
dry, stable ride.  Watercraft World has, on numerous occasions, recognized the 
Tigershark by selecting the 1993 Tigershark and the 1994 and 1995 Montego 
Deluxe as the "Best Buy" in the Recreational Runabout category and by naming 
the Daytona 770 as the "Editors Choice Award" in 1996.

     All-Terrain Vehicles (ATV).  In December 1995, the Company introduced its
first ATV, the Bearcat 454 4X4, which provided many industry-leading features 
such as exclusive rocker-shifter, full floor boards, and a 50-inch wheelbase. 
Since that time, the Arctic Cat ATV line has grown to include four models: the
Arctic Cat 454 4x4, Arctic Cat 454 2x4, Arctic Cat 300 4x4 and Arctic Cat 300 
2x4.  Arctic Cat ATVs are designed for the utility, farming/ranching and 
hunting/fishing markets.  These heavy duty machines feature aspects ensuring 
ease of handling and agility over rough terrain.  Features like hydraulic disc
brakes, hi-low range and a plentiful 4.25 gallon fuel tank, all make Arctic Cat
ATVs consumer friendly.    

     Parts, Garments and Accessories.  The Company is the exclusive provider of
genuine Arctic Cat snowmobile, Tigershark, and Arctic Cat ATV parts, garments
and accessories. Included are replacement parts for Arctic Cat snowmobiles, 
items to upgrade a snowmobile such as an electric start kit, a reverse gear kit
and a two-speed transmission kit, as well as accessories such as mirrors, 
windshields, luggage racks, backrests, two-person seats, saddlebags, bumpers, 
gauges, tail light protectors and snowmobile covers.  Other items include 
maintenance supplies such as oil and fuel additives, clutch and carburetor 
parts, track studs and carbide runners, shocks and springs, accessory fuel 
tanks, vinyl protectant, touch-up paint, hood and windshield cleaners, 
windshield defogger and engine storage preservers.  Tigershark parts and 
accessories include impellers, grates, bilge pumps, batteries, covers, mirrors,
oil and beach dollies.  Arctic Cat ATV parts and accessories include winch kits
, plow kits, portable lights, utility bags as well as maintenance supplies such
as brake fluid, fuel de-icer, anti-freeze, and fuel stabilizers.  The Company 
also sells generators under the Arctic Power label.

     The Company offers snowmobile garments for adults and children under the
"Arcticwear" label.  Suits, jackets, pants and accessory garments are offered 
in a wide variety of styles and sizes combining fashion with functional utility
designed for the demands of snowmobiling and other winter activities.  The 
Arcticwear line of clothing also includes crew neck sweaters, pull-overs, 
riding gloves, hats, fog-resistant face shields, helmets, boots, duffel bags,
jerseys and T-shirts.  The colors and designs of many of these items are 
coordinated with specific Arctic Cat snowmobile models.

     The Company offers Tigershark garments under the "Sharkwear" label. 
Included in the stylish line are neoprene and lycra wet suits, goggles, 
sunglasses, coolers, duffle bags, water shoes and gloves, T-shirts, 
sweatshirts, jackets, golf shirts, shorts and towels.

     The Company offers ATV garments under the "Arcticwear ATV Gear" label.
This line of clothing is geared toward function and comfort and includes suits,
jackets, gloves, boots, helmets, sweatshirts, t-shirts, and caps.
     
     The Company has in the past, and may in the future, consider adding other
products consistent with its manufacturing and marketing expertise.

Manufacturing and Engineering

     Arctic Cat snowmobiles and ATVs and Tigershark PWC are manufactured at 
the Company's facilities in Thief River Falls, Minnesota.  The Company 
produces and/or paints hoods and other parts for its Arctic Cat snowmobiles and
PWC in adison, South Dakota.  The Company also has a facility in Bucyrus, Ohio 
which houses its service parts, garments and accessories distributor 
operations.  The Company has chosen to rely on outside vendors for some 
component parts and is vertically integrated in other phases of its 
manufacturing process.  The Company has developed relationships with selected 
high quality vendors in order to obtain access to particular capabilities and 
technologies outside the scope of the Company's expertise.  The Company designs
component parts, contracts with the vendors for the development of tooling, and
then enters into agreements to purchase component parts manufactured utilizing 
the tooling.  In its vertically integrated operations, the Company manufactures
hoods, hulls, decks, foam seats and seat covers and the Company machines, welds
and paints other components.  The Company then completes the total assembly of 
its products at its facilities in Thief River Falls.  Manufacturing operations 
include digital and computer-automated equipment to speed production, reduce 
costs and improve the quality, fit and finish of every product. The Company 
believes that all raw materials used in its manufacturing process and all 
component parts, with the exception of engines and carburetors, are available 
from multiple alternative vendors on short notice at competitive prices.

     Since the Company's inception, its snowmobile engines have been
manufactured by Suzuki Motor Corporation ("Suzuki") pursuant to a supply
agreement which is automatically renewed annually unless terminated.  While 
notice of termination of the supply agreement may be given annually, effective 
cessation of supply would take at least one model year due to the contractual 
notice requirement.  The Company's PWC and ATV models also incorporate engines 
manufactured by Suzuki pursuant to separate agreements which have similar 
termination provisions as the snowmobile agreement.

     The Company and Suzuki have enjoyed an excellent relationship since the
Company's inception.  Suzuki purchased approximately 31% of the Company's then
outstanding capital stock in July 1988, prior to the Company's initial public 
offering, and is currently the Company's largest shareholder with approximately
25% of the Company's outstanding capital stock.  If Suzuki were ever to cease 
supplying engines to the Company, such an interruption could materially and 
adversely affect production.  The Company believes it could take up to two 
model years for a new engine supplier to be in a position to manufacture the 
Company's specially designed engines.  

     Since the Company began production, it has followed a build-to-order 
policy to control snowmobile, PWC, and ATV inventory levels.  Under this 
policy, the Company only manufactures a number of machines equivalent to the
orders received from its dealers and distributors, plus a small number of 
uncommitted machines used for new dealer development, in-house testing and 
miscellaneous promotional purposes. Speculative production and excessive 
inventories in certain periods during the 1970's and early 1980's contributed 
to significant price discounting in the snowmobile industry.  Since the 
consolidation of the snowmobile industry in the mid-1970's through the early 
1980's, speculative production in the industry has been reduced and dealer 
inventories have remained consistently below historic peak levels.  The Company
believes dealer inventory levels of non-current Arctic Cat model snowmobiles, 
PWC and ATVs have regularly been and are currently among the lowest in the 
industry.

     Most sales of snowmobiles to retail customers begin in the early fall and
continue during the winter.  Orders by dealers and distributors for each year's
production are placed in the spring following a series of dealer and 
distributor meetings.  Snowmobiles are build-to-order commencing in 
approximately late February and continuing through December.  Since its 
inception, the Company has experienced a low level of snowmobile order 
cancellation.  Approximately 30% to 40% of the Company's snowmobiles have 
historically been sold to retail customers prior to the end of October, long 
before the season's snow conditions are known.

     Sales of PWC to retail customers generally begin in the spring and 
continue during the summer.  Orders by dealers and distributors for the 
Company's 1998 model line will be placed in the fall, following a series of 
dealer and distributor meetings.  The PWC are then built to order commencing 
in the fall and continuing through the early spring.

     Retail sales of ATVs occur throughout the year with seasonal highs 
occurring in the spring and fall.  As with the snowmobiles and PWC, the Company
will produce ATV units on a build-to-order basis.  The Company believes ATVs 
will be built throughout the year to coincide with dealer and consumer demands.

     The Company is committed to an ongoing engineering program dedicated to
innovation and to continued improvements in the quality and performance of its
products.  The Company currently employs 127 individuals in the design and
development of new and existing products, with an additional 32 individuals 
directly involved in the testing of snowmobiles, PWC, and ATVs in normal and 
extraordinary conditions at the Company's test track and test facility in Thief
River Falls as well as surrounding waterways.  In addition, snowmobiles, PWC, 
and ATVs are tested in conditions and locations similar to those in which they 
are used.  The Company uses computer-aided design and manufacturing systems to 
shorten the time between initial concept and final production.  For 1995, 1996 
and 1997, the Company spent approximately $7,207,000, $9,317,000, and
$9,911,000, or 2.0%, 2.3%, and 2.1%, of net sales for the year, on engineering,
research and development, all of which was Company sponsored.  In addition, 
utilizing their particular expertise, the Company's vendors regularly test and
apply new technologies to the design and production of component parts.

Sales and Marketing

     The Company's products are currently sold through an extensive network of
independent dealers located throughout the contiguous United States and Canada,
and through distributors representing dealers in Alaska, Europe, the Middle 
East, Asia and other international markets.  To promote new dealerships and to 
service its existing dealer network, the Company also contracts on an 
independent basis with sales representatives throughout the United States and 
Canada to represent the Company and its products.

     The Company's dealers enter into an annual renewable contract and are
required to maintain status as an authorized dealer in order to continue 
selling the Company's products.  To obtain and maintain such status, dealers 
are required to order a sufficient number of snowmobiles, PWC, and/or ATVs to
service their market area adequately.  In addition, the dealers must perform 
service on these units and maintain satisfactory service performance levels, 
and their mechanics must complete special training provided by the Company.  
Dealers are also required to carry an inventory of genuine Arctic Cat and/or 
Tigershark parts and accessories.  As is typical in the industry, most of the 
Company's dealers also sell some combination of motorcycles, marine products, 
lawn and garden products and other related products.  Approximately 50% of the
Company's dealers sell only Arctic Cat snowmobiles, versus multiple brands of 
snowmobiles.  Relations with dealers are generally considered excellent.

     The Company utilizes exclusive distributors outside the United States and
Canada to take advantage of their knowledge and experience in their respective 
markets and to increase market penetration of the Company's products.  Each 
distributor is subject to a distribution agreement which stipulates an 
exclusive territory for a term ranging from one to three years with specified 
minimum sales and service requirements for their territory.  In fiscal 1997, 
the Company began marketing its complete product lines to Canadian dealers.  
The Company believes that marketing directly through dealers brings the Company
closer to its Canadian customers, which enables improved service and more 
competitive prices on snowmobiles, PWC, ATVs and parts, garments and 
accessories.  Canadian sales are made in Canadian dollars, a major portion of 
which is financed through certain Canadian financial institutions.  Sales 
outside North America are made in U.S. dollars and supported by irrevocable 
letters of credit.  

        The Company's marketing efforts are comprised of dealer, distributor 
and customer promotions, advertising and cooperative programs with its dealers 
and distributors.  Each year, the Company and its distributors conduct dealer 
shows in order to introduce the upcoming year's models and to promote dealer 
orders. Marketing activities are also designed to promote directly to 
consumers.  Products are advertised by the Company in consumer magazines and 
through other media. In addition, the Company engages in extensive dealer 
cooperative advertising, on a local and national level, whereby the Company and
its dealers share advertising costs.  Each season the Company produces 
promotional films, product brochures, point of purchase displays, leaflets, 
posters and banners, and other promotional items for use by dealers.  The 
Company also participates in consumer shows and rallies with dealers and 
sponsors independent drivers who participate in races throughout the world.  
The Company publishes and mails, four times a year, the Pride magazine to all 
registered owners of Arctic Cat snowmobiles, registered owners of its products.

     The Company places strong emphasis on identifying and addressing the
specific needs of its customers by periodically conducting dealer and consumer
focus group meetings and surveys.  

     The Company warrants its snowmobiles, PWC, and ATVs under a limited 
warranty against defects in materials and workmanship for a period ranging from
six months to one year from the date of retail sale or for a period of 90 days 
from the date of commercial or rental use.  Repairs or replacements under 
warranty are administered through the Company's dealers and distributors and 
have not had a material effect on the Company's business.

     Since 1985, the Company has entered into an annual arrangement with certain
financial institutions to provide floor plan financing for the Company's North 
American dealers.  These agreements improve the Company's liquidity by 
financing dealer purchases of products without requiring substantial use of the
Company's working capital.  The Company is paid by the floorplan companies 
within thirty days of shipment and as part of its marketing program the Company
pays the floor plan financing of its dealers for certain fixed time periods 
depending on the size of a dealer's order.  The financing agreements require 
repurchase of repossessed new and unused units and set limits upon the 
Company's potential liability for annual repurchases, such aggregate potential
liability being approximately $6,600,000 at March 31, 1997.  No material losses
have been incurred by the Company under these agreements, which are terminable
by either party upon 30 days' notice.

Competition

     The snowmobile, PWC, and ATV markets are highly competitive, with 
competition based on a number of factors, including performance, styling, fit 
and finish, brand loyalty, reliability, durability and price.  The Company 
believes Arctic Cat snowmobiles and ATVs and Tigershark PWC are highly 
regarded by consumers in all of these competitive categories.  Certain of the 
Company's competitors are more diversified and have financial and marketing 
resources which are substantially greater than those of the Company.

Regulation

     Both federal and state authorities have vigorous environmental control
requirements relating to air, water and noise pollution that affect the 
manufacturing operations of the Company.  The Company endeavors to insure that
its facilities comply with applicable environmental regulations and standards.
Various states and other governmental agencies have also promulgated safety 
regulations regarding the use of snowmobiles, PWC and ATVs.

     Certain materials used in snowmobile, PWC, and ATV manufacturing that are 
toxic, flammable, corrosive or reactive are classified by the federal and state
governments as "hazardous materials."  Control of these substances is regulated
by the Environmental Protection Agency and various state pollution control 
agencies which require reports and inspect facilities to monitor compliance.  
The Company's cost of compliance with environmental regulations has not been, 
and is not expected to be, material.  The Company's manufacturing facilities 
are subject to the regulations promulgated by, and may be inspected by, the 
Occupational Safety and Health Administration.

     The Company is a member of the International Snowmobile Manufacturers
Association (ISMA), a trade association formed to promote safety in the
manufacture and use of snowmobiles, among other things.  The ISMA is currently
made up of Arctco, Bombardier (Ski-Doo), Yamaha, and Polaris.   The ISMA 
members are also members of the Snowmobile Safety and Certification Committee 
(SSCC), which promulgated voluntary safety standards for snowmobiles.  The SSCC
standards, which require testing and evaluation by an independent testing
laboratory of each model produced by participating snowmobile manufacturers,
have been adopted by the Canadian Department of Transport.  Following the
development of the SSCC standards, the U.S. Consumer Products Safety
Commission denied a petition to develop a mandatory federal safety standard for
snowmobiles in light of the high degree of adherence to the SSCC standards in 
the United States.  Since the Company's inception, all of its models have 
complied with the SSCC standards.

     The Company is a member of National Marine Manufacturers Association
(NMMA) and the Personal Watercraft Industry Association (PWIA).  Tigershark 
personal watercraft conform to applicable United States Coast Guard (USCG)
standards and Society of Automobile Engineer (SAE) recommended practices.
     
     The Company is a member of the Specialty Vehicle Institute of America 
(SVIA), a trade association organized to foster and promote the safe and 
responsible use of specialty vehicles manufactured and/or distributed 
throughout the United States of America.  The Company is also a member of the 
Canadian All-Terrain Vehicle Distributors Council (CATV), a council of similar 
function.  In addition, the Arctic Cat ATV conforms to certain U.S. Consumer 
Product Safety Commission standards.

     Governmental bodies have proposed legislation involving more stringent
emissions standards for two-cycle engines.  Such engines are used on the
Company's snowmobiles and PWC.  The Company currently is unable to predict
whether such legislation will be enacted and, if so, the ultimate impact on the
Company and its operations.  However, the Company is currently evaluating 
several alternatives to comply with the proposed legislation.

Employees

     During fiscal 1997, the Company had peak employment of approximately 1,722
employees, including 238 salaried and 1,484 hourly and production personnel. 
Due to the seasonal nature of sales and the Company's production schedules, 
prior to the introduction of the PWC, approximately 60% of hourly personnel 
worked only during the spring through the late fall production period.  
However, during the past four fiscal years,  most employees remained employed 
throughout the year to produce the Tigershark PWC and Arctic Cat ATV.  The 
Company's employees are not represented by a union or subject to a collective 
bargaining agreement.  The Company has never experienced a strike or work 
stoppage and considers its relations with its employees to be excellent.

Intellectual Property

     The Company makes an effort to patent all significant innovations that it
considers patentable and owns numerous patents and know-how which relate to
production of its snowmobiles, PWC, ATVs and other products.  Trademarks are 
important to the Company's snowmobile, PWC, ATVs and related parts, garments 
and accessories business activities.  While from time to time the Company 
becomes aware of the unauthorized use of its trademarks, particularly in the 
sale of promotional items, the Company has a vigorous program of trademark 
enforcement to eliminate the unauthorized use of its trademarks, thereby 
strengthening the value of its trademarks and improving its image and customer
goodwill.  The Company believes that its "Arctic Cat " registered United States
trademark is its most significant trademark.  Additionally, the Company has 
numerous registered trademarks, trade names and logos, both in the United 
States and internationally.
 
Item 2.  Properties
     
     The Company owns its manufacturing facilities and executive offices in 
Thief River Falls, Minnesota.  The facilities consist of approximately 488,000
square feet of manufacturing, office and warehouse space on 49.5 acres,
including approximately 417,000 square feet devoted to manufacturing, and 
approximately 71,000 square feet devoted to office and administrative uses.

     The Company also owns a separate building on land contiguous to the
manufacturing facilities and executive offices.  The building consists of
approximately 60,000 square feet on two floors of which the Company utilizes
approximately two-thirds for its sewing production of Arcticwear garments and
snowmobile seats. In addition, the Company also owns three separate parcels of
undeveloped land adjacent to its property totaling approximately 94.8 acres.  
This property is used by the Company in some of its testing activities and 
remains available for future expansion.  The Company owns all the tooling used 
in the manufacture of its products and the machinery located at its plant in 
Thief River Falls, Minnesota.   

     During fiscal 1997, the Company purchased the 37,000 square foot building 
located in Madison, South Dakota, that it had leased since 1992.  This facility
is used to produce and/or paints hoods and other parts for the Company's Arctic
Cat snowmobiles and PWC.  

     Also during fiscal 1997, the Company constructed a 220,000 square foot 
facility in Bucyrus, Ohio, to house its service parts, garments and accessories
distribution operations.  The Company believes the Bucyrus facility's proximity
to central shipping hubs and close access to Canada will allow decreased 
delivery times to the majority of its dealers.


Item 3.  Legal Proceedings

     Accidents involving personal injury and property damage occur in the use 
of snowmobiles, PWC, and ATVs.  Claims have been made against the Company from
time to time.  It is the Company's policy to vigorously defend against these 
actions. The Company believes that the cases in discovery are adequately 
covered by product liability insurance.  Although the Company from time to time
has been named as a defendant in lawsuits involving product liability claims 
against Arctic Enterprises, Inc. on the theory that the Company is a successor
of Arctic Enterprises, Inc., the Company is not a successor of Arctic 
Enterprises, Inc. and has never been found liable in any such lawsuits. The 
Company is not involved in any other legal proceedings which are considered to
have the potential for a materially adverse impact on the Company's business or
financial condition.

     Product liability insurance is presently maintained by the Company on a 
"per occurrence" basis (with coverage being provided in respect of accidents 
which occurred during the policy year, regardless of when the related claim is 
made) in the amount of $5,000,000 in the aggregate, in addition to a $1,000,000
self-insured retention.  The Company believes such insurance is adequate.  

                                 
   Item 4.  Submission of Matters to a Vote of Security Holders

        None

   Item 4.   (A)  Executive Officers of Registrant


       Name                   Age                 Position            
      ______                 _____               __________

  William G. Ness             59        Chairman of the Board of Directors
  Christopher A. Twomey       49        President and Chief Executive Officer
  Bryce D. Abrahamson         43        Vice President--Materials
  Mark E. Blackwell           44        Vice President--Marketing
  Terry J. Blount             54        Vice President--Human Resources
  Timothy C. Delmore          43        Chief Financial Officer and Secretary
  Ronald G. Ray               48        Vice President--Manufacturing
  Roger H. Skime              54        Vice President--Research & Development
  Ole E. Tweet                50        Vice President--New Product Development
  
        Mr. Ness has been Chairman of the Board of Directors of the Company 
since its inception in 1983.  He is also co-owner and a Vice President of 
Northern  Woodwork (specialty furniture manufacturer), Thief River Falls, 
Minnesota and a director of Northern State Bank.

        Mr. Twomey has been President and Chief Executive Officer of the 
Company since January 1986 and a director since 1987.  He has held various 
executive officer positions with the Company since 1983.  Mr. Twomey is also a 
Community Board Member of Norwest Bank Minnesota West, N.A.

        Mr. Abrahamson has been Vice President--Materials of the Company since 
1988. He has been with the Company since its inception in 1983, serving as 
Purchasing Agent prior to being named to his present post.  Mr. Abrahamson has 
been employed in the snowmobile industry for 23 years.

        Mr. Blackwell has been Vice President--Marketing since May of 1992 and 
has over 15 years of marketing experience in the recreational vehicle field.  
Previously he served  for  five years as Marketing Director for American Suzuki
Motor Corporation. His responsibilities have included the motorcycle and marine
divisions.

        Mr. Blount has been Vice President--Human Resources since June of 1996.
Mr. Blount has over 28 years of Human Resource experience in the manufacturing
field.  Prior to joining the Company, Mr. Blount worked as Vice President-
Human Resources at Washington Scientific Industries since 1981.

        Mr. Delmore has been Chief Financial Officer of the Company since 1986 
and has been Corporate Secretary of the Company since 1989.  Mr. Delmore, a CPA
with seven years of prior public accounting experience, joined the Company in 
1985 as Controller.

        Mr. Ray has been Vice President-Manufacturing since April of 1992 and 
has over 27 years of manufacturing experience.  Before joining Arctic Cat he
served eight years as Vice President of Manufacturing for a Minnesota based
company.
        
        Mr. Skime has been Vice President--Research and Development of the 
Company since its inception in 1983 and has been employed in the snowmobile 
industry for 36 years.

        Mr. Tweet, Vice President of New Product Development and General 
Manager of the Marine Division, had been the Company's Vice President-
Marketing since its inception in 1983 and has been employed in the snowmobile 
industry for 32 years. 





                                  











               (This space intentionally left blank.)










     
                                 PART II

Item 5.  Market for Registrant's Common Stock and Related Stockholder Matters

     The Company's common stock is traded on the Nasdaq National Market
under the Nasdaq symbol "ACAT".  Quotations below represent the high and low
closing sale prices as reported by Nasdaq.  The Company's stock began trading
on the Nasdaq National Market on June 26, 1990.

                                         Years Ended

                             March 31, 1997             March 31, 1996 
   Quarterly Prices          High         Low           High        Low  

   First Quarter            $12.50       $ 9.50         $15.88    $10.98
   Second Quarter           $12.25       $ 8.88         $14.50    $11.00
   Third Quarter            $10.75       $ 9.00         $14.13    $11.00    
   Fourth Quarter           $11.00       $ 9.44         $13.13    $ 9.50    

   As of June 20, 1997, the Company had approximately 779 stockholders of
record, including the nominee of Depository Trust Company which held 17,681,392
shares of common stock.

   On March 2, 1992, the Company initiated a $0.0267 per share regular 
quarterly dividend.  The quarterly dividend was increased to $0.0355 per 
share on March 2, 1993 and subsequently increased to $0.0467 per share on March
2, 1994. On February 2, 1995, the Company increased the quarterly dividend to 
$0.06 per share.  All dividends have been adjusted for stock-splits.











                         (This space intentionally left blank.)


Item 6.    Selected Financial Data
            Years Ended March 31,
    (in thousands, except per share amounts)

                             1997       1996       1995       1994      1993
                             ____       ____       ____       ____      ____
Income Statement Data:                                      

Net sales                   $468,595   $404,996   $367,144  $268,057  $184,720
Cost of goods sold           351,249    308,946    267,210   190,972   132,950
                             _______    _______    _______   _______   _______
Gross profit                 117,346     96,050     99,934    77,085    51,770
Selling, general and 
administrative expenses       83,282     72,473     50,939    36,906    26,196
                              ______     ______     ______    ______   _______
Operating profit              34,064     23,577     48,995    40,179    25,574
Interest income                1,798      2,228      2,383     1,595     1,533
Interest expense                (109)        -         (17)      (98)     (184)
                              ------     ------     ------     ------    ------
Earnings before income taxes  35,753     25,805     51,361    41,676    26,923
Income taxes                  12,692      9,159     17,976    14,170     8,912
                              ______     ______     ______    ______    ______
Net earnings                $ 23,061   $ 16,646   $ 33,385  $ 27,506  $ 18,011
                              ======     ======     ======    ======    ======
                                            
Net earnings per share      $   0.78   $   0.56   $   1.13   $   0.94  $   0.62
                              ======     ======     ======     ======    ======
                                             
Cash dividends per share    $   0.24   $   0.24   $   0.21   $   0.15  $   0.12
                              ======     ======     ======     ======    ======
Average shares                      
outstanding                   29,476     29,661     29,495     29,267    29,078
                              ======     ======     ======     ======    ======
                  
_______________________________________________________________________________
As of March 31,                 1997       1996        1995       1994     1993
Balance Sheet Data (in thousands)

Cash & short-term investments $ 50,740  $ 44,002  $  65,241  $  59,923 $ 54,812
Working capital                131,604   130,142     128,845   104,885   83,878
Total assets                   217,967   207,996     183,996   154,980  122,149
Long-term debt                   --        --          --        --         581
Shareholders' equity           166,738   156,193     147,067   118,203   94,301

_______________________________________________________________________________
QUARTERLY FINANCIAL DATA (unaudited)
(in thousands, except per share amounts)
                            Total     First       Second    Third     Fourth
                            Year      Quarter     Quarter   Quarter   Quarter
Net Sales                   ______    ______      ______    ______    ______
    1997                   $468,595    89,126     177,925   133,877    67,667
    1996                    404,996    61,759     166,059   123,623    53,555
    1995                    367,144    56,007     149,204   112,844    49,089

Gross Profit
    1997                   $117,346    18,539      49,389    35,715    13,703
    1996                     96,050    11,806      43,295    31,792     9,157
    1995                     99,934    13,741      41,845    32,940    11,408

Net Earnings (Loss)
    1997                   $ 23,061     1,002      18,587     6,020    (2,548)
    1996                     16,646    (4,268)     17,888     6,015    (2,989)
    1995                     33,385     3,583      18,959    10,761        82

Net Earnings (Loss) Per Share
    1997                   $   0.78      0.03        0.63      0.20     (0.09)
    1996                       0.56     (0.14)       0.60      0.20     (0.10)
    1995                       1.13      0.12        0.64      0.36      0.00

Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations
         
   Fiscal 1997 was a successful, record breaking sales year for Arctic Cat Inc.
The Company also achieved record retail sales of Arctic Cat snowmobiles for the
fourteenth consecutive year.  Dealer and customer reception of the Arctic Cat 
all-terrain vehicle (ATV) continues to be encouraging after completing its 
first year in this strategic market.  The Company's continued growth in this 
$1.2 billion market will be enhanced by the introduction of new models which 
will occur during our next fiscal year. 
     
Financial Data
(in thousands, except per share data)                                         
                                         Years ended March 31,
                                1997            1996            1995

Net Sales                      $468,595        $404,996        $367,144
Net Earnings                   $ 23,061        $ 16,646        $ 33,385
Net Earnings Per Share            $0.78           $0.56           $1.13
Cash & Short-Term Investments  $ 50,740        $ 44,002        $ 65,241
Sales by Product Line (In %)
  Snowmobiles                        58%             66%             65%
  PWC                                15%             14%             18%
  ATVs                               11%              3%              -
  Parts, Garments & Accessories      16%             17%             17%
  
Results of Operations

     1997 vs. 1996

    Net sales increased 15.7% in 1997 to $468,595,000 from $404,996,000 in 1996
due to a 2.0% increase in snowmobile sales, on flat unit volume, an 8.9% 
increase in parts, garments and accessories sales, and $50.7 million of ATV 
sales as the Company completed its first full year in the ATV market.  PWC 
unit volume increased 17.8%.  The Company believes the increases in snowmobile 
parts and accessory sales were driven by increased demand for the Company's 
products as well as by excellent winter conditions in the midwest and western 
United States and Canada.  PWC sales increases resulted from late shipments of
models for the 1996 summer season that were shipped in the first quarter ended 
June 30, 1996 and the earlier shipment of models for the 1997 summer season
occurring in the fourth quarter.

    Gross profit increased 22.2% to $117,346,000 in 1997 from $96,050,000 in
1996.  Gross profit as a percent of net sales was 25.0% in 1997 compared to 
23.7% in 1996.  The increase in the gross profit percentage was primarily due 
to the positive fluctuation in the exchange rates between the U.S. dollar and 
the Japanese yen.  The Company shares exchange rate fluctuations with Suzuki 
Motor Corporation, its engine supplier.  These fluctuations affected all three
product lines and increased gross profit by approximately $5,500,000 over 
fiscal 1996 (see Inflation and Exchange Rates).  Also improving the gross 
profit percentage were Canadian dealer direct snowmobile and accessory 
shipments which yielded higher margins than the prior years shipments to 
Canadian distributors.  These factors were mitigated by a larger percentage of
ATVs and PWC in the sales mix which yield lower margins than snowmobiles.

    Selling, general and administrative expenses increased 14.9% to $83,282,000
in 1997 from $72,473,000 in 1996.  The increase is principally attributable to
increased selling and administrative expenses associated with increased ATV 
sales and increased expenses due to selling directly to dealers in Canada.  
As a percent of net sales, selling, general and administrative expenses were 
17.8% in 1997 compared to 17.9% in 1996.

    Operating profits increased 44.5% to $34,064,000 in 1997 from $23,577,000
in 1996.  As a percent of net sales, operating profits increased to 7.3% in 
1997 from 5.8% in 1996 (see gross profit and operating expense discussion).

    Net earnings increased 38.5% to $23,061,000 in 1997 from $16,646,000 in 
1996.  Net earnings as a percent of net sales were 4.9% and 4.1% in 1997 and 
1996 respectively.  Net earnings per share were $0.78 in 1997 compared to $0.56
in 1996.
        
   1996 vs. 1995
   
    Net sales increased 10.3% in 1996 to $404,996,000 from $367,144,000 in 1995
due to a 6.5% increase in snowmobile unit volume, a 14.3% increase of parts, 
garments and accessories sales, and $12,763,000 of ATV sales as the Company 
entered the ATV market during the fourth quarter.  PWC unit volume decreased 
14.2% as shipments of certain new models were shifted to the first quarter of 
fiscal 1997.  The Company believes the increases in snowmobile and accessory 
sales were driven by increased demand for the Company's products as well as by 
growth in the North American snowmobile market. 
                                                               
   Gross profit decreased 3.9% to $96,050,000 in 1996 from $99,934,000 in 1995.
Gross profit as a percent of net sales was 23.7% in 1996 compared to 27.2% in
1995.  The decrease in the gross profit percentage is due principally to the 
fluctuation in the exchange rates between the U.S. dollar and the Japanese yen,
as well as lower margins on PWC compared to last year.  The Company shares 
exchange rate fluctuations with Suzuki Motor Corporation, its engine supplier.
These fluctuations, which mainly affected the snowmobile and PWC product lines,
decreased gross profit by approximately $4,000,000 over fiscal 1995 (see
Inflation and Exchange Rates).

   Selling, general and administrative expenses increased 42.3% to $72,473,000
in 1996 from $50,939,000 in 1995.  The increase is principally attributable to 
increased selling and administrative expenses related to the 10.3% increase in 
net sales, factory-to-dealer incentives for the PWC line, and to a much 
lesser extent, expenses related to the change in Canadian distribution and 
increased marketing and development costs for the PWC and ATV product lines.  
As a percent of net sales, selling, general and administrative expenses were 
17.9% in 1996 compared to 13.9% in 1995.

   Operating profits decreased 51.9% to $23,577,000 in 1996 from $48,995,000 in
1995.  As a percent of net sales, operating profits decreased to 5.8% in 1996 
from 13.3% in 1995 (see gross profit and operating expense discussion).

   Net earnings decreased 50.1% to $16,646,000 in 1996 from $33,385,000 in 
1995.  Net earnings as a percent of net sales were 4.1% and 9.1% in 1996 and 
1995, respectively.  Net earnings per share were $0.56 in 1996 compared to 
$1.13 in 1995.


Liquidity and Capital Resources

     The seasonality of the Company's snowmobile production cycle and the lead
time between the commencement of production in late February and commencement 
of shipments late in the first quarter have resulted in significant 
fluctuations in the Company's working capital requirements during the year.  
Historically, the Company has financed its 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.    

Cash and Short-Term Investments                         

     Cash and short-term investments were $50,740,000 at March 31, 1997 
compared to $44,002,000 at March 31, 1996. The Company's cash balances 
traditionally peak early in the fourth quarter and then decrease as working 
capital requirements increase when the Company's snowmobile production cycle 
begins.  The Company's investment objectives are first, safety of principal and
second, rate of return.

Working Capital    
        
     The Company has an unsecured credit agreement with a bank for the issuance
of up to $30,000,000 of documentary and stand-by letters of credit. The total 
letters of credit issued at March 31, 1997 were $19,888,000, of which 
$16,639,000 was issued to Suzuki Motor Corporation for engine purchases.  
During fiscal 1996, the Company's Board of Directors authorized the repurchase
of up to 1,500,000 shares of common stock.  During 1997 and 1996, the Company
invested $5,858,000 and $672,000 to repurchase and cancel 596,500 and 66,000 
shares.  In 1997, the Company invested $21,270,000 in capital expenditures 
including approximately $6,000,000 for a parts, garments and accessory 
distribution facility in Bucyrus, Ohio.  The Company expects that for fiscal 
1998 capital expenditures, including tooling, will approximate $17,000,000.  
The Company believes that cash generated from operations will be sufficient to
meet its working capital, regular quarterly dividend, share repurchase program
and capital expenditure requirements for the foreseeable future.
     
     The Company does not provide financing for the purchase of snowmobiles, 
ATVs or PWC by its retail customers.  The Company has agreements with certain
finance companies to provide floor plan financing for the Company's North 
American dealers. These agreements improve the Company's liquidity by financing
dealer purchases of products without requiring substantial use of the Company's
working capital.  The Company is paid by the floor plan companies within thirty
days of shipment and as part of its marketing program the Company pays the 
floor plan financing of its dealers for certain set time periods depending on 
the size of a dealer's order.  The financing agreements require repurchase of 
repossessed new and unused units and sets limits upon the Company's potential 
liability for annual repurchases.  The aggregate potential liability was 
approximately $6,600,000 at March 31, 1997.  No material losses have been 
incurred by the Company under these agreements, which are terminable by either 
party upon 30 days notice.

Inflation and Exchange Rates

     Inflation is not expected to have a significant impact on the Company's 
business.  The Company generally has been able to offset the impact of 
increasing costs through a combination of productivity gains and price 
increases.

     The relationship of the U.S. dollar to the Canadian dollar and Japanese 
yen may have a significant impact on the Company's business.  Two of the 
Company's principal competitors are based in Japan and Canada. Also, the 
Company purchases its snowmobile, ATV and PWC engines and related parts from 
Suzuki Motor Corporation and sells a full line of products to Canadian dealers.
All purchase and sales prices are determined annually.  The Company has 
agreements with Suzuki Motor Corporation, that renew annually, to share the 
impact of fluctuations in the exchange rate between the U.S. dollar and 
Japanese yen, above and below a fixed range contained in the agreements for 
snowmobile and PWC engines. The Company has in the past, in the case of the 
Japanese yen, and may in the future enter into foreign exchange contracts for 
both the Japanese yen and the Canadian dollar to minimize the impact of 
exchange rate fluctuations (see gross profit discussion).

Forward-Looking Statements

     The Private Securities Litigation Reform Act of 1995 provides a safe 
harbor for certain forward-looking statements.  This Report on Form 10-K, as 
well as the Company's Annual Report and future filings with the Securities and 
Exchange Commission, the Company's press releases and oral statements made with
the approval of an authorized executive officer, contains forward-looking 
statements that reflect the Company's 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.  
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: product mix; competitive pressure on sales and pricing; increase in
material or production cost which cannot be recouped in product pricing; 
changes in the sourcing of engines from Suzuki; warranty expenses; foreign 
currency exchange rate fluctuations; product liability claims and other legal 
proceedings in excess of insured amounts; environmental and product safety 
regulatory activity; effects of the weather; and overall economic conditions 
and consumer confidence.  


Item 8.  Financial Statements and Supplementary Data

         Financial Statements and Notes appear on pages F-1 through F-11.

         Quarterly financial data appears in Item 6.

Item 9.  Changes and Disagreements with Accountants on Accounting and Financial
         Disclosure

         None

                                 PART III

Item 10.  Directors and Executive Officers of the Registrant

     The information included under the heading "Election of Directors" in the
Company's definitive Proxy Statement for the Annual Meeting of Shareholders to 
be held August 14, 1997, is incorporated herein by reference.

     Pursuant to Instruction 3 to Item 401(b) of Regulation S-K, information as
to executive officers of the Company is set forth in Item 4(A) of this Form 
10-K.

Item 11.  Executive Compensation

     The information included under the heading "Executive Compensation and 
Other Information" in the Company's definitive Proxy Statement for the Annual 
Meeting of Shareholders currently scheduled to be held August 14, 1997, is 
incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The information included under the heading "Beneficial Ownership of 
Capital stock" in the Company's definitive Proxy Statement for the Annual 
Meeting of Shareholders to be held August 14, 1997, is incorporated herein by
reference.


Item 13.  Certain Relationships and Related Transactions

     Information with respect to certain relationships and related 
transactions, appearing under the heading "Executive Compensation and 
Other Information- Certain Transactions" in the Company's definitive Proxy 
Statement for the Annual Meeting of Shareholders to be held on August 14, 1997,
is incorporated herein by reference.
                                  
                                  
                                  PART IV
Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

   (a)  Documents filed as part of report

     1. Financial Statements.

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

                                                                  Form 10-K
                                                                 Page Reference
         (i)       Consolidated Balance Sheets                          F-1
                   as of March 31, 1997 and 1996

        (ii)       Consolidated Statements of Earnings                  F-2
                   for the three years ended March 31, 1997, 
                   1996 and 1995

       (iii)       Consolidated Statements of Shareholders'             F-3
                   Equity for the three years ended March 31, 
                   1997, 1996 and 1995

        (iv)       Consolidated Statements of Cash Flows                F-4
                   for the three years ended March 31, 1997, 
                   1996 and 1995
         
         (v)       Notes to Consolidated Financial                      F-5 to
                   Statements                                           F-11   

        (vi)       Report of Independent Certified Public               F-12
                   Accountants

       2.  Schedules filed as part of Form 10-K:

         (i)       Schedule II - Valuation and Qualifying Accounts      F-13   
                                          
    3.   Exhibits                                            Method of Filing
                  
          3(a) Amended and Restated Articles of Incorporation           (2)
               of Company                 
                                                                              
          3(b) Restated By-Laws of the Company                          (1) 

          4(a) Form of specimen Common Stock Certificate                (1)   

         10(a) 1989 Stock Option Plan, as amended                       (2)   

         10(b) 1995 Stock Option Plan, as amended                       (2)

         10(c) Purchase/Supply Agreement dated as of                    (1)
               March 1, 1985 between Suzuki Motor Co.,
               Ltd. and the Company, and related Agreement
               on Implementation of Warranty Provision.

         10(d) Form of Employment Agreement between the                 (1)   
               Company and each of its executive officers

         10(e) Floorplan Repurchase Agreement dated                     (1)
               July 13, 1984, between the Company
               and ITT Commercial Finance Corp.

         10(f) Floorplan Repurchase Agreement dated as                  (1)
               of June 15, 1988, between the Company
               And ITT Commercial Finance, a division
               Of ITT Industries of Canada, Ltd.
                                                                
         10(g) Discretionary Revolving Credit Facility,                 (2)
               dated as of June 6, 1997, between the Company
               and Norwest Bank Minnesota, National Association.

           21  Subsidiaries of the Registrant                           (2)
                   
           23  Consent of Independent Certified Public Accountants      (2)   

           27  Financial Data Schedule                                  (2)

    (b)   Reports on Form 8-K

          No reports on Form 8-K were filed during the three
          months ended March 31, 1997.                          

    (c)   Exhibits


          Reference is made to Item 14(a) 3.
     
    (d)   Schedules

          None

 --------------------------------------
                                                                

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

    (2)  Filed with this Form 10-K.
   
    










                   (This space intentionally left blank.)



                                SIGNATURES

        Pursuant to the requirements of Section 13 or 15 (d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized, on the 27th day 
of June, 1997.                                   
                                                
                                                ARCTIC CAT INC.
                                              
                                              /s/Christopher A. Twomey
                                             _________________________________
                                                 Christopher A. Twomey
                                             President, Chief Executive Officer
                                                        and Director
                                                (Principle Executive Officer
                                                             and Director)

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

/s/William G. Ness                                            June 27, 1997
___________________________                                 ___________________

William G. Ness
Chairman of the Board and Director

/s/Christopher A. Twomey                                      June 27, 1997
___________________________                                 ___________________
Christopher A. Twomey
President, Chief Executive Officer
and Director
(Principle Executive Officer)

/s/Timothy C. Delmore                                         June 27, 1997
___________________________                                 ___________________
Timothy C. Delmore
Chief Financial Officer
(Principle Financial and Accounting Officer)

/s/Robert J. Dondelinger                                      June 27, 1997
___________________________                                 ___________________
Robert J. Dondelinger, Director

/s/William I. Hagen                                           June 27, 1997
__________________________                                  ___________________
William I. Hagen, Director


__________________________                                  ___________________
Takeshi Natori, Director

/s/Lowell T. Swenson                                          June 27, 1997
__________________________                                  ___________________
Lowell Swenson, Director

/s/Gregg A. Ostrander                                         June 27, 1997
__________________________                                  ___________________
Gregg A. Ostrander, Director


__________________________                                  ___________________
Kenneth J. Roering, Director






                       Arctic Cat Inc. and Subsidiaries
                         CONSOLIDATED BALANCE SHEETS
                                   March 31,
                        
     ASSETS                                       1997                1996
                                                  ____                ____
CURRENT ASSETS
     Cash and equivalents                    $  5,540,000        $  9,032,000
     Short-term investments                    45,200,000          34,970,000
     Accounts receivable, less allowances      27,393,000          36,465,000
     Inventories                               86,502,000          86,618,000
     Prepaid expenses                           1,618,000           2,404,000
     Income taxes receivable                    3,838,000                  - 
     Deferred income taxes                      8,369,000           8,920,000
                                              ___________         ___________
          Total current assets                178,460,000         178,409,000

PROPERTY, PLANT AND EQUIPMENT - (at cost)
     Machinery, equipment and tooling          60,534,000          55,118,000
     Buildings and improvements                11,244,000           6,191,000
     Land                                         527,000             192,000
                                               __________          __________
                                               72,305,000          61,501,000
     Less accumulated depreciation             32,798,000          31,914,000
                                               __________          __________
                                               39,507,000          29,587,000
                                               __________          __________
                                             $217,967,000        $207,996,000
                                              ===========         ===========
     LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                        $ 21,586,000        $ 23,947,000
     Accrued expenses                          25,270,000          24,320,000
                                               __________          __________
          Total current liabilities            46,856,000          48,267,000

DEFERRED INCOME TAXES                           4,373,000           3,536,000
    
COMMITMENTS AND CONTINGENCIES                          -                   -  
SHAREHOLDERS' EQUITY
  Preferred stock, par value $1.00; 
    2,300,000 shares authorized; none issued           -                   -  
  Preferred stock - Series A 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, 21,533,136 in 1997; 
    22,055,971 in 1996                            215,000             221,000
  Class B common stock, par value $.01; 
    7,560,000 shares authorized, issued, 
    and outstanding                                76,000              76,000
  Additional paid-in capital                   17,069,000          22,502,000
  Retained earnings                           149,378,000         133,394,000
                                              ___________         ___________
                                              166,738,000         156,193,000
                                              ___________         ___________
                                             $217,967,000        $207,996,000
                                              ============        ============
                                       F-1 

                      Arctic Cat Inc. and Subsidiaries
                     CONSOLIDATED STATEMENTS OF EARNINGS
                             Years ended March 31,

                                             
                                    1997           1996           1995         
                                    ____           ____           ____

Net sales                       $468,595,000   $404,996,000   $367,144,000   
                    
Cost of goods sold               351,249,000    308,946,000    267,210,000    
                                 ___________    ___________    ___________
     Gross profit                117,346,000     96,050,000     99,934,000     
                    
Selling, general and 
administrative expenses           83,282,000     72,473,000     50,939,000 
                                 ___________    ___________    ___________
                    
     Operating profit             34,064,000     23,577,000     48,995,000     
                    
Other income (expense)                  
     Interest income               1,798,000      2,228,000      2,383,000 
     Interest expense               (109,000)            -         (17,000)    
                                 ___________    ___________    ___________
                                   1,689,000      2,228,000      2,366,000  
                                 ___________    ___________    ___________
Earnings before income taxes      35,753,000     25,805,000     51,361,000     
                    
Income tax expense                12,692,000      9,159,000     17,976,000   
                                 ___________    ___________    ___________
     Net earnings               $ 23,061,000   $ 16,646,000   $ 33,385,000  
                                  ==========     ==========     ==========

Net earnings per share                 $0.78          $0.56          $1.13 
                                         ===            ===           ====
Weighted average common and 
  common equivalent shares        29,476,000     29,661,000     29,495,000     
  outstanding                     ==========     ==========     ==========



                                       F-2
<TABLE>
                                Arctic Cat Inc. and Subsidiaries
                        CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                    Years ended March 31,

<CAPTION>
                                                          Class B          Additional   
                                  Common Stock          Common Stock        Paid-in        Retained   
                              Shares       Amount     Shares     Amount     Capital        Earnings      Total         
      
                              ______       ______     ______     ______    __________     __________   
_________
<S>                          <C>          <C>        <C>         <C>       <C>          <C>           <C>   
Balances at April 1, 1994    21,770,386   $218,000   7,560,000   $76,000   $21,521,000  $
96,388,000  $118,203,000  
                                        
 Contribution to retirement 
   savings plan                   4,197         -           -         -         77,000            -         77,000

 Exercise of stock options      375,212      4,000          -         -      1,947,000            -      1,951,000 
                                        
 Tax benefits from 
   stock option exercises            -          -           -         -        914,000            -        914,000

 Common stock retired           (79,382)    (1,000)         -         -     (1,556,000)           -    
(1,557,000) 
                                        
 Cash dividends ($.21 per share)     -          -           -         -             -     (5,906,000)   (5,906,000)    
                                        
 Net earnings                        -          -           -         -             -     33,385,000    33,385,000   
                             __________    _______   _________    ______    __________    __________  
___________ 

Balances at March 31, 1995   22,070,413    221,000   7,560,000    76,000    22,903,000  
123,867,000   147,067,000    
                                             
 Exercise of stock options       58,786      1,000          -         -        302,000            -        303,000 
                                        
 Tax benefits from 
   stock option exercises            -          -           -         -         62,000            -         62,000

 Common stock retired           (73,228)    (1,000)         -         -       (765,000)           -       (766,000) 
  
                                        
 Cash dividends ($.24 per share)     -          -           -         -             -     (7,119,000)   (7,119,000)    
                                        
 Net earnings                        -          -           -         -             -     16,646,000    16,646,000   
                             __________    _______   _________    ______    __________    __________  
___________

Balances at March 31, 1996   22,055,971    221,000   7,560,000    76,000    22,502,000  
133,394,000   156,193,000    
                                        
 Exercise of stock options       83,238         -           -         -        464,000            -        464,000   
                                        
 Tax benefits from 
   stock option exercises            -          -           -         -         62,000            -         62,000

 Common stock retired          (606,073)    (6,000)         -         -     (5,959,000)           -    
(5,965,000) 
                                        
 Cash dividends ($.24 per share)     -          -           -         -             -     (7,077,000)   (7,077,000)    
                                        
 Net earnings                        -          -           -         -             -     23,061,000    23,061,000   
                             __________    _______   _________    ______    __________    __________  
___________

Balances at March 31, 1997   21,533,136   $215,000   7,560,000   $76,000   $17,069,000 
$149,378,000  $166,738,000   
                             ==========    =======   =========   =======    ==========  
===========   ===========
</TABLE>                               F-3

                        Arctic Cat Inc. and Subsidiaries
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             Years ended March 31,


                                             1997          1996          1995
Cash flows from operating activities    
 Net earnings                          $ 23,061,000  $ 16,646,000 $ 33,385,000
 Adjustments to reconcile net earnings
  to net cash provided by operating 
  activities
    Depreciation                         11,350,000     7,646,000    5,448,000
    Deferred income taxes                 1,388,000    (2,481,000)    (127,000)
    Contribution to retirement 
     savings plan                                -             -        77,000
    Changes in operating assets 
     and liabilities:
      Trading securities                (12,476,000)   25,280,000  (12,603,000)
      Accounts receivable                 9,072,000   (17,099,000)  (4,353,000)
      Inventories                           116,000   (16,692,000) (10,030,000)
      Prepaid expenses                      786,000      (400,000)  (1,265,000)
      Accounts payable                   (2,229,000)    7,957,000   (3,308,000)
      Accrued expenses                      950,000     5,237,000    2,599,000
      Income taxes                       (3,908,000)    2,684,000   (1,481,000)
                                         __________    __________   __________
        Net cash provided by 
        operating activities             28,110,000    28,778,000    8,342,000
                                      
                                      Cash flows from investing activities
 Additions to property, plant and 
  equipment                            (21,270,000)  (17,155,000) (10,664,000)
 Sales and maturities of 
  available-for-sale securities           4,500,000     2,292,000    2,669,000
 Purchases of available-for-sale 
  securities                             (2,254,000)   (2,933,000)  (4,032,000)
                                         __________    __________    _________
        Net cash used in 
        investing activities            (19,024,000)  (17,796,000) (12,027,000)

Cash flows from financing activities
 Dividends paid                          (7,077,000)   (7,119,000)  (5,906,000)
 Proceeds from issuance of common stock     357,000       209,000      943,000
 Common stock retired                    (5,858,000)     (672,000)          -
                                         __________    __________    _________
        Net cash used in 
        financing activities            (12,578,000)   (7,582,000)  (4,963,000)
                                         __________    __________    _________
Net increase (decrease) in cash 
 and equivalents                         (3,492,000)    3,400,000   (8,648,000)

Cash and equivalents at beginning 
 of year                                  9,032,000     5,632,000   14,280,000
                                         __________    __________    _________
Cash and equivalents at end of year    $  5,540,000  $  9,032,000 $  5,632,000
                                         ==========    ==========   ==========

Supplemental disclosure of cash 
 payments for income taxes             $ 15,212,000  $ 10,869,000 $ 19,584,000
                                         ==========    ==========   ==========

Supplemental disclosure of non-cash financing activities:
  
  During 1997, 1996 and 1995, common stock with a fair market value of 
  $107,000, $94,000 and $1,557,000 was canceled as settlement for the 
  exercise of certain stock options and associated payroll taxes.

  Tax benefits derived from the exercise of stock options reduced income tax
  obligations and increased additional paid-in capital in the amount of 
  $62,000, $62,000 and $914,000 during 1997, 1996 and 1995.



                                       F-4


                        Arctic Cat Inc. and Subsidiaries
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        March 31, 1997, 1996 and 1995


                                             
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Arctic Cat Inc. and Subsidiaries (the "Company") design, engineer, 
  manufacture and market snowmobiles and all-terrain vehicles (ATVs) under 
  the Arctic Cat brand name, and personal watercraft under the Tigershark brand
  name, as well as related parts, garments and accessories, principally through 
  its facilities in Thief River Falls, Minnesota.  Principal products, as a 
  percentage of 1997 sales, are:  snowmobiles - 58%, personal watercraft - 15%, 
  ATVs - 11%, and parts, garments and accessories - 16%.  The Company operates 
  in a single industry segment and its products are sold through a network of 
  independent dealers located throughout the United States, Canada, Scandinavia 
  and other international markets.

  Use of Estimates:
  Preparation of the Company's 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.

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

  Cash and Equivalents:
  The Company considers all highly liquid temporary investments with an 
  original maturity of three months or less to be cash equivalents.  Cash 
  equivalents totaled $10,109,000 and $12,582,000 at March 31, 1997 and 1996, 
  are stated at cost, which approximates market value based upon quoted market 
  prices, and were principally invested in three issuers' and two issuers' put 
  bonds in 1997 and 1996.

  Short-Term Investments:
  Short-term investments include trading securities with unrealized gains and
  losses included in net earnings and available-for-sale securities with 
  unrealized gains and losses reported within shareholders' equity using the
  specific identification method.  Short-term investments are reported at cost,
  which approximates market value based upon quoted market prices.

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

  Property, Plant and Equipment:
  Depreciation is provided to relate the cost of depreciable assets to 
  operations over their estimated service lives principally on a straight-line
  basis. Estimated service lives range from 15-25 years for buildings and 
  improvements and 3-7 years for machinery, equipment and tooling.  Accelerated
  and straight-line methods are used for income tax reporting.

  Product Warranties:
  The Company provides for estimated warranty costs at the time of sale and 
  accrues for specific items at the time their existence and amounts are known
  following the sale.  Warranty costs on certain parts and components are 
  reimbursed to the Company by supplying vendors.


                                       F-5

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

  Revenue Recognition:
  The Company recognizes revenue when products are shipped to dealers.
  
  Research and Development:
  The Company expenses research and development costs as a component of selling
  , general and administrative expenses as incurred.  Research and development 
  expense was $9,911,000, $9,317,000 and $7,207,000 during 1997, 1996 and 1995.

  Advertising:
  The Company expenses advertising costs as incurred.  Advertising expense was
  $17,049,000, $12,296,000 and $8,903,000 during 1997, 1996 and 1995.


  Stock-Based Compensation:
  The Company utilizes the intrinsic value method of accounting for its 
  employee stock-based compensation plans.  Pro forma information related to 
  the fair value based method of accounting is contained in Note 1.

  Net Earnings Per Share:
  Net earnings per share is computed by dividing net earnings by the weighted
  average outstanding common shares and common share equivalents, when 
  dilutive.

  The Financial Accounting Standards Board has issued Statement of Financial 
  Accounting Standards No. 128, Earnings Per Share, which is effective for
  financial statements issued after December 15, 1997.  Early adoption of the
  new standard is not permitted.  The new standard eliminates primary and fully
  diluted earnings per share and requires presentation of basic and diluted
  earnings per share together with disclosure of how the per share amounts were
  computed.  The effect of adopting this new standard would not be material for
  1997, 1996 or 1995.

  Foreign Currency:
  Effective April 1, 1996, the Company began marketing its products directly to
  Canadian dealers in Canadian currency.  The Company's Canadian operations use
  the U.S. dollar as the functional currency.  Canadian assets and liabilities
  are translated at the foreign exchange rates in effect at the balance sheet 
  date.  Revenues and expenses are translated at the average foreign exchange
  rate in effect.  Translation and exchange gains and losses are reflected in 
  the results of operations. 

  The Company enters into foreign exchange forward contracts to hedge purchase
  commitments denominated in Japanese yen.  Gains and losses on the foreign 
  exchange contracts are deferred and included in the determination of the 
  related foreign currency transaction.  At March 31, 1997, the Company had 
  open Japanese yen forward purchase contracts with notional amounts totaling 
  $13,993,000.
  
NOTE B - SHORT-TERM INVESTMENTS

  Short-term investments consist primarily of a diversified portfolio of tax 
  exempt municipal bonds and municipal bond mutual funds and are classified as 
  follows at March 31:

                                               1997                1996      
                                               ____                ____

     Trading securities                     $32,490,000         $20,014,000
     Available-for-sale debt securities      12,710,000          14,956,000
                                             __________          __________
                                            $45,200,000         $34,970,000
                                             ==========          ==========
                                       F-6

  The contractual maturities of available-for-sale debt securities at March 31,
  1997, are as follows:  $500,000 within one year, $3,090,000 from one year 
  through five years, and $9,120,000 from five years through ten years.  Gross 
  realized and unrealized gains and losses related to available-for-sale 
  securities were not material.

NOTE C -INVENTORIES

  Inventories consist of the following at March 31:
                                                 1997            1996      
                                                 ____            ____

     Raw materials and sub-assemblies          $32,784,000    $39,027,000
     Finished goods                             32,573,000     22,727,000
     Parts, garments and accessories            21,145,000     24,864,000
                                                __________     __________
                                               $86,502,000    $86,618,000
                                                ==========     ==========


NOTE D - ACCRUED EXPENSES

  Accrued expenses consist of the following at March 31:

                                                 1997             1996      
                                                 ____             ____

     Compensation                            $ 7,952,000      $ 5,892,000
     Warranty                                  7,971,000        7,939,000
     Self-insured retentions                   3,391,000        3,185,000
     Other                                     5,956,000        7,304,000
                                              __________       __________
                                             $25,270,000      $24,320,000
                                              ==========       ==========

NOTE E - RETIREMENT SAVINGS PLAN

  The Company's 401(k) retirement savings plan covers substantially all 
  eligible employees.  Employees may contribute up to 20% of their compensation
  with the Company matching 100% of the employee contributions, up to a maximum
  of 3% of the employee's compensation.  The Company can elect to make 
  additional contributions at its discretion.  Total Company contributions were
  $773,000, $724,000 and $579,000 in 1997, 1996 and 1995.


NOTE F - RELATED PARTY TRANSACTIONS

  The Company purchases engines and related parts, which are manufactured in
  Japan, from Suzuki Motor Corporation (Suzuki) (see Note I).  Such purchases 
  totaled $103,285,000, $95,619,000 and $77,005,000 in 1997, 1996 and 1995.  
  The purchase price of engines and related parts is determined annually.  The 
  Company has an agreement with Suzuki, which renews annually, to share the 
  impact of fluctuations in the exchange rate between the U.S. dollar and the 
  Japanese yen above and below a fixed range contained in the agreement for 
  snowmobile and watercraft engine purchases.  Foreign currency exchange losses
  under this agreement were not material during the periods presented.


                                       F-7

  As described above, and in Note I, the Company is dependent on Suzuki for the
  near term supply of its engines and related parts.  An interruption of this 
  supply could have a material adverse effect on the Company's operations.

  Freight services and certain raw materials are purchased from companies where
  certain of the Company's directors are officers or significant shareholders. 
  In 1997, 1996 and 1995, these transactions aggregated $7,699,000, $6,255,000 
  and $4,961,000.


NOTE G - INCOME TAXES

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

                                    1997              1996             1995
                                    ____              ____             ____

    Current  -Federal             $9,767,000       $10,375,000     $16,227,000
             -State                1,537,000         1,265,000       1,876,000

    Deferred                       1,388,000        (2,481,000)       (127,000)
                                  __________        __________      __________
                                 $12,692,000        $9,159,000     $17,976,000
                                  ==========        ==========      ==========

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

                                                      1997             1996
                                                      ____             ____    
    Deferred income taxes assets                                
     Accrued warranty                               $2,989,000      $2,977,000
     Inventory capitalization and reserves           1,827,000       2,317,000
     Other                                           3,553,000       3,626,000
                                                     _________       _________
                                                    $8,369,000      $8,920,000
                                                     =========       =========

    Deferred income taxes - liabilities
     Depreciation                                   $2,683,000      $2,057,000
     Other                                           1,690,000       1,479,000
                                                     _________       _________
                                                    $4,373,000      $3,536,000
                                                     =========       =========


  The following is a reconciliation of the Federal statutory income tax rate to
  the effective tax rate for the years ended March 31:
                                                
                                                1997       1996       1995
                                                ____       ____       ____

     Statutory income tax rate                  35.0%      35.0%      35.0%
     State taxes                                 2.3        3.2        2.4
     Tax exempt interest                        (1.3)      (2.9)      (1.6)
     Foreign sales corporation                  (1.5)      (2.0)      (1.0)
     Other                                       1.0        2.2         .2 
                                                ____       ____       ____
                                                35.5%      35.5%      35.0%
                                                ====       ====       ====

                                       F-8

NOTE H - COMMITMENTS AND CONTINGENCIES

  Letters of Credit:
  At March 31, 1997, the Company had an unsecured credit agreement with a bank
  for the issuance of up to $30,000,000 of documentary and stand-by letters of 
  credit. The total letters of credit issued at March 31, 1997, were 
  $19,888,000, of which $16,639,000 were issued to Suzuki for engine purchases 
  (see Note F).  The letters of credit expire through September 1997.

  Dealer Financing:
  Finance companies provide certain of the Company's dealers and distributors 
  with financing.  The Company has agreements to repurchase certain repossessed
  products sold to its dealers and reimburse the finance companies for losses 
  up to specified limits.  At March 31, 1997, the Company was contingently 
  liable under these agreements for a maximum repurchase amount of 
  approximately $6,600,000.  No material losses have been incurred under these 
  agreements during the periods presented.

  The Company pays a specified portion of the floor plan interest payable to 
  finance companies for certain of its dealers who qualify under various 
  marketing programs.  Total payments under these programs were $10,506,000, 
  $7,416,000 and $4,881,000 in 1997, 1996 and 1995 and are included in selling,
  general and administrative expenses.

  Litigation:  
  The Company is subject to legal proceedings and claims which arise in the 
  ordinary course of business.  In the opinion of management, the ultimate
  outcome of these matters will not be material to the Company's cash flow or 
  consolidated financial statements.


NOTE I - SHAREHOLDERS' EQUITY

  Stock Plan Options:
  The Company has stock option plans that provide for incentive and 
  non-qualified stock options to be granted to directors, officers and other 
  key employees or 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 at the date of 
  grant.  At March 31, 1997, the Company had 1,090,300 shares of common stock 
  available for issue under the plans.  

  Transactions under the plans during each of the three years in the period 
  ended March 31, 1997 are summarized as follows:
                

                                          F-9
                                       Number of               Weighted 
                                      shares under              average
                                        option               exercise price
                                        _______              ________________
     
     Outstanding at April 1, 1994       1,162,526                    $ 6.57
       Granted                            241,471                     16.64
       Exercised                         (375,213)                     5.20
                                        __________                   _______

     Outstanding at March 31, 1995      1,028,784                      9.44
       Granted                            255,000                     11.25
       Exercised                          (58,786)                     5.15
                                        __________                   _______

     Outstanding at March 31, 1996      1,224,998                     10.02
       Granted                            602,752                     10.25
       Exercised                          (83,238)                     5.59
                                        __________                   _______

     Outstanding at March 31, 1997      1,744,512                    $10.31
                                        =========                    =======
  
  Options exercisable at March 31:

  1995                                    265,019                    $ 7.15
  --------------------------------------------------------------------------
  1996                                    475,831                    $ 7.62  
  --------------------------------------------------------------------------
  1997                                    751,180                    $ 8.94    
  --------------------------------------------------------------------------
  
  The following tables summarize information concerning currently outstanding
  and exercisable stock options:

  Options Outstanding                   Weighted
                                        Average                 Weighted
  Range of              Number          Remaining               Average
  Exercise Prices       Outstanding     Contractual Life        Exercise Price 
  ----------------------------------------------------------------------------
  $ 5.95-$ 8.03         431,820         5 months                $ 5.99
    9.50- 13.33       1,071,221         4.5 years                10.63
   16.33- 19.75         241,471         2.2 years                16.64
  ----------------------------------------------------------------------------
                      1,744,512
  ____________________________________________________________________________

  Options Exercisable
                                                                Weighted
  Range of              Number                                  Average
  Exercise Prices       Exercisable                             Exercise Price
  ----------------------------------------------------------------------------
  $ 5.95-$ 8.03         386,820                                 $ 5.99
    9.50- 13.33         305,463                                  11.03
   16.33- 19.75          58,897                                  17.52
  ----------------------------------------------------------------------------
                        751,180
  ____________________________________________________________________________

  The Company's 1997 and 1996 pro forma net earnings and net earnings per share
  would have been $22,290,000 and $16,450,000, or $0.76 and $0.55 per share had
  the fair value method been used for valuing options granted during 1997 and 
  1996.  The impact on net earnings may differ in future disclosures because 
  they do not take into effect pro forma compensation expense related to grants
  made before 1996.  The weighted average fair value of options granted in 1997
  and 1996 was $3.40 and $3.84, computed by applying the following weighted 
  average assumptions to the binomial options pricing model: dividend yield of
  2%; risk-free rate of return of 6.6% and 6.2%; volatility of 35%; and an 
  average term of 4.7 and 5 years for 1997 and 1996.

  Class B Common Stock:
  Suzuki owns all outstanding shares of the Company's Class B common stock.  At
  the option of Suzuki, the Class B common stock is convertible into an equal 
  number of shares of the Company's common stock.  The Class B shareholder is 
  entitled to elect one member of the Company's Board of Directors but cannot 
  vote for the election of other directors of the Company.  The Class B 
  shareholder can vote on all other matters submitted to the common 
  shareholders.  The Class B common stock participates equally with the common 
  stock in all dividends and other distributions duly declared by the Company's
  Board of Directors.  The Class B common shares are converted into an equal 
  number of shares of common stock if:  Suzuki owns less than 15% of the 
  aggregate number of outstanding common and Class B common shares;
  the Company becomes a non-surviving party due to a merger, recapitalization, 
  or the Company sells substantially all of its assets; or due to the transfer 
  of Class B common stock by Suzuki to any person.

  In addition, the Company has a Stock Purchase Agreement with Suzuki that
  prohibits the purchase of additional shares of the Company's common stock 
  unless, following such purchase, Suzuki's ownership is less than or equal to 
  32% of the aggregate outstanding shares of common and Class B common stock.  
  The Company has the first right of refusal to purchase any shares Suzuki 
  intends to sell.  Suzuki has agreed not to compete in the manufacture of 
  snowmobiles or related parts so long as it supplies engines to the Company or
  owns at least 10% of the aggregate common and Class B common shares 
  outstanding.

  Preferred Stock:
  The Company's Board of Directors is authorized to issue 2,300,000 shares of 
  $1.00 par value preferred stock in one or more series.  The board can 
  determine voting, conversion, dividend and redemption rights and other 
  preferences of each series.  No shares have been issued.

                                       F-10
  Shareholders' Rights Plan:
  In connection with the adoption of a Shareholders' Rights Plan, the Company
  created a Series A Junior Participating preferred stock.  Under terms of the 
  Company's Shareholder Rights Plan, upon the occurrence of certain events, 
  registered holders of common stock and Class B common stock are entitled to 
  purchase one-hundredth of a share of Series A Junior Participating preferred 
  stock at a stated price, or to purchase either the Company's common shares or
  common shares of an acquiring entity at half their market value.  The Rights 
  related to this plan expire September 5, 2001.


  Share Repurchase Authorization:
  The Company's Board of Directors has authorized the repurchase of up 
  to 1,500,000 shares of common stock.  During 1997 and 1996, the Company 
  invested $5,858,000 and $672,000 to repurchase and cancel 596,500 and 
  66,000 shares.


NOTE J - EXPORT SALES AND MAJOR CUSTOMER
        
  Prior to March 31, 1996, the Company marketed its products to Canadian 
  dealers through two distributors serving eastern and western Canada.  Sales 
  to one of these distributors amounted to $29,437,000 and $40,175,000 during
  1996 and 1995.  Effective April 1, 1996, the Company began marketing all of 
  its products directly to Canadian dealers.

  Sales to foreign customers, located primarily in Canada, amounted to 
  $94,468,000, $73,964,000 and $74,136,000 in 1997, 1996 and 1995.


                                       F-11

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors 
Arctic Cat Inc.

     We have audited the accompanying consolidated balance sheets of Arctic  
Cat Inc. (f/k/a Arctco, Inc.) and Subsidiaries as of March 31, 1997 and 1996, 
and the related consolidated statements of earnings, shareholders' equity, and 
cash flows for each of the three years in the period ended March 31, 1997.  
These financial statements are the responsibility of the Company's management. 
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Arctic Cat Inc
 . and Subsidiaries as of March 31, 1997 and 1996, and the consolidated results 
of their operations and their cash flows for each of the three years in the 
period ended March 31, 1997, in conformity with generally accepted accounting 
principles.

     We have also audited Schedule II of Arctic Cat Inc. and Subsidiaries for
each of the three years in the period ended March 31, 1997.  In our opinion, 
this schedule presents fairly, in all material respects, the information 
required to be set forth therein.

/s/Grant Thornton LLP
______________________
Minneapolis, Minnesota
May 9, 1997


                                       F-12
 <TABLE>
                      ARCTIC CAT INC. AND SUBSIDIARIES
                SCHEDULE II-VALUATION AND QUALIFING ACCOUNTS
                    THREE YEARS ENDED MARCH 31, 1997
<CAPTION>

                                 Balance at     Charged to     Charged to
                                 Beginning      Costs and      Other Accounts   Deductions-      Balance at end
    Description                  of Period      Expenses        -Describe        Describe         of Period
    ___________                  __________     ___________    ______________   ___________      ________________

<S>                              <C>            <C>            <C>             <C>               <C>
Warranty Reserve
 Year ended March 31, 1997       $7,939,000     $13,915,000         -          $13,883,000 (a)   $7,971,000
  
 Year ended March 31, 1996        6,012,000      14,354,000         -           12,427,000 (a)    7,939,000
  
 Year ended March 31, 1995        5,518,000       9,638,000         -            9,144,000 (a)    6,012,000


Self-insured Retentions:
 Year ended March 31, 1997        3,185,000       4,371,000         -            4,165,000 (b)    3,391,000

 Year ended March 31, 1996        2,504,000       3,777,000         -            3,096,000 (b)    3,185,000

 Year ended March 31, 1995        2,449,000       2,432,000         -            2,377,000 (b)    2,504,000

Other:                                                                          
 Year ended March 31, 1997        3,037,000          -              -                -            3,190,000

 Year ended March 31, 1996        1,608,000          -              -                -            3,037,000

 Year ended March 31, 1995        1,683,000          -              -                -            1,608,000
                                                               
(a) Warranty claims paid less vendor reimbursements.                                                               
(b) Health and workers' comp claims and expenses paid.
</TABLE>                                                               
                                                               
                                   F-13
 

                               ARCTIC CAT INC.
                               EXHIBIT INDEX

 Exhibit Number

    3(a)                   Amended and Restated Arcticles of Incorporation
                           of Company

  10(a)                    1989 Stock Option Plan, as amended
  
  10(b)                    1995 Stock Option Plan, as amended

  10(g)                    Discretionary Revolving Credit Facility,
                           dated as of June 6, 1997, between the Company
                           and Norwest Bank Minnesota, National Association.
  
   21                      Subsidiaries of Registrant

   23                      Consent of Independent Certified Public 
                           Accountants

   27                      Financial Data Schedule