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BRP Reports First Quarter Fiscal Year 2014 Results

Published online: Jun 15, 2013 News

BRP Inc. on Thursday reported its financial results for the quarter ending April 30, 2013. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.

"We are pleased to report our first results as a public company and we take this opportunity to welcome our new shareholders to BRP," said BRP president and CEO José Boisjoli. "Our first quarter puts us on track for a strong performance this year. Our revenues from our year-round products increased by 27 percent during the quarter, led by the sales of our Can-Am Spyder ST and Maverick side-by-side vehicle which add to our solid track record of successfully introducing new products and generating strong consumer acceptance."

Boisjoli continued, "During Q1, we also launched the new Rotax 900 ACE snowmobile engine, which was well received by the network, and we registered strong spring orders of snowmobiles to be delivered during the second half of the year. In addition, our Spyder retail sales performance has continued to outpace the on-highway motorcycle industry.

"International growth is at the heart of our business strategy. We are pleased with our 8 percent revenue increase from the international market, especially given the challenging economic situation in Western Europe. The construction of our second Mexican manufacturing site, in Querétaro, is on schedule," he concluded.

 

Fiscal Year 2014 First Quarter Revenues Highlights

Revenues for the quarter ending April 30, 2013, were $804.3 million, an increase of 5.5 percent or $41.6M compared to Q1 of FY13. Revenues increased by 12 percent when excluding the impact of the exit of the sport boat business in the fall 2012. The increase in revenues includes a favorable foreign exchange rate variation of $13 million mainly related to the strengthening of the U.S. dollar against the Canadian dollar. BRP's revenues are derived from the sales of its seasonal products (Ski-Doo and Lynx snowmobiles and Sea-Doo watercraft), Year-round products-Can-Am ATV and side-by-side vehicles and the Spyder-along with its propulsion systems (Rotax engines and Evinrude outboard engines) and related parts, accessories and clothing (PAC).

 

Seasonal Products

Revenues for seasonal products decreased by $46.9 million, or 18.5 percent, to $206.7 million for the quarter ending April 30, 2013, compared with $253.6 million for the corresponding period last year. The decrease in revenues is attributable to the reduction of $44 million of revenues following BRP's decision announced in the fall of 2012 to exit the sport boat business.

 

Year-Round Products

Revenues for year-round products increased by $87 million, or 27.4 percent, to $404.7 million for the quarter ending April 30, 2013, up from $317.7 million for the corresponding period last year. The increase is primarily due to the introduction of new models such as the Can-Am Spyder ST and the Maverick side-by-side vehicle.

 

Propulsion Systems

Revenues for propulsion systems remained stable at $92.9 million for the quarter ending

April 30, 2013, compared with $93.1 million for the corresponding period last year despite the cold weather during North America's spring, which impacted sales of outboard engines.

 

Parts, Accessories & Clothing (PAC)

Revenues for PAC increased by $1.7 million, or 1.7 percent, up to $100 million for the quarter ending April 30, 2013, up from $98.3 million for the corresponding period last year.

Gross profit reached $218 million or 27.1 percent of revenues, an increase of 2.7 percent or $5.8 million for the quarter ending April 30, 2013, up from $212.2 million for the corresponding period last year. The gross profit margin decreased by 70 basis points primarily due to additional manufacturing costs in year-round products in order to increase production flexibility to better respond to market demand and to additional expenses supporting the watercraft transfer to the Querétaro, Mexico, facility.

Operating expenses increased by $8.9 million, or 7.2 percent, to $131.9 million for the quarter endin April 30, 2013, up from $123 million for the corresponding period last year. The increase was primarily due to higher advertising expenses in all product categories, higher stock-based compensation in relation to the initial public offering of the company and higher investments in research and development projects.

Normalized net income increased by $3.8 million, or 7.7 percent to $53.4 million for the quarter ending April 30, 2013, compared with $49.6 million for the corresponding period last year.

BRP Inc. hosted a conference call and webcast Thursday to discuss the company's 2014 first quarter earnings results. The call was hosted by Boisjoli and CFO Claude Ferland. A slide presentation and link to the audio webcast will be posted at http://investors.brp.com in the financial presentations section.

A replay of the conference call will be available for a one-week period by accessing the same link on BRP's website.