|View printer-friendly version|
|BRP reports first-quarter results for fiscal year 2015|
 Please see definitions of Normalized net income and Normalized earnings per share on Page 2 of this release below Net Income Data table
Valcourt, Québec, June 12, 2014 — BRP Inc. (TSX: DOO) today reported its financial resultsfor the three-month period ended April 30, 2014. All financial information is in Canadian dollarsunless otherwise noted. The complete financial results are available at www.sedar.com.
“Our financial results for the first quarter were as expected and consistent with our outlook,” saidJosé Boisjoli, president and CEO. “Our sales in international markets grew in the quarterdespite the situation in Russia, but this was offset by the long winter affecting sales of off-roadvehicles in North America. We continue to fulfill our strategic initiatives and we are very muchon track to accomplish our annual plan.”
Commenting on the outlook for Fiscal Year 2015, Boisjoli added: “We are fine-tuning ourguidance for Fiscal Year 2015, but as a whole, forecasted growth for Revenues and NormalizedNet Income is unchanged. We anticipate a stronger second half of the year resulting fromstrong spring snowmobile orders, the introduction of the Can-Am Outlander L ATV, the restart ofthe Sea-Doo Spark manufacturing in Querétaro and upcoming product launches. For thesecond quarter, we expect our financial performance to be similar to last year’s, factoring in thecontinued uncertainty in Eastern Europe.”
Highlights for the Three-Month Period Ended April 30, 2014
Revenues decreased by $45.7 million, or 5.7%, to $758.6 million for the three-month periodended April 30, 2014, compared with $804.3 million for the corresponding period endedApril 30, 2013. The revenue decrease was mainly due to lower wholesale in Year-RoundProducts and to lower wholesale and unfavourable mix in Seasonal Products. The decrease inrevenues was partially offset by a favourable foreign exchange rate variation of $49 millionmainly related to the strengthening of the U.S. dollar and the Euro against the Canadian dollar.
QUARTERLY REVIEW BY CATEGORIES
Revenues from Seasonal Products decreased by $22.1 million, or 10.7%, to $184.6 million for the three-month period ended April 30, 2014, compared with $206.7 million for the corresponding period ended April 30, 2013. The reduction resulted primarily from a decrease of traditional PWC volume partly offset by the new entry-level Sea-Doo Spark PWC. The decrease of volume was attributable to a longer than anticipated production ramp-up at the Querétaro, Mexico facility causing delays in the delivery of certain PWC products. The decrease in revenues was partially offset by a favourable foreign exchange rate variation of $11 million.
Revenues from Year-Round Products decreased by $39.3 million, or 9.7%, to $365.4 million for the three-month period ended April 30, 2014, compared with $404.7 million for the corresponding period ended April 30, 2013. The decrease resulted primarily from lower shipments of SSVs due to the impact of the introduction of the Can-Am Maverick models in the corresponding period last year. To a lesser extent, the decrease was also attributable to ATVs mainly due to the decrease of volume sold in Russia, which was primarily driven by the political and economic instability in Eastern Europe. The decrease in revenues was partially offset by a favourable foreign exchange rate variation of $22 million.
Revenues from Propulsion Systems increased by $4.4 million, or 4.7%, to $97.3 million for the three-month period ended April 30, 2014, compared with $92.9 million for the corresponding period ended April 30, 2013. The increase in revenues was mainly attributable to a favourable foreign exchange rate variation of $9 million. The increase in sales related to the new jet propulsion system was more than offset by the lower volume of motorcycle engines sold.
PAC (Parts, Accessories & Clothing)
Revenues from PAC increased by $11.3 million, or 11.3%, to $111.3 million for the three-month period ended April 30, 2014, compared with $100.0 million for the corresponding period ended April 30, 2013. The increase was mainly attributable to a favourable foreign exchange rate variation of $7 million and from a higher volume of PAC related to Seasonal Products due to better winter conditions in North America.
Gross profit decreased by $44.6 million, or 20.5%, to $173.4 million for the three-month period ended April 30, 2014, compared with $218.0 million for the corresponding period ended April 30, 2013. Gross profit margin percentage decreased by 420 basis points to 22.9% from 27.1% for the three-month period ended April 30, 2013. The decrease in gross profit margin percentage was primarily due to lower wholesale in Year-Round and Seasonal Products, an unfavourable product mix in Seasonal Products, expenses related to the production ramp-up at the Querétaro, Mexico facility and to the transfer of PAC distribution to third-party logistics provider. The margin decrease was partially offset by a favourable foreign exchange rate variation of $7 million.
Operating expenses increased by $13.1 million, or 9.9%, to $145.0 million for the three-month period ended April 30, 2014, compared with $131.9 million for the three-month period ended April 30, 2013. This increase was mainly due to a negative foreign exchange impact of $12 million.
Normalized net income of $16.6 million, a decrease of $36.8 million, which resulted in normalized basic earnings per share of $0.14, a decrease of $0.38 per share. The decrease in normalized net income is primarily due to lower wholesale in Year-Round and Seasonal Products, cost related to the production ramp-up at the Querétaro facility and to the transfer of PAC distribution.
Fiscal Year 2015 Guidance
BRP’s financial guidance targets as presented on March 28, 2014 are revised as follows (no change unless otherwise noted):
 Effective tax rate based on Normalized Earnings before Income Tax.
The above targets are based on a number of economic and market assumptions the Company has made in preparing its Fiscal Year 2015 financial guidance, including assumptions regarding the performance of the economies in which it operates, foreign exchange currency fluctuations, market competition and tax laws applicable to its operations. The Company cautions that the assumptions used to prepare the forecasts for Fiscal Year 2015, although reasonable at the time they were made, may prove to be incorrect or inaccurate. In addition, the above forecasts do not reflect the potential impact of any non-recurring or other special items or of any new material commercial agreements, dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after June 11, 2014. The financial impact of such transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business. Accordingly, our actual results could differ materially from our expectations as set forth in this news release. The outlook provided constitutes forward-looking statements within the meaning of applicable securities laws and should be read in conjunction with the "Caution Concerning Forward-Looking Statements" section.
Conference Call and Webcast Presentation
Today at 9 a.m. (EDT), BRP Inc. will host a conference call and webcast to discuss BRP's FY2015 first-quarter results released this morning. The call will be hosted by José Boisjoli, president and CEO and Sébastien Martel, CFO. A slide presentation and link to the audio webcast will be posted at http://investors.brp.com in the Event Calendar section.
Note that exceptionally, this conference call will be held at 9 a.m. (EDT) to accommodate for the Annual Shareholders’ Meeting that will be held at 1 p.m. (EDT) the same day in the Laurent Beaudoin Design & Innovation Centre in Valcourt. The meeting will be webcast live. Click here for details.
To listen to the first-quarter conference call by phone, for the English integral version (event number 4192520), please dial 1-514-861-1681 or 1-800-766-6630 (toll-free in North America), or 00 800 2787-2090 for overseas callers. For the French version (event number 4192521), please dial 1-514-392-1478 or 1-866-542-4146 (toll-free in North America), or 00 800 7701 8886 for overseas calls.
A replay of the conference call will be available two hours after the call for 30 days following the original broadcast.
To listen to an instant replay of the call, please dial 514-861-2272 or 1-800-408-3053. For the English integral version, please enter the pass code 5909362. For the French translation, enter 3412785. The instant replay will be available 30 days following the call.
Ski-Doo, Lynx, Sea-Doo, Evinrude, Rotax, Can-Am and the BRP logo are trademarks of Bombardier Recreational Products Inc. or its affiliates.
|Print Page | E-mail Page | RSS Feeds | E-mail Alerts|