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|BRP reports fiscal year 2016 second-quarter results|
BRP's Sea-Doo Spark watercraft. © BRP 2015
Revenues of $812.1 million, a 4.1% increase compared to the second quarter of FY2015;
Valcourt, Québec, September 11, 2015 — BRP Inc. (TSX:DOO) today reported its financial results for the three- and six-month periods ended July 31, 2015. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.
"Two years after the introduction of the Sea-Doo Spark, we can now affirm that we have achieved our goal of rejuvenating the personal watercraft industry, knowing that it has grown globally by more than 25%, having a positive impact on sales of traditional personal watercraft. We also had an excellent first season with our Can-Am Outlander L ATV family, which contributed to good market share gains in the mid-cc ATV segment," said José Boisjoli, president and CEO. "These successes are the results of the teams' excellent execution and hitting the market on time."
Commenting on the outlook for the second half of Fiscal Year 2016, Boisjoli added: "I am happy with the momentum our products are gaining globally. I remain confident that despite softer markets in Russia, Latin America and lately Canada, we are well positioned with our products' portfolio to deliver strong results in the second half."
Please see definitions of Normalized EBITDA, Normalized net income and Normalized diluted earnings per share below the Net income data table.
Highlights for the Three- and Six-Month Periods Ended July 31, 2015
Revenues increased by $32.1 million, or 4.1%, to $812.1 million for the three-month period ended July 31, 2015, compared with $780.0 million for the corresponding period ended July 31, 2014. The revenue increase was mainly due to a favourable foreign exchange rate variation of $45 million mostly related to the strengthening of the U.S. dollar against the Canadian dollar. The increase was partially offset by lower wholesale in Year-Round Products and Seasonal Products.
Revenues increased by $171.6 million, or 11.2%, to $1,710.2 million for the six-month period ended July 31, 2015, compared with $1,538.6 million for the corresponding period ended July 31, 2014. The revenue increase was mainly due to higher wholesale in Seasonal Products. The increase includes a favourable foreign exchange rate variation of $81 million mainly due to the strengthening of the U.S. dollar against the Canadian dollar, partially offset by the strengthening of the Canadian dollar against the euro.
For a reconciliation of Net income (loss) to Normalized net income (loss) and Normalized EBITDA, see the Reconciliation Tables in the MD&A.
Normalized EBITDA and Normalized Net Income (loss) are non-IFRS measures that the Company uses to assess its operating performance. Normalized EBITDA is defined as net income (loss) before financing costs, financing income, income taxes expense (recovery), depreciation expense and normalized elements. Normalized Net Income (loss) is defined as net income (loss) before normalized elements adjusted to reflect the tax effect on these elements. See "Non-IFRS Measures" section included in the MD&A.
Normalized earnings (loss) per share - basic and normalized earnings (loss) per share – diluted are calculated respectively by dividing the normalized net income (loss) by the weighted average number of shares – basic and the weighted average number of shares – diluted.
QUARTERLY REVIEW BY CATEGORIES
Revenues from Year-Round Products increased by $1.0 million, or 0.3%, to $298.4 million for the three-month period ended July 31, 2015, compared with $297.4 million for the corresponding period ended July 31, 2014. The increase resulted primarily from a favourable foreign exchange rate variation of $16 million, mostly offset by lower wholesale and an unfavourable product mix in ATVs and roadsters.
Revenues from Seasonal Products increased by $3.6 million, or 1.4%, to $263.4 million for the three-month period ended July 31, 2015, compared with $259.8 million for the corresponding period ended July 31, 2014. The increase resulted primarily from earlier shipments of snowmobiles and a favourable foreign exchange rate variation of $15 million. The increase was partially offset by lower volumes of PWC sold due to earlier deliveries made in the first quarter compared to last year, following the completion of the production ramp-up at the Querétaro, Mexico facility.
Revenues from Propulsion Systems increased by $11.0 million, or 13.0%, to $95.4 million for the three-month period ended July 31, 2015, compared with $84.4 million for the corresponding period ended July 31, 2014. The increase in revenues was mainly attributable to a favourable mix of outboard engines sold due to the E-TEC G2 introduction and to lower sales programs. The increase in revenues also includes a favourable foreign exchange rate variation of $3 million.
PAC (Parts, Accessories, Clothing and other services)
Gross profit increased by $26.5 million, or 18.5%, to $169.4 million for the three-month period ended July 31, 2015, compared with $142.9 million for the corresponding period ended July 31, 2014. The gross profit increase includes a favourable foreign exchange rate variation of $9 million. Gross profit margin percentage increased by 260 basis points to 20.9% from 18.3% for the three-month period ended July 31, 2014. The increase in gross profit margin percentage was primarily due to lower sales programs in SSVs and outboard engines and lower production costs, partially offset by an unfavourable mix of roadsters and ATVs sold.
Operating expenses increased by $7.8 million, or 5.6%, to $147.1 million for the three-month period ended July 31, 2015, compared with $139.3 million for the three-month period ended July 31, 2014. This increase was mainly due to an unfavourable foreign exchange impact of $10 million.
Normalized net income reached $4.0 million, an increase of $12.8 million, which resulted in normalized diluted earnings per share of $0.03, an increase of $0.10 per share. The increase was primarily due to higher operating income, partially offset by higher income taxes expense.
Fiscal Year 2016 Guidance
BRP's financial guidance targets as presented on March 27, 2015 are adjusted due to a lower expected depreciation expense as follows:
The above targets are based on a number of economic and market assumptions the Company has made in preparing its Fiscal Year 2016 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 2016, 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 September 10, 2015. 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 FY2016 second-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 athttp://investors.brp.com in the Event Calendar section.
To listen to the conference call by phone, for the English integral version (event number 4222677), please dial 514-861-1681 or 800-766-6630 (toll-free in North America). For the French version (event number 4222676), please dial 514-392-1478 or 866-542-4146 (toll-free in North America). Click here for international dial-in numbers.
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 800-408-3053. For the English integral version, please enter the pass code 7673355. For the French translation, enter 9367167.
Ski-Doo, Lynx, Sea-Doo, Evinrude, Rotax, Can-Am, Spyder, E-TEC, G2, Spark, Outlander and the BRP logo are trademarks of Bombardier Recreational Products Inc. or its affiliates. All other trademarks are the property of their respective owners.
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CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
BRP undertakes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event that BRP does update any forward-looking statement, no inference should be made that BRP will make additional updates with respect to that statement, related matters, or any other forward-looking statement.
CAUTION REGARDING NON-IFRS MEASURES
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