|BRP reports fourth-quarter and fiscal year 2016 results|
The model year 2017 Ski-Doo line-up was launched on February 22, 2016. © BRP 2016
Revenues of $3,829.2 million for FY2016, an 8.6% increase compared to FY2015;
Normalized EBITDAof $460.0 million, a 9.2% increase compared to the same period last year;
Normalized net incomeof $200.8 million resulting in a normalized diluted earnings per shareof $1.71;
Net income of $51.6 million, a decrease of $18.5 millioncompared to the same period last year;
Non-cash impairment charge of $45.1 million, net of income taxes, related to its outboard engine assets; and
Reaffirmed our leadership in the snowmobile market with the launch of a new Ski‑Doo platform.
Valcourt, Québec, March 18, 2016– BRP Inc. (TSX:DOO) today reported its financial results for the three- and twelve-month periods ended January 31, 2016. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available atwww.sedar.com.
"Despite intense competition and a softer economy in certain key markets, the BRP team has really come together and delivered on our plan.This has been a year marked by solid product introductions, flawless execution on all our programs and gains across our product lines. I would highlight in particular the introduction of all our new products, the completion of our second state-of-the-art manufacturing facility in Juárez, Mexico, and the addition of 105 new powersports dealers to our North American network," said José Boisjoli, president and CEO. "We feel the momentum across all our product lines, particularly with Can-Am vehicles where we've commited to deliver a new side-by-side model every six months for the next four years. I'm also very proud of the recently launched Ski-Doo platform that will maintain our leadership position."
In closing, Boisjoli added: "Our continued focus on innovation, which consistently drives market share gains, as well as our geographic and product diversification and global manufacturing footprint, continue to provide us with the levers required to deliver growth. In addition, given our team's determination and the breadth of products to be announced over the coming year, across our six product lines, I am confident that we will reach our financial targets for Fiscal Year 2017."
Highlights for the Three- and Twelve-Month Periods Ended January 31, 2016
Revenues increased by $40.7 million, or 3.8%, to $1,108.8 million for the three-month period ended January 31, 2016, compared with $1,068.1 million for the corresponding period ended January 31, 2015. The revenue increase was mainly due to a favourable foreign exchange rate variation of $98 million related largely to the strengthening of the U.S. dollar against the Canadian dollar and to higher wholesale in Year-Round Products. The increase was partially offset by lower wholesale in Seasonal Products.
Gross profit decreased by $3.8 million, or 1.3%, to $285.9 million for the three-month period ended January 31, 2016, compared with $289.7 million for the corresponding period ended January 31, 2015. The gross profit decrease is mainly due to lower wholesale and additional sales program costs in snowmobiles, partially offset by a favourable foreign exchange rate variation of $13 million. Gross profit margin percentage decreased by 130 basis points to 25.8% from 27.1% for the three-month period ended January 31, 2015. The decrease in gross profit margin percentage was primarily due to higher sales programs in snowmobiles, to an unfavourable channel mix in outboard engines and to an unfavourable foreign exchange variation, partially offset by general price increases.
Revenues increased by $304.5 million, or 8.6%, to $3,829.2 million for the twelve-month period ended January 31, 2016, compared with $3,524.7 million for the corresponding period ended January 31, 2015. The revenue increase was attributable to a favourable foreign exchange rate variation of $254 million mainly due to the strengthening of the U.S. dollar against the Canadian dollar and to a higher wholesale in Year-Round Products and PAC.
Gross profit increased by $68.6 million, or 8.1%, to $914.2 million for the twelve-month period ended January 31, 2016, compared with $845.6 million for the corresponding period ended January 31, 2015. The gross profit increase includes a favourable foreign exchange rate variation of $23 million. Gross profit margin percentage remained stable at 23.9% for the twelve-month period ended January 31, 2016 compared with 24.0% for the twelve-month period ended January 31, 2015. Higher sales program costs in Seasonal Products and unfavourable foreign exchange rate impact were offset by lower production costs and general price increases.
QUARTERLY REVIEW BY CATEGORIES
Revenues from Year-Round Products increased by $66.6 million, or 16.0%, to $482.6 million for the three-month period ended January 31, 2016, compared with $416.0 million for the corresponding period ended January 31, 2015. The increase resulted from a favourable foreign exchange rate variation of $51 million, from a higher volume of SSV sold following the introduction of the Defender and from general price increases. The increase was partially offset by an unfavourable product mix of SSV sold.
Revenues from Seasonal Products decreased by $34.9 million, or 8.9%, to $356.7 million for the three-month period ended January 31, 2016, compared with $391.6 million for the corresponding period ended January 31, 2015. The decrease resulted primarily from a lower volume of snowmobiles sold mainly attributable to earlier shipments during the year and additional sales program costs due to a lack of snowfall in North America and an economic slowdown experienced in Western Canada. The decrease was partially offset by a favourable mix in PWC and a favourable foreign exchange rate variation of $24 million.
Revenues from Propulsion Systems decreased by $9.7 million, or 8.9%, to $99.0 million for the three-month period ended January 31, 2016, compared with $108.7 million for the corresponding period ended January 31, 2015. The decrease in revenues was mainly attributable to a lower volume and an unfavourable mix of outboard engines sold. The decrease was partially offset by a favourable foreign exchange rate variation of $9 million.
PAC (Parts, Accessories, Clothing and other services)
Revenues from PAC increased by $18.7 million, or 12.3%, to $170.5 million for the three-month period ended January 31, 2016, compared with $151.8 million for the corresponding period ended January 31, 2015. The increase was mainly attributable to a favourable foreign exchange rate variation of $14 million and to a higher volume of SSV and roadsters PAC sold resulting from new product introductions. The increase was partially offset by a lower volume of snowmobile PAC sold resulting from a lack of snowfall in North America and an economic slowdown experienced in Western Canada.
Operating expenses increased by $95.2 million, or 82.5%, to $210.6 million for the three-month period ended January 31, 2016, compared with $115.4 million for the three-month period ended January 31, 2015. This increase was mainly due to a non-cash impairment charge of $70.3 million ($45.1 million net of income taxes) related to outboard engine assets and to an unfavourable foreign exchange impact of $17 million. The impairment was triggered by the strengthening of the U.S. dollar against almost all currencies which has negatively impacted the profitability of outboard engine products sold outside of the United States, and by lower overall performance than expected.
Normalized net income stood at $86.8 million, a decrease of $29.7 million, which resulted in a normalized diluted earnings per shareof $0.75, a decrease of $0.23 per share. The decrease was primarily due to lower wholesale in snowmobiles and higher operating expenses.
Fiscal Year 2017 Guidance
The table below sets forth BRP's financial guidance for Fiscal Year 2017 when compared to actual results for Fiscal Year 2016. The individual targets are based on certain assumptions for currency exchange rates and exclude the effects of future fluctuations.
The above targets are based on a number of economic and market assumptions the Company has made in preparing its Fiscal Year 2017 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 2017, 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 March 17, 2016. 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 fourth-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 in the Event Calendar section.
To listen to the conference call by phone, for the English integral version (event number 4237594), please dial 514-861-1681 or 800-766-6630 (toll-free in North America). For the French version (event number 4237595), please dial 514-392-1478 or 866-225-0198 (toll-free in North America). Click 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 7500930. For the French translation, enter 5363392.
 See "Non-IFRS Measures" section.
Ski-Doo, Lynx, Sea-Doo, Evinrude, Rotax, Can-Am, Spyder, Defender 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.
Normalized EBITDA is defined as net income before financing costs, financing income, income taxes expense (recovery), depreciation expense and normalized elements. Normalized Net Income is defined as net income before normalized elements adjusted to reflect the tax effect on these elements. Normalized income taxes expense is defined as income taxes expense adjusted to reflect the tax effect on normalized elements. Normalized earnings per share - basic and normalized earnings per share – diluted are calculated respectively by dividing the normalized net income by the weighted average number of shares – basic and the weighted average number of shares – diluted. The Company refers the reader to the "Selected Consolidated Financial Information" section of the MD&A for the reconciliations of Normalized EBITDA and Normalized Net Income presented by the Company to the most directly comparable IFRS measure.
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|"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding BRP's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.|