BRP Inc., a global leader in the design, development, manufacturing, distribution and marketing of powersports vehicles and propulsion systems, reported its financial results for the three- and twelve-month periods ended January 31, 2014.

 

BRP’s portfolio includes Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, Can-Am all-terrain and side-by-side vehicles, Can-Am roadsters, Evinrude outboard engines and Rotax engines for karts, motorcycles and recreational aircraft as well as inboard jet propulsion systems for boats. BRP supports its line of products with a dedicated parts, accessories and clothing business. With annual sales of over CA$3 billion from 105 countries, the Company employs approximately 7,100 people worldwide.

All below financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.

“I am pleased with our results for our first year as a publicly-traded company,” said José Boisjoli, president and CEO. “The hard work of our employees has yielded good results. Revenues and normalized net income for fiscal year 2014 progressed by 10% and 15% respectively, and year-round products have surpassed seasonal products in terms of revenues for the first time, a testament to our growth strategy in these categories and the continued expansion of our dealer network.”

Commenting on the outlook for Fiscal Year 2015, Boisjoli added: “In North America we are exiting an exceptional snowmobile season with dealer inventories at an all-time low. This situation has caused shortages of snowmobiles at certain dealers but it certainly bodes very well for the next wholesale season in the second half of the year. The coldest winter in over 30 years in North America and the geopolitical uncertainty in Russia will have some impact on product deliveries early in the year, however I am confident we can continue to grow revenues and earnings with a strong product portfolio, a large geographic diversification and some exciting upcoming product news.”

Highlights for the Three- and Twelve-Month Periods Ended January 31, 2014

Revenues increased by $111.4 million, or 14.1%, to a quarterly record of $902.9 million for the three-month period ended January 31, 2014, up from $791.5 million for the corresponding period ended January 31, 2013. The increase in revenues includes a favourable foreign exchange rate variation of $53 million, mainly related to the strengthening of the U.S. dollar and the Euro against the Canadian dollar.

Revenues increased by $297.9 million, or 10.3%, to $3,194.1, million for the twelve-month period ended January 31, 2014, up from $2,896.2 million for the corresponding period ended January 31, 2013. The revenues were negatively impacted by the exit of the sport boat business in Fiscal Year 2013 that accounted for $74 million in revenues for the twelve-month period ended January 31, 2013. Excluding the exit of the sport boat business, revenues would have increased by 13.2% or $371.9 million. The increase in revenue includes a favourable foreign exchange rate variation of $114 million, mainly related to the strengthening of the U.S. dollar and the Euro against the Canadian dollar.

Seasonal Products

Revenues from seasonal products increased by $35.4 million, or 9.5%, to $406.4 million for the three-month period ended January 31, 2014, compared with $371.0 million for the corresponding period ended January 31, 2013. The increase in revenues resulted primarily from PWC due to increased volume, partially offset by an unfavourable product mix effect. The increase in revenues includes a favourable foreign exchange rate variation of $20 million.

North American Seasonal Products retail sales, excluding the sport boat business, registered an increase in the low double-digit percent range as compared to the fourth quarter of Fiscal Year 2013.

Year-Round Products

Revenues from year-round products increased by $49.1 million, or 22.0%, to $272.5 million for the three-month period ended January 31, 2014, up from $223.4 million for the corresponding period ended January 31, 2013. The increase is primarily due to higher wholesale and a favourable product mix in side-by-side vehicles resulting mainly from an expanded line-up such as the Can-Am Maverick two- and four-passenger models.The increase in revenues includes a favourable foreign exchange rate variation of $18 million.

North American Year-Round Products retail sales increased on a percentage basis by low double digits compared with the fourth quarter of Fiscal Year 2013.

Propulsion Systems

Revenues from propulsion systems increased by $5.1 million, or 7.3%, to $75.3 million for the three-month period ended January 31, 2014, compared with $70.2 million for the corresponding period ended January 31, 2013. The increase in revenues is mainly attributable to a favourable foreign exchange rate variation of $7 million.

PAC (Parts, Accessories & Clothing)

Revenues from PAC increased by $21.8 million, or 17.2%, to $148.7 million for the three-month period ended January 31, 2014, up from $126.9 million for the corresponding period ended January 31, 2013. The increase is primarily due to a higher volume driven by the growth of Year-Round Products and Seasonal Products businesses. The revenue increase includes a favourable foreign exchange rate variation of $8 million.

Fiscal Year 2015 Guidance and First Quarter Outlook

The company is introducing its financial guidance for Fiscal Year 2015 with an increase in company revenues and normalized net income of between 9% and 13%, and between 10% and 17% respectively, when compared to fiscal year 2014. The guidance includes an assumption for lower sales and profitability as a result of the growing geopolitical uncertainty in Russia.