BRP Reports Second Quarter Fiscal Year 2014 Results

by Off-Road Hub Mag | Posted on Thursday, September 12th, 2013

brp-logo-2VALCOURT, QUEBEC – September 12, 2013 –  BRP Inc. (TSX: DOO) today reported its financial results for the three and six-month periods ended July 31, 2013. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.

“Our second quarter results were right in line with our expectations and we are on track to achieve our guidance for the year. I’m particularly pleased with the 16% growth in retail sales of our products in North America during the quarter,” said President and CEO, José Boisjoli.

“I am pleased with the performance of our team and the strength of our brands. Our 14 percent growth in international markets (excluding sport boat) is a strong testament to our product momentum, and this despite the fact that our second quarter is traditionally our weakest quarter of the year.”

“I’m looking forward to welcoming over 2,000 participants from 99 countries as we begin our semi-annual dealer meeting in Orlando, Florida in three days. This event will be another key opportunity to showcase our leadership in the powersports industry as we introduce new Sea-Doo and Can-Am models for the 2014 season,” he concluded.

Highlights For The Three and Six-Month Periods Ended July 31, 2013

Revenues for the three-month period ended July 31, 2013 were $620.9 million, an increase of 2.1% or $12.8M compared to the same period of last year. Revenues increased by 6.5% or $37.8 million when excluding the impact of the exit of the sport boat business in the fall of 2012. The increase in revenues includes a favourable foreign exchange rate variation of $11 million, mainly related to the strengthening of the Euro against the Canadian dollar.

Revenues for the six month period ended July 31, 2013 were $1,425.2 million, an increase of 4.0% or $54.4 million compared to the same period of last year. Revenues increased by 9.5% or $123.4 million when excluding the impact of the exit of the sport boat business in the fall of 2012. The increase in revenues includes a favourable foreign exchange rate variation of $24 million, mainly related to the strengthening of the US dollar and Euro against the Canadian dollar.

NET INCOME DATA

130912 BRP NET INCOME DATA

[1]EBITDA, Normalized EBITDA, Normalized net income and Normalized earnings per share are non-IFRS measures that the Company uses to assess its operating performance. EBITDA is defined as net income before financing costs, financing income, income taxes expense (recovery), depreciation expense and foreign exchange (gain) loss on long-term debt. Normalized EBITDA is defined as net income before financing costs, financing income, income taxes expense, depreciation expense, foreign exchange (gain) loss on long-term debt, increase in fair value of redeemable common shares and unusual and non-recurring items. Normalized net income is defined as net income before foreign exchange (gain) loss on long-term debt, increase in fair value of redeemable common shares and unusual and non-recurring items adjusted to reflect the tax effect on these items. Normalized earnings per share is calculated by dividing the normalized net income by the weighted average number of shares.

[2]Restated to reflect the application of the amendments to IAS 19 “Employee Benefits” standard as explained in Note 2a) of the unaudited condensed consolidated interim financial statements for the second quarter ended July 31, 2013.

Seasonal Products

Revenues from Seasonal Products decreased by $15.5 million, or 9.9%, to $140.6 million for the three-month period ended July 31, 2013, compared with $156.1 million for the corresponding period last year. The decrease in revenues is attributable to the reduction of $25 million of revenues following the Company’s decision announced in the third quarter of 2012 to exit the sport boat business. Excluding theexit of the sport boat business, revenues would have increased by $9.5 million or 7.2%. The increase resultsfrom higher volume of products sold, partially offset by additional sales programs put in place to supportretail in North America due to the late arrival of spring and generally unfavourableweather conditions.

Year-Round Products

Revenues from Year-Round Products increased by $20.9 million, or 8.1%, to $278.1 million for the three-month period ended July 31, 2013, up from $257.2 million for the corresponding period last year. The increase is primarily due to higher worldwide sales of both ATV and Side by Side Vehicles, partially offset by additional sales programs.

Propulsion Systems

Revenues from Propulsion Systems decreased by $2.6 million, or 2.9%, to $85.9 million for the three-month period ended July 31, 2013, compared with $88.5 million for the corresponding period last year. The decrease in revenues is mainly due to lower volume of outboard engines sold, partially offset by a favourable foreign exchange rate variation of $3 million.

PAC (Parts, Accessories & Clothing)

Revenues from PAC increased by $10.0 million, or 9.4%, to $116.3 million for the three months ended July 31, 2013, up from $106.3 million for the corresponding period last year. The increase is primarily due to increased sales of Year-Round Products and a favourable foreign exchange rate variation of $2 million.

Gross profit decreased by $7.0 million, or 4.7%, to $142.6 million for the three-month period ended July 31, 2013, down from $149.6 million for the corresponding period last year. The gross profit margin decreased by 160 basis points from 24.6% for the three-month period ended July 31, 2012. The decrease in gross profit margin was primarily due to increased sales program costs and to additional costs related to the transfer of PWC manufacturing to the Querétaro, Mexico facility. The decrease was partially offset by favourable product mix, higher selling prices and by a favourable foreign exchange rate variation of $6 million.

Operating expenses decreased by $28.0 million, or 20.8%, to $106.8 million for the three-month periodended July 31, 2013, down from $134.8 million for the three-month period ended July 31, 2012. During the three-month period ended July 31, 2013, the Company recorded a gain of $11.0 million from an insurance recovery whereas during the three-month period ended July 31, 2012, restructuring costs of $9.7 million and an impairment charge of $7.6 million were recorded in connection respectively with the transfer of PWC manufacturing in Mexico and the closure of the sport boat business. The foreign exchange impact represented an increase of operating expenses of $3 million. Overall, operating expenses before unusual and non-recurring items remained stable between the three-month periods ended July 31, 2013 and July 31, 2012.

Pages: 1 2


Advertisement


Advertisement


Off-Road Hub Magazine - Your Complete Source for Off-Road News and Information