Home » News » BRP revenues up 25 percent in fiscal 2015 Q2, net loss sliced

BRP revenues up 25 percent in fiscal 2015 Q2, net loss sliced

News release

BRP reported its second quarter results for fiscal year 2015 on Friday.

Highlights:

  • Revenues of $780 million, a 25.6% increase compared to the same period last year;
  • Normalized EBITDA[1] of $31.3 million;
  • Net loss of $3.6 million compared to a net loss of $7.9 million for the same period last year, which resulted in a diluted loss per share of $0.03 compared to a diluted loss per share of $0.07;
  • Normalized net loss of $8.8 million that resulted in a normalized diluted loss per share of $0.07;
  • 19% increase in retail sales of Seasonal Products and Year-Round Products in North America when compared to the same period last year;
  • The Evinrude E-TEC G2 outboard engine received positive feedback from dealers, boat builders and trade media; and
  • Revealed today the industry’s first turbocharged side-by-side vehicle, the 121-hp-rated Can-Am Maverick X ds.

BRP Inc. (TSX: DOO) today reported its financial results for the three- and six-month periods ended July 31, 2014. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.

“After a soft start into Fiscal Year 2015, Revenues growth accelerated meaningfully in the second quarter with solid performance in Seasonal Products,” said José Boisjoli, president and CEO. “Our second quarter is typically seasonally weaker and our gross margins were affected by higher costs resulting from sales programs and an unforeseen foreign exchange impact.”

Commenting on the outlook for the second half of Fiscal Year 2015, Boisjoli added: “We had strong retail in North America for both Seasonal and Year-Round Products when compared to the second quarter of last year driven by the commercial success of the Sea-Doo Spark watercraft, Can-Am Spyder and side-by-side vehicles. Our inventories in the channel are in good shape and this bodes well for the second half of the year. As such, we are reaffirming our guidance for Fiscal Year 2015 with expected continued acceleration of Revenues and a strong finish in the fourth quarter driven by sales of snowmobiles and deliveries of new products.”

Highlights for the Three- and Six-Month Periods Ended July 31, 2014

Revenues increased by $159.1 million, or 25.6%, to $780.0 million for the three-month period ended July 31, 2014, compared with $620.9 million for the corresponding period ended July 31, 2013. The revenue increase was mainly due to higher wholesale in Seasonal Products and in Year-Round Products along with an increased wholesale of their related parts, accessories and clothing (PAC). The increase was partially offset by increased sales program costs relating to Year-Round Products. The increase in revenues included a favourable foreign exchange rate variation of $35 million mainly related to the strengthening of the Euro and the U.S. dollar against the Canadian dollar.

Revenues increased by $113.4 million, or 8.0%, to $1,538.6 million for the six-month period ended July 31, 2014, compared with $1,425.2 million for the corresponding period ended July 31, 2013. The revenue increase was mainly due to higher wholesale in Seasonal Products and their related PAC, partially offset by lower wholesales and higher sales program costs in Year-Round Products. The revenue increase included a favourable foreign exchange rate variation of $84 million mainly related to the strengthening of the U.S. dollar and the Euro against the Canadian dollar.

QUARTERLY REVIEW BY CATEGORIES

Seasonal Products

Revenues from Seasonal Products increased by $119.2 million, or 84.8%, to $259.8 million for the three-month period ended July 31, 2014, compared with $140.6 million for the corresponding period ended July 31, 2013. The increase resulted primarily from an increase of volume of PWC sold driven by the new entry-level Sea-Doo Spark model and an increase in volume of snowmobiles sold for the upcoming season. The increase in revenues included a favourable foreign exchange rate variation of $10 million.

Year-Round Products

Revenues from Year-Round Products increased by $19.3 million, or 6.9%, to $297.4 million for the three-month period ended July 31, 2014, compared with $278.1 million for the corresponding period ended July 31, 2013. The increase resulted primarily from higher shipments of Can-Am side-by-side vehicles reflecting the industry growth in North America and to a lower extent from Can-Am all-terrain vehicles. The increase was mitigated by higher sales program costs. The increase in revenues included a favourable foreign exchange rate variation of $13 million.

Propulsion Systems

Revenues from Propulsion Systems decreased by $1.5 million, or 1.7%, to $84.4 million for the three-month period ended July 31, 2014, compared with $85.9 million for the corresponding period ended July 31, 2013. The decrease in revenues was mainly attributable to a lower volume of outboard engines sold, partially offset by a favourable mix. The decrease included a favourable foreign exchange rate variation of $5 million.

PAC (Parts, Accessories, Clothing and other services)

Revenues from PAC increased by $22.1 million, or 19.0%, to $138.4 million for the three-month period ended July 31, 2014, compared with $116.3 million for the corresponding period ended July 31, 2013. The increase was mainly attributable to a higher volume of Seasonal Products’ PAC sold due to the good performance of the Sea-Doo Spark model and higher deliveries of snowmobiles’ PAC for the upcoming season. The increase included a favourable foreign exchange rate variation of $7 million.

Gross profit remained stable to $142.9 million for the three-month period ended July 31, 2014, compared with $142.6 million for the corresponding period ended July 31, 2013. Gross profit margin percentage decreased by 470 basis points to 18.3% from 23.0% for the three-month period ended July 31, 2013. The decrease in gross profit margin percentage was primarily due to higher sales programs costs in Year-Round Products, absorption of overhead costs stemming from the reduction of finished goods inventory, unfavourable foreign exchange rate variations and expenses related to the production ramp-up at the Querétaro, Mexico facility and to the transfer of PAC distribution to third-party logistics providers. The foreign exchange rate negatively impacted the gross profit by $4 million.

Operating expenses increased by $32.5 million, or 30.4%, to $139.3 million for the three-month period ended July 31, 2014, compared with $106.8 million for the three-month period ended July 31, 2013. This increase was driven by increased marketing expenses in relation with the Sea-Doo Spark model and the launch of the new Evinrude E-TEC G2 outboard engine and by increased research and development costs. The increase included an unfavourable foreign exchange impact of $6 million.

Normalized net loss of $8.8 million, a decrease of $16.4 million, which resulted in normalized diluted loss per share of $0.07, a decrease of $0.14 per share. The decrease in normalized net income was primarily due to increased sales program costs, costs related to the production ramp-up at the Querétaro facility and to the transfer of PAC distribution and increased marketing costs, offset by an increase of products sold. The decrease included an unfavourable foreign exchange rate variation of $10 million.

Click here for reuse options!
Copyright 2014 Powersports Business

Leave a Reply

Your email address will not be published. Required fields are marked *

*