BRP reports fiscal 2016 Q1 results; revenues increase

News release

BRP Inc. (TSX: DOO) today reported its financial results for the three-month period ended April 30, 2015. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.

“We were able to deliver strong results thanks to the good work our team has done in delivering all our projects. Production at our manufacturing sites was on schedule and markets reacted well to our latest product introductions,” said José Boisjoli, president and CEO. “Despite headwinds from a volatile currency situation, difficult market conditions in Russia and in Latin America and a more aggressive competitive environment, our first quarter was slightly better than planned.”

Highlights for the Three-Month Period Ended April 30, 2015

Revenues increased by $139.5 million, or 18.4 percent, to $898.1 million for the three-month period ended April 30, 2015, compared with $758.6 million for the corresponding period ended April 30, 2014. The revenue increase was mainly due to higher wholesale in Seasonal Products. The increase includes a favorable foreign exchange rate variation of $36 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.

QUARTERLY REVIEW BY CATEGORIES

Year-Round Products

Revenues from Year-Round Products increased by $32.7 million, or 8.9 percent, to $398.1 million for the three-month period ended April 30, 2015, compared with $365.4 million for the corresponding period ended April 30, 2014. The increase was primarily attributable to higher volumes following the introduction of the Maverick X ds side-by-side models and the expected industry growth. The increase in revenues includes a favorable foreign exchange rate variation of $20 million.

Seasonal Products

Revenues from Seasonal Products increased by $86.6 million, or 46.9 percent, to $271.2 million for the three-month period ended April 30, 2015, compared with $184.6 million for the corresponding period ended April 30, 2014. The increase resulted primarily from a higher volume of PWC sold due to earlier shipments following the completion of the production ramp-up at the Querétaro, Mexico facility and from additional deliveries to sustain the expected retail increase during the upcoming season. The increase in revenues includes a favorable foreign exchange rate variation of $12 million.

Propulsion Systems

Revenues from Propulsion Systems increased by $5.2 million, or 5.3 percent, to $102.5 million for the three-month period ended April 30, 2015, compared with $97.3 million for the corresponding period ended April 30, 2014. The increase in revenues was primarily attributable to a favorable mix of outboard engines sold due to the E-TEC G2 introduction and a favorable foreign exchange rate variation of $2 million.

PAC (Parts, Accessories, Clothing and other services)

Revenues from PAC increased by $15.0 million, or 13.5 percent, to $126.3 million for the three-month period ended April 30, 2015, compared with $111.3 million for the corresponding period ended April 30, 2014. The increase was mainly attributable to a higher volume of Year-Round Products and outboard engines PAC resulting from new product introduction. The increase includes a favorable foreign exchange rate variation of $2 million.

Gross profit increased by $39.5 million, or 22.8 percent, to $212.9 million for the three-month period ended April 30, 2015, compared with $173.4 million for the corresponding period ended April 30, 2014. The gross profit increase includes a favorable foreign exchange rate variation of $6 million. Gross profit margin percentage increased by 80 basis points to 23.7 percent from 22.9 percent for the three-month period ended April 30, 2014. The increase in gross profit margin percentage was primarily due to increased volume of PWC sold, partially offset by an unfavorable mix in PWC and roadsters.

Operating expenses increased by $4.1 million, or 2.8 percent, to $149.1 million for the three-month period ended April 30, 2015, compared with $145.0 million for the three-month period ended April 30, 2014. This increase was mainly due to an unfavorable foreign exchange impact of $10 million.

Normalized net income reached $37.2 million, an increase of $20.6 million, which resulted in normalized diluted earnings per share of $0.31, an increase of $0.17 per share. The increase was primarily due to higher operating income, partially offset by higher income taxes expense.