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BRP revenue up 15 percent in Q3

BRP Inc. released its financial results for the three- and nine-month periods ended October 31, 2017, reporting increased revenues of 15 percent and a record for Q3, and a 7 percent increase in gross profit.

"I am proud of our retail momentum and the strong execution of our team worldwide; our third-quarter results are on target, and they represent a record in BRP history," said José Boisjoli, president and CEO. "We had an excellent reaction to our latest products at our dealer event in Dallas. We entered a new segment with the launch of the Can-Am Maverick Trail vehicle, introduced a new Sea-Doo watercraft platform and announced an entry-level Spyder family starting at under US$10,000 for next Fall."

"We are also announcing a second phase of investment to increase SSV and powertrain production capacity, that should be completed in fiscal year 2020," Boisjoli added. "This decision is testament to the strong growth we see with our Can-Am side-by-side business and our commitment to further developing it."

"Overall, considering industry trends, the competitive landscape and the global economy, I am pleased by our strong results," Boisjoli concluded. "I am confident that we will deliver on our full-year guidance, including growth in normalized earnings per share of 15% to 20%."

BRP enters into the SSV segment with the Can-Am Maverick Trail vehicle.

Revenues increased by $160.3 million, or 14.8%, to $1,240.5 million for the three-month period ended October 31, 2017 , compared with$1,080.2 million for the corresponding period ended October 31, 2016 . The revenue increase was mainly due to higher wholesale in Year-Round Products and Seasonal Products. The increase was partially offset by an unfavorable foreign exchange rate variation of $29 million.

Gross profit increased by $22.2 million, or 7.2%, to $329.4 million for the three-month period ended October 31, 2017, compared with$307.2 million for the corresponding period ended October 31, 2016. The gross profit increase includes an unfavorable foreign exchange rate variation of $15 million. Gross profit margin percentage decreased by 180 basis points to 26.6% from 28.4% for the three-month period ended October 31, 2016. The decrease was primarily due to higher sales program costs driven by the increase in retail sales, higher production costs and an unfavorable foreign exchange rate variation, partially offset by a higher volume of SSV and snowmobiles sold and general price increases.

Revenues increased by $357.5 million, or 12.5%, to $3,223.7 million for the nine-month period ended October 31, 2017, compared with$2,866.2 million for the corresponding period ended October 31, 2016. The revenue increase was primarily attributable to higher wholesale of Year-Round Products and Seasonal Products. The increase was partially offset by an unfavorable foreign exchange rate variation of $22 million.

Gross profit increased by $77.0 million, or 11.4%, to $750.3 million for the nine-month period ended October 31, 2017, compared with $673.3 million for the corresponding period ended October 31, 2016. The gross profit increase includes an unfavorable foreign exchange rate variation of $10 million. Gross profit margin percentage decreased by 20 basis points to 23.3% from 23.5% for the nine-month period ended October 31, 2016. The decrease was primarily due to higher production costs and higher sales program costs driven by the increase in retail sales, partially offset by a favorable product mix, a higher volume in SSV as well as general price increases.

Year-Round Products

Revenues from Year-Round Products increased by $77.0 million, or 20.1%, to $460.9 million for the three-month period ended October 31, 2017, compared with $383 .9 million for the corresponding period ended October 31, 2016. The increase resulted from a higher volume of SSV sold due mainly to the Can-Am Maverick X3 and the Can-Am Maverick Trail. The increase was partially offset by lower wholesale in Spyder vehicles and an unfavorable foreign exchange rate variation of $11 million.

Seasonal Products

Revenues from Seasonal Products increased by $74.6 million, or 17.9%, to $491.7 million for the three-month period ended October 31, 2017, compared with $417.1 million for the corresponding period ended October 31, 2016. The increase resulted primarily from snowmobile due to a higher volume mainly attributable to earlier shipments than last year and to a favorable product mix. The increase was partially offset by an unfavorable foreign exchange rate variation of $12 million.

Propulsion Systems

Revenues from Propulsion Systems decreased by $0.7 million, or 0.7%, to $93.5 million for the three-month period ended October 31, 2017, compared with $94.2 million for the corresponding period ended October 31, 2016. The decrease includes an unfavorable foreign exchange rate variation of $2 million.

PAC (Parts, Accessories, Clothing and other services)
Revenues from PAC increased by $9.4 million, or 5.1%, to $194.4 million for the three-month period ended October 31, 2017, compared with $185 .0 million for the corresponding period ended October 31, 2016. The increase was mainly attributable to a higher volume of SSV accessories and snowmobile parts sold. The increase was partially offset by an unfavorable foreign exchange rate variation of $4 million.

Operating expenses increased by $23 .2 million, or 16.1%, to $167.4 million for the three-month period ended October 31, 2017, compared with $144.2 million for the three-month period ended October 31, 2016. This increase was mainly attributable to higher selling and marketing expenses for continued product investments.

Note: All financial information is in Canadian dollars unless otherwise noted.

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