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BRP’s fiscal Q1 brings 16.4 percent revenue increase

BRP Inc. (TSX:DOO) today reported its financial results for the three-month period ended April 30, 2018. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com, as well as in the Quarterly Reports section of BRP’s website.

“Business is off to a very strong start. Record results for the first quarter are setting the stage for a solid year,” said José Boisjoli, president and CEO. “Our momentum continues with strong gains and we are outperforming in all product lines. Our steady growth is largely attributable to the dedication and excellent execution of our teams globally. We are also encouraged by the global economic landscape. Even with the possible impact of commodities and transport costs, we are confident to be able to deliver our increased guidance.”

Highlights for the Three-Month Period Ended April 30, 2018

Revenues increased by $159.8 million, or 16.4 percent, to $1,136.7 million for the three-month period ended April 30, 2018, compared with $976.9 million for the corresponding period ended April 30, 2017. The revenue increase was primarily attributable to higher wholesale of Year-Round Products, partially offset by an unfavourable foreign exchange rate variation of $13 million.

BRP’s North American retail sales for powersports vehicles and outboard engines increased by 9 percent for the three-month period ended April 30, 2018 compared with the three-month period ended April 30, 2017, mainly due to an increase in SSV.

As at April 30, 2018, North American dealer inventories for powersports vehicles and outboard engines increased by 9 percent compared to April 30, 2017, driven mainly by PWC.

QUARTERLY REVIEW BY CATEGORIES

Year-Round Products

Revenues from Year-Round Products increased by $130.5 million, or 32.9 percent, to $526.6 million for the three-month period ended April 30, 2018, compared with $396.1 million for the corresponding period ended April 30, 2017. The increase was primarily attributable to a higher volume of SSV and 3WV sold, partially offset by an unfavourable foreign exchange rate variation of $8 million.

Seasonal Products

Revenues from Seasonal Products increased by $26.1 million, or 8.0 percent, to $350.4 million for the three-month period ended April 30, 2018, compared with $324.3 million for the corresponding period ended April 30, 2017. The increase resulted primarily from a higher volume of PWC sold, partially offset by an unfavourable foreign exchange rate variation of $5 million.

Propulsion Systems

Revenues from Propulsion Systems decreased by $10.8 million, or 10.6 percent, to $91.1 million for the three-month period ended April 30, 2018, compared with $101.9 million for the corresponding period ended April 30, 2017. The decrease was mainly attributable to a lower volume of motorcycle engines sold.

PAC (Parts, Accessories, Clothing and other services)

Revenues from PAC increased by $14.0 million, or 9.1 percent, to $168.6 million for the three-month period ended April 30, 2018, compared with $154.6 million for the corresponding period ended April 30, 2017. The increase was mainly attributable to a higher volume of SSV and PWC accessories.

Operating expenses increased by $28.7 million, or 17.2 percent, to $195.4 million for the three-month period ended April 30, 2018, compared with $166.7 million for the three-month period ended April 30, 2017. The increase was mainly attributable to higher selling and marketing expenses for continued product investments and to an unfavourable foreign exchange rate variation of $10 million.

Declaration of dividend

The Board of Directors approved a quarterly dividend of $0.09 per share for holders of its multiple voting shares and subordinate voting shares. The dividend will be paid on July 13, 2018 to shareholders of record at the close of business on June 29, 2018. The payment of each quarterly dividend remains subject to the declaration of that dividend by the Board of Directors. The actual amount, the declaration date, the record date and the payment date of each quarterly dividend are subject to the discretion of the Board of Directors.

Highlights for the quarter vs Q1 FY18:

  • Revenues of $1,136.7 million, an increase of $159.8 million or 16.4 percent.
  • Gross profit of $281.6 million representing 24.8 percent of revenues, an increase of $54.5 million or 160 basis points.
  • Normalized EBITDA of $126.6 million representing 11.1 percent of revenues, an increase of $26.0 million;
  • Net income of $13.4 million, an increase of $18.3 million, which resulted in a diluted earnings per share of $0.13, an increase of $0.18 per share.
  • Normalized net income of $53.5 million, an increase of $10.7 million, which resulted in a normalized diluted earnings per share of $0.52, an increase of $0.14 per share.
  • Announcement of a direct distribution model in Russia, during summer 2018, to support its growth strategy and increase its presence in the country.
  • Expansion of the SSV lineup with the addition of two Can-Am Maverick Sport packages with a 60-inch wide wheel base.
  • FY2019 guidance increased to reflect higher demand for BRP products.

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