BRP reports fiscal year 2019 first-quarter results
Highlights for the quarter vs Q1 FY18:
- Revenues of $1,136.7 million, an increase of $159.8 million or 16.4%;
- Gross profit of $281.6 million representing 24.8% of revenues, an increase of $54.5 million or 160 basis points;
- Normalized EBITDA  of $126.6 million representing 11.1% 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.
 See “Non-IFRS Measures” section.
Valcourt, Quebec, May 31, 2018 – 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,” Boisjoli concluded.
Highlights for the Three-Month Period Ended April 30, 2018
Revenues increased by $159.8 million, or 16.4%, 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% 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% compared to April 30, 2017, driven mainly by PWC.
QUARTERLY REVIEW BY CATEGORIES
Revenues from Year-Round Products increased by $130.5 million, or 32.9%, 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.
Revenues from Seasonal Products increased by $26.1 million, or 8.0%, 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.
Revenues from Propulsion Systems decreased by $10.8 million, or 10.6%, 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%, 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%, 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.
Fiscal Year 2019 Guidance
The table below sets forth BRP’s financial guidance for Fiscal Year 2019 when compared to actual results for Fiscal Year 2018, as revised to reflect the adoption of new IFRS 9 Financial instruments (IFRS 9) and IFRS 15 Revenue from contracts with customers (IFRS 15) standards effective as of February 1, 2018.
The above targets are based on a number of economic and market assumptions the Company has made in preparing its Fiscal Year 2019 financial guidance, including assumptions regarding the performance of the economies in which it operates, foreign exchange currency fluctuations, market competition and tax laws applicable to its operations. The Company cautions that the assumptions used to prepare the forecasts for Fiscal Year 2019, although reasonable at the time they were made, may prove to be incorrect or inaccurate. In addition, the above forecasts do not reflect the potential impact of any non-recurring or other special items or of any new material commercial agreements, dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after May 30, 2018. The financial impact of such transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business. Accordingly, our actual results could differ materially from our expectations as set forth in this news release. The outlook provided constitutes forward-looking statements within the meaning of applicable securities laws and should be read in conjunction with the "Caution Concerning Forward-Looking Statements" section.
Conference Call and Webcast Presentation
Today at 9 a.m. ET, BRP will host a conference call and webcast to discuss its FY2019 first-quarter results. The call will be hosted by José Boisjoli, President and CEO, and Sébastien Martel, CFO. To listen to the conference call by phone (event number 4287502), please dial 514-861-1681 or 800-766-6630 (toll-free in North America). Click for international dial-in numbers.
The Company’s first-quarter FY2019 MD&A, financial statements and webcast presentation are posted in the Quarterly Reports section of BRP’s website, while its Annual Information Form can be found in the Annual Reports section.