BRP Reports Second Quarter Earnings Increase
October 26, 2004
Filed under Features
Bombardier Recreational Products Inc. (BRP), Valcourt, Quebec, reported net income for the second quarter ended July 31, 2004, of $18.7 million, up from $2.8 million in the same quarter last year. Revenues increased by 15.6% to $572.6 million from $495.5 million in the second quarter last year. All reported figures are in Canadian dollars. For the six months, revenues increased by 19.2% from $1,003.4 million to $1,195.6 million. For the six-month period, BRP reported a net loss of $17 million compared to $13.7 million last year.
BRP's income from continuing operations for the second quarter of 2005 was $20.8 million compared to an income from continuing operations of $3.6 million for the same period last year. Year-to-date loss from continuing operations amounted to $13.7 million compared to $11.1 million for the same period in 2004.
The sale of the Utility Vehicles segment to Camoplast Inc. had minimal impact on the results of operations and financial position of BRP for the second quarter this year, the company said, since the Utility Vehicles segment represented only 3.3% of combined revenues at the end of 2004. The net proceeds of from the sale of the Utility Vehicles segment will be received in the third quarter of fiscal 2005.
Second quarter results were driven by increased sales of snowmobiles, watercraft and ATVs as well as a better product mix. These gains more than offset the negative impact related to the strengthening of the Canadian dollar in relation to the U.S. dollar, the company said, and they total approximately $12 million in the second quarter this year and $38 million year-to-date.
Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $84.5 million for the six months ended July 31, 2004, compared to $35.4 million for the corresponding period last year. This improvement results mainly from the impact of additional revenues and increased gross profit when adjusted for impacts resulting from purchase accounting.
"The popularity of our ATV products, our agreement with John Deere, the increased deliveries of snowmobiles, our decision to better align watercraft production with the retail business cycle and the growth of our international sales all contributed to the increased sales and volumes of the quarter," said Jose Boisjoli, BRP's president and CEO.
BRP now operates in two segments: the Power Sports segment designs, develops, manufactures and sells snowmobiles, watercraft, ATVs, sport boats and Rotax engines; the Marine Engines segment designs, develops, manufactures and sells outboard engines.
Power Sports segment revenues for the second quarter of 2005 reached $417.7 million compared to $354.3 million for the same quarter of FY04, an increase of 17.9%. Year-to-date revenues increased by $163.9 million to $901.1 million, an increase of 22.2% over the same period the previous year.