BRP Posts Earnings Gains
January 20, 2005
Filed under Features
Bombardier Recreational Products, Inc., (BRP), the privately-held powersports OEM based in Valcourt, Quebec, reported income gains from continuing operations in the third quarter and nine months ended Oct. 31, 2004.
Revenues for the quarter declined 6%, but revenues for the nine-month period rose 9%. Third quarter revenues were affected by foreign currency fluctuations of C$55 million, C$48 million of which came in the powersports segment and C$7 million in the marine engine business.
BRP income from continuing operations in the third quarter totalled C$53.6 million, up from C$33.8 in the same period last year. For the nine months, income from continuing operations was C$39.9 million, up from C$22.7 million.
BRP was spun off from Bombardier, Inc., last December and is owned 50% by Bain Capital, a U.S. investment group, 35% by the Bombardier family and 15% by a Canadian fund manager.
At the same time that BRP was announcing its earnings, Bombardier was shaking up the international investment community with news that it had restructured its board of directors and its top executive team.
Paul Tellier suddenly left his position as CEO of Bombardier, as did two board members. Laurent Beaudoin, board chairman and a member of the Bombardier family, set up an office of the president that includes himself, his son, Pierre, and Andre Navarri, who runs the firm’s train operations. The Bombardier family controls 58% of the public Bombardier company.
The changes at Bombardier will not have any affect on the BRP company, a BRP spokesman said, even though there is some cross ownership.
During the last year, BRP has made several major restructuring moves to streamline its operations, including selling assets, simplifying product lines and reducing employment. The savings from these moves are expected to total C$40 million.
Costs associated with these moves will total about C$29 million this year and C$4 million next year, officials said during a Dec. 15 conference call with investors.