BRP reports record Q1 revenues driven by Spyder, UTVs
BRP Inc. gave its first public quarterly conference call Thursday, reporting record first quarter revenues of $804.3 million Canadian.
Revenues from the first quarter, which concluded April 30, were up 5.5 percent year-over-year, or up 12 percent excluding the sport boat business, which BRP exited in the fall. Year-Round Products, which include the company’s Spyder Roadster, ATVs and side-by-sides, drove the increase with a 27.4 percent jump in revenues to $404.7 million. Double-digit retail growth was reported in both the Can-Am side-by-side and the Spyder segments.
Though revenues for the company’s Seasonal Products, including snowmobiles and PWC, were down 18.5 percent to $206.7 million, which was mostly driven by a reduction of $44 million in revenues due to the sport boat segment departure. BRP president and CEO José Boisjoli reported end of season snowmobile retail sales were up in the low single digits.
“We ended the snowmobile season with low dealer inventories and strong orders heading into the selling season,” he said during the call.
PWC sales faltered in the first quarter, down in the low single digits, but BRP attributed that mostly to unfavorable weather in North America. The company has moved up its PWC promotions in response to a competitor’s recent promotion release, and it expects that to drive traffic into dealerships.
Combined North American retail sales in both Year-Round and Seasonal products rose 6 percent overall. Parts, Accessories & Clothing revenues were up 1.7 percent to $100 million, due in part to a high double-digit increase in snowmobile PAC.
Among BRP’s top priorities for the coming years is the expansion of the company’s North American dealer network.
“If you remember our plan is to have 200-300 dealers in the South and the Southwest of the United States within the next four years,” Boisjoli said.
He added, “So far the plan this year is to have 35-45 dealers in the South and the Southwest, and the plan is on-going, and we believe this plan will happen.”
The company’s guidance for the full year include revenues up in the high single-digits and a normalized EPS of $1.45-$1.50.
The company’s full release follows:
BRP Inc. (TSX: DOO) today reported its financial results for the first quarter ended April 30, 2013. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.
“We are pleased to report our first results as a public company and we take this opportunity to welcome our new shareholders to BRP. Our first quarter puts us on track for a strong performance this year,” remarked President and CEO José Boisjoli. “Our revenues from our Year-Round Products increased by 27% during the quarter led by the sales of our Can-Am Spyder ST and Maverick side-by-side vehicle which add to our solid track record of successfully introducing new products and generating strong consumer acceptance,” he added.
“During Q1, we also launched the new Rotax 900 ACE snowmobile engine which was well received by the network and we registered strong spring orders of snowmobiles to be delivered during the second half of the year. In addition, our Spyder retail sales performance has continued to outpace the on-highway motorcycle industry.”
“International growth is at the heart of our business strategy; we are pleased with our 8% revenue increase from the International market, especially given the challenging economic situation in Western Europe. The construction of our second Mexican manufacturing site in Querétaro, is on schedule,” he concluded.
Fiscal Year 2014 First Quarter Revenues Highlights
Revenues for the first quarter ended April 30, 2013 were $804.3 million, an increase of 5.5% or $41.6M compared to Q1 of FY13. Revenues increased by 12% when excluding the impact of the exit of the sport boat business in the fall 2012. The increase in revenues includes a favourable foreign exchange rate variation of $13 million mainly related to the strengthening of the U.S. dollar against the Canadian dollar. The Company’s revenues are derived from the sales of its Seasonal Products (Ski-Doo and Lynx snowmobiles and Sea-Doo watercraft), Year- Round Products (Can-Am all-terrain (ATV) and side-by-side vehicles (SSV) and Spyder), its Propulsion Systems (Rotax engines and Evinrude outboard engines) and related Parts, Accessories and Clothing (PAC).
Revenues for Seasonal Products decreased by $46.9 million, or 18.5%, to $206.7 million for the first quarter ended April 30, 2013, compared with $253.6 million for the corresponding period last year. The decrease in revenues is attributable to the reduction of $44 million of revenues following the Company’s decision announced in the fall of 2012 to exit the sport boat business.
Revenues for Year-Round Products increased by $87.0 million, or 27.4%, to $404.7 million for the first quarter ended April 30, 2013, up from $317.7 million for the corresponding period last year. The increase is primarily due to the introduction of new models such as the Can-Am Spyder ST and the Maverick side-by-side vehicle.
Revenues for Propulsion Systems remained stable at $92.9 million for the first quarter ended April 30, 2013, compared with $93.1 million for the corresponding period last year despite the cold weather during the spring in North America which impacted our sales of outboard engines.
PAC (Parts, Accessories & Clothing)
Revenues for PAC increased by $1.7 million, or 1.7%, up to $100.0 million for the first quarter ended April 30, 2013, up from $98.3 million for the corresponding period last year.
Gross profit reached $218.0 million or 27.1% of revenues, an increase of 2.7% or $5.8 million for the first quarter ended April 30, 2013, up from $212.2 million for the corresponding period last year. The gross profit margin decreased by 70 basis points primarily due to additional manufacturing costs in Year-Round Products in order to increase production flexibility to better respond to market demand and to additional expenses supporting the watercraft transfer to the Querétaro, Mexico facility.
Operating expenses increased by $8.9 million, or 7.2%, to $131.9 million for the first quarter ended April 30, 2013, up from $123.0 million for the corresponding period last year. The increase was primarily due to higher advertising expenses in all product categories, higher stock-based compensation in relation to the initial public offering of the Company and higher investments in research and development projects.
Normalized net income increased by $3.8 million, or 7.7% to $53.4 million for the first quarter ended April 30, 2013 compared with $49.6 million for the corresponding period last year.