Valcourt, Québec - BRP Inc. reported its financial results for the three- and nine-month periods ended October 31, 2013. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com.
Highlights:
- Record quarterly revenues of $866.0 million, an increase of 18 percent compared to the corresponding period of FY2013
- Net income of $48.2 million, an increase of 52 percent compared to the third quarter FY2013, which resulted in basic earnings per share of $0.41, an increase of $0.10 compared to the corresponding period of FY2013;
- Normalized net income of $59.0 million, an increase of 39 percent compared to the third quarter FY2013, which resulted in normalized basic earnings per share of $0.50, an increase of $0.08 compared to the corresponding period of FY2013;
- Updating FY2014 normalized basic EPS guidance to $1.49-$1.54 from $1.45-$1.50
"The strong performance in our third quarter was primarily driven by strong shipments of snowmobiles both in North America and internationally," José Boisjoli, president and CEO, said. "Our results were also buoyed by consumer enthusiasm for our year-round products led by our new models of side-by-side vehicles which have been well received worldwide. With solid results through nine months of the fiscal year, we are on track to meet our Revenue and Normalized EBITDA guidance for the year and we are very excited about the line-up of new products for the coming model year 2014.
"I am very pleased with this performance and particularly proud of the fact that we were able to deliver strong quarterly results as we approach our 10th anniversary as a standalone company. I would like to take this opportunity to thank our employees, our dealers and distributors for their hard work and continued loyal support."
Revenues increased by $132.1 million, or 18.0 percent, to $866.0 million for the three-month period ended October 31, 2013, up from $733.9 million for the corresponding period ended October 31, 2012. The increase in revenues includes a favourable foreign exchange rate variation of $37 million, mainly related to the strengthening of the U.S. dollar and the Euro against the Canadian dollar.
Revenues increased by $186.5 million, or 8.9 percent, to $2,291.2 million for the nine-month period ended October 31, 2013, up from $2,104.7 million for the corresponding period ended October 31, 2012. The revenues were negatively impacted by the exit of the sport boat business that accounted for $71 million in revenues for the nine-month period ended October 31, 2012. Excluding the exit of the sport boat business, revenues would have increased by 12.7 percent or $257.5 million. The increase in revenue includes a favourable foreign exchange rate variation of $61 million, mainly related to the strengthening of the U.S. dollar and the Euro against the Canadian dollar.
Seasonal Products
Revenues from Seasonal Products increased by $106.3 million, or 38.5 percent, to $382.5 million for the three-month period ended October 31, 2013, compared with $276.2 million for the corresponding period ended October 31, 2012. The increase in revenues results mainly from a higher volume and from a favourable product mix of snowmobiles sold following increased orders for the model year 2014 resulting from dealers and distributors' demand. These incremental orders were mainly shipped in the third quarter. The increase in revenues includes a favourable foreign exchange rate variation of $14 million.
North American Seasonal Products retail sales, excluding the sport boat business, registered an increase in the mid-twenty per cent range as compared to the third quarter of Fiscal 2013.
Year-Round Products
Revenues from Year-Round Products increased by $2.2 million, or 0.9 percent, to $249.6 million for the three-month period ended October 31, 2013, up from $247.4 million for the corresponding period ended October 31, 2012. The increase is primarily due to higher wholesale and a favourable product mix in side-by-side vehicles, for an increase of approximately 38 percent compared with the corresponding period ended October 31, 2012. The increase was mainly offset by a 20 percent reduction in ATV sales compared with the corresponding period ended October 31, 2012. This reduction is mainly due to the introduction during the previous fiscal year of new ATV models such as the Can-Am Outlander two-passenger family and mud-ready models. The increase in revenues includes a favourable foreign exchange rate variation of $12 million.
North American Year-Round Products retail sales increased on a percentage basis by mid-single digits compared with the third quarter of Fiscal 2013.
PAC (Parts, Accessories & Clothing)
Revenues from PAC increased by $16.0 million, or 12.5 percent, to $144.3 million for the three-month period ended October 31, 2013, up from $128.3 million for the corresponding period ended October 31, 2012. The increase is primarily due to a higher volume driven by the increase of Year-Round Products business. The revenue increase includes a favourable foreign exchange rate variation of $5 million.
Gross profit increased by $46.5 million, or 26.2 percent, to $223.9 million for the three-month period ended October 31, 2013, up from $177.4 million for the corresponding period ended October 31, 2012. Gross profit margin percentage increased by 170 basis points to 25.9 percent from 24.2 percent for the three-month period ended October 31, 2012. The increase in gross profit margin percentage was primarily due to higher volumes in Seasonal Products, a favourable product mix and a favourable foreign exchange rate variation of $12 million. The increase was partially offset by the costs related to the transfer of PWC manufacturing to the Querétaro, Mexico facility.
Operating expenses decreased by $3.9 million, or 2.9 percent, to $128.9 million for the three-month period ended October 31, 2013, down from $132.8 million for the three-month period ended October 31, 2012. This decrease is mainly due to restructuring costs of $17.1 million that were recorded in connection with the closure of the sport boat business during the three-month period ended October 31, 2012, partially offset by higher stock-based compensation in relation to the initial public offering of the subordinate voting shares of the Company, higher advertising expenses to support the introduction of new products and a negative foreign exchange impact of $3 million.
Normalized net income increased by $16.6 million to $59.0 million for the three-month period ended October 31, 2013, compared with $42.4 million for the corresponding period last year. The increase is primarily due to higher wholesale and favourable product mix in Seasonal Products.
