BRP Reports record fourth-quarter and fiscal year 2017 results
Highlights for the quarter vs Q4 FY2016:
Record revenues of $1,305.3 million for the fourth quarter of FY2017, an 18% increase;
Normalized diluted earnings per share[1] of $1.00, an increase of 33% or $0.25 per share; and
North American retail sales increased 12% mainly driven by SSV and snowmobiles.
Highlights for the year vs FY2016:
Record revenues of $4,172 million for FY2017, a 9% increase;
Gross profit of $1,009 million representing 24.2% of revenues, an increase of $95 million and 30 basis points respectively;
Normalized EBITDA[1] of $503 million, a 9% increase;
Net income of $257 million, an increase of $205 million, which resulted in diluted earnings per share of $2.27, an increase of $1.83 per share;
Normalized net income[1] of $222 million, an increase of $21 million, which resulted in normalized diluted earnings per share[1] of $1.96, an increase of 15% or $0.25 per share; and
Added 70 new dealers to its North American powersports dealer network, 55 to its Evinrude dealer network and signed 13 outboard supply agreements with boat manufacturers.
Valcourt, Québec, March 24, 2017 – BRP Inc. (TSX:DOO) today reported its financial results for the three- and twelve-month periods ended January 31, 2017. 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 BRPs website.
"The fourth quarter has always been the busiest of the year, in terms of sales and shipments, and our execution was flawless. We are seeing great momentum with the retail sales of Can-Am Defender and Maverick X3 side-by-side vehicles and Sea-Doo watercraft, which have contributed to this years great results, said José Boisjoli, president and CEO. "And while the Can-Am Maverick X3 model was only recently introduced to the market, the consumer and dealer response has been extremely positive.
"We have completed a record quarter and a record year in difficult market conditions, and I firmly believe that our success is largely due to the quality of our team, and the diversification of our product offering, geographic sales and manufacturing footprint, Boisjoli added. "I am very proud of the BRP team for the excellence of its work, and I remain convinced that our focus on our strategic priorities is key to achieving our objectives and delivering our FY18 guidance.
Highlights for the Three- and Twelve-Month Periods Ended January 31, 2017
Revenues increased by $196.5 million, or 17.7%, to $1,305.3 million for the three-month period ended January 31, 2017, compared with $1,108.8 million for the corresponding period ended January 31, 2016. The revenue increase was mainly due to higher wholesale in Seasonal Products and Year-Round Products, partially offset by an unfavourable foreign exchange rate variation of $48 million related largely to the decrease of the U.S. dollar and the euro against the Canadian dollar.
Gross profit increased by $49.7 million, or 17.4%, to $335.6 million for the three-month period ended January 31, 2017, compared with $285.9 million for the corresponding period ended January 31, 2016. The gross profit increase includes an unfavourable foreign exchange rate variation of $24 million. Gross profit margin percentage decreased by 10 basis points to 25.7% from 25.8% for the three-month period ended January 31, 2016. The decrease in gross profit margin percentage was primarily due to higher sales program costs in Year-Round Products and an unfavourable foreign exchange variation, mostly offset by a favourable product mix in side-by-side vehicle (SSV) and snowmobile.
Revenues increased by $342.3 million, or 8.9%, to $4,171.5 million for the twelve-month period ended January 31, 2017, compared with $3,829.2 million for the corresponding period ended January 31, 2016. The revenue increase was primarily attributable to higher wholesale of Year-Round Products and Seasonal Products and a favourable foreign exchange rate variation of $12 million mainly due to the strengthening of the U.S. dollar against the Canadian dollar.
Gross profit increased by $94.7 million, or 10.4%, to $1,008.9 million for the twelve-month period ended January 31, 2017, compared with $914.2 million for the corresponding period ended January 31, 2016. The gross profit increase includes an unfavourable foreign exchange rate variation of $24 million. Gross profit margin percentage increased by 30 basis points to 24.2% from 23.9% for the twelve-month period ended January 31, 2016. The increase in gross profit margin percentage was primarily due to a favourable product mix in SSV, Spyder vehicles and personal watercraft (PWC) as well as general price increases, partially offset by higher sales programs costs and an unfavourable foreign exchange variation.
Year-Round Products
Revenues from Year-Round Products increased by $44.7 million, or 9.3%, to $527.3 million for the three-month period ended January 31, 2017, compared with $482.6 million for the corresponding period ended January 31, 2016. The increase resulted from a higher volume and a favourable product mix of SSV sold following the introduction of the Can-Am Maverick X3 and Defender models. The increase was partially offset by lower wholesale in Can-Am Spyder vehicles and an unfavourable foreign exchange rate variation of $27 million.
Seasonal Products
Revenues from Seasonal Products increased by $132.8 million, or 37.2%, to $489.5 million for the three-month period ended January 31, 2017, compared with $356.7 million for the corresponding period ended January 31, 2016. The increase resulted primarily from snowmobile due to a higher volume mainly attributable to later shipments this year and to a favourable mix. The increase was partially offset by an unfavourable foreign exchange rate variation of $13 million.
Propulsion Systems
Revenues from Propulsion Systems increased by $12.5 million, or 12.6%, to $111.5 million for the three-month period ended January 31, 2017, compared with $99.0 million for the corresponding period ended January 31, 2016. The increase in revenues was mainly attributable to a higher volume of motorcycle engines sold and a favourable mix of outboard engines sold. The increase was partially offset by an unfavourable foreign exchange rate variation of $4 million.
PAC (Parts, Accessories, Clothing and other services)
Revenues from PAC increased by $6.5 million, or 3.8%, to $177.0 million for the three-month period ended January 31, 2017, compared with $170.5 million for the corresponding period ended January 31, 2016. The increase was mainly attributable to a higher volume of SSV PAC sold following the introduction of the Can-Am Maverick X3 and to a higher volume of snowmobile PAC sold. The increase was partially offset by an unfavourable foreign exchange rate variation of $4 million.
Operating expenses decreased by $42.4 million, or 20.1%, to $168.2 million for the three-month period ended January 31, 2017, compared with $210.6 million for the three-month period ended January 31, 2016. This decrease was mainly due to a non-cash impairment charge of $70.3 million recorded last year related to the outboard engines cash generating unit. The decrease was partially offset by higher selling and marketing and general and administrative expenses for continued product investments.
[1] See "Non-IFRS Measures section.
Fiscal Year 2018 Guidance
The table below sets forth BRPs financial guidance for Fiscal Year 2018 when compared to actual results for Fiscal Year 2017. The individual targets are based on certain assumptions for currency exchange rates and exclude the effects of future fluctuations.
The above targets are based on a number of economic and market assumptions the Company has made in preparing its Fiscal Year 2018 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 2018, 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 March 23, 2017. 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 Inc. will host a conference call and webcast to discuss BRP's FY2017 fourth-quarter and year-end results released this morning. The call will be hosted by José Boisjoli, president and CEO, and Sébastien Martel, CFO. To listen to the English-only conference call by phone (event number 4260664), please dial 416-340-2217 or 800-806-5484 (toll-free in North America). Click for international dial-in numbers.
The Companys fourth-quarter and year-end FY2017 MD&A, financial statements and webcast presentation are posted in the Quarterly Reports section of BRPs website, while its Annual Information Form can be found in the Annual Reports section. To listen to an instant replay of the call, please dial 514-861-2272 or 800-408-3053, and enter the pass code 4221718.
