Issue link: https://read.dmtmag.com/i/343790
16 • July 13, 2014 • Powersports Business FINANCE www.PowersportsBusiness.com BRP Inc. reported its revenues decreased by $45.7 million, or 5.7 percent, to $758.6 million for the three-month period ended April 30, 2014, compared with $804.3 million for the corresponding period ended April 30, 2013. BRP last month reported its financial results for the three-month period ended April 30. The company said the revenue decrease was mainly due to lower wholesale in Year-Round Products and to lower wholesale and unfavor- able mix in Seasonal Products. The decrease in revenues was partially offset by a favorable foreign exchange rate variation of $49 million mainly related to the strengthening of the U.S. dollar and the Euro against the Canadian dol- lar. All financial information is in Canadian dollars unless otherwise noted. "Our financial results for the first quarter were as expected and consistent with our out- look," said José Boisjoli, president and CEO. "Our sales in international markets grew in the quarter despite the situation in Russia, but this was offset by the long winter affecting sales of off-road vehicles in North America. We continue to fulfill our strategic initiatives, and we are very much on track to accomplish our annual plan." Commenting on the outlook for fiscal year 2015, Boisjoli added: "We are fine-tuning our guidance for fiscal year 2015, but as a whole, forecasted growth for revenues and normal- ized net income is unchanged. We anticipate a stronger second half of the year resulting from strong spring snowmobile orders, the introduction of the Can-Am Outlander L ATV, the restart of the Sea-Doo Spark manu- facturing in Querétaro and upcoming product launches. For the second quarter, we expect our financial performance to be similar to last year's, factoring in the continued uncertainty in Eastern Europe." R e v e n u e s f r o m S e a s o n a l P r o d u c t s decreased by $22.1 million, or 10.7 percent, to $184.6 million for the three-month period ended April 30, 2014, compared with $206.7 million for the corresponding period ended April 30, 2013. The reduction resulted primarily from a decrease of traditional PWC vol- ume partly offset by the new entry-level Sea- Doo Spark PWC. The decrease of volume was attributable to a longer than anticipated pro- duction ramp-up at the Querétaro, Mexico, facil- ity causing delays in the delivery of certain PWC products. The decrease in revenues was partially offset by a favorable foreign exchange rate variation of $11 million. Revenues from Year-Round Products decreased by $39.3 million, or 9.7 per- cent, to $365.4 million for the three-month period ended April 30, 2014, compared with $404.7 million for the corresponding period ended April 30, 2013. The decrease resulted primarily from lower shipments of side-by- sides due to the impact of the introduction of the Can-Am Maverick models in the cor- responding period last year. To a lesser extent, the decrease was also attributable to ATVs mainly due to the decrease of volume sold in Russia, which was primarily driven by the political and economic instability in Eastern Europe. The decrease in revenues was par- tially offset by a favorable foreign exchange rate variation of $22 million. R e v e n u e s f r o m P A C i n c r e a s e d b y $11.3 million, or 11.3 percent, to $111.3 mil- lion for the three-month period ended April 30, 2014, compared with $100.0 million for the corresponding period ended April 30, 2013. The increase was mainly attributable to a favorable foreign exchange rate variation of $7 million and from a higher volume of PAC related to Seasonal Products due to better win- ter conditions in North America. PSB BRP's Q1 revenues down 6 percent in fiscal quarter JOSÉ BOISJOLI BRP ENTERS JOINT VENTURE IN CHINA BRP and its longtime distributor in China, Smooth Marine Equipment Ltd ("Smooth Marine"), will pursue together the growth of BRP's business in China through a joint venture structure. "We have been operating in China for 14 years, a market where our business has grown over 30 percent annually in the last three years," said José Boisjoli, BRP president and CEO. "We sell all our product lines in China and see good potential for Can-Am off-road vehicles and for Sea-Doo watercraft. The joint venture structure will leverage the in-market knowledge of our partner." The investment will further strengthen BRP's presence and commitment to the Chinese market and provide opportunities to accelerate dealer expansion. BRP established a regional office in Shanghai in 2012 and has since increased its network to 19 dealers with plans to increase to 30 within two years. "Our knowledge of the local industry and BRP's innovative products, such as the Sea-Doo Spark watercraft, are a great combination," said YY Chen, owner of Smooth Marine. "We are confident this agreement will help develop the powersports industry in China. BRP's offering is unique and fits well in the Chinese market. We are thrilled to bring BRP's promise of providing the ultimate powers- ports experience to customers in China." Smooth Marine has been a BRP partner in China since 2002. As part of the agreement, BRP will have a majority ownership stake in the new company. The agreement will become effective in early 2015.