6-K
BRP Inc. (DOO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OFFOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2021
Commission File Number: 001-38648
BRP INC.
(Translationof registrant’s name into English)
726Saint-Joseph Street
Valcourt, Quebec, Canada
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXHIBIT INDEX
Exhibit 99.2 to this report of a Foreign Private Issuer on Form 6-K are deemed filed for all purposes under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.
| Exhibit<br><br><br>No. | Description |
|---|---|
| 99.1 | Press Release of BRP Inc., dated March 25, 2021 announcing fourth quarter and fiscal 2021 results |
| 99.2 | Press Release of BRP Inc., dated March 25, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BRP Inc. | ||
|---|---|---|
| Date: March 25, 2021 | By: | /s/ Sébastien Martel |
| Name | Sébastien Martel | |
| Title: | Chief Financial Officer |
EX-99.1
Exhibit 99.1
| PRESS RELEASE |
|---|
| For immediate distribution |
BRP REPORTS RESULTS FOR ITS FOURTH QUARTER
AND FY21 YEAR-END
In February 2021, BRP announced the introduction of its best-selling European snowmobile brand, Lynx,
to North America ©BRP2021
Highlights for FY21 Q4
| • | Revenues of $1,815.1 million, an increase of $199.2 million compared to FY20 fourth quarter;<br> |
|---|---|
| • | Normalized diluted earnings per share^[1]^ are $1.82, an increase of<br>$0.70 per share, while diluted earnings per share of $2.95, an increase of $1.63 per share when compared to FY20 fourth quarter. |
| --- | --- |
Highlightsfor FY21:
| • | Solid retail performance in North America with Powersports retail sales up 25% in FY21, compared to FY20, resulting in an all-time low level of its North American powersport dealer inventory; |
|---|---|
| • | Revenues of $5,952.9 million, a decrease of $99.8 million compared to FY20, as most of the Company’s<br>manufacturing operations were temporarily suspended for two months in response to COVID-19 measures; |
| --- | --- |
| • | Outperformed FY21 guidance with Normalized diluted earnings per<br>share^[1]^ of $5.39, an increase of $1.56 per share or 41%, while diluted earnings per share of $4.10, an increase of $0.14 per share or 3.5%, when compared to FY20; |
| --- | --- |
| • | The Company realigned its marine business by winding down the Evinrude E-TEC<br>outboard engines and focusing on the growth of its boat brands and new technologies; |
| --- | --- |
| • | On February 16, 2021, the Company repaid the US $600 million Term Loan<br>B-2 and concurrently increased the outstanding amount under its Term Loan B-1 by US $300.0 million. |
| --- | --- |
Fiscal 2022 full-year guidance
| • | The Company is expecting a strong revenue growth ranging from 25% to 30% compared to FY21, with positive contributions from<br>all its product lines; |
|---|---|
| • | Anticipated Normalized diluted earnings per share^[1]^ of $7.25 to<br>$8.00, representing a growth of 35% to 48% compared to FY21. |
| --- | --- |
| ^[1]^ | See “Non-IFRS Measures” section of this press release. |
| --- | --- |
Valcourt, Quebec, March 25, 2021 – BRP Inc. (TSX:DOO; NASDAQ:DOOO) today reported its financial results for the three- and twelve-month periods ended January 31, 2021. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available on SEDAR, as well as in the Quarterly Reports section of BRP’s website.
“We are very pleased with our fourth quarter results which ended Fiscal 2021 on a strong note. We reported record results for the year thanks to our team’s ability to quickly implement initiatives to mitigate the impact of the pandemic while at the same time positioning the business to take advantage of the surge in consumer demand. Our strong start to the year was accelerated by an influx of new customers to our business. This unprecedented demand level led to a 25% year-over-year retail growth for our powersports products in North America,” said José Boisjoli, President and CEO.
“Fiscal 2022 is off to a strong start as well. We are seeing continued strong retail demand across all our product lines. In addition, we are making strategic investments in new products, production capacity and the electrification of our current product portfolio which bodes well for the future. We are well-positioned to deliver another strong year with an anticipated growth of 35% to 48% in diluted Normalized EPS.”
“I would like to thank our employees, suppliers and dealers for their agility, dedication and resilience during this past year. Their hard work allowed us to deliver exceptional results in Fiscal 2021. We are excited about the future with many projects in motion, including our investment in electric vehicles,” concluded Mr. Boisjoli.
Highlights for the Three- and Twelve-Month Periods Ended January 31, 2021
Revenues increased by $199.2 million, or 12.3%, to $1,815.1 million for the three-month period ended January 31, 2021, compared with $1,615.9 million for the corresponding period ended January 31, 2020. The revenue increase was mainly driven by a higher volume of products sold and lower sales programs due to a strong retail environment, partially offset by an unfavourable foreign exchange rate variation of $19 million.
The Company’s North American retail sales for powersports vehicles increased by 30% for the three-month period ended January 31, 2021 compared with the three-month period ended January 31, 2020. The increase was mainly driven by snowmobile, SSV and ATV. North American boat retail sales increased by 48% compared with the three-month period ended January 31, 2020.
Gross profit increased by $118.2 million, or 30.8%, to $501.9 million for the three-monthperiod ended January 31, 2021, compared with $383.7 million for the corresponding period ended January 31, 2020. The gross profit increase includes an unfavourable foreign exchange rate variation of $21 million. Gross profit margin percentage increased by 400 basis points to 27.7% from 23.7% for the three-month period ended January 31, 2020. The increase was primarily due to positive pricing and sales programs variation due to the strong retail environment and a higher volume of Seasonal Products sold, partially offset by higher freight and logistic costs and an unfavourable foreign exchange rate variation.
Page 2
Operating expenses increased by $66.5 million, or 35.7%, to $252.8 million for the three-monthperiod ended January 31, 2021, compared with $186.3 million for the three-month period ended January 31, 2020. This increase was mainly attributable to the reversal in Fiscal 2020 of $40.5 million of provisions related to a favourable litigation decision, higher variable employee compensation expenses and continued product investments.
Revenues decreased by $99.8 million, or 1.6%, to $5,952.9 million for the twelve-month period ended January 31, 2021, compared with $6,052.7 million for the corresponding period ended January 31, 2020. The revenue decrease was primarily attributable to a lower volume of Year-Round Products and Seasonal Products due to the temporary suspension of production during part of the first half of Fiscal 2021 following government measures adopted in response to COVID-19, and to a lower volume of Marine products sold due to the wind-down of the Evinrude E-TEC outboard engines production. The decrease was partially offset by lower sales programs due to a strong retail environment, higher volume of Powersports PA&A and a favourable foreign exchange rate variation of $3 million.
The Company’s North American retail sales for powersports vehicles increased by 25% for the twelve-month period ended January 31, 2021 compared with the twelve-month period ended January 31, 2020, mainly due to an increase in SSV, ATV and snowmobile. North American boat retail sales increased by 10% compared with the twelve-month period ended January 31, 2020.
Gross profit increased by $18.3 million, or 1.3%, to $1,472.3 million for the twelve-month period ended January 31, 2021, compared with $1,454.0 million for the corresponding period ended January 31, 2020. The gross profit increase includes an unfavourable foreign exchange rate variation of $21 million. Gross profit margin percentage increased by 70 basis points to 24.7% from 24.0% for the twelve-month period ended January 31, 2020. The increase was the result of a positive pricing and sales programs variation due to the strong retail environment. The increase was partially offset by the under-absorption of fixed costs resulting from the temporary suspension of production, the costs related to the wind-down of the Evinrude E-TEC outboard engines production and higher labour, freight and logistic costs.
Operating expenses increased by $157.0 million, or 18.5%, to $1,006.7 million for the twelve-month period ended January 31, 2021, compared with $849.7 million for the twelve-month period ended January 31, 2020. The increase was mainly attributable to the impairment charge recorded during the first quarter of Fiscal 2021 for the Marine segment and the restructuring costs for a total of $214.4 million, partially offset by cost reduction initiatives to mitigate the COVID-19 impact.
QUARTERLYREVIEW BY SEGMENT
Powersports
Year-Round Products
Revenues from Year-Round Products increased by $54.6 million, or 7.7%, to $759.7 million for the three-month period ended January 31, 2021, compared with $705.1 million for the corresponding period ended January 31, 2020. The increase resulted mainly from a favourable product mix in SSV and lower sales programs due to a strong retail environment. The increase was partially offset by a lower volume of 3WV sold due to a change in the production schedule compared to the fourth quarter of Fiscal 2020 and an unfavourable foreign exchange rate variation of $8 million.
North American Year-Round Products retail sales increased on a percentage basis in the high-thirties range compared with the three-month period ended January 31, 2020.
Page 3
Seasonal Products
Revenues from Seasonal Products increased by $128.7 million, or 23.7%, to $671.4 million for the three-month period ended January 31, 2021, compared with $542.7 million for the corresponding period ended January 31, 2020. The increase was driven by a higher volume of snowmobile and PWC sold, by lower sales programs due to a strong retail environment and by favourable pricing. The increase was partially offset by an unfavourable foreign exchange rate variation of $9 million.
North American Seasonal Products retail sales increased on a percentage basis in the mid-twenties range compared with the three-month period ended January 31, 2020.
Powersports PA&A and OEM Engines
Revenues from Powersports PA&A and OEM Engines increased by $41.5 million, or 19.2%, to $257.1 million for the three-month period ended January 31, 2021, compared with $215.6 million for the corresponding period ended January 31, 2020. The increase was mainly attributable to a higher volume of PA&A in SSV, ATV and snowmobile coming from strong unit retail sales and higher replacement parts revenue driven by an increased usage of products by consumers.
Marine
Revenues from the Marine segment decreased by $28.2 million, or 17.9%, to $129.2 million for the three-month period ended January 31, 2021, compared with $157.4 million for the corresponding period ended January 31, 2020. The decrease was mainly due to the wind-down of the Evinrude E-TEC outboard engines production resulting in a lower volume of outboard engines sold.
DECLARATION OF DIVIDEND
The Board of Directors approved a quarterly dividend of $0.13 per share for holders of its multiple voting shares and subordinate voting shares. The dividend will be paid on April 19, 2021 to shareholders of record at the close of business on April 5, 2021. The payment of each quarterly dividend remains subject to the declaration of that dividend by the Board of Directors.
The actual amount, the declaration date, the record date and the payment date of each quarterly dividend are subject to the discretion of the Board of Directors.
Page 4
Fiscal Year 2022 Guidance
The table below sets forth BRP’s financial guidance for Fiscal Year 2022:
| Financial Metric | FY21 | FY22 Guidance^[3]^vs FY21 | |||
|---|---|---|---|---|---|
| Revenues | |||||
| Year-Round Products | $ | 2,824.2 | Up 35% to 40% | ||
| Seasonal Products | $ | 1,825.0 | Up 20% to 25% | ||
| Powersports PA&A and OEM Engines | $ | 882.8 | Up 10% to 15% | ||
| Marine | $ | 420.9 | Up 18% to 23% | ||
| Total Company Revenues | $ | 5,952.9 | **** | Up 25% to 30% | |
| Normalized EBITDA^[1]^ | $ | 999.0 | **** | Up 22% to 30% | |
| Effective Tax Rate^[1][2]^ | 25.9 | % | 26.0% to 26.5% | ||
| Normalized Earnings per Share –Diluted^[1]^ | $ | 5.39 | **** | Up 35% to 48% ($7.25 to $8.00) | |
| Net Income | 362.9 | ~$630M to $695M |
Other assumptions for FY22 Guidance:
| • | Depreciation expense: ~$280M |
|---|---|
| • | Net Financing Costs Adjusted: ~$75M |
| --- | --- |
| • | Weighted average number of shares – **** diluted: ~87M shares |
| --- | --- |
| • | Capital Expenditures: ~$575M to $600M |
| --- | --- |
| ^[1]^ | Please refer to “Non-IFRS Measures” section. |
| --- | --- |
| ^[2]^ | Effective tax rate based on Normalized Earnings before Normalized Income Tax. |
| --- | --- |
| ^[3]^ | Please refer to the “Caution Concerning Forward-Looking Statements” and “Key assumptions” sections of<br>this press release for a summary of important risk factors that could affect the above guidance and of the assumptions underlying this Fiscal Year 2022 financial guidance. |
| --- | --- |
Page 5
Net Income data
| Three-month periods ended | Twelve-month periods ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Canadian dollars) | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2019 | ||||||||||
| Revenues by category | |||||||||||||||
| Powersports | |||||||||||||||
| Year-Round Products | $ | 759.7 | **** | $ | 705.1 | $ | 2,824.2 | **** | $ | 2,791.7 | $ | 2,240.6 | |||
| Seasonal Products | **** | 671.4 | **** | 542.7 | **** | 1,825.0 | **** | 1,901.4 | 1,803.5 | ||||||
| Powersports PA&A and OEM Engines | **** | 256.8 | **** | 215.4 | **** | 882.8 | **** | 799.8 | 707.5 | ||||||
| Marine | **** | 127.2 | **** | 152.7 | **** | 420.9 | **** | 559.8 | 492.2 | ||||||
| Total Revenues | **** | 1,815.1 | **** | 1,615.9 | **** | 5,952.9 | **** | 6,052.7 | 5,243.8 | ||||||
| Cost of sales | **** | 1,313.2 | **** | 1,232.2 | **** | 4,480.6 | **** | 4,598.7 | 3,990.4 | ||||||
| Gross profit | **** | 501.9 | **** | 383.7 | **** | 1,472.3 | **** | 1,454.0 | 1,253.4 | ||||||
| As a percentage of revenues | **** | 27.7 | % | 23.7 | % | **** | 24.7 | % | 24.0 | % | 23.9 | % | |||
| Operating expenses | |||||||||||||||
| Selling and marketing | **** | 102.2 | **** | 88.9 | **** | 332.5 | **** | 382.5 | 336.9 | ||||||
| Research and development | **** | 78.9 | **** | 64.7 | **** | 242.3 | **** | 238.4 | 221.7 | ||||||
| General and administrative | **** | 71.2 | **** | 68.5 | **** | 230.5 | **** | 256.9 | 214.7 | ||||||
| Other operating expenses (income) | **** | 0.5 | **** | (35.8 | ) | **** | 24.3 | **** | (28.1 | ) | 7.5 | ||||
| Impairment charge | **** | — | **** | — | **** | 177.1 | **** | — | — | ||||||
| Total operating expenses | **** | 252.8 | **** | 186.3 | **** | 1,006.7 | **** | 849.7 | 780.8 | ||||||
| Operating income | **** | 249.1 | **** | 197.4 | **** | 465.6 | **** | 604.3 | 472.6 | ||||||
| Net financing costs | **** | 23.5 | **** | 24.6 | **** | 100.2 | **** | 88.7 | 73.9 | ||||||
| Foreign exchange (gain) loss on long-term debt | **** | (99.3 | ) | 9.5 | **** | (118.9 | ) | 9.9 | 69.8 | ||||||
| Income before income taxes | **** | 324.9 | **** | 163.3 | **** | 484.3 | **** | 505.7 | 328.9 | ||||||
| Income tax expense | **** | 60.7 | **** | 45.1 | **** | 121.4 | **** | 135.1 | 101.6 | ||||||
| Net income | $ | 264.2 | **** | $ | 118.2 | $ | 362.9 | **** | $ | 370.6 | $ | 227.3 | |||
| Attributable to shareholders | $ | 264.3 | **** | $ | 118.4 | $ | 363.4 | **** | $ | 371.4 | $ | 227.0 | |||
| Attributable to non-controlling interest | $ | (0.1 | ) | $ | (0.2 | ) | $ | (0.5 | ) | $ | (0.8 | ) | $ | 0.3 | |
| Normalized EBITDA ^[1]^ | $ | 313.1 | **** | $ | 221.8 | $ | 999.0 | **** | $ | 804.4 | $ | 655.9 | |||
| Normalized net income ^[1]^ | $ | 162.8 | **** | $ | 100.2 | $ | 477.0 | **** | $ | 358.4 | $ | 308.6 | |||
| ^[1]^ | See “Non-IFRS Measures” section. | ||||||||||||||
| --- | --- |
Page 6
Other Financial data
| Three-month periods ended | Twelve-month periods ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Canadian dollars, except per share data) | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2019 | |||||
| Revenues by geography | ||||||||||
| United States | $ | 944.6 | $ | 856.2 | $ | 3,306.5 | $ | 3,321.2 | $ | 2,817.1 |
| Canada | **** | 296.9 | 238.9 | **** | 923.4 | 951.8 | 845.5 | |||
| International ^[1]^ | **** | 573.6 | 520.8 | **** | 1,723.0 | 1,779.7 | 1,581.2 | |||
| $ | 1,815.1 | $ | 1,615.9 | $ | 5,952.9 | $ | 6,052.7 | $ | 5,243.8 | |
| Declared dividends per share | $ | 0.11 | $ | 0.10 | $ | 0.11 | $ | 0.40 | $ | 0.36 |
| Weighted average number of shares – basic | **** | 87,440,713 | 88,617,489 | **** | 87,519,856 | 92,760,943 | 98,291,845 | |||
| Weighted average number of shares – diluted | **** | 89,508,263 | 89,888,161 | **** | 88,604,984 | 93,813,815 | 99,588,888 | |||
| Earnings per share - basic | $ | 3.02 | $ | 1.34 | $ | 4.15 | $ | 4.00 | $ | 2.31 |
| Earnings per share - diluted | **** | 2.95 | 1.32 | **** | 4.10 | 3.96 | 2.28 | |||
| Normalized earnings per share – basic<br>^[2]^ | **** | 1.86 | 1.13 | **** | 5.46 | 3.87 | 3.14 | |||
| Normalized earnings per share – diluted<br>^[2]^ | **** | 1.82 | 1.12 | **** | 5.39 | 3.83 | 3.10 | |||
| ^[1]^ | International is defined as all jurisdictions except the United States and Canada. | |||||||||
| --- | --- | |||||||||
| ^[2]^ | See “Non-IFRS Measures” section. | |||||||||
| --- | --- |
Conference Call and Webcast Presentation
Today at 9 a.m. EDT, BRP Inc. will host a conference call and webcast to discuss its FY21 fourth quarter results. The call will be hosted by José Boisjoli, President and CEO, and Sébastien Martel, CFO. To listen to the conference call by phone (event number 8886898), please dial 1-833-449-0987 (toll-free in North America). Click here for international dial-in numbers.
The Company’s fourth quarter FY21 MD&A, financial statements and webcast presentation will be posted in the Quarterly Reports section of BRP’s website and its Annual Information Form can be found in the Annual Reports section.
AboutBRP
We are a global leader in the world of powersports vehicles, propulsion systems and boats built on over 75 years of ingenuity and intensive consumer focus. Our portfolio of industry-leading and distinctive products includes Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, Can-Am on- and off-road vehicles, Alumacraft, Manitou, Quintrex boats and Rotax marine propulsion systems as well as Rotax engines for karts and recreational aircraft. We complete our lines of products with a dedicated parts, accessories and apparel business to fully enhance the riding experience. With annual sales of CA$6.0 billion from over 130 countries, our global workforce is made up of more than 14,500 driven, resourceful people.
Page 7
www.brp.com
@BRPNews
Ski-Doo, Lynx, Sea-Doo, Can-Am, Rotax, Alumacraft, Manitou, Quintrex, Stacer, Savage, Evinrude and the BRP logo are trademarks of Bombardier Recreational Products Inc. or its affiliates. All other trademarks are the property of their respective owners.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this press release, including, but not limited to, statements relating to our Fiscal Year 2022, including financial guidance and relatedassumptions of the Company (including revenues, Normalized EBITDA, Effective Tax Rate, Normalized earnings per share, net income, depreciation expense, net financing costs adjusted, weighted average of the number of shares diluted and capitalexpenditures), the Company’s ability to deliver strong results, its expectation for continued strong retail demand across its product lines and its plan to make strategic investments in new products, production capacity and in theelectrification of its vehicles, statements relating to the declaration and payment of dividendsstatements about the Company’s current and future plans, and other statements about the Company’s prospects, expectations, anticipations,estimates and intentions, results, levels of activity, performance, objectives, targets, goals or achievements, priorities and strategies, financial position, market position, capabilities, competitive strengths, beliefs, the prospects and trends ofthe industries in which the Company operates, the expected growth in demand for products and services in the markets in which the Company competes, research and product development activities, including projected design, characteristics, capacity orperformance of future products and their expected scheduled entry to market expected financial requirements and the availability of capital resources and liquidities or any other future events or developments and other statements that are nothistorical facts constitute forward-looking statements within the meaning of Canadian and United States securities laws. The words “may”, “will”, “would”, “should”, “could”, “expects”,“forecasts”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “outlook”, “predicts”, “projects”,“likely” or “potential” or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.
Forward-looking statements are presented for the purpose of assisting readers in understanding certain key elements of the Company’s current objectives, goals,targets, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for otherpurposes; readers should not place undue reliance on forward-looking statements contained herein. Forward-looking statements, by their very nature, involve inherent risks and uncertainties and are based on a number of assumptions, both general andspecific, as further described below.
Many factors could cause the Company’s actual results, level of activity, performance or achievements or futureevents or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail under the heading “Risk Factors” ofits Annual Information Form: the impact of adverse economic conditions such as those resulting from the ongoing coronavirus (known as COVID-19) health crisis (including on consumer spending, the Company’soperations and supply and distribution chains, the availability of credit and the Company’s workforce); any decline in social acceptability of the Company’s products; fluctuations in foreign currency exchange rates; high levels ofindebtedness; any unavailability of additional capital; unfavourable weather conditions; any failure of information technology systems or security breach; the Company’s international sales and operations; any supply problems, termination orinterruption of supply arrangements or increases in the cost of materials; seasonal sales fluctuations; any inability to comply with product safety, health, environmental and noise pollution laws; the Company’s large fixed cost base; anyinability of dealers and distributors to secure adequate access to capital; the Company’s competition in product lines; any Company’s inability to successfully execute its growth strategy; any failure to maintain an effective system ofinternal control over financial reporting and to produce accurate and timely financial statements; any loss of members of the Company’s management team or employees who possess specialized market
Page 8
knowledge and technical skills; any inability to maintain and enhance the Company’s reputation and brands; any significant product liability claim; any significant product repair and/orreplacement due to product warranty claims or product recalls; the Company’s reliance on a network of independent dealers and distributors; any Company’s inability to successfully manage inventory levels; any intellectual propertyinfringement and litigation; any Company’s inability to successfully execute its manufacturing strategy or to meet customer demand as a result of manufacturing capacity constraints; increased freight and shipping costs or disruptions intransportation and shipping infrastructure; any failure to comply with covenants in financing and other material agreements; any changes in tax laws and unanticipated tax liabilities; any impairment in the carrying value of goodwill and trademarks;any deterioration in relationships with employees; pension plan liabilities; natural disasters; any failure to carry proper insurance coverage; volatility in the market price for the Subordinate Voting Shares; the Company’s conduct of businessthrough subsidiaries; the significant influence of Beaudier Group and Bain Capital; and future sales of Subordinate Voting Shares by Beaudier Group, Bain Capital, directors, officers or senior management of the Company. These factors are notintended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully.
Unless otherwisestated, the forward-looking statements contained in this press release are made as of the date of this press release and the Company has no intention and undertakes no obligation to update or revise any forward-looking statements to reflect futureevents, changes in circumstances, or changes in beliefs, unless required by applicable securities regulations. In the event that the Company does update any forward-looking statements contained in this press release, no inference should be made thatthe Company will make additional updates with respect to that statement, related matters or any other forward-looking statement. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
KEY ASSUMPTIONS
The Company made a number of economic,market and operational assumptions in preparing and making certain forward-looking statements contained in this press release and in preparing its Fiscal Year 2022 guidance, including the following: reasonable industry growth ranging from slightlydown to up high-single digits %; market share that will remain constant or moderately increase; no further deterioration and a relatively rapid stabilization of global and North American economic conditions, including with respect to the ongoing COVID-19 crisis; any increase in interest rates will be modest; currencies will remain at near current levels; inflation will remain in line with central bank expectations in countries where the Company is doingbusiness; the Company’s current margins, excluding the impact of the wind-down of Evinrude E-TEC outboard engines and COVID-19, will remain at current or improved levels; the supply base will remain ableto support product development and planned production rates on commercially acceptable terms in a timely manner; there will be no significant changes in tax laws or free trade arrangements or treaties applicable to the Company; no trade barrierswill be imposed amongst jurisdictions in which the Company carries operations; and the absence of unusually adverse weather conditions, especially in peak seasons. BRP cautions that its assumptions may not materialize and that current economicconditions, including all of the current uncertainty resulting from the ongoing COVID-19 health crisis and its broader repercussions on the global economy, render such assumptions, although believed reasonableat the time they were made, subject to greater uncertainty.
NON-IFRS MEASURES
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do nothave a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providingfurther understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported underIFRS. The Company uses non-IFRS measures including Normalized revenues, Normalized gross profit, Normalized EBITDA, Normalized net income, Normalized income tax expense, Normalized effective tax rate,Normalized basic earnings per share and Normalized diluted earnings per share.
Page 9
Normalized revenues and Normalized gross profit are provided to assist investors in determining the financialperformance of the Company on a consistent basis by excluding elements such as wind-down costs which are considered not being reflective of the ongoing operational performance of the Company. Normalized EBITDA is provided to assist investors indetermining the financial performance of the Company’s operating activities on a consistent basis by excluding certain non-cash elements such as depreciation expense, impairment charge, foreign exchangegain or loss on the Company’s long-term debt denominated in U.S. dollars and foreign exchange gain or loss on certain of the Company’s lease liabilities. Other elements, such as restructuring and wind-down costs, gain or loss on litigationand acquisition-related costs, may also be excluded from net income in the determination of Normalized EBITDA as they are considered not being reflective of the operational performance of the Company. Normalized net income, Normalized income taxexpense, Normalized effective tax rate, Normalized basic earnings per share and Normalized diluted earnings per share, in addition to the financial performance of operating activities, take into account the impact of investing activities, financingactivities and income taxes on the Company’s financial results.
The Company believes non-IFRS measures areimportant supplemental measures of financial performance because they eliminate items that have less bearing on the Company’s financial performance and thus highlight trends in its core business that may not otherwise be apparent when relyingsolely on IFRS measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of companies, many of which presentsimilar metrics when reporting their results. Management also uses non-IFRS measures in order to facilitate financial performance comparisons from period to period, prepare annual operating budgets, assess theCompany’s ability to meet its future debt service, capital expenditure and working capital requirements and also as a component in the determination of the short-term incentive compensation for the Company’s employees. Because othercompanies may calculate these non-IFRS measures differently than the Company does, these metrics are not comparable to similarly titled measures reported by other companies.
Normalized revenues is defined as revenues before normalized elements. Normalized gross profit is defined as gross profit before normalized elements. NormalizedEBITDA is defined as net income before financing costs, financing income, income tax expense (recovery), depreciation expense and normalized elements. Normalized net income is defined as net income before normalized elements adjusted to reflect thetax effect on these elements. Normalized income tax expense is defined as income tax expense adjusted to reflect the tax effect on normalized elements and to normalize specific tax elements. Normalized effective tax rate is based on Normalized netincome before Normalized income tax expense. Normalized earnings per share—basic and Normalized earnings per share – diluted are calculated respectively by dividing the Normalized net income by the weighted average number of shares –basic and the weighted average number of shares – diluted. The Company refers the reader to the “Selected Consolidated Financial Information” section of this press release for the reconciliations of Normalized EBITDA and Normalizednet income presented by the Company to the most directly comparable IFRS measure.
Page 10
Reconciliation Tables
The following table presents the reconciliation of Net income to Normalized net income^[1]^ and Normalized EBITDA^[1]^.
| Three-month periods ended | Twelve-month periods ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Canadian dollars) | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2019 | ||||||||||
| Net income | $ | 264.2 | **** | $ | 118.2 | $ | 362.9 | **** | $ | 370.6 | $ | 227.3 | |||
| Normalized elements | |||||||||||||||
| Foreign exchange (gain) loss on long-term debt and lease liabilities | **** | (103.0 | ) | 9.9 | **** | (121.8 | ) | 10.4 | 69.8 | ||||||
| Transaction costs and other related expenses<br>^[2]^ | **** | 0.2 | **** | 0.6 | **** | 1.5 | **** | 2.9 | 2.7 | ||||||
| Restructuring and related costs ^[3]^ | **** | — | **** | (0.3 | ) | **** | 7.5 | **** | 1.7 | 1.3 | |||||
| Impairment charge ^[4]^ | **** | — | **** | — | **** | 177.1 | **** | — | — | ||||||
| (Gain) loss on litigation ^[5]^ | **** | — | **** | (40.4 | ) | **** | (4.0 | ) | (40.0 | ) | 1.3 | ||||
| Transaction costs on long-term debt | **** | — | **** | — | **** | 12.7 | **** | — | 8.9 | ||||||
| Evinrude outboard engines wind-down ^[6]^ | **** | 2.0 | **** | — | **** | 96.1 | **** | — | — | ||||||
| COVID-19 pandemic impact ^[7]^ | **** | (1.7 | ) | — | **** | 10.6 | **** | — | — | ||||||
| Gain on disposal of property, plant and equipment | **** | — | **** | — | **** | (12.7 | ) | — | — | ||||||
| Gain on NCIB | **** | — | **** | — | **** | (12.2 | ) | — | — | ||||||
| Depreciation of intangible assets related to business combinations | **** | 1.1 | **** | 1.2 | **** | 4.4 | **** | 3.6 | 1.2 | ||||||
| Other elements | **** | — | **** | 0.9 | **** | 0.6 | **** | 0.9 | (0.1 | ) | |||||
| Income tax adjustment | **** | — | **** | 10.1 | **** | (45.7 | ) | 8.3 | (3.8 | ) | |||||
| Normalized net income ^[1]^ | **** | 162.8 | **** | 100.2 | **** | 477.0 | **** | 358.4 | 308.6 | ||||||
| Normalized income tax expense ^[1]^ | **** | 60.7 | **** | 35.0 | **** | 167.1 | **** | 126.8 | 105.4 | ||||||
| Financing costs adjusted ^[1] [8]^ | **** | 26.2 | **** | 24.9 | **** | 107.3 | **** | 90.9 | 68.0 | ||||||
| Financing income adjusted ^[1] [8]^ | **** | (2.7 | ) | (0.3 | ) | **** | (7.6 | ) | (2.2 | ) | (2.2 | ) | |||
| Depreciation expense adjusted ^[1] [9]^ | **** | 66.1 | **** | 62.0 | **** | 255.2 | **** | 230.5 | 176.1 | ||||||
| Normalized EBITDA ^[1]^ | $ | 313.1 | **** | $ | 221.8 | $ | 999.0 | **** | $ | 804.4 | $ | 655.9 | |||
| ^[1]^ | ^See “Non-IFRS Measures”section.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[2]^ | ^Costs related to business combinations.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[3]^ | ^The Company is involved, from time to time, in restructuring andreorganization activities in order to gain flexibility and improve efficiency. The costs related to these activities are mainly composed of severance costs and retention salaries.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[4]^ | ^During the twelve-month period ended January^^31, 2021, the Company recorded an impairment charge of $177.1^^million related to its Marine segment.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[5]^ | ^The Company was involved in patent infringement litigation cases with oneof its competitors.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[6]^ | ^During the three- and twelve-month periods ended January^^31, 2021, the Company incurred costs related to the wind-down of the Evinrude E-TEC outboard engines production such as, but not limited to, retail salesincentives, restructuring costs and other exit costs.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[7]^ | ^Incremental costs associated with theCOVID-19 pandemic such as, but not limited to, labour cost related to furloughs.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[8]^ | ^Adjusted for transaction costs on long-term debt and NCIB gains and lossesin net income.^ | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[9]^ | ^Adjusted for depreciation of intangible assets acquired through businesscombinations.^ | ||||||||||||||
| --- | --- |
Page 11
The following table presents the reconciliation of Revenues to Normalized revenues ^[1]^ and Gross profit to Normalized gross profit ^[1]^.
| Three-month periods ended | Twelve-month periods ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Canadian dollars) | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2021 | January 31,<br>2020 | January 31,<br>2019 | ||||||||||
| Revenues | $ | 1,815.1 | **** | $ | 1,615.9 | $ | 5,952.9 | **** | $ | 6,052.7 | $ | 5,243.8 | |||
| Evinrude outboard engine wind-down ^[2]^ | **** | (9.6 | ) | — | **** | 31.9 | **** | — | — | ||||||
| Normalized revenues ^[1]^ | $ | 1,805.5 | **** | $ | 1,615.9 | $ | 5,984.8 | **** | $ | 6,052.7 | $ | 5,243.8 | |||
| Gross profit | $ | 501.9 | **** | $ | 383.7 | $ | 1,472.3 | **** | $ | 1,454.0 | $ | 1,253.4 | |||
| As a percentage of revenues | **** | 27.7 | % | 23.7 | % | **** | 24.7 | % | 24.0 | % | 23.9 | % | |||
| Evinrude outboard engine wind-down ^[2]^ | **** | 2.1 | **** | — | **** | 66.3 | **** | — | — | ||||||
| COVID-19 pandemic impact ^[3]^ | **** | (1.7 | ) | — | **** | 10.6 | **** | — | — | ||||||
| Normalized gross profit ^[1]^ | $ | 502.3 | **** | $ | 383.7 | $ | 1,549.2 | **** | $ | 1,454.0 | $ | 1,253.4 | |||
| As a percentage of Normalized revenues | 27.8 | % | 23.7 | % | 25.9 | % | 24.0 | % | 23.9 | % | |||||
| ^[1]^ | See “Non-IFRS Measures” section. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[2]^ | During the three- and twelve-month periods ended January 31, 2021, the Company incurred costs related to the<br>wind-down of the outboard engine production such as, but not limited to, retail sales incentives, restructuring costs and other exit costs. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^[3]^ | Incremental costs associated with the COVID-19 pandemic such as, but not limited<br>to, labour cost related to furloughs. | ||||||||||||||
| --- | --- | ||||||||||||||
| For media enquiries: | For investor relations: | ||||||||||||||
| --- | --- | ||||||||||||||
| Elaine Arsenault | Philippe Deschênes | ||||||||||||||
| Senior Advisor, Media Relations | Investor Relations | ||||||||||||||
| Tel.: 514.238.3615 | Tel.: 450.532.6462 | ||||||||||||||
| [email protected] | [email protected] |
Page 12
EX-99.2
Exhibit 99.2
| PRESS RELEASE<br><br><br>For immediate distribution |
|---|
BRP TO INTRODUCE ELECTRIC MODELS FOR EACH OF ITS PRODUCT LINES BY THE END OF 2026
BRP presented e-concepts of Sea-Dooand Ryker models among others and introduced
the Rotax Sonic E-Kart in 2019. ^©^BRP 2021
| • | BRP to invest $300 million over the next five years to electrify its existing product lines by the end of 2026.<br> |
|---|---|
| • | The first product is expected to be introduced to the market within the next two years, followed by a rapid roll-out across all product lines. |
| --- | --- |
| • | BRP is developing its Rotax modular electric powerpack technology in-house which<br>will be leveraged across all product lines. |
| --- | --- |
| • | BRP is creating an Electric Vehicle Development Centre in Canada, which will focus on the “energy side”: the<br>charger and the battery pack, as well as the complete integration into the vehicle, and a second pole of development in Austria, which will focus on the “torque side”: the inverter and the high performance electric motor.<br> |
| --- | --- |
| • | BRP is actively recruiting to expand its EV team of experts. |
| --- | --- |
Valcourt, Quebec, March 25, 2021 – BRP (TSX: DOO; NASDAQ: DOOO) announced its five-year plan where it will offer electric models in each of its product lines by the end of 2026. To achieve this, BRP plans to invest $300M over five years in product development, specialized equipment, infrastructure, production tooling and facilities.
“We have always said electrification was not a question of ‘if’ but a question of ‘when’. Today, we’re very excited to unveil more details of our plan to deliver market-shaping products that will enhance the consumer experience by offering new electric options,” said José Boisjoli, President and CEO. “We are leveraging our engineering know-how and innovation capabilities to define the best strategy for developing electric-powered products,” he added.
After developing and evaluating several concepts, BRP has made the bold decision to develop its Rotax modular electric powerpack technology which will be leveraged across all product lines enhancing the consumer experience by offering new electric options. To achieve this, BRP is expanding its Rotax electric power unit development infrastructure in Gunskirchen, Austria, and is also creating the BRP Electric Vehicle Development Centre, located in its hometown of Valcourt, Quebec, Canada. This facility will feature state-of-the-art equipment, including several sophisticated test benches and dynamometers, plus an ultramodern robotized manufacturing cell for electric batteries.
“We are thrilled to create our EV expertise centre, taking steps into the world of electrification,’’ said Bernard Guy, Senior Vice-President, Global Product Strategy. “Experts on our EV team will feel the agility of a startup environment but will benefit from BRP’s financial resources and state-of-the-art equipment to design our in-house technology,” he added.
BRP’s electric path
In early 2019, BRP acquired assets of Alta Motors, an electric motorcycle manufacturer, and commercialized the Rotax Sonic E-Kart, which is currently in operation at the Rotax MAX Dome in Linz, Austria. A few months later, it showcased e-concepts at Club BRP 2019 to give a glimpse of what the future could hold for both its current product lines and for other potential segments. BRP has produced several battery-electric, hybrid-electric and even fuel cell-electric vehicles over the years. Today’s announcement brings BRP’s electric journey further into focus, with a clear vision and firm plans to roll out its electric products.
Expanding BRP’s electric vehicle developmentteam
The R&D team is expanding quickly, and BRP is recruiting for several positions as it moves to the next phase of its electric propulsion technology development. With involvement from Quebec, Austria, Finland and the United States, BRP’s top talent worldwide, including hundreds of engineers and specialized technicians, will work together to develop and produce electric vehicles at BRP.
For more information on employment opportunities with BRP EV R&D centers, please visit careers.brp.com/electric
About BRP
We are a global leader in the world of powersports vehicles, propulsion systems and boats, built on over 75 years of ingenuity and intensive consumer focus. Our portfolio of industry-leading and distinctive products includes Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, Can-Am on- and off-road vehicles, Alumacraft, Manitou, Quintrex boats and Rotax marine propulsion systems as well as Rotax engines for karts and recreational aircraft. We complete our lines of products
with a dedicated parts, accessories and apparel business to fully enhance the riding experience. With annual sales of CA$6 billion from over 130 countries, our global workforce is made up of more than 14,500 driven, resourceful people.
www.brp.com
@BRPNews
Ski-Doo, Lynx, Sea-Doo, Can-Am, Rotax, Evinrude, Manitou, Alumacraft, Telwater and the BRP logo are trademarks of Bombardier Recreational Products Inc. or its affiliates. All other trademarks are the property of their respective owners.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Certain statementsin this press release, including, but not limited to, statements relating to the Company’s five-year plan and its related investments into the electrification of its product lines, the Company’s ability to secure the required resources andcreate poles of development and other statements about the Company’s prospects, expectations, anticipations, estimates and intentions, results, performance, objectives, targets, goals or achievements, priorities and strategies, financialresources, capabilities, beliefs, research and product development activities, including projected features, capacity or performance of future products and their impact on consumer experience, expected scheduled entry to market, expected financialrequirements and the availability of capital resources and liquidities or any other future events or developments and other statements that are not historical facts constitute forward-looking statements within the meaning of Canadian and UnitedStates securities laws. The words “may”, “will”, “would”, “should”, “could”, “expects”, “forecasts”, “plans”, “intends”, “trends”,“indications”, “anticipates”, “believes”, “estimates”, “outlook”, “predicts”, “projects”, “likely” or “potential” or the negative or other variations of thesewords or other comparable words or phrases, are intended to identify forward-looking statements. Forward-looking statements, by their nature, involve inherent risks and uncertainties and are based on assumptions, both general and specific. TheCompany cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although believed reasonable at the time they were made, subject to greater uncertainty. Actual results or future events ordevelopments may differ materially from those expressed or implied by the forward-looking statements due to a number of factors, including the impact of adverse economic conditions such as those resulting from the ongoing COVID-19 health crisis as well as those identified in BRP’s annual management’s discussion and analysis and audited consolidated financial statements for its fiscal year 2021 and the other recent andfuture filings with applicable Canadian and U.S. securities regulatory authorities, available on SEDAR at sedar.com or EDGAR at sec.gov, respectively. These factors are not intended to represent a complete list of the factors that could affect theCompany; however, these factors should be considered carefully. The forward-looking statements contained in this press release are made as of the date of the press release and the Company has no intention and undertakes no obligation to update orrevise any forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities regulations. In the event that the Company does update any forward-looking statements containedin this press release, no inference should be made that the Company will make additional updates with respect to that statement, related matters or any other forward-looking statement.
-30-
| For media enquiries: | For investor relations: |
|---|---|
| Elaine Arsenault | Philippe Deschênes |
| Senior Advisor, Media Relations | Investor Relations |
| Tel.: 514.238.3615 | Tel.: 450.532.6462 |
| [email protected] | [email protected] |