BRP revenues jump 22.3 percent

SAINT BRUNO, Quebec – Revenues for Bombardier Recreational Products Inc., recently branded as “BRP”, reached $630.9 million for the first quarter of FY05 compared to $515.8 million for last year’s first quarter, an increase of 22.3 percent, the company said this morning in a press release.

BRP’s decision to postpone watercraft production and deliveries from the latter part of fiscal year ended January 31, 2004 to first quarter of fiscal year 2005, along with an increase in outboard engine and ATV sales were largely responsible for the revenue increase, the company said.

Watercraft revenues increased by 35.0 percent during the first quarter 2005 compared to the first quarter 2004, caused mainly by the production shift to match the watercraft-selling season, BRP said. The company singled out its Sea-Doo RXP and Sea-Doo 3D models as having generated a great deal of interest.

Marine engines revenues have increased by 11.0 percent when compared to the first quarter of last year, BRP said.

“The Evinrude E-TEC is making its mark in the outboard engine business,” BRP said. “The larger E-TEC engines, 200, 225 and 250 HP, were introduced to the market in February and have been well received by both the media and the dealer network.”

The company said its consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) has reached $32.2 million compared to ($0.4) million for the same period last year. The improvement is mainly due to the impact of additional revenues and lower operating expenses, BRP said.

“These results confirm the continued demand for our innovative products, a very encouraging trend for our company”, said Jose Boisjoli, BRP’s CEO. “I am pleased to see that although foreign exchange fluctuations had an expected negative impact on our results, it was largely offset by increased deliveries of our products. I am also satisfied that we were able to improve our consolidated adjusted EBITDA and our cash position as compared to last year.”

Gross profit percentage falls

BRP’s gross profit percentage of revenues decreased to 14.3 percent from 16.0 percent when compared to the same quarter in fiscal 2004. The gross profit decrease was caused primarily by the unfavorable impact of a stronger Canadian dollar in relation to the U.S. dollar, the company said.

Net loss for the three-month period ended April 30, 2004 was $35.7 million compared to a net loss of $16.5 million for the same period in fiscal 2004.

“The variation in net loss was primarily related to unrealized foreign exchange loss on long term debt, to non-recurring related items resulting from purchase accounting and to increased interest expense on long term-debt and accretion in carrying value of redeemable preferred shares,” BRP said.

“2004 is the beginning of a new era for BRP,” Boisjoli said. “Our cost reduction plan is ongoing and will contribute to increase our profitability going forward. As we work to retain the confidence of our customers with innovative products we are consolidating our leadership position in our traditional markets and growing our presence in the others.”

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