BRP quarterly call: Spark up, Maverick slowing down

Publish Date: 
Jun 12, 2014
By Vince Guerrieri

“We continue to make inroads in the large-CC segment, but we know that industry growth comes from the mid-CC segment,” Boisjoli said. “It’s not only the fastest growing segment, but it’s the biggest. The Outlander L will have positive impact in the second half of the year.”

Chief Financial Officer Sebastien Martel said inventory was down 5 percent year-over-year, and the company ran out of snowmobiles in March.

“All in all, we are comfortable with our dealer inventory position right now,” he said.

Snowmobile production will begin Monday for the 2015 model year. Boisjoli said the 2015 snowmobile models were well-received when they were introduced in March.

“The customer reaction has been very positive,” he said. “Our dealers are looking forward to the winter.”

Also, Spark production will end soon. The factory that produces the Spark, in Queretaro, Mexico, will halt production soon for retooling, and Sparks will start being produced again in September. Additionally, BRP will begin construction next month on a new factory in Juarez, Mexico, to build Can-Am ATVs and Spyders. Boisjoli said operations are planned to start at the factory before the end of 2015.

Boisjoli said despite the decrease, revenues remained in line with expectations and consistent with predictions. Martel said the company expects a soft second quarter, but to rebound significantly in the second half of the year, driven by strong snowmobile sales.

Revenues were down in the United States and Canada, but were up internationally – in spite of political and economic upheaval in Russia and Eastern Europe.

“Our sales in international were up 4 percent over last year, so this remains a growth opportunity for the future,” Boisjoli said.

BRP also announced Thursday that it had entered into a joint venture with Smooth Marine, a Chinese marketer and distributor of marine products since the 1970s, and BRP’s distributor in China since 2002. The venture, which will take effect Feb. 1, will give BRP a majority stake in the new company, and allow BRP to expand its presence in China. Boisjoli said business has grown 30 percent annually for the past three years. BRP opened a regional office in Shanghai in 2012, and has added 19 dealers in China, with plans to add 11 more in the next two years.