brp sees sales dip profits rise in powersports unit
Amsnow
June 29, 2005 - Canadian recreational vehicle maker Bombardier Recreational Products saw its sales decline, but trimmed its loses considerably compared with the first quarter a year earlier. In addition, profits were up in its power-sports unit.
The overall sales dip was due mainly to the Canadian dollar gaining strength against the U.S. dollar, BRP said. Its sales decreased $29.9 million or 5% compared to the same period a year ago. Last year sales hit $623.9 million for the 3 months ended April 30 and this year slipped to $594 million. The Canadian dollar was stronger by $28 million for the period accounting for all but $1.9 million of the decrease.
Net loss for the period was $2.8 million, a big improvement from a net loss of $48.2 million in last year's first quarter. The turnaround is credited to a cost cutting plan that included a reduction in product complexity and changes in the firm's operational structure, giving it a better ability to offset fluctuations of the Canadian dollar against other currencies.
BRP's power-sports segment, which includes snowmobiles, watercraft, ATVs, sport boats, and Rotax engines saw sales decline $12.4 million to $471.8 million. Again, the dip was mostly due to U.S. dollar devaluation, but also reflects a loss in sales from the ATV division, which has shifted focus to the "recreation-utility" market comprised of sport and youth enthusiasts.
However, profits from the power-sports unit were up from $6.6 million to $33 million due to improved product mix and SKU rationalization. BRP also noted it remained No. 1 in snowmobile sales for 2005.
On the marine side, which makes Evinrude outboard engines, sales dipped to $138.6 million in the period, compared with $151.1 million a year earlier. Sales of its Evinrude E-TEC engines increased, but were offset by a voluntary reduction in other product offerings.