News and stories from the world of the Powersports business.
AIMExpo 2024, We’ve Got It All — Now Feb. 6-8, 2024
Powersports, Education, Networking, Super Bowl, Lunar New Year
We knew it was going to be tough to top AIMExpo 2023, but the stars have aligned for one of the most exciting weeks in Las Vegas, with AIMExpo 2024 taking top billing, of course. Best part, we’ve got hotel rooms blocked for our attendees with rates that are nearly the same or lower than last year’s.
To better accommodate travel, we’ve moved up AIMExpo show dates to start one day earlier — now Tuesday, February 6 through Thursday, February 8 — this also ensures hotel rates are in line with 2023 and will allow everyone to head out of town (if they want) before the full impact of Super Bowl crowds and Lunar New Year celebrants hit the city.
Our guaranteed discounted hotel rates will be available to book through the AIMExpo website by early May, but they will only be offered through our exclusive reservation link. If you try to book rooms early, most hotels have not yet released inventory for next February which means you might not see any rooms available or they may be listed at the highest tier. Same goes for many airlines, whose schedules may not yet be open that far in advance.
The Sahara and Renaissance hotels have let us know that rates for 2024 will be very similar to rates offered this past February. Sahara’s rates will start at $69 and rates at the Renaissance will start at $197. We do not know, nor can we forecast, what rates at other properties will be and encourage you to book at the official AIMExpo hotels when our room blocks open up for reservations.
Updated AIMExpo 2024 schedule
SHOW DATES
Tuesday, February 6 9am – 5pm; Industry party to follow
Wednesday, February 7 9am – 5pm
Thursday, February 8 9am – 1pm
MOVE-IN*
Sunday, February 4 1pm – 6pm
Monday, February 5 7am – 8pm
*We will work with individual companies to accommodate move-in times that need extended hours on Monday.
MOVE-OUT
Thursday, February 8 1:01pm – 8pm
Friday, February 9 8am – noon
Additional AIMExpo FAQ
Q: When will you start assigning booth space?
A: April, we are less than a month away!
Q: When will I be able to book my hotel rooms?
A: AIMExpo hotel blocks will open in May; we will send out reservation links.
Q: When will I be able to register?
A: Registration will open in June. Don’t worry, we’ll remind you!
We look forward to seeing everyone back at AIMExpo, the largest powersports trade show in North America, as we gather to Connect, Engage, Unite!
New Board Officers Elected to Lead Motorcycle Industry Council
The Motorcycle Industry Council Board of Directors elected new officers to lead the powersports industry in 2023. Derek Brooks, motorcycle product line manager, Yamaha Motor Corporation, U.S.A., was appointed chair; John Hinz, CEO of KTM North America, Inc., was appointed vice chair; and Jim Woodruff, CEO of National Powersport Auctions, will remain secretary and treasurer. MIC also welcomes new board members Bill Savino, senior manager of sales support for American Honda Motor Co., Inc., replacing Chuck Boderman, who retired this year; and Eric Sievers, director, sales planning and analysis at Kawasaki Motors Corp., USA, replacing Bill Jenkins, who also retired this year.
“It’s a great honor to be elected chair of MIC,” Brooks said. “Over the past couple of years, we’ve seen encouraging growth in our industry, no doubt spurred by the pandemic as people looked for new ways to recreate. We need to continue nurturing these new and returning riders, keeping them excited and engaged so they can pass their love and enthusiasm on to friends and family. This means I will be keenly focused on policy and market issues facing our industry, including ensuring motorized two-wheelers have a voice in transportation plans, and that riders have access to OHV spaces. I also want to thank out-going Chair Chuck Boderman for his leadership and his unwavering support of the powersports industry and for MIC as its industry association.”
“This is truly a time of opportunity,” said Hinz. “MIC’s market expansion effort, Ride With Us, has shown great results, inspiring more people to consider motorcycling on the dirt or on the street. I look forward to continuing this effort and supporting MIC as we find more ways to open the doors to motorcycling to even more people.”
“Together, we have done a remarkable job navigating the past few years, which were filled with unprecedented obstacles and surprises,” said Woodruff. “While our industry, like all others, will continue to face challenges, we are well-positioned at the MIC to serve the needs of our powersports industry —manufacturers, aftermarket, dealers, services, and of course, our riders and customers. I look forward to continuing my role as Secretary/Treasurer.”
The MIC Board of Directors includes representation from across powersports. Serving the 2023 term are:
Chair of the Board: Derek Brooks, Yamaha Motor Corporation, U.S.A.
Vice Chair: John Hinz, KTM North America, Inc.
Secretary/Treasurer: Jim Woodruff, National Powersport Auctions
Directors
Jeff Brown, EagleRider
Tim Calhoun, Tim Calhoun Powersports Consulting
Kerry Graeber, Suzuki Motor USA, LLC
Robin Hartfiel, Dealernews
Erik Larson, Piaggio Group Americas
Joey Lindahl, Polaris, Inc.
Rod Lopusnak, Triumph Motorcycles America
Marc McAllister, Tucker Powersports
Shawn McLean, BMW Motorrad USA
Jeff Proctor, BRP, Inc.
*Bill Savino, American Honda Motor Co., Inc.
*Eric Sievers, Kawasaki Motors Corp., USA
_______________________
* New board member
Revzilla to be Title Sponsor of AMA National Adventure Riding Series
The American Motorcyclist Association proudly announces Revzilla as the title sponsor for the 2023 Revzilla AMA National Adventure Riding Series. The series currently offers 13 two-day events across the country, and is designed to meet the needs of adventure riders looking to explore off-road terrain on their motorcycles.
“Revzilla’s passion for adventure riding and its dedication to supporting the motorcycle community aligns perfectly with the spirit of the Revzilla AMA National Adventure Riding Series,” said AMA Chief Operating Office James Holter. “Revzilla’s involvement increases much-needed and valuable support for the AMA and our chartered organizations that deliver challenging and inspiring events for adventure riders across the country.”
Revzilla, founded in 2007 by a core team of riders, works to bring motorcycle enthusiasts the best possible shopping experience as part of the Comoto family of brands. Their mission is to serve riders while fueling the industry and inspiring the community.
“As a company of riders, we’re excited be the title sponsor of the 2023 Revzilla AMA National Adventure Riding Series and support the local clubs who put on these great adventure riding events across the U.S.” said Steve Bontempo, Revzilla/Comoto Chief Digital Officer. “More and more riders are discovering adventure riding, and this series provides a great way for more new — as well as experienced — riders to get their bikes dirty, off road.”
The 2023 Revzilla AMA National Adventure Riding Series will feature a wide range of events, including dual-adventure routes, backcountry exploration and rally-inspired activities. Riders of all skill levels are welcome to participate, and the events will be organized by AMA clubs and promoters across the country.
“Revzilla’s support will help us continue to deliver high-quality events that challenge and inspire adventure riders of all levels,” Holter added. “We look forward to a great season and can’t wait to see what the future holds for the series.”
For more information on the 2023 Revzilla AMA National Adventure Riding Series and to register for an event, please visit AmericanMotorcyclist.com/adventure-riding. Be sure to follow the series on social media using the hashtag #AMAadv and stay tuned for updates on exclusive Revzilla promotions and discounts for series participants.
BRP Reports Its Fourth Quarter and Full-Year 2023 Results
Highlights for FY23 Q4
- Revenues of $3,076.3 million, an increase of $728.8 million or 31% compared to the same period last year, a record performance for a single quarter in the Company’s history;
- Retail sales up for Powersports products by 21% compared to the same period last year, and market share gains for SSV in North America;
- Normalized diluted earnings per share [1] of $3.85, an increase of $0.85 per share or 28%, and diluted earnings per share of $4.54, an increase of $2.04 per share or 82% compared to the same period last year;
- Normalized EBITDA [1] of $528.0 million, an increase of $111.6 million or 27% compared to the same period last year.
Highlights for FY23
- Increased revenues by 31% compared to last year, reaching an all-time record high of $10,033.4 million;
- Outperformed our increased FY23 guidance with Normalized diluted earnings per share [1] of $12.05, an increase of $2.13 per share or 21%;
- Achieved market share gains of over 5 percentage points in the North American Powersports industry;
- Provided strong returns to shareholders with $356 million deployed for share repurchases and dividend payments; and
- Continued to invest in future market-shaping products with the completion of 3 acquisitions, the creation of the LVHA Group and the start of construction of the Can-Am electric two-wheel motorcycle production facility in Querétaro, Mexico.
Fiscal 2024 full-year guidance
- The Company is well positioned to continue its growth with revenues expected to increase in the range of 9% to 12% compared to fiscal year 2023; and
- Normalized diluted earnings per share [1] expected in the range of $12.25 – $12.75 or resulting in an increase of 2% to 6% compared to fiscal 2023.
VALCOURT, QUEBEC, CANADA – March 23, 2023 (Motor Sports NewsWire) – BRP Inc. (TSX: DOO, NASDAQ: DOOO) today reported its financial results for the three- and twelve-month periods ended January 31, 2023. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available on SEDAR and EDGAR as well as in the section Quarterly Reports of BRP’s website.
“We achieved record results for the year with revenues exceeding $10 billion for the first time ever, solid profit margins and Normalized EPS above our guidance range. These achievements speak volumes about the dedication and relentless work of our team, as well as the strength of our product portfolio. We are proud of our outstanding fourth quarter retail performance as we significantly outpaced the Powersports industry and concluded the year with an exceptional 5 percentage points market share increase over the previous year in North America,” said José Boisjoli, President and CEO of BRP.
“Heading into fiscal 2024, despite macro concerns, we expect to continue our growth and deliver Normalized EPS between $12.25 and $12.75. BRP’s proven reputation for product innovation, industry-leading brands and solid dealer network provide a robust foundation for sustainable growth,” concluded Mr. Boisjoli.
| __________________________ | |
| 1 | See “Non-IFRS Measures” section of the press release. |
FISCAL YEAR 2024 GUIDANCE
The Company has established its FY24 guidance as follows:
| Financial Metric | FY23 | FY24 Guidance [2] vs FY23 |
| Revenues | ||
| Year-Round Products | $4,827.1 | Up 16% to 19% |
| Seasonal Products | 3,440.3 | Down 4% to Flat |
| Powersports PA&A and OEM Engines | 1,276.4 | Up 3% to 7% |
| Marine | 489.6 | Up 45% to 50% |
| Total Company Revenues | 10,033.4 | Up 9% to 12% |
| Normalized EBITDA [3] | 1,706.3 | Up 9% to 13% |
| Effective Tax Rate [3][4] | 24.4 % | 24.5% to 25.5% |
| Normalized Earnings per Share – Diluted [2] | $12.05 | $12.25 to $12.75 (Up 2% to 6%) |
| Net Income | 865.4 | ~$985M to $1,025M |
| Other assumptions for FY24 Guidance | |
| •Depreciation Expenses Adjusted | ~$375M (Compared to $304M in FY23) |
| •Net Financing Costs Adjusted: | ~$180M (Compared to $110M in FY23) |
| •Weighted average number of shares – diluted: | ~80.5M shares (Compared to 80.9M shares in FY23) |
| •Capital Expenditures: | ~$750M to $800M (Compared to $659M in FY23) |
| _______________________________ | |
| 2 | Please refer to the “Caution Concerning Forward-Looking Statements” and “Key assumptions” sections of this press release for a summary of important risk factors that could affect the above guidance and of the assumptions underlying this Fiscal Year 2024 guidance. |
| 3 | See “Non-IFRS Measures” section of the press release. |
| 4 | Effective tax rate based on Normalized Earnings before Normalized Income Tax. |
| Financial Highlights | ||||||
| Three-month periods ended | Twelve-month periods ended | |||||
| (in millions of Canadian dollars, except per share data and margin) | January 31,2023 | January 31,2022 | January 31,2023 | January 31,2022 | January 31,2021 | |
| Revenues | $3,076.3 | $2,347.5 | $10,033.4 | $7,647.9 | $5,952.9 | |
| Gross Profit | 787.6 | 609.5 | 2,499.4 | 2,132.2 | 1,472.3 | |
| Gross Profit (%) | 25.6 % | 26.0 % | 24.9 % | 27.9 % | 24.7 % | |
| Normalized EBITDA [5] | 528.0 | 416.4 | 1,706.3 | 1,462.1 | 999.0 | |
| Net income (loss) | 365.1 | 209.6 | 865.4 | 794.6 | 362.9 | |
| Normalized net income [5] | 309.2 | 251.3 | 976.7 | 846.5 | 477.0 | |
| Earnings per share – diluted | 4.54 | 2.50 | 10.67 | 9.31 | 4.10 | |
| Normalized earnings per share – diluted [5] | 3.85 | 3.00 | 12.05 | 9.92 | 5.39 | |
| Weighted average number of shares – basic | 78,812,364 | 81,965,577 | 79,382,008 | 82,973,284 | 87,519,856 | |
| Weighted average number of shares – diluted | 80,402,213 | 83,691,775 | 80,946,102 | 85,259,520 | 88,604,984 |
FOURTH QUARTER RESULTS
For the fourth quarter of Fiscal 2023, the Company continued to deliver strong financial results which contributed to exceed its previously announced Fiscal 2023 financial guidance. The demand for our products continued to be strong, as evidenced by the increase of 21% in the Company’s North American retail sales for Powersports Products during the fourth quarter of Fiscal 2023 compared to the same period last year.
The increase in revenues for the three-month period ended January 31, 2023 compared to Fiscal 2022 is mainly explained by a strong consumer demand. It was supported by the additional available capacity such as the new Juarez-3 facility dedicated to SSV production, successful new product introductions, and the final completion of its substantially completed units available for retail allowing to achieve record high revenues during the fourth quarter of Fiscal 2023. The supply chain is gradually returning to a more stable level, however we continue to incur production inefficiencies resulting in higher production costs. Most Powersports product lines favorably contributed to the strong revenue growth compared to the fourth quarter of Fiscal 2022, resulting in higher profitability than last year.
Revenues
Revenues increased by $728.8 million, or 31.0%, to $3,076.3 million for the three-month period ended January 31, 2023, compared to $2,347.5 million for the corresponding period ended January 31, 2022. The revenue increase was primarily driven by a higher wholesale volume across all product lines due to strong retail demand, and the introduction of the Sea-Doo pontoon. The increase includes a favourable foreign exchange rate variation of $73 million.
- Year-Round Products [6] (41% of Q4-23 revenues): Revenues from Year-Round Products increased by $401.7 million, or 47.1%, to $1,254.8 million for the three-month period ended January 31, 2023, compared to $853.1 million for the corresponding period ended January 31, 2022. The increase was due to a higher volume and favorable pricing across all product lines. The higher volume of SSV sold was driven by strong market demand and increased production capacity. The increase in ATV and 3WV volume was due to better product availability. The increase includes a favourable foreign exchange rate variation of $35 million.
- Seasonal Products [7] (43% of Q4-23 revenues): Revenues from Seasonal Products increased by $270.6 million, or 25.8%, to $1,319.5 million for the three-month period ended January 31, 2023, compared to $1,048.9 million for the corresponding period ended January 31, 2022. The increase was due to a higher volume of PWC sold along with favorable pricing across all product lines and the introduction of the Sea-Doo pontoon. The higher volume of PWC sold was driven by strong market demand and better product availability. These increases were partially offset by a decrease in the volume of snowmobiles sold resulting from the suspension of sales in Russia. The increase also includes a favourable foreign exchange rate variation of $17 million.
- Powersports PA&A and OEM Engines [7] (12% of Q4-23 revenues): Revenues from Powersports PA&A and OEM Engines increased by $67.6 million, or 21.8%, to $378.3 million for the three-month period ended January 31, 2023, compared to $310.7 million for the corresponding period ended January 31, 2022. The increase was due to a higher volume of PA&A coming from strong unit retail sales, combined with favourable pricing and the introduction of the Sea-Doo pontoon. The increase also includes a favourable foreign exchange rate variation of $15 million.
- Marine [7] (4% of Q4-23 revenues): Revenues from the Marine segment decreased by $10.5 million, or 7.6%, to $128.5 million for the three-month period ended January 31, 2023, compared to $139.0 million for the corresponding period ended January 31, 2022. The decrease was due to a lower volume of boats sold due to supply chain disruptions, which slowed down the introduction of new products, partially offset by favourable pricing in addition to a favourable mix of boats sold. The decrease includes a favourable foreign exchange rate variation of $6 million.
| _______________________ | |
| 5 | See “Non-IFRS Measures” section of this press release. |
| 6 | The inter-segment transactions are included in the analysis. |
| 7 | The inter-segment transactions are included in the analysis. |
North American Retail Sales
The Company’s North American retail sales for Powersports products increased by 21%, or 19% when excluding pontoons for the three-month period ended January 31, 2023 compared to the three-month period ended January 31, 2022. The increase was mainly attributable to PWC and SSV.
- Year-Round Products: retail sales increased on a percentage basis in the mid-thirties range compared to the three-month period ended January 31, 2022.
- Seasonal Products: retail sales increased on a percentage basis in the low-teens range compared to the three-month period ended January 31, 2022.
- Marine: boat retail sales decreased by 57% compared to the three-month period ended January 31, 2022.
Gross profit
Gross profit increased by $178.1 million, or 29.2%, to $787.6 million for the three-month period ended January 31, 2023, compared to $609.5 million for the corresponding period ended January 31, 2022. The increase in gross profit was primarily due to the favorable volume of SSV and PWC sold and a favorable pricing across all product lines. Gross profit margin percentage decreased by 40 basis points to 25.6% from 26.0% for the three-month period ended January 31, 2022. The slight decrease in gross profit margin percentage was attributable to higher logistics, commodities and labour costs due to inefficiencies related to supply chain disruptions and inflation, and higher sales programs resulting from historical low levels in Fiscal 2022. The decrease was partially offset by higher volume and favorable pricing.
Operating expenses
Operating expenses increased by $87.8 million, or 33.4%, to $350.7 million for the three-month period ended January 31, 2023, compared to $262.9 million for the three-month period ended January 31, 2022. The increase was mainly attributable to higher general and administrative (“G&A”) expenses, mainly for the modernization of the Company’s software infrastructure to support future growth, increases in research and development (“R&D”) expenses and selling and marketing to support future growth, and continued product investments.
Normalized EBITDA [8]
Normalized EBITDA [8] increased by $111.6 million, or 26.8%, to $528.0 million for the three-month period ended January 31, 2023, compared to $416.4 million for the three-month period ended January 31, 2022. The increase was primarily due to higher gross profit partially offset by higher operating expenses.
Net Income
Net income increased by $155.5 million or 74.2%, to $365.1 million for the three-month period ended January 31, 2023, compared to $209.6 million for the three-month period ended January 31, 2022. The increase was primarily due to a higher operating income and a favorable foreign exchange rate variation impact on the U.S. denominated long-term debt, partially offset by net financing costs and a higher income tax expense.
TWELVE-MONTH PERIOD ENDED JANUARY 31, 2023
Revenues
Revenues increased by $2,385.5 million, or 31.2%, to $10,033.4 million for the twelve-month period ended January 31, 2023, compared to $7,647.9 million for the corresponding period ended January 31, 2022. The increase was primarily due to a higher volume of SSV, snowmobile, 3WV and PWC sold, the introduction of Sea-Doo pontoons and favorable pricing across all product lines. The increase includes a favourable foreign exchange rate variation of $107 million.
Normalized EBITDA [8]
Normalized EBITDA [8] increased by $244.2 million, or 16.7%, to $1,706.3 million for the twelve-month period ended January 31, 2023, compared to $1,462.1 million for the twelve-month period ended January 31, 2022. The increase was primarily due to higher gross profit, partially offset by higher operating expenses, mostly in R&D and G&A.
Net Income
Net income increased by $70.8 million to $865.4 million for the twelve-month period ended January 31, 2023, compared to $794.6 million for the twelve-month period ended January 31, 2022. The increase in net income was primarily due to a higher operating income and lower net financing costs, partially offset by an unfavorable impact of the foreign exchange rate variation on the U.S. denominated long-term debt and a higher income tax expense.
| ________________________ | |
| 8 | See “Non-IFRS Measures” section of the press release. |
LIQUIDITY AND CAPITAL RESOURCES
The Company generated net cash flows from operating activities totaling $649.5 million for the twelve-month period ended January 31, 2023 compared to $770.0 million for the twelve-month period ended January 31, 2022.
The Company invested approximately $660 million of its liquidity in capital expenditures to add production capacity and modernize the Company’s software infrastructure to support future growth and $208 million in business combinations. The Company also returned $356 million to shareholders through share repurchases and a quarterly dividend payout.
On December 13, 2022, the Company entered into an incremental U.S. $500.0 million tranche under its Term Facility. This new tranche matures on December 13, 2029, and, consistent with the existing tranche of the Term Facility, is exempt of financial covenants. On the same date, the Company fully repaid the then outstanding U.S. $100 million Term Loan B-2 for repayment of $135.0 million.
Dividend
On March 22, 2023, the Company’s Board of Directors declared a quarterly dividend of $0.18 per share for holders of its multiple voting shares and subordinate voting shares. The dividend will be paid on April 17, 2023 to shareholders of record at the close of business on April 3, 2023.
CONFERENCE CALL AND WEBCAST PRESENTATION
Today at 9 a.m. EDT, BRP Inc. will host a conference call and webcast to discuss its FY23 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 39706809), please dial 1 (888) 396-8049 (toll-free in North America). Click here for International numbers.
The Company’s fourth quarter FY23 webcast presentation is posted in the Quarterly Reports section of BRP’s website.
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