BRP(US:DOOO)2021-09-02 20:15Financial Data and Key Metrics Changes - Revenues increased by 54% to $1.9 billion, with normalized EBITDA rising 94% to $415 million and normalized earnings per share up 1.5 times to $2.89 [8][28][36] - The company is increasing its normalized EPS guidance for the year to a range of $8.25 to $9.75 per share, representing a growth of 53% to 81% compared to last year [7][36] Business Line Data and Key Metrics Changes - North American Powersport retail sales were down 19% for the quarter but up 14% compared to the second quarter of fiscal year '20, indicating strong demand despite lower inventory [9][11] - Seasonal products revenue increased by 78% to $575 million, driven by higher shipments and a richer mix of personal watercraft [23] - Powersports Parts, Accessories & Apparel and OEM engines revenues rose by 19% to $249 million for the quarter [24] Market Data and Key Metrics Changes - North American retail sales decreased in Q2 due to low inventory but were up 9% compared to two years ago [11] - The company gained market share in most product lines despite overall industry challenges, with new entrants representing 43% of buyers in Q2 compared to 41% last year [13] Company Strategy and Development Direction - The company is focusing on attracting new entrants through product innovation and community engagement initiatives [12][39] - The introduction of new products, such as the Sea-Doo Switch and Can-Am upgrades, is expected to drive future growth [14][19] - The company anticipates a significant inventory replenishment cycle over the next 12 to 18 months, supported by increased production capacity [40] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain challenges, including semiconductor shortages and labor issues, but expressed confidence in improving conditions by the end of 2021 and into 2022 [33][46] - The company expects Q3 to be challenging due to low inventory levels but anticipates a stronger Q4 as supply chain issues are resolved [36][55] Other Important Information - The company generated $417 million of cash from operations and invested $217 million in working capital, with a focus on managing supply chain constraints [29] - The company successfully completed a substantial issuer bid, repurchasing 3.4 million shares [29] Q&A Session Summary Question: Market share gains by newer entrants - Management noted that while some dealers reported losing customers, the impact was minimal, and new entrants are showing strong intent to remain in the industry [43] Question: Confidence in Q4 logistics improvement - Management highlighted improvements in supplier operations and expected better conditions for semiconductor supply by late 2021 [46] Question: EPS guidance and profitability drivers - Management indicated that better-than-expected results were driven by lower sales programs and a richer product mix, offsetting some commodity cost pressures [49][50] Question: Q3 performance expectations - Management confirmed that Q3 would be weaker due to low inventory and supply chain challenges, but they expect Q4 to improve significantly [55] Question: Inventory replenishment expectations - Management projected that inventory replenishment would begin next year, with a significant backlog of demand expected to drive sales [72][74]