BRP(US:DOOO)2020-08-27 17:55Financial Data and Key Metrics Changes - Revenue for the quarter was $1.2 billion, down 15% from last year, which was better than expected given the pandemic impact [6][18] - Normalized EBITDA increased by 28% to $214 million, with normalized EPS rising 61% to $1.14 [6][18] - Free cash flow generated so far this year was $248 million, with over $900 million in additional financing secured [19] Business Line Data and Key Metrics Changes - Year-Round Products revenue decreased by 15%, but retail sales for Can-Am side-by-side were up low-40%, solidifying a 2 market share position [10] - ATV retail was up low-20% in North America and over 30% in Asia Pacific [11] - Personal Watercraft revenue was down 25%, but retail sales increased mid-teen percentage due to strong consumer demand [13][14] - Powersports parts, accessories, and apparel revenue increased by 20%, driven by strong retail momentum [15] Market Data and Key Metrics Changes - Retail sales increased by 40% in North America, 41% in EMEA, 34% in Asia Pacific, and 27% in Latin America [7] - North American dealer inventory was down 51%, and finished goods inventory was down 38% [8][23] - New entrants to the Powersports industry increased by 51% compared to the same quarter last year, with 41% being completely new to the industry [9] Company Strategy and Development Direction - The company plans to construct a second plant dedicated to side-by-side vehicles to increase capacity by 50% [10] - Focus on converting new entrants into lifelong customers through marketing initiatives [10][31] - Commitment to investing in product development and maintaining liquidity for future growth [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to emerge stronger from the crisis, despite uncertainties related to COVID-19 [5][19] - Anticipated revenue decline of 5% to 9% for the year, with normalized EPS expected between $3.65 to $3.95 [5][26] - Management remains cautious but optimistic about the demand for products in the second half of the year [28][29] Other Important Information - The company is focused on maintaining health and safety measures in operations while managing supply chain challenges [30][74] - The wind down of Evinrude outboard engines is expected to impact Marine revenues, projected to decline by 25% to 30% [16][75] Q&A Session Summary Question: Current status of operations at plants and utilization levels - All operations are running at full capacity without efficiency loss, despite some supply chain challenges [33][34] Question: Marketing efforts to attract new customers - Active marketing efforts are in place to engage new customers and convert them into lifelong users [36][37] Question: Outlook for Snowmobile season and production capacity - Production is scheduled to run at full capacity until Christmas, with the ability to meet dealer orders [41] Question: Impact of the pandemic on the five-year plan - The essence of the five-year plan remains unchanged, with some minor adjustments in product introduction timelines [46] Question: Capital deployment and working capital movement - Expecting significant CapEx investments in fiscal '22, with a focus on rebuilding inventory [47] Question: Dealer inventory and optimal levels - Dealer inventory is down nearly $1 billion, indicating a significant reduction that needs to be addressed [64] Question: Market share outlook and competitive positioning - Market share may experience short-term losses due to inventory availability, but the company expects to regain momentum as inventory levels normalize [71]