BRP Inc (DOOO) 2014 Q1 法說會逐字稿

Hello, ladies and gentlemen, and welcome to the BRP Q1 FY14 Investors Call. The call is about to commence. I would now like to turn the meeting over to Mr. Jon Reider. (spoken in French) Please go ahead.

Thank you, operator, and good morning to all of you on the phone and the webcast. Welcome to BRP's fiscal 2014 first quarter results call. With me are Jose Boisjoli, BRP's President and Chief Executive Officer, Claude Ferland, Chief Financial Officer, and Pierre Pichette, Vice President of Communications and Public Affairs.

I would like to remind everyone to please refer to page two of the first quarter update slide presentation, currently available on our website at www.brp.com, under the investor relations section, to view our caution regarding forward-looking statements and the risk factors pertaining to these statements. And with that, I'd like to hand it over to Jose.

Thank you, Jon. Good morning and thank you for joining us today for our first quarterly call as a public Company. As you are all aware, we successfully completed our initial public offering and began trading on the Toronto Stock Exchange under the symbol DOO on May 29. As you can imagine, it's been very exciting time for our Company, and I want to thank all of our employees around the world for their continuing effort in building BRP into the Company that it is today.

I also want to take the opportunity at this time to welcome all of our new shareholders. On today's call, I will highlight our performance in the quarter, talk briefly about industry trends, and update you on the progress being made with regards to our strategic objectives that underlie the BRP growth story. Following this, Claude Ferland, our CFO, will take you through our Q1 numbers in greater details and present our guidance for the full fiscal year.

Before explaining our Q1 result, I would like to give you our view on the weather pattern and its impact on retail. The winter was long in North America and Europe, and we had good end-of-season snowmobile retail. The snowmobile orders for next season are good, and our shipment in the second half of the year will be higher than last year.

The flip side of the long winter is the cold spring that we are having so far in Europe and North America. As of now, our retail for watercraft and outboard engine are behind last year. While our market [foresee] the [unavailable] cycle industry is down mid single digits, our Spyder retail sales are up versus last year, but somewhat behind our initial expectation. In our business, we always have these variations, but I wanted to explain the situation for these four product lines.

Overall, our Q1 global sales were right in line with expectation, and our normalized net income was slightly better than what we had planned. We achieve a 12% growth in comparable revenue to Q1 fiscal year 2013, and note that this exclude the revenue related to the sport boat business, which, as you know, we exited in the fall of 2012. The growth in revenue was driven primarily by a 27% growth rate in year-round products, mainly coming from strong side-by-side revenues and increased roadster sales.

Our normalized net income grew 8% to C$54 million, putting us on target to meet our full year guidance of [slow] double digit growth in normalized net income for the year, or normalized EPS in the range C$1.45 to C$1.50. Keep in mind that this assumed the full size of the over element of 1.8 million shares associated with our recently completed IPO.

As we indicated in our prospectus, our quarterly EBITDA result can be volatile. It can be influenced by the timing of new product launches, timing of expenses, and sales program put in place to react to weather-related factor or investment decisions, such as our ramp-up in Mexico. Importantly, we are confident, then, on an annual basis, we will meet our guidance. Claude will go through the financial and the guidance for the fiscal year in a few minutes.

In term of our business highlights for the quarter, we ended the snowmobile season with low dealer inventory and strong orders heading into the new selling season. As I just mentioned, despite the spring weather impact, which affected industry sales for watercraft, Spyder, and outboard engine, we still reported growth in our seasonal and year-round products retail sales of 6%. We saw double digit retail growth for our combined Can-Am Recreational Side-by-Side and Spyder. We began deliveries our new Maverick Side-by-Side vehicle with very good sell-through at the dealership.

The construction of our second Mexican site in Queretaro is on schedule. We are on track to meet our expectation for increasing our dealer network coverage in North America, and we successfully completed our initial public offering and paid down C$250 million of our term facility.

In term of our performance in the quarter by product category, 50% of our sales were divided from year-round products, 26% were from seasonal product, and 12% each from propulsion system and parts, accessories, and clothing. On a geographical breakdown, 51% of sales came from the US, 18% originated in Canada, and 31% came from international. On the international front, we recorded growth of 8% in sales. Our growth was mainly driven by year-round product sales in Scandinavia and Russia.

Focusing on seasonal product, as is normally the case in Q1, almost 100% of our revenue in the quarter came from personal watercraft sales, as multi-year '13 snowmobile deliveries were completed by January 31.

Both the overall industry and our own Sea-Doo retail sales were down by mid double digits, all as a result of poor weather. Our product, however, continues to differentiate itself and generate traffic, as noted, during the most recent boat show season, where consumer orders were up more than 20%. A key selling feature, which continued to drive demand, is that we are the only OEM to offer a break on the watercraft.

As I mentioned, we reported very strong of 27% in our year-round products in the quarter. On the retail side, the US recreational side-by-side industry grew high single digits, while our North American side-by-side sales grew high double digit. Deliveries of our new Maverick started in the quarter, and we are very pleased with the strong sell-through at dealerships. Just last week, we introduced our new Can-Am Side-by-Side lineup for 2014, extending our offering in both the Maverick and Commander platform. We'll also begin the production and deliveries of the highly anticipated Maverick four passenger this month.

On the Spyder side, as I mentioned earlier, while the closest relevant industry data, the on-highway motorcycle industry was down mid single digits in the quarter, our Spyder retail sales continued to grow by high single digits. The Spyder community is growing steadily, and, as an example, we expect the largest order group event ever to take place next weekend in Maggie Valley, North Carolina, with almost 1,350 people registered, so far, with over 825 vehicles.

As you can see, our propulsion system category remained flat in the quarter, with a flat performance in outboard engine, offset by double digit revenue growth at Rotax, as we benefited from favorable timing of motorcycle engine deliveries to OEMs. In addition, during the quarter, we signed supply agreement for our new Jet Boat Propulsion System with two major boat OEMs, Chaparral, and Rec Boat Holdings, maker of Four Winns, Glastron, and Scarab boats.

On the part, accessories, and clothing side, which also includes other incidental revenue, the overall business was up 2%. However, when excluding the other revenue decrease of C$3 million, our part, accessories, and clothing business was up 6%, mainly driven by strong seasonal and year-round product PAC business. As could be expected, given our favorable weather pattern, the outboard engine PAC business was down compared to last year.

I am pleased with our overall performance in our first quarter of fiscal year '14. We are well positioned to continue building on the three key strategic pillars that have been driving us over the past ten years -- the continued development of a diversified product portfolio, with a sharp focus on innovation, the global expansion of our dealer network, and the evolution of our manufacturing footprint. Our priorities are the following -- grow our revenue from year-round products, expand our North American dealer network, ramp up watercraft production in Mexico, and continue product innovation.

We are preparing for the next Club BRP dealer meeting to be held in Orlando in September. This is a key event, where we bring together our worldwide dealers, distributors, and dealer prospect and introduce our new Sea-Doo and Can-Am models.

The year started off well, and we are pleased to be a public Company and give you -- and give our new shareholders the opportunity to share in our success. And with that, I will pass it over to Claude.

Thank you, Jose. Prior to taking you through the financial highlights for the quarter, I just wanted to say a few words about our normalized metrics. We believe that normalized EBITDA and normalized net income are two very good indicators to measure our Company's operating performance.

These measures would typically exclude the P&L impact arising from the foreign exchange gain or loss on our US dollar term debt, the increase or decrease in the fair value of redeemable common shares, as well as unusual and nonrecurring items adjusted to reflect the tax effect related to these items.

Now for the highlights. We posted revenues of C$804 million, an increase of 5.5% over the same period in fiscal '13, representing a record level for the Company in the first quarter. Excluding the impact of sport boat revenues, which we exited in the fall of 2012, our revenues increased by 11.9%. Our gross profit of C$218 million in the quarter, or 27.1% of revenues, equated to an increase of 2.7% over last year.

Normalized EBITDA came in a C$107.8 million, or 13.4% of revenues, which represented a decrease of 1.7% over the same period last year. And all of this resulted in a normalized net income of C$53.4 million, an increase of 7.7% over Q1 fiscal '13, or C$0.52 per normalized earning per shares.

Also, just to recap on our going public transaction, on May 29, 2013, the Company completed its initial public offering of its subordinate voting shares and received gross proceeds of C$262 million from the issuance of the subordinate voting shares. At the same time, the Company repaid C$258 million of its C$1.05 billion term facility and also amended its pricing, which resulted in reduced interest cost. We also extended the maturity of our C$350 million revolving credit facility from March 2016 to May 2018 and amended our pricing to reduce interest cost on this as well.

On this slide we have provided you with a graphic representation to help you understand the bridge from our fiscal year 2014 Q1 EBITDA to our Q1 normalized net income. We start with the Q1 fiscal year '14 EBITDA of C$87.6 million that we adjust to remove the impact of the increase in the fair value of the redeemable common shares.

This non-cash expense is a result of the fair value measurement of certain shares outstanding as of April 30, 2013 that were classified as liabilities for accounting purposes. Going forward, we will no longer see this type of adjustment since these shares have been exchanged for subordinate voting shares as part of the IPO that closed on May 29, 2013. The normalized EBITDA is then adjusted with the depreciation expenses, the net financing costs, and the adjusted income taxes expense to derive the normalized net income of C$53.4 million.

We have also provided you with a graph illustrating the bridge from our fiscal '13 Q1 normalized net income to our fiscal '14 Q1 net income. The C$12 million increase in volume, mix, and pricing was offset by a C$12 million increase in production costs, mainly due to the initial expenses supporting the initial stages of the transfer of PWC manufacturing to Mexico and the additional manufacturing cost in year-round products in order to increase production flexibility to better respond to market demand.

In addition, we saw a slight increase in sales program costs in the quarter, and we expect that this will continue into Q2. The increase in operating expenses is mainly due to higher advertising expenses in all product categories, higher stock-based compensation in relation with the IPO, and higher investment in research and development projects.

Now, turning to the balance sheet, cash is down C$450 million versus the beginning of the year, mainly as a result of the C$529 million distribution to shareholders during the first quarter of fiscal 2014. The long-term debt increase of C$17 million is explained by a C$7.5 million Euro term loan at favorable interest rate under a national government program and an C$8 million foreign exchange rate impact on the US dollar term facility.

Free cash flow of C$87.3 million in the quarter was down versus Q1 fiscal '13, as a result of an abnormally low level of accounts payable at the end of fiscal '12, due to early payment to suppliers, which positively impacted the Q1 fiscal '13 free cash flow.

Now, a quick update on BRP's North America Powersports dealer inventory at the end of the first quarter. Dealer inventory was up 12% compared to the same period in fiscal year '13. The reasons for this were twofold -- growth in our side-by-side business as we filled the pipeline with our new Maverick and slower retail than expected of our PWC and Roadster, resulting from the colder spring weather. We are comfortable with our current inventory position.

As this is our first opportunity to report as a public Company, we are also taking the opportunity to present the investment community with full year guidance for the current fiscal year. While our business is quite seasonal and our quarterly performance can vary from year to year, we are quite confident that our annual results will illustrate the overall success of our strategy going forward. So, on an annual basis, we are targeting growth in Company's revenue in the high single digits.

We are expecting both normalized EBITDA and normalized net income to be up low double digits percent, and we are forecasting normalized earnings per share of C$1.45 to C$1.40 -- C$1.50. Note that this is a 10% to 14% increase over our pro forma earnings per share in fiscal '13, assuming that the overallotment of 1.8 million shares is fully exercised. We will obviously keep you updated on our progress throughout the year. On that note, I would like to turn it back to the operator to open the lines for Q&A. Thank you.

(spoken in French) (Operator Instructions) Robin Farley, UBS.

Great. Thanks. I had two questions. One is can you quantify the --

Ms. Farley, your line is open. You may go ahead with your question.

Thanks. Yes, I wonder if you could quantify what the increase in North American dealers is versus the prior year. And then, also, with the cold weather affecting sales for the Roadster earlier in the year, just to sort of give us an idea of whether that -- just to sort of see how that was weather related and whether that hurt sales later in the spring, can you give any color on how sales have trended in, kind of -- in May, so far, I guess, post to April end of the quarter? Thanks.

Good morning, Robin.

Hi.

Let's say that, obviously, the -- we're very happy with the long winter for snowmobiles, but the cold spring was tough for the spring -- the summer product. I would say, so far, if you look at the motorcycle industry that is down mid single digit, we're up high single digit, and we're happy with our performance, but we talking to dealers, and many dealers are saying that customer are on the fence, and if you have a good -- a few good days in a row, you can see activity at the dealership.

Then, I'm still believe that the summer could turn warmer and better, and we could have a long summer, and all this trend could turn around.

At international, in many country where the weather is acceptable, we have a very good momentum with the Roadster. That's why we believe that the weather really affected the Roadster sales in North America. But, so far -- and again, you remember, last winter, in February, we were quite unhappy with the trend on the snowmobile business, but March was cold and long in the winter, and it turn out to be a very good snowmobile season.

Then, again, we are behind. We are up, high single digits, in the trend versus last year. We still hope that this will -- the weather will get better and -- to make our numbers, but, so far, we didn't see any change in May.

Great. Thank you. And then, on the number of North American dealers and -- because I'm just thinking about that versus your inventory -- your dealer inventory being at 12% -- just how much of that is due to greater number of dealers?

It's not really due to the great -- to an increased number of dealers in North America. Mainly, the increase in dealer inventory is to support the growth in the side-by-side business, where we're filling in the pipeline with the Maverick deliveries, and obviously, we're seeing somewhat of an increase because of the slower retail than expected of the PWC due to the cold weather. And as Jose mentioned, the snowmobile season ended up very well, so we're seeing reduced dealer inventory results at our snowmobile dealers.

If you remember, then, with the Maverick, we entering in a new segment of the side-by-side business, which we call the recreational sport side-by-side, and it's normal that we filling up the pipeline with that new platform, and we very comfortable with the dealer inventory.

That's great. Thank you.

Tim Conder, Wells Fargo Securities.

Yes, just a follow-on, actually, on both of Robin's questions. Jose, if -- regarding the Spyder in Europe, in particular, there's a lot of reports of rain in Hungary, Germany -- flooding over there. Any color in particular on the motorcycle industry and the Spyder in Europe, in particular? You -- again, you mentioned international strength, but is that in Europe, or is that more in other international areas outside of North America?

Yes. Good morning, Tim. Obviously, should talk Western Europe [are the] country that you name the motorcycle industry is down, and surprisingly, we're up right now in those country. The new Spyder ST model is very popular, and we getting traction there again. The country that you just named are affected by the weather.

That being said, Spyder today is sold in about 75 country; then, we have good traction in Australia and New Zealand. We have good traction in other country, where the Spyder is growing. Then, Western Europe is definitely [not ideal], but again, Spyder is sold in 75 country, and many of those, the momentum is good.

Okay, okay. And then, on the dealer count in North America, in particular, the US, how are the plans progressing there, so far, and then, as far as adding dealers, the upgrades, and then, the conversion to just new overall systems and programs and such?

Yes. If you remember, our plan is to add 200 to 300 dealers in the South and the Southwest of United States within the next four years.

Yes.

And you could -- we could have some optimization in the Snow Belt. Then, at the end of the four years, you could have -- we believe the addition will be there, but you might have some reduction in the Snow Belt. So far, the plan this year is to add 35 to 40 dealers in the South and Southwestern United States, and the plan is ongoing, and we believe that this number will happen.

And again, when I say 35 to 40, it's up and running dealers. That mean dealer that we have signed, our product is in the showroom, and they are starting to retail and service product. It's not just signing, and you start the operation two months after. Then, the plan is on plan -- the program is on plan, and we feel good about those additions.

Okay, okay. And then, lastly, how are your thoughts -- you mentioned you called out the outboard, in particular -- again, negatively impacted, along with watercraft, due to the weather. How are your thoughts, as it relates to watercraft and outboard engine sales? At what point do you feel that if the sales -- if the weather remains challenging for, obviously, everyone, at what point do you feel that sales could be deferred a season?

Typically, the watercraft -- the -- I would say about 50% of the watercraft have been in May, June, July -- the watercraft retail. Then, obviously, we missed Memorial weekend. Memorial weekend in US was not good. The weather was so-so; then, we missed an important weekend in US.

But again, I'm -- I believe it's too early to believe that we cannot recover. The -- right now, the -- there is a -- good traffic, again, at the -- our boat show season. We were very happy, because we had -- our sales versus the year before are -- was 20% up and with the same program that we had. We had the five-year warranty program.

If you purchase a watercraft at the boat show, and same program, and we're 20% up. And, so far, this spring is cold. Now, last week, one of our competitor started to announce programs. We have follow -- will follow this also with our program. This is about a month earlier than typical. Typical -- you have program on the back end of July; now we have to react to the competitor, and this could spark up some retail.

This -- those thing happened, and again, this is North America; same thing in Western Europe. We have a good traction in watercraft, right now, in [LATAN]. LATAN is doing well in Australia and New Zealand. It's the low season, but the people are upbeat for next season. Then again, our watercraft business is obviously North America, but also, a big chunk is international then.

Yes.

You were commenting North America, which, I believe and I hope it will turn around, and -- but the rest of the world is still good potential for the rest of the year.

Okay, great. Thank you.

Gerrick Johnson, BMO Capital Markets.

Hey, good morning. Welcome to our world. Say, Jose, what are some of the biggest near-term opportunities for international growth, and can you give us an update on how those are progressing?

Good morning, Gerrick. Let's say that -- we've been working on international for the last ten years, and it's not a short journey. And the dynamic, overall, is very good in the industry. Today, if I -- if we look at Western Europe, Middle East, and Africa, and Scandinavia and Eastern Europe, we believe this year those markets will grow, but at a slower pace than the last few years. But we have a very good momentum in APAC and LATAN, where we believe, this year, those two area region could be up high double digit versus the year before.

Then, overall, the dynamic is very good outside North America. Western Europe, obviously, is tough, but all the other region are growing, and one of the reason is side-by-side is developing in those countries. Watercraft -- ATVs is also growing in those country. We gaining market share of using those two product lines, and Roadster is also growing. Then, it's a mix of the industry growing and not gaining market share in those industry. Then, we're very happy with our progress at international, and we believe it will continue.

Great. Thank you. On jet propulsion, will those be booked as Evinrude sales or Rotax sales? And then, when do we start seeing shipment revenue from those agreements [at your] income statement, and is there any way you can give us some sort of order of magnitude as to how big those can be?

Yes. This is a Rotax engine, the same engine that we're using on watercraft, that, with our jet propulsion system that we're using on watercraft that we'll sell to Chaparral and Rec Boat Holdings. The propulsion system will be assemble in Sturtevant, where we have our outboard facility and will be shipped to those OEM, and you will see some sales in the second half of the year, but no big number this year. You won't see a big difference. We just starting to ramping up.

They have to modify the boat first to add that propulsion system, and they just starting to ramping up that -- those product line. Then, small number this year, growing, going forward, but, that being said, we want to be cautious. We have a group of technical people who assist them to make sure that when we are out there with the complete product, the boat and the power pack, we have good quality product. Then, small number this fiscal year, growing, in time, and, in time, you might expect that we'll add both builders to our business.

Okay. And just one last quickie here. I think I heard you say you released details on model year 2014 side-by-sides. If that's correct, where can we find those details?

Okay. It's on our website. We just introduced five new models. It's variation of Commander and variation of Maverick. And, on the Maverick, there was -- when we came out with the Maverick last year, we didn't have any power steering. Then -- now, we have had, on some model, the power steering.

And on the Commander side, we introduce some also variation to the Commander to -- its package to the Commander to please the customer. This is on our website. We have had five new model altogether. Right now, we have 14 new model, if I don't count the colors, and obviously, we did bring some additional colors to the lineup. Then, if you go on our website, it's all there.

Okay. And will there be additional releases or introductions in Orlando, in addition to what you just explained?

Now you're pulling my -- you're pulling a bit more. Currently, obviously, Gerrick, I won't comment on that one, but you can expect us to introduce new models all the time. Going forward, we want to be aggressive on the side-by-side business.

Okay. Very good, guys. Thank you.

Thank you.

Mark Petrie, CIBC.

Yes, good morning. I just wanted to follow up on the international question and -- as it relates to dealer counts and what the progress is there.

Yes, on international, we already have about 2,000 dealer at international, and at international, the point is different. We have introduced Roadsters a few years ago and the side-by-side. At international, the point is more helping the dealer to be more performing than having dealers. There is a few country, like China, where we need to have some more dealers; Australia, the same thing.

But it's more helping the dealer to be more performing retailing our product. Then, there is not as much having dealers in those country than sometime the dealer is simply missing space in his existing location, and he need a larger showroom. You know, two side-by-side in the showroom takes a lot of space. Then, this is the plan. That being said, very, very optimistic about our momentum in APAC and LATAN this year.

Okay, thanks. And I just wanted to follow, too, on the PAC business. Can you just talk a bit about the impact of weather there, and also, the impact of product mix as it relates to seasonal and non-seasonal?

Yes. On the PAC sales on the first quarter, obviously, the snowmobile season helped PAC sales, and on the outboard, many people delay the timing when they put the boat on the water. And every time you put a vehicle in the water -- a boat on the water, you have always, like, startup maintenance to do, and that is very good for the PAC business. Then, typically, this will start on the last month of -- in April in some area in the Snow Belt. Now, we believe there -- them delay in May and June. Then, that's why we believe outboard PAC sales were impacted.

On the other hand -- and that's our beauty of our diversification. We have six product line. I learned that you never win on every product -- you never win on all product line at the same time. You have always ups and downs, and that's the beauty of our Company. Then, we've gain on snowmobile, delay on outboard PAC. We believe it will happen in the second quarter.

Okay. Thanks a lot.

(Operator Instructions) (spoken in French) [Steve Harcher], RBC Capital Markets.

Great. Thank you. Just a couple more questions, just if we can elaborate on the Spyder rollout. Just curious, I guess, if it's -- how broadly it has penetrated across the various countries that you're in now? And any feedback or initial reception in some of the newer regions that you might have rolled into more recently?

Let's see, Steve, as you know, the Spyder -- this product was not designed to attract motorcycle. There is some motorcyclists that transition to the Spyder, but the Spyder was there to attract people who never crossed the line of buying a motorcycle and go on the road. About more than 20% of our customer are female rider, and, more and more, what we call none-none customer people, who never owned a motorcycle, are buying the Roadsters.

Then -- right now, the momentum is good. I mean, we're happy with the high single digit retail growth, despite motorcycle industry is down 6 -- mid single digit. We're happy with our momentum.

We are in 75 country. There is -- we will start selling Spyder in Japan this fall. This is a new for us, and we didn't enter Japan, which is a good market for high CC cruiser market. It's a good market, and we didn't enter -- the Roadster was not [homologated] yet in Japan, because there was some specificity in their regulation that were difficult, but we overcome that with the Japanese authority, and this will start this fall. That being said, our challenge in the Roadster is to build the awareness.

Yes.

And right now, we prefer -- we are in 75 country; we prefer to continue to build the awareness in those country, because the infrastructure is there, and the dealers are there, and they are ready to sell. It's our job to be a better marketer and continue to -- or, to continue to build the awareness. But we're happy with our momentum, so far, and our job is to build the awareness and bring more models to the market.

Just as a quick follow-up -- just, in terms of building that awareness, presumably, that comes with a marketing spend and incentives and such. Is that changing over what the plan might have been a few months ago -- getting more aggressive or less aggressive, based on the momentum you're seeing now?

Yes. One thing we've done this year, we -- last -- we have -- this year, we decided to advance our marketing campaign in North America by one month, which, with the weather -- with the cold spring, was probably not the smartest move, but --

Hard to call the weather.

Yes. This is very difficult to call. Last year, we felt we were a little too late, and this year, we had planned -- we had advanced it by one month. But, overall, it's not something that you cannot -- you can measure on a monthly basis. It's something that takes time, and you need to be patient to it. And we're happy, again, with the momentum, and we always tweaking our campaign. After a season, we always measure what works, what didn't work so well, trying to adapt the campaign, but it's something that takes time.

And it's never all, so, where the dealers have a big plate. The dealers -- we encourage the dealers to do trial. If you have -- if a customer is not sure, very often, when you give him a chance to ride the Roadster, I mean, you close the sale then. This is working on the marketing campaign, working with the dealers to close more and more sales, and it's something that will take times.

Great. Thank you very much.

At this time, we have no further questions. I would now like to turn the meeting back over to Mr. Boisjoli.

Thank you. To conclude, let's say that, over the past 10 years, BRP has invested heavily in build a solid foundation for growth. We have six strong product lines and brands. We have develop a solid distribution network. Our manufacturing base is highly diversified, and we are at the beginning of the growth cycle of our two new product lines. We are now better positioned than ever before to grow both top line and bottom line on the global scale. Our first quarter results put us on track to achieve our yearend guidance.

In conclusion, over the past few weeks, Claude and I had the opportunity to meet a large number of analysts and investor, and I think that we were able to demonstrate that we at BRP are very passionate about our products and proud of our heritage and of our global reputation for innovation and creativity. We are excited about our future and our growth prospect and look forward to updating you on our progress on the quarterly basis.

Please note that our Q2 conference call is scheduled for Thursday, September 12. We are also planning an investor day in mid September and will provide you with further details over the coming weeks. Thank you again for your interest in BRP, and I wish you all a good summer.

Thank you. The conference has now ended. (spoken in French) Please disconnect your line at this time. (spoken in French) We thank you for your participation. (spoken in French)