Good morning, ladies and gentlemen. Welcome to the BRP Inc.'s FY 2023 first quarter results conference call. For participants who use the telephone line, it is recommended to turn off the sound on your device. I would now like to turn the meeting over to Mr. Philippe Deschênes. Please go ahead, Mr. Deschênes. Thank you, Julie. Good morning and welcome to BRP's conference call for the first quarter of fiscal year 2023. Joining me this morning are José Boisjoli, President and Chief Executive Officer, and Sébastien Martel, Chief Financial Officer. Before we move to the prepared remarks, I would like to remind everyone that certain forward-looking statements will be made during the call and that actual results could differ from those implied in these statements. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult BRP's MD&A for a complete list of these. Also, during the call, reference will be made to supporting slides, and you can find the presentation on our website at brp.com under the investor relations section. With that, I'll turn the call over to José. Thank you, Philippe. Good morning, everyone, and thank you for joining us. Our team once again demonstrated our ability to succeed in a tough environment. We outperformed the industry in terms of retail and delivered better than expected financial results for the quarter despite supply chain disruption. This solid performance put us in a good position to deliver strong growth for the year as we remain focused on achieving our guidance, which calls for a revenue increase of 24%-29% and EPS growth of 11%-14% after accounting for the recently completed SIB. Let's turn to slide four for the key financial highlights of the quarter. Revenue reached CAD 1.8 billion, stable compared to last year. Still, we saw solid growth for side-by-side, which was offset by lower shipment of personal watercraft and three-wheel vehicle. This shows our ability to optimize production by prioritizing certain product line based on component availability. This resulted in a higher level of off-road vehicle production in Q1, while shipment of personal watercraft and three-wheel vehicles are expected to accelerate in Q2. As anticipated, inefficiencies caused by supply chain disruption put pressure on our profitability in the quarter. Still, we offset some of that pressure through manufacturing optimization and tight expense management, resulting in a better than expected performance. Turning to slide five for a look at our Q1 retail performance. Our retail sales remain limited by product availability in the quarter. Still, we outpaced the industry in North America as our powersport retail sales were down 9% compared to an industry that was down low 20%. To put our performance in context, let's turn to slide six. As you can see on the slide, the retail decline does not indicate the lack of consumer demand. Instead, it reflects limited product availability. I would like to remind you in today's environment that the retail is directly proportionate to wholesale and our ability to manage the supply chain. Our retail in Q1 was in line with our wholesale, and we expect to this trend to continue in the coming quarters as dealer inventory will remain low. While our retail was down compared to last year, first quarter is up about 30% compared to fiscal year 2020 and 2021 levels. We are not seeing any sign of slowing demand. Website traffic and Google search for our product remain high. Our customer pre-order are not slowing down, being up 80% year-over-year. This year, pre-orders include the Switch, which is a new product, as well as side-by-side and ATV, for which we were not tracking pre-orders last year. Excluding these, pre-orders were stable. All in all, we continue to see very robust consumer demand for our product. Turning to slide seven for a quick update on the supply chain. As expected, we continue to operate in a volatile supply chain environment throughout Q1. Two points to keep in mind. First, we are dealing with tight component availability and higher costs related to logistics and commodities. Second, the situation in Asia is putting additional pressure on supply chains. We expect this pressure to continue throughout the year. To manage the situation, we continue to seek alternative sources of supply if required, optimize production based on component availability, and manufacture units that are missing a few components and retrofit them when we receive the parts. Despite this volatility, our plan for the year remains intact. Now let's turn to slide eight for year-round product. Revenue was up 1% to CAD 934 million in the first quarter, driven by strong shipments of side-by-side vehicles, which were offset by lower volume of three-wheel vehicles as we shift production of that product line to the second quarter. In terms of retail, Can-Am side-by-side had its strongest Q1 ever. Benefiting from the additional production capacity at [Polaris Street] and the fact that we prioritize the production for that product line. ATV also had a strong quarter. Although retail sales were down, our results compare with the record Q1 last year. Both product lines have outpaced their industry in the quarter and season to date. With our solid lineup and additional production capacity, we are well positioned to sustain that trend. As for three-wheel vehicles, retail was down more than the industry in the quarter due to limited product availability. Still, we continue to have strong traction with our different initiatives to grow that business, notably as we further expand our Women of On-Road community and as we see more solid momentum with the rider education program, for which course completions are up 15% year to date. All in all, we are well positioned to sustain our momentum with three-wheel vehicles as we will increase shipments in the coming months. Turning to seasonal products on Slide nine. Seasonal product revenue was CAD 409 million, down 12% from fiscal year 2022 Q1 as a result of lower volume of personal watercraft. Due to supply chain disruption, more shipments have been moved to the second quarter compared to last year. Now looking at the retail, starting with snowmobile. Snowmobile completed its North American 2022 season at the end of March with our Ski-Doo and Lynx lineup significantly outpacing the industry. We've gained six percentage point of market share for the season and held the number one market position in every industry segment in which we compete. We also had similar success in Scandinavia, where our market share is up by nine percentage points so far this season. This demonstrates our ability to manage our supply chain and gain share during peak retail season. As for next season, our spring booking campaign drove solid traction with consumers. We have already secured about 70% of our North American and 40% of our Scandinavian expected volume for next year with customer pre-order unit. This performance is similar to last year, which was an all-time high. With very low inventory level in the network at the end of the season and strong spring booking, we are very well positioned to have a solid 2023 snowmobile season. Turning to Sea-Doo. Our retail of personal watercraft and pontoon was impacted by limited product availability in the quarter as production was constrained by supply chain. Still, the season is off to a good start with continued strong consumer interest. To put things into perspective, while our North American personal watercraft retail was down in the quarter compared to last year, it was up about 20% compared to the first quarter of fiscal year 2021. In counter-seasonal market, demand remained very strong. Late in the season, with retail up 19% in Brazil and Asia Pacific, driving more market share gain in both regions. All in all, with strong demand around the world and a very high level of customer pre-season commitments, we are well positioned to deliver another solid year for our Sea-Doo business as we ramp up shipments throughout the rest of the year. Continuing on slide 10 with a look at powersports parts, accessories, and apparel, and OEM engines. Revenue was up 14% to CAD 344 million for the quarter. We continue to benefit from the growing vehicle fleet, which lead to a higher volume of replacement parts. Our accessories lineup continue to be well-received, driven by the LinQ ecosystem offerings. Moving to Marine on slide 11. Revenue was stable at CAD 122 million as a more favorable product mix was offset by lower shipment of boats and PWCs. Looking at retail sales, it is still very early in the season, but Manitou is seeing a decline in retail sales due to limited product availability. Also, at Alumacraft, we decided to stop producing fully welded boats to focus on [GTI boat models]. In the short term, it reduced shipment volume and retail sales. In Australia, the boating season has just ended and Telwater retail was down mid-single-digit% as we had limited inventory in the network. Looking ahead, we are shifting our focus to the next generation of boat with the Ghost engine, which we'll be introducing at our dealer event in August. To prepare for this launch, we are optimizing our operation, notably by expanding Manitou manufacturing facility in Lansing, Michigan, nearly doubling its production capacity with a ramp-up plan for the end of the year. We are reorganizing our St. Peters site for Alumacraft to maximize production capacity for higher-end boats, including those with the Ghost engine. This upgrade should be completed in early fiscal year 2024. We are very excited about this next step for our marine strategy. We believe it will bring significant customer benefit. With that, I turn the call over to Sébastien. Thank you, José, and good morning, everyone. As anticipated, the ongoing supply chain challenges weighed on our ability to increase our deliveries during the first quarter, which impacted our wholesale and retail performance. Tight management of operations, a better product mix, and lower expenses allowed us to deliver better than anticipated profitability. Our revenues for the quarter were stable versus last year, ending at CAD 1.8 billion. Our gross profit margin was stronger than anticipated, ending at 25.1%, but was down in comparison to last year's level due to a less favorable mix of products sold and the impact of supply chain challenges, which caused additional costs and a less efficient use of our assets. We generated CAD 272 million of normalized EBITDA, and our normalized net income came in at CAD 137 million, resulting in a normalized earnings per share of CAD 1.66, down 34% from last year's Q1. The decline in net income was primarily due to a lower volume, a less favorable mix of products sold, and higher operating expenses. As for the production cost inflation, while important, it had little impact on our bottom line as it was more than offset by the pricing adjustments we made over the last several quarters. From a cash flow perspective, we had a negative free cash flow in the quarter as we continued investing in the business, notably with CAD 109 million of CapEx to support our growth projects and CAD 459 million in working capital as we continue operating our retrofit strategy, which is allowing us to better serve our customers and dealers, but requires higher investment in inventory. Moving to our network inventory status on slide 14. Year-over-year, our network inventory is up 20%, driven by the strong shipments of missing components to dealers late in the quarter, notably for off-road vehicles. Still, inventory levels remain very low from a historical perspective, being down over 60% in comparison to the first quarters of fiscal years 2020 and 2021. Given the continued strong demand for our products and the ongoing supply chain headwinds, our view has not changed, and we do not expect any meaningful inventory replenishment to take place this year. Now looking at slide 15 for an update of the guidance for the year. All in all, our production plan and expected profitability for the year remains essentially in line with our initial guidance. We are therefore reaffirming our target of delivering 24%-29% growth in revenues and 12%-15% growth in normalized EBITDA. Taking into account the lower share count resulting from the completion of our recent SIB, our normalized EPS guidance is now 11%-11.35%, representing a growth of 11%-14% over last year. While our view for the full fiscal year remains mostly intact, we now expect to continue having to deal with a challenging supply chain environment throughout the year. When compared to our initial guidance, the added costs relating to those supply chain disruptions are expected to be offset by lower promotional spending. In terms of year-over-year, we expect to continue incurring higher costs during the second quarter, resulting in a slightly lower than anticipated normalized EBITDA for the quarter, which should be flat to down low single digits compared to last year. However, our plan is to continue producing substantially completed units that will be retrofitted as components come in. Based on the visibility we have with our suppliers today, we expect to receive the necessary components and be able to catch up on retrofits and product deliveries in the second half of the year, especially with strong shipments in the first quarter. On that, I will turn the call over back to José. Thank you, Sébastien. To conclude, I am pleased with our first quarter performance as we delivered results slightly ahead of expectation, despite the volatile supply chain environment. Consumer interest for our products remains healthy, with demand continuing to outpace supply, resulting in solid retail and high level of pre-orders. In this context, our product diversification, our modular design, and manufacturing agility are key competitive advantage that allow us to continue outpacing the industry. The first quarter was also marked by continued progress on key strategic initiatives. We had the very successful launch of our Can-Am electric two-wheel vehicle teaser, which has generated significant interest from consumers, dealers, and the media. Our expansion projects have been delivered on plan, and we are ready to run at full capacity. We look forward to introducing our new boats with the Project Ghost engine propulsion system later this summer and taking a big leap forward in our marine strategy. Looking at the rest of the year, we expect supply chain pressure throughout the year. Still, we remain confident in our ability to manage through these challenges and deliver another record year. Looking beyond, we are well positioned to deliver sustainable growth for our business. We look forward to sharing an update of the M25 strategy and financial target at our Analyst and Investor Day on June 14 and 15 in Florida. Additionally, we recently reiterated our commitment to corporate social responsibility with the launch of our CSR 25 program, which includes tangible targets centered around reducing the carbon footprint relating to products and operations, ensuring a positive and sustainable impact in our communities and the daily lives of our employees, and our commitment to high ethical standards in conducting operations in a sustainable manner. I invite you to review our sustainability report, which was released this morning for further detail. Also, we will be hosting our dealers in Salt Lake City, Utah, on August seven and nine. This will be our first in-person dealer event since February 2020. It will be a big event for powersports, but also a first with marine integrated. I look forward to seeing our dealers and getting their feedback in person. Lastly, I wish to thank all our employees for their hard work and dedication in this very busy time, our supplier for doing everything they possibly can to meet our orders, and our dealers for their patience and support. On that note, I turn the call over to the operator for questions. Thank you. At this time, if you'd like to ask a question, press star, then one on your telephone keypad. To withdraw your question, press star one again. Thank you. Your first question comes from Craig Kennison from Baird. Please go ahead. Hey, good morning, and thank you for taking my question. I do take your point that retail trends seem to be the result of supply shortages and that trends would be much better if you could get more product out there. But it does seem like there's something going on in the larger economy and that the Fed needs to basically curtail demand to get control of inflation. I'm just curious how you reconcile some of the signals you're getting with your, you know, Google Search trends and your web traffic and all of that with what we're seeing in the broader economy, which is clearly a slowdown. Good morning, Craig. To be honest, we had our review with all our divisions before obviously our quarterly results, and we challenged the team and we don't see right now slowing down in demand. Their customers. Maybe it's because our customer, our household income higher than the average, they don't feel this impact. Interest rates are getting higher, but still very competitive in the big scheme. The fuel price has some impact. Nobody likes the price of the gas at the pump, but the dollar impact on our customer is not so big on the yearly basis. When we look at all this, we don't see much reduction in demand. Cancellation of pre-orders are similar to last year. So far so good. The way we see it is, our plan is to continue to run our factory at full production, trying to do right the first time. If we cannot, we retrofit the unit. We're trying to meet customer demand as much as we can. So far, the team are doing a great job to manage through the supply chain volatility. Great. Thank you. Your next question comes from Robin Farley from UBS. Please go ahead. We don't hear you, Robin. Oh, sorry about that. Yeah, thanks. Two questions. One is your language around supply chain disruption. You know, a quarter ago, talked about expecting the outlook to improve in Q2, and now, here during Q2, it sounds like it's gonna continue throughout the year. Is that? I don't know if you're just being conservative in your outlook or if you're seeing things continuing to worsen, because that's also a much sort of longer expectation, right? It feels like over the last couple quarters, it's always been the idea that it was within two quarters that there would be improvement, and now it sounds much worse than that. Just wondering how much worse what you're seeing is in supply chain. Also just a quick clarification on your EPS guidance. The raise looks, you know, primarily just from the share repurchase. Does that include just the share repurchase that you have completed already and not share repurchase that you might do that's authorized for later this year? I just wanted to clarify that. Thank you. I will take the question on supply chain, and Sébastien will talk about EPS. If I give you the big picture on the supply chain, on the commodity side, there is no availability issue, and the price starts to stabilizing, then this is positive. Microchip supply chain remain difficult. Sometimes you can find substitution, but sometime you cannot, and this is what happened with Watercraft in Q1. Now we have a solution. Logistics is difficult but manageable. When you have a problem with container vessel, you can always air freight shipment around the world to production facility. What was a bit surprising in Q1 was the lockdown in China with the COVID zero tolerance, this created more disruption for us, but also for some of our supplier. In March, when we talked to you, we were planning H1 to be difficult and improving in H2. Now we see that Q2 will be difficult, Q3 will be difficult, maybe some improvement in Q4, but we're planning for a difficult year. That being said, overall, we believe that it will remain difficult, but we believe also that we have a good way to manage the situation. With the modular design of our product line, the product seasonality, then we can favor a product versus the other. I believe we are well-positioned to manage the supply chain challenge. Because of our footprint in Mexico, labor availability is good. We believe overall we are in a good situation to manage the overall situation, and that's why we outpace the industry in Q1. On your EPS guidance adjustment, yes, it only reflects what we've done so far this year, and it does not reflect what we could potentially do for the remaining part of the year. Okay, great. Thank you. Your next question comes from Martin Landry from Stifel GMP. Please go ahead. Hi, good morning. You know, you do talk a lot about supply chain that constrain your capacity. I was wondering if you can give us a little bit of a picture of your capacity utilization during the quarter, and also what you are, you know, assuming in your guidance in terms of capacity utilization for the remainder of the year. Yeah, on the capacity, snowmobile was down, watercraft was running production at full capacity. Supply was different because of shortage. The ATV side-by-side were about 70%. Our plan for the remaining of the whole year for all product line is about 85% of capacity. Okay. You know, what would you consider full capacity? Would it be like 90% or something like that, or? Full capacity is 100%. Let's say when you operate above 90%-95%, we consider that full capacity. My other question is, you know, we're seeing interest rates rising, and they are expected to continue to rise. I was wondering if you can remind us what's the proportion of your units which are sold, using credit rather than cash? Yeah. Martin. About 60%-70% of the units that we sell are financed either through the partners that we have agreements with or local partners with the dealer. Obviously it is a big-ticket item, so it's normal that financing is used as a tool to close a transaction. But one thing that is encouraging is when we look at the overall FICO scores, the scores are higher than what they were two years ago pre-COVID. We were hovering in the range of 720 at pre-COVID, and now last year we finished at about 745. That trend is continuing from a credit rating point of view. Obviously people that are buying our products seem to be better off financially as well. Okay. Do you expect the rising rates to have an impact on your volume on a go-forward basis? Well, the rates are still relatively low, when you look at the overall cost of financing. Yes, it's a big-ticket item, but we're talking about items of $15-$20 thousand. It does not have a significant impact on the monthly payment that the consumers make, when they decide to finance the product. Okay. Okay, thank you, and congrats on the results. Thank you, Martin. Your next question comes from George Doumet from Scotiabank. Please go ahead. Yeah. Good morning, guys. I think, José, on slide six, you spoke about pre-orders being flat on a like-for-like basis. Just wondering, did you expect that to maybe be up a little bit? Just your thoughts there, and maybe talk a little bit about what we're seeing under the hood, so maybe demand patterns and what categories, what geographies are maybe stronger than what you had expected. No, I mean, first the pre-orders, we're very happy because snowmobile last season and this season is at an all-time high. Like I said in my script, 70% of our snowmobile production is sold to North America and 40% in Scandinavia. In Scandinavia, just to give you a sense, historically it was more about 10%-16%. Now 40%, we're very happy. The point was on snowmobile all-time high, on the watercraft all-time high. Obviously, the 80% we show here was because last year we didn't report Switch. Switch is basically sold out in North America. For ATV side-by-side, again, different than our competitor. We allow our dealers to only pre-sell what we allocate to them. Basically we give an allocation for the next three months. They are able to pre-sell only those three months to consumers. They are not allowed to pre-sell something that they will receive in six months, and we do that not to disappoint customer if something happens. Overall, we're very, very happy with the pre-sales level. Like we see on snowmobile, when it's a call to action, like on snowmobile, the consumer knew with the new lineup we introduced in February that if they would order, we would produce their unit. If there is a customer or change in the trend, this customer are ready to put their money down to secure the delivery of their unit. Okay, that's helpful. Thanks. Just maybe one last one for September. I think last call you know we spoke to better manage retail sales programs, like some learnings we did through COVID. Can you maybe talk a little bit to what those are? I think you also called out 100 basis points being the margin headwind for sales program. If you look to next year, is that expected to be less or maybe a similar kind of drive? Thanks. Yeah. Good morning. When we talked back in March, we talked about the expected margin decline this year about 400 basis points. Obviously with the guidance unchanged, that remains in terms of expectation. My expectation is that we would obviously be impacted favorably by higher volume by about 100 basis points, inefficiencies by 200, and a saving on sales program by 100. Well, not a saving, but a deterioration of sales programs by 100. Based on what we see today with the supply chain and the low inventory in the network, our expectation is that potential headwind from programs this year will not happen, but it's gonna be offset by higher inflation and inefficiency. Call it 300 basis points inefficiencies this year. The learnings from COVID, obviously, there's better tools that are available to manage your retail program, regionally. Using better analytics, targeted programs as well from a SKU level, the teams are able to be more efficient in how they attribute incentive on a regional and a product line basis, and that's driving efficiencies. Okay. Thanks for your answers. Your next question comes from Xian Siew from BNP Paribas. Please go ahead. Hi, guys. Thanks for the question. You talked about increasing capacity out of the Juarez and how that's kind of helping. I'm curious, how are you able to get so many more components to, you know, to use that incremental facility given where supply chain is? I guess maybe some help there. Yeah, a few things. You know, before Juárez 3, we're producing everything on one site and the complexity of the factory, the models we're producing there were high. We had a lot of different platforms, the Maverick Trail, the Maverick Sport, the Maverick X3, and the Defender. In the Defender, the utility, you have the base and you have the one with cab and air conditioning. This is super complex. The fact that having two factories now, one is focusing on the utility, the other one is focusing on the sport platform, and this has improved efficiency. We believe even if we're not running those two facilities at 100%, we believe this have improved efficiency, and in terms of right the first time and in terms of quality. Maybe just some color on the supply chain. It's when we build incomplete units, it's one, two or three components that are missing on these units. The supply chain is able to, when we work with them and say, "Well, down the road we wanna increase by 10%, 15%, 20%," you'll get 90%, 99% of the components and we know which components are more troublesome. Proactively we're working with our suppliers to make sure that they source from their tier two and tier three suppliers the necessary components so that, when we do ramp up production, we're able to supply these goods as well. Obviously we have that flexibility with substantially completed units. If we don't get it week whatever, 43 of the year, we'll get them in week 46 or 47 and retrofit these units. Also, the two factories gave us a chance to retrofit more units in both factories instead of one. Okay. That's really helpful. Maybe on that point on the retrofit, maybe an update on where we are. It sounds like you're making progress from the ones that are outstanding and you got a nice boost at the end of the quarter. You know, maybe are there less out there? How should we think about that flowing through in terms of timing? Yeah. As I said in my prepared remarks, we did ship quite a few components in the last few weeks of the quarters, which allowed us to get the components to the dealers and they'll be able to work on these units early Q2 and obviously it's gonna help retail in the second quarter. If you exclude these components that we shipped in the last few weeks, actually, our inventory would be down 25% instead of up 20%. We've done very good progress. Again, as we said, we expect that we will be running with a high level of retrofit inventory throughout the year until the situation gets back to a more normal level. Okay. Got it. Very helpful. Thank you. Your next question comes from Joe Altobello from Raymond James. Please go ahead. Thanks. Hey, guys. Good morning. I guess the first question, big picture, you know, obviously, the industry was down low 20s%, as you mentioned this quarter. What are you guys baking in in terms of the industry for fiscal 2023? Good morning, Joe. It's a tough one to call because it's very dependent on how the other OEMs are performing as well. If I go back to Q4 results, the industry was down low teens%. We were down -7%. This year, this quarter, as you mentioned, low 20s%, we were down -9%. We seem to have found a way to navigate through the supply chain uncertainty. It's really a question of how other OEMs are performing and how we're performing as well, which will drive overall industry retail. We're calling for, obviously, strong wholesale in our guidance this year, and obviously, this should translate in good retail for us as well. Okay. Understood. Just kinda on that last point in terms of guidance, you know, obviously coming into this quarter, the thinking was that things started to get better. In Q2, it sounds like that's more like a Q4 event, yet your revenue guide, your EBITDA guide, has not changed. Does that reduce your visibility, at least your confidence in the outlook this year, given that turn has been pushed out effectively two quarters? From the overall consumer demand, obviously, we have a strong order book from the dealers, strong low level of inventory. Our ability, if we produce these units to get them sold, is very high in that confidence. Obviously, we are dependent on many suppliers, and we are working proactively with them to make sure we get the components. Could there be an event in two, three, four months that's beyond our control, which influences our output? Absolutely. From what we see today, we are obviously confident in our ability to deliver the guidance for the full year. Okay. Thanks, guys. Your next question comes from Benoit Poirier from Desjardins. Please go ahead. Yes. Good morning, everyone. First question, I'm just wondering what led you to stronger than expected normalized EBITDA versus earlier comments made back in Q4 about the EBITDA could be down 40%-50%. Just wondering why the EPS beat in Q1 does not flow into the guidance range for the full year. Is it mostly timing issue? Well, Benoit, well, obviously, we're managing operations tightly, and we finished the quarter better from an OpEx point of view, so less expenses coming from tight management. That's a timing element. The other element, the mix was also more favorable from a side-by-side point of view, and that's also a timing element. That's the reason why we did not feel it was the right time to adjust the guidance. Okay, perfect. Given your comments and no big inventory replenishment for the year, I was just wondering if you could talk about the potential working capital release we might expect for the full year. In light of your comments about the inventory, which should we more expect working capital release to happen next year? Any talk about the movement in working capital expected for the coming quarter? As you saw in the first quarter, we did invest quite a bit in working capital. We expect to run at high levels of working capital investments, as we said in our prepared remarks and some of the questions we answered. I'm not expecting a free cash flow release coming from a reduction of working cap this year. Obviously, hopefully, it would happen next year as the supply chain normalizes. Okay. Okay, perfect. Any thoughts about how the supply chain issues impact your electrification strategy and ability to deliver the Project Ghost? No impact, Benoit. Project Ghost is going in production this fall. We have no issue there. Electrification, we're still obviously planning in two years, and I hope the supply chain will get better by that time. Okay. Thank you very much, Sébastien. Thank you. Your next question comes from Joseph Spak from RBC Capital Markets. Please go ahead. Thank you. Maybe just in the quarter of the 1.5% organic growth, I know you said a lot of that was price driven. Can you give us the breakdown between price and volume? You know, how much of the inflationary cost you incurred in the quarter did that price offset? When I look at the overall margin bridge, obviously margin is down 409 basis points in the quarter. Mix was unfavorable by 240 basis points. Pricing was 500 basis points. That compensated the inflationary and turbulence costs we had from the supply chain for a -500. We were not running our plants at full capacity, so obviously less efficient for about - 250 basis points. Okay. You know, you talked about some, you know, the supply chain issues lasting a little bit longer than you expected. The pricing you've put in place to date compensates for that or are there potentially sort of additional actions needed? We should compensate for it. If you look at what we've done from a pricing point of view, last quarter, I talked about MSRP increases by 4% versus a year ago. We have surcharge as well, which is another about 2%. That's a gross 6%, call it pricing increase. That should offset the inflationary costs that we're being hit with and the turbulence cost as well for the year. Okay. Just one more on rates, but maybe from a different perspective, because I believe most of your financing costs are from the term facility, which is variable. I know you have hedges in place, but you did raise your net financing cost. Is that just a mark to market on current rates, or are you also embedding a continued rise in rates? No. What I compared to versus the guidance we issued back in March, obviously we did not factor in for the SIB, so that's a cash use and also a higher level of working capital use. We will be using the revolver more than what we were planning back in March. The adjustment that we did on financing cost is a reflection of that. Oh, it's just a greater use of the revolver, not an increase in the cost of that revolver? That's correct. Maybe a bit of cost there, but the majority of the variation comes from the greater usage. Okay. Thank you. Your next question comes from Cameron Doerksen from National Bank Financial. Please go ahead. Yeah, thanks. Good morning. Wonder if you could talk a little bit more about the seasonal products, I guess, how the revenue is gonna play out, I guess, for the remainder of the year. The guide's up 22%-27%, but you had, you know, obviously negative year-over-year in Q1. It sort of implies a really huge sort of second half of the year for seasonal products. Maybe you can just talk a bit about, you know, how you're gonna get to that number. Yeah. Good morning. Obviously, when you look at the remaining part of the year, obviously the revenue growth probably in the range of between 32% and 38% overall for BRP. Year round, much higher, but a strong growth for seasonal. It will be more towards Q3 and Q4. Q4 will be strong with some of the deliveries. Q3 is going to be personal watercraft and also personal watercraft in Q4. Expect it to be more skewed towards Q3 and Q4. Okay. No, that's helpful. Just, you know, a question maybe on the, I guess the inventory levels at the dealer. Do you have an idea of where you stand relative to some of your big competitors? I mean, are you in a better position on the dealer inventory, worse position? Just trying to get a sense of, you know, kind of what the retail performance might be relatively, and, you know, as it's driven by, to some extent, the what's available at the dealer level. Do you have an idea of kind of where you stand relative to your peers? We are about 70% versus pre-COVID, but we believe we are same level than the competition. Okay. That's helpful. Thanks very much. Thank you. Your next question comes from Fred Wightman from Wolfe Research. Please go ahead. Hey, guys. Good morning. I just wanted to follow up on the comments about the component shipments late in the quarter. I mean, that's pretty similar to what you saw last quarter as well. The language looks pretty much unchanged. Just wondering if you are actually seeing an uptick in retail, and if we should expect sort of similar outsized market share gains this quarter as well. Well, the expectation on deliveries this quarter is from a wholesale perspective better than the Q1. Obviously starting out the quarter with some inventory that will be available. When we look at the retail numbers for the quarter at the start of the quarter, they're very good. Obviously a lot of consumers are waiting for their personal watercraft, and that's what we're delivering in May, and they're happy to obviously receive them. Perfect. Then you guys have included, you know, data points and slides on new entrants for a while now, but it didn't look like there was anything in this quarter's slides. Is there any way you could just give a comment about new entrants and what you're sort of seeing versus plan or what you've seen in recent history? Yeah, just to give you a sense, new entrant, if we look at it by product line, it's same than the previous two years. Just to give you a summary, historically about 20% new entrant. Last two years, 30%. In Q1, we're low 20%. If you look at it's a product mix. If you look at it by product line, a snowmobile is historically low year-end trend. When watercraft and three-wheel, it's close to 50%, and it's just a question of product mix. When we look at it by product line, is the same level as what happened in the last two years. Perfect. Thanks, guys. Thank you. Your next question comes from Brian Morrison from TD Securities. Please go ahead. Yes, good morning. Just wanna ask a follow-up question, maybe just staying on slide seven and go back to the supply chain challenges. I understand the heightened supply chain challenges, but within other components, when you're seeking alternative sources, what are those key components? And can you provide some insight into your visibility into securing timely supply in order to meet your targets, which are for a big second half? Yeah. Basically, first, we're working hand in hand with suppliers. Because we have good visibility on our direct supplier, but sometimes on the tier two, we don't have visibility, then we said to our supplier, "If you have a problem or if one of your suppliers has a problem, let us know. We'll try to help." We have three consulting companies in the world working for us to find alternatives. I mean, if you have a problem, a shortage with commodity, now, it's quite easy to find a replacement. Even in microchip, sometimes, when it's a generic microchip, you can find alternatives. When it's a more specific microchip, it's more difficult. Basically, it's working with our suppliers, tier one and tier two to have a good communication and try to work together to find alternatives. The advantage that we have versus, I believe, some of our competition. I give an example. In Q1, we had a shortage in a specific component for watercraft. When we assembled those watercraft, we didn't put the cluster. The cluster was available for side-by-side and ATVs. That's helped the overall. I think this is an advantage, the fact that we have modular design and the fact that we have seasonality. This is an advantage that we have versus some of our competition. Sorry, is there more work to be done, or you have good visibility into securing timely supply for the second half? We have good visibility. The thing is sometimes it change, but we have good visibility. Okay. Last question, maybe for Seb. You mentioned that cancellations were flat. Just in terms of customer pre-orders, what are typical for deposits and pendings for deposits? I've seen from your peers that cancellations remain very low. I think, as the way it works, the customer gave a $500 deposit, and this is refundable till the product is planned in the load building, the shipment. Historically, we always had, let's say, a mid-single digit overall. Right now, if you look at the cancellation on the global retail, it's low single digit. If you took it on certificate, it's mid-single digit, in line with what we had in the last two years. Thank you very much. Your next question comes from Chris Hodson from Edgewater Research. Please go ahead. Yeah, guys. Thanks. Question on dealer inventory. I was curious if you would differentiate at all by product segment there. You know, it seems like, at least on a year-over-year basis, side-by-side product flow got a little better, you know, three-wheel and personal watercraft a little different. I know a year-over-year basis isn't the perfect way to evaluate it right now. Curious with a bigger picture view, if you differentiate at all between any categories getting a little bit better, or, you know, still notably more challenged. Thanks. Yes, I could comment overall, from an inventory point of view, it's still extremely low. Yes, slightly better for side-by-side and ATV, but three-wheel down, and we would like to have more three wheels in the network today. Personal watercraft, it's flat year-over-year, but it's a unit that turns quite quickly, when it gets to the dealership, and so we ship less in the first quarter. These units would have been retailed anyhow. The expectation is that's gonna improve, this quarter as we ship more personal watercraft and three-wheel. Great. Thanks. Your next question comes from Brandon Rollé from D.A. Davidson. Please go ahead. Good morning, congrats on the strong quarter. I had a couple questions around your cost of goods sold. Could you break out what percentage of your shipping costs diesel represents and maybe what percentage of total cost of goods sold your ship cost represent? Oh, it's a good one this morning, and I don't have that granularity. When I look at the overall increase that we've had in the quarter, just coming from we'll call it supply chain disruption, not necessarily related to fuel, because fuel-related costs we're able to pass as a surcharge. The overall freight is up approximately 40% if I could compare this quarter to two years ago. It's obviously quite a sizable increase. Overall freight total, you're probably looking at, on a quarterly basis, at freight in and freight out as well, probably in the range of CAD 175 million - CAD 200 million a quarter. That includes everything, the goods coming in from our suppliers and when we ship to our consumers as well. Okay, great. Just finally, on the marine segment, could you talk about some of the demand trends you're seeing there in the markets you participate in? Thank you. Same as powersports. Demand is very, very high. To give you a sense, in Australia, we just ended the season or we're ending the season right now, and the inventory level is very, very low, and it's well-positioned for next year in Australia. In North America, obviously, it's all about supply. Many boat builders like us are struggling with their suppliers. Typically, in the boat business, suppliers are smaller, and we had some difficulty, but demand remained very strong. Your next question comes from Gerrick Johnson from BMO Capital Markets. Please go ahead. Good morning. Sébastien, I was curious about your comments on the negative mix shift affecting gross margin as side-by-side and PA&A seemed to outperform. What was the mix shift impact? The major one was personal watercraft. It's obviously a very good product line for us, and given the lower level of deliveries that we've had in the second quarter, that obviously had an impact on the mix. From side-by-side, it was more the obviously the product line on its standalone basis is very good, but the margin varies by the models we ship. The model mix was not as rich this quarter for side-by-side. Okay. Which are the less rich models in side-by-side? That is something we'll keep for ourselves. Competitive reason. Okay. We'll keep for us. Obviously the lower end or core pricing models usually have a lower margin than the higher end models. Yeah. Okay. On Switch, any shipments in the quarter, what's the cadence for Switch going forward? Yeah. We had the same in watercraft. There was a component that affects both, and we are accelerating right now the shipment of Switch. It will be. Okay. Strong quarter for Switch in Q2. Okay, great. Thank you. Thank you. There are no further question at this time. I will turn the call back over to Mr. Deschênes to close the meeting. Thank you, Judith. Thanks, everyone, for joining us this morning and for your interest in BRP. As José mentioned, we will be hosting our Investor Day on June 14 and 15, Orlando, Florida, where we will be providing an update on our M25 strategy. Note that the presentation will be available online. You will be able to find more information on this next week. Also note that our Q2 earnings call is planned for September 14. Thanks again, everyone, and have a good day. This concludes today's conference call. You may now disconnect.