Montreal, Canada -- 08/05/2010
Dorel Industries Inc. (TSX: DII.B DII.A) today announced strong
results for the second quarter ended June 30, 2010. Total revenue
for the period was up 10.3% to US$607.7 million from US$551.1
million for the same quarter a year ago. Net income was US$35.1
million or US$1.05 per diluted share compared with US$24.8 million
or US$0.74 per diluted share for the corresponding quarter of 2009.
Year-to-date revenue was US$1.2 billion, up 11.9% from US$1.08
billion last year. Net income rose to US$72.5 million or US$2.18 per
diluted share compared to US$52.8 million or US$1.58 per diluted
share for the first half of 2009. Organic revenue growth in both the
quarter and year-to-date was approximately 9.5%.
2009 results included significant "mark-to-market" losses on foreign
exchange hedging instruments in the pre-tax amount of US$12.6 million
in the quarter and US$12.1 million for the first half of the year.
After tax, these losses represented the equivalent of US$0.27 per
diluted share for the quarter and US$0.25 per diluted share for the
first six months. While earnings in 2010 do not include material mark
-to-market amounts, currency rate variations versus last year have
significantly reduced earnings in all three segments. For the quarter
this negative impact reduced pre-tax earnings by approximately US
$11 million.
"We are proud of this quarter's results. Despite negative factors such
as foreign exchange, high input costs and increasing ocean freight rates,
our divisions performed well and succeeded in building business slowly
but steadily," said Dorel, President and Chief Executive Officer Martin
Schwartz. "We maintained our pace of innovation and accelerated
marketing support. Solid top-line results, in conjunction with our cost
and productivity efforts, enabled us to deliver meaningful profit
improvement year over year.
"We are seeing the benefits of the on-going investments in our
bicycle business through improved product development, solidifying
our structure and promoting our brands. Our brands are gaining wider
acceptance and our bicycles are more in demand. As we continue to
capitalize on our strong business model in Home Furnishings, that
segment was again a significant contributor to profits as consumers
recognize the value of our products, particularly during these uncertain
times."
Second quarter Recreational/Leisure revenue increased by US$15.8
million, or 7.9%, to US$214.9 million. Year-to-date revenues are up
10.0% or US$36.0 million to US$396.6 million. The organic revenue
increase was approximately 5% for both the quarter and year-to-date
when the impact of new business acquisitions during 2009 and foreign
exchange rate variations are excluded. Though less significant than
Juvenile, earnings in 2010 are being negatively affected by the value
of the Euro.
Cycling Sports Group (CSG) sales were up considerably over last year
with exceptional demand for the division's elite racing bicycles such as
the Cannondale SuperSix. As in the first quarter, demand for new model
year products remains strong across all brands resulting in expansion of
the dealer base and increases in multi-brand dealers.
Schwinn experienced a strong increase in POS year-over-year, due
to the multi-million dollar advertising campaign launched in mid April,
excellent retailer support and good early spring weather.
While increasing selling, general and administration costs, the ad
campaign has been effective in enhancing the Schwinn brand. Sales
to the segment's mass merchant customers were hindered by a lack
of supply due to the global shortage of ocean containers, a situation
which is improving.
For Dorels full earnings second quarter See:
* http://www.newswire.ca/en/releases/arch ... c8541.html
Profile
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile
products and bicycle company. Established in 1962, Dorel creates
style and excitement in equal measure to safety, quality and value.
The Company's lifestyle leadership position is pronounced in both its
Juvenile and Bicycle categories with an array of trend-setting products.
Dorel's powerfully branded products include Safety 1st, Quinny,
Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale,
Schwinn, GT, Mongoose, IronHorse and SUGOI in Recreational/Leisure.
Dorel's Home Furnishings segment markets a wide assortment
of furniture products, both domestically produced and imported.
Dorel is a US$2 billion company with 4500 employees, facilities
in nineteen countries, and sales worldwide.
