Montreal, Canada -- 05/28/2009
Dorel Industries Inc. (TSX: DII.B, DII.A) President and CEO,
Martin Schwartz, told shareholders attending Wednesday's
annual meeting that there are a number of important factors
which will see the Company perform well, in light of the current
global recession. Dorel posted its best year ever in 2008 with
revenues of US$2.2 billion and net income of US$113 million.
First quarter 2009 revenues were US$525 million and net income
was US$28 million, lower than last year's first quarter, but "given
the context of the economic situation, we are more than satisfied
with the start to the year," Mr. Schwartz told his audience.
Dorel's products have traditionally been resilient in recessionary times.
Despite current and past difficult economic times, consumers have
continued to purchase juvenile items and Dorel's diverse product line
matches their needs well. The bicycle/fitness industry as a whole has
been benefitting from recent attitudes towards the environment and
personal health. In addition, Dorel has always operated in the value
priced home furnishings market. As shoppers look toward less
expensive furniture purchases, they are increasingly turning to
the Company's ready-to-assemble furniture products.
"Our price points fit the times. Retailers have shifted gears and are
offering consumers products in what we term "opening to mid price
points", as shoppers of every description are gravitating to the big
box outlets. Dorel excels in these categories with the majority of
our sales in these price points. We are also picking up new listings
from competitors. In times of uncertainty, retailers seek strong,
stable suppliers with a history of delivering, and who will be around
for the long term. Dorel fits that bill perfectly. Our financial strength
also provides a high level of comfort," said Mr. Schwartz.
Shareholders were provided with an overview of all three Dorel
segments. Results at Dorel Juvenile Group in the US have been
strong in 2009. Their earnings exceeded plan in the first quarter
and order levels in the second quarter have been strong.
The division will be making a major announcement early in the
near future which will unveil a completely revolutionary advancement
in one of Dorel's most important juvenile categories.
Juvenile in Europe softer, but strong base remains
Currently, the situation in Europe is different. The economy
abroad slowed later than in North America and, as such,
recovery will lag the US.
"We are, nonetheless, optimistic. Ever since we acquired the
juvenile business in Europe in 2003, it has done very well for us.
Over the years we have built upon a very solid base, expanding
operations into many European countries and building market
share with our excellent products and strong management teams
there."
A focus on bicycle innovation
Much has been accomplished since Dorel acquired Cannondale
last year. A new, multi-faceted Worldwide Centers of Excellence
program has been developed, in the continuation of Dorel's strategy
to become the global innovation leader in the recreation and leisure
markets.
Five Centers of Excellence are being established around the world,
with each focused on market leadership in a specific market segment
or expertise. The Recreational/Leisure segment plans on unveiling new
Cannondale models in the coming months with truly unique features.
"We've been working with an industry-leading designer with the goal
of making Cannondale the desired brand in bikes," noted Mr. Schwartz.
Home Furnishings continues to make headway
Excellent progress has been made by the management team
dedicated to Home Furnishings. This year's first quarter was the
segment's best since the fourth quarter of 2007, with Ameriwood's
domestically-produced RTA furniture leading the way.
The demand for Ameriwood's lines at mass merchants and DIY centers
is a testament to their efforts to concentrate on "back to basics" items,
rebuilding customer confidence and improving efficiencies.
The expertise that turned around Ameriwood is now being centered
on Cosco Home & Office. Operations and product offerings are more
focused and they have won several new important, large listings.
While the division still expects to lose money in 2009 due to the
cost of resolving previous years' issues, plans are well on track
for a return to profitability next year.
Outlook
"The positive results of our efforts are apparent in the first
quarter 2009 results. We are optimistic in Juvenile in North
America and have a number of innovative new, exciting products
in the pipeline.
The situation in bikes remains unpredictable as consumer buying
patterns have been inconsistent. In Home Furnishings, indications
point to a good year, led by Ameriwood which is now a solid money
maker. Even after considering all of the issues in 2009, our full year
outlook remains unchanged. We are committed to reducing expenses,
anticipate cash flow of at least US$150 million and expect input costs
will remain stable through the year. As previously stated, we do not
anticipate 2009 will be as profitable as 2008 but nor do we expect it to
be anywhere nearly as negative as current market conditions suggest,"
concluded Mr. Schwartz.
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 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$2.2 billion company with 4700 employees, facilities
in eighteen countries, and sales worldwide.
