Dorel announces third quarter results

EXCHANGES
TSX: DII.B, DII.A

  • Strong cash flow quarter
  • Recreational/Leisure continues to perform well, Juvenile down
  • Dorel to acquire majority interest in a South American juvenile products business (see separate release issued this morning)

MONTREAL, Nov. 3, 2011 /PRNewswire/ - Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the third quarter ended September 30, 2011.  Revenue for the period increased by US$6.3 million, or 1.1%, to US$575.8 million from US$569.5 million a year ago. Net income was US$23.1 million or US$0.71 per diluted share compared to US$30.6 million or US$0.92 per diluted share in 2010.

Total nine month revenue was up US$29.2 million, or 1.6%, to US$1.80 billion from US$1.77 billion in prior year. Net income was US$77.2 million or US$2.36 per diluted share compared to US$101.8 million or US$3.06 per diluted share for the year-to-date period in 2010. Upon transition to IFRS, previously issued earnings per diluted share of US$0.91 and US$3.09 for the third quarter and nine months respectively have been restated to US$0.92 and US$3.06.

"We are disappointed with the results of our Juvenile segment, particularly in the U.S. Performance was at an unacceptable level due to the perfect storm of rapidly increasing input costs and decreased consumer demand for juvenile products.  Consumers maintained a tight rein on spending and this meant we were unable to pass the majority of higher costs on to our customers.  In Recreational/Leisure we maintained our momentum as the Cannondale brand becomes increasingly synonymous with product innovation.  Sales to mass merchants were also up year-over-year. Home Furnishings sales were down almost 7% as POS levels were affected by the weak economy.  Nonetheless the segment continues to be a good generator of cash.  For the Company as a whole, year-to-date cash flow generation is up over US$30 million from last year due to improved working capital management, principally inventory reductions," commented Dorel President and CEO Martin Schwartz.

 
Summary of Financial Highlights
Third Quarters Ended September 30
All figures in thousands of US $, except per share amounts
    2011   2010   Change %
Total revenue   575,828   569,455   1.1%
Net income   23,074   30,649   -24.7%
  Per share - Basic   0.71   0.93   -23.7%
  Per share - Diluted   0.71   0.92   -22.8%
Average number of shares outstanding - diluted weighted average   32,613,976   33,159,981    
             
             
Summary of Financial Highlights
Nine Months Ended September 30
All figures in thousands of US $, except per share amounts
    2011   2010   Change %
Total revenue   1,802,621   1,773,463   1.6%
Net income   77,231   101,780   -24.1%
  Per share - Basic   2.37   3.09   -23.3%
  Per share - Diluted   2.36   3.06   -22.9%
Average number of shares outstanding - diluted weighted average   32,779,635   33,260,965    

Juvenile Segment

 
Third Quarters Ended September 30
    2011   2010    
    $   % of rev.   $   % of rev.   Change %
Total revenue   227,080       248,421       -8.6%
Gross profit   50,089   22.1%   65,622   26.4%   -23.7%
Operating profit   4,934   2.2%   22,443   9.0%   -78.0%
                     
                     
Nine Months Ended September 30
    2011   2010    
    $   % of rev.   $   % of rev.   Change %
Total revenue   740,665       794,005       -6.7%
Gross profit   183,445   24.8%   218,210   27.5%   -15.9%
Operating profit   43,461   5.9%   81,544   10.3%   -46.7%

Third quarter revenue and operating profits declined in the majority of the Juvenile segment's divisions.  The organic revenue decrease was approximately 13%, with the most significant decline at Dorel Juvenile Group (DJG) in the U.S. where cautious consumers have created a difficult retail environment.  In Europe, sales in local currency were down just over 10%, however upon conversion to the U.S. dollar, decreased by less than 3%. Sales declines were most pronounced in Southern Europe.  Despite car seat sales being slightly down, feedback from European retailers is that Dorel Europe is still out-pacing the market.

Margins have eroded, particularly in the U.S. where higher input costs, mainly resin, significantly reduced earnings and the ability to pass on these higher costs to customers has been limited. This was compounded by a less favourable product mix.  Also, the stronger U.S. dollar at the end of the quarter reduced operating profit at several divisions.  However, resin costs have begun to decline which will provide some relief as the Company moves into the fourth quarter and next year.  A further bright spot at DJG is the progress being made with its international brands, Quinny and Maxi-Cosi. With an added focus and new leadership in this area, the brands are being increasingly accepted in the U.S. market with more placements in more stores.

Recreational/Leisure Segment

 
Third Quarters Ended September 30
    2011   2010    
    $   % of rev.   $   % of rev.   Change %
Total revenue   209,823       172,530       21.6%
Gross profit   47,055   22.4%    39,420   22.8%   19.4%
Operating profit   10,008   4.8%   9,111   5.3%   9.8%
                     
                     
Nine Months Ended September 30
    2011   2010    
    $   % of rev.   $   % of rev.   Change %
Total revenue   659,344       569,095       15.9%
Gross profit   158,642   24.1%   137,062   24.1%   15.7%
Operating profit   49,053   7.4%   41,191   7.2%   19.1%

Revenue in the third quarter increased 21.6%, as strong sales to the independent bicycle dealer (IBD) channel continued, driven by new product innovation and brand support.  This was evidenced at September's two major bike shows in Europe and the U.S. where new products were enthusiastically received. In the mass merchant channel, sales for the quarter improved over last year.  The segment's organic revenue increase was approximately 18% for the quarter and is 13% year-to-date. As in Juvenile, the stronger U.S. dollar at the end of September also affected operating profit, reducing the gross margin percentage by approximately 1% in the quarter.

The segment's earnings in the quarter were hampered by a loss at its apparel division, with earnings declining by approximately US$2.5 million from last year.  The decrease was due mainly to a write-down of excess inventory from prior model years and one-time costs of $US0.8 million related to a strategic decision to outsource the "custom manufacturing" part of this business.  Principally for employee severance, it is anticipated that in the fourth quarter additional one-time costs of US$1.5 million will be incurred as part of this initiative. Though less than 5% of the segment's total revenues, improving profits at the apparel division remain a focus as management believes the SUGOI brand and its product offerings offer substantial opportunity. Preliminary orders for spring 2012 are higher than they were a year ago at this time.

Excluding the decline in earnings at this division, the operating profit in the segment would have increased by over 35% for the quarter as opposed to the 9.8% recorded.

Home Furnishings Segment

                     
Third Quarters Ended September 30
    2011   2010    
    $   % of rev.   $   % of rev.   Change %
Total revenue         138,925         148,504       -6.5%
Gross profit           15,709   11.3%       17,345   11.7%   -9.4%
Operating profit             6,748   4.9%         7,052   4.7%   -4.3%
                     
                     
Nine Months Ended September 30
    2011   2010    
    $   % of rev.   $   % of rev.   Change %
Total revenue   402,612       410,363       -1.9%
Gross profit   48,498   12.0%   57,238   13.9%   -15.3%
Operating profit   20,765   5.2%   29,024   7.1%   -28.5%

Home Furnishings' year-over-year third quarter revenue decreased 6.5% and is down 1.9% year-to-date.  While the difficult U.S. economy continued to affect POS levels at retail, the segment's various divisions have maintained their market share.  In the quarter and year-to-date, a principal driver of the sales decline was the decision to exit unprofitable product SKUs sold by the Cosco Home & Office division as it became strategically advantageous to no longer sell these items. Sales of ready-to-assemble furniture are also down from prior year, but increases in other furniture lines, mainly upholstered furniture and futons, offset some of these decreases.

Cost increases in commodities, labour and rising costs in Asia also affected margins. In addition, the continued strength of the Canadian dollar increased costs for two of the segment's plants that are based in Canada but ship primarily to the U.S.  Notably, the earnings decline in the quarter versus the prior year was the lowest decline thus far in 2011 and this improved earnings trend is expected to continue into the fourth quarter.

Cash Flow
During the first nine months of the year, cash flow provided by operating activities was US$105.8 million compared to US$72.5 million recorded in 2010, an increase of US$33.3 million. This was despite lower year-over-year after-tax earnings of US$24.5 million and was due to improved working capital management, principally inventory reductions. As has been stated in the past, the Company estimates the appropriate level of inventory to support the business to be from US$450 million to US$470 million. As a result of management's focus on right sizing inventory levels, the balance as at September 30, 2011 was US$446.4 million. This reduction has generated year-to-date cash flow of US$63 million.

Other
A third quarter income tax recovery of US$8.7 million was recorded. This was mainly due to a US$6.2 million tax benefit in the Netherlands where the Juvenile segment's new product R&D program qualified for the Dutch government's "Innovation Box" program. This lower rate of tax in the Netherlands is anticipated to remain in effect going forward. For mainly this reason, the Company's 2011 year-to-date tax rate is 6.4%, as compared to 16.2% in 2010. Excluding the US$6.2 million recovery in the Netherlands, the current year-to-date tax rate would be 13.9%, more in line with the prior year. However due principally to the impact of the "Innovation Box" tax recovery, the rate for the year is now expected to be in the range of 8% to 12%.

Increase to Normal Course Issuer Bid
The Company announces that it has amended its normal course issuer bid in order to increase the maximum number of Class B Subordinate Voting Shares that may be repurchased for cancellation during the twelve month period ending April 3, 2012 from 700,000 Class B Subordinate Voting Shares to 1,420,660, representing 5% of Dorel's issued and outstanding Class B Subordinate Voting Shares as at March 29, 2011 (see press release dated March 31, 2011).  No other terms of the normal course issuer bid have changed.

The purchases by Dorel will be effected through the facilities of the Toronto Stock Exchange and will be made at the market price of the Class B Subordinate Voting Shares at the time of the purchase.  To date, Dorel has purchased a total of 575,400 Class B Subordinate Voting Shares at a weighted average price of $23.52 under the current normal course issuer bid.  As at November 2, 2011, there were 27,847,677 Dorel Class B Subordinate Voting Shares issued and outstanding.

In addition, Dorel has amended the automatic share purchase agreement with CIBC World Markets Inc. in connection with the normal course issuer bid in order to take into account the revised terms of the bid.  Under the agreement, CIBC may acquire, at its discretion, Class B Subordinate Voting Shares at any time on Dorel's behalf, subject to certain parameters as to price and number of shares.

The amended normal course issuer bid has been approved by the Toronto Stock Exchange.

Quarterly dividend
The Board of Directors of Dorel declared its regular quarterly dividend of US$0.15 per share on the outstanding number of the Company's Class A Multiple Voting Shares, Class B Subordinate Voting Shares and Deferred Share Units. The dividend is payable on December 1, 2011 to shareholders of record as at the close of business on November 17, 2011.

Outlook
"The third quarter was very challenging for Dorel with the Juvenile segment having one of its poorest quarters ever.  As we move into the last quarter of 2011, we expect that the Juvenile segment will reverse its downward earnings trend in the fourth quarter, while posting similar revenues to last year's fourth quarter.  Aided mainly by lower costs, earnings will move towards fourth quarter 2010 figures, though gross margins will be lower than last year.  Dorel's senior management is focused on addressing issues within the segment and we are expecting to see improvement through 2012." commented Mr. Schwartz.

"I am delighted with the juvenile acquisition announced this morning. The transaction is intended to extend our reach in a market we believe has great growth potential and provides Dorel with another important brand in Chile, Bolivia, Peru and Argentina, further solidifying our position as a global leader in the juvenile products industry. It will be immediately accretive to earnings and responds to our corporate objective of growing Juvenile through geographic expansion.

"Our Recreational/Leisure segment continues to perform well and we see no change in this positive trend through year-end. Driven by exciting new innovative products consumers have embraced our various brands. Cannondale has had an excellent year and we see this growth continuing.  Pre-holiday sales to mass merchants have been good, helped by a major retailer's decision to reinstate its lay-away plan.  In Home Furnishings, we expect the fourth quarter to be improved over last year's comparable period. Overall, we believe that the worst is over for Dorel and going forward we expect to return to a better level of performance," concluded Mr. Schwartz.

Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, November 3, 2011 at 1:00 P.M. Eastern Time. Interested parties can join the call by dialling 1-800-731-5319. The conference call can also be accessed via live webcast at www.dorel.com or www.newswire.ca. If you are unable to call in at this time, you may access a tape recording of the meeting by calling 1-877-289-8525 and entering the passcode 4479973# on your phone. This tape recording will be available on Thursday, November 3, 2011 as of 4:00 P.M. until 11:59 P.M. on Thursday, November 10, 2011.

Complete financial statements will be available on the Company's website, www.dorel.com, and will be available through the SEDAR websites.

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 both domestically produced and imported furniture products, principally within North America. Dorel is a US$2.3 billion company with 4700 employees, facilities in nineteen countries, and sales worldwide.

Caution Regarding Forward Looking Statements
Certain statements included in this press release may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation.  Except as may be required by Canadian securities laws, Dorel does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Dorel's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Dorel cannot guarantee that any forward-looking statement will materialize. Forward-looking statements are provided in this press release for the purpose of giving information about Management's current expectations and plans and allowing investors and others to get a better understanding of Dorel's operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.

Forward-looking statements made in this press release are based on a number of assumptions that Dorel believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from the Company's expectations expressed in or implied by the forward-looking statements include:  general economic conditions; changes in product costs and supply channel; foreign currency fluctuations; customer and credit risk including the concentration of revenues with few customers; costs associated with product liability; changes in income tax legislation or the interpretation or application of those rules; the continued ability to develop products and support brand names; changes in the regulatory environment; continued access to capital resources and the related costs of borrowing; changes in assumptions in the valuation of goodwill and other intangible assets and subject to dividends being declared by the Board of Directors, there can be no certainty that Dorel's Dividend Policy will be maintained. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in Dorel's annual MD&A and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference.

Dorel cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to Dorel or that Dorel currently deems to be immaterial may also have a material adverse effect on our business, financial condition or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Except as otherwise indicated, forward-looking statements do not reflect the potential impact of any non-recurring or other unusual items or of any dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date hereof. The financial impact of these transactions and non-recurring and other unusual items can be complex and depends on the facts particular to each of them. Dorel therefore cannot describe the expected impact in a meaningful way or in the same way Dorel presents known risks affecting the business.

 

DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ALL FIGURES IN THOUSANDS OF US $
             
    as at   as at
    September 30,
2011
  December 30,
2010
             
    (unaudited)   (unaudited)
             
ASSETS            
CURRENT ASSETS            
  Cash and cash equivalents   $ 25,778   $ 15,748
  Trade and other receivables     382,801     356,507
  Inventories     446,364     510,068
  Other financial assets     8,144     2,554
  Income taxes receivable     19,312     14,096
  Prepaid expenses     21,341     17,823
      903,740     916,796
             
NON-CURRENT ASSETS            
  Property, plant and equipment     158,120     158,752
  Intangible assets     392,502     396,354
  Goodwill     554,660     554,528
  Deferred tax assets     64,779     65,690
  Other assets     1,834     2,215
      1,171,895     1,177,539
    $ 2,075,635   $ 2,094,335
             
LIABILITIES            
CURRENT LIABILITIES            
  Bank indebtedness   $ 22,338   $ 30,515
  Trade and other payables     294,502     323,588
  Other financial liabilities     2,295     4,203
  Income taxes payable     4,547     13,154
  Long-term debt     17,142     10,667
  Provisions     40,546     43,232
      381,370     425,359
             
NON-CURRENT LIABILITIES            
  Long-term debt     291,968     319,281
  Pension and post-retirement benefit obligations     32,027     32,056
  Deferred tax liabilities     107,177     109,789
  Provisions     1,847     1,780
  Other financial liabilites     28,394     31,253
  Other long-term liabilities     3,995     2,966
      465,408     497,125
             
EQUITY            
SHARE CAPITAL     176,094     178,816
CONTRIBUTED SURPLUS     25,900     23,776
ACCUMULATED OTHER COMPREHENSIVE INCOME     69,135     64,626
RETAINED EARNINGS     957,728     904,633
      1,228,857     1,171,851
    $ 2,075,635   $ 2,094,335

 
DOREL INDUSTRIES INC.
CONSOLIDATED INCOME STATEMENTS
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
                         
    Third Quarters Ended   Nine Months Ended
    September  30,
2011
  September 30,
2010
  September  30,
2011
  September 30,
2010
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
                         
Sales   $ 574,092   $ 567,329   $ 1,794,219   $ 1,765,199
Licensing and commission income     1,736     2,126     8,402     8,264
TOTAL REVENUE     575,828     569,455     1,802,621     1,773,463
                         
Cost of sales     462,975     447,068     1,412,036     1,360,953
GROSS PROFIT     112,853     122,387     390,585     412,510
                         
                         
Selling expenses     48,241     42,899     140,703     128,822
General and administrative expenses      38,521     38,874     128,781     127,821
Research and development expenses     7,048     6,931     22,378     21,423
OPERATING PROFIT     19,043     33,683     98,723     134,444
                         
Finance expenses     4,659     5,201     16,246     13,046
INCOME BEFORE INCOME TAXES     14,384     28,482     82,477     121,398
                         
Income taxes expense     (8,690)     (2,167)     5,246     19,618
NET INCOME   $ 23,074   $ 30,649   $ 77,231   $ 101,780
                         
EARNINGS PER SHARE                        
  Basic     $0.71     $0.93     $2.37     $3.09
  Diluted     $0.71     $0.92     $2.36     $3.06
                         
SHARES OUTSTANDING                        
  Basic - weighted average     32,506,383     32,833,643     32,596,280     32,906,296
  Diluted - weighted average     32,613,976     33,159,981     32,779,635     33,260,965
                         
                         
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ALL FIGURES IN THOUSANDS OF US $
                         
    Third Quarters Ended   Nine Months Ended
    September  30,
2011
  September 30,
2010
  Septembe30,
2011
  September 30,
2010
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
                         
NET INCOME   $ 23,074   $ 30,649   $ 77,231   $ 101,780
                         
OTHER COMPREHENSIVE INCOME (LOSS):                        
Cumulative translation account:                        
Net change in unrealized foreign currency gains (losses) on translation of
net investments in foreign operations, net of tax of nil
    (39,256)     43,595     (557)     (23,678)
                         
                         
Net changes in cash flow hedges:                        
Net change in unrealized gains (losses) on derivatives designated as
cash flow hedges
    15,734     (6,628)     11,846     (7,973)
Reclassification to income     (3,857)     (400)     (6,265)     (467)
Reclassification to the related non financial asset     (2,045)     215     1,310     (399)
Deferred income taxes     (2,646)     2,102     (1,735)     3,429
      7,186     (4,711)     5,156     (5,410)
                         
Defined benefit plans:                        
Actuarial gains (losses) on defined benefit plans     116     (979)     (6)     (2,726)
Deferred income taxes     (30)     346     (84)     981
      86     (633)     (90)     (1,745)
                         
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)     (31,984)     38,251     4,509     (30,833)
                         
TOTAL COMPREHENSIVE INCOME (LOSS)   $ (8,910)   $ 68,900   $ 81,740   $ 70,947

 
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ALL FIGURES IN THOUSANDS OF US $
                         
  Attributable to equity holders of the Company
  Share
Capital
Contributed
Surplus
Cumulative
Translation
Account*
Cash Flow
Hedges*
Defined
Benefit
Plans*
Retained
Earnings
Total
Equity
  (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
                             
Balance as at December 31, 2009 $ 174,816 $ 20,311 $ 96,840 $ 895 $ $ 809,976 $ 1,102,838
                             
Total comprehensive income (loss)   -   -   (23,678)   (5,410)   (1,745)   101,780   70,947
Issued under stock option plan   4,707   -   -   -   -   -   4,707
Reclassification from contributed surplus due to exercise of stock options   1,147   (1,147)   -   -   -   -   -
Repurchase and cancellation of shares   (2,406)   -   -   -   -     (2,406)
Premium paid on share repurchase   -   -   -   -   -   (10,829)   (10,829)
Share-based payments   -   3,709   -   -   -   -   3,709
Dividends on common shares   -   -   -   -   -   (13,977)   (13,977)
Dividends on deferred share units   -   39   -   -   -   (39)   -
                             
Balance as at September 30, 2010 $ 178,264 $ 22,912 $ 73,162 $ (4,515) $ (1,745) $ 886,911 $ 1,154,989
                             
                             
Balance as at December 31, 2010 $ 178,816 $ 23,776 $ 67,970 $ (1,032) $ (2,312) $ 904,633 $ 1,171,851
                             
Total comprehensive income (loss)   -   -   (557)   5,156   (90)   77,231   81,740
Issued under stock option plan   429   -   -   -   -   -   429
Reclassification from contributed surplus due to exercise of stock options   89   (89)   -   -   -   -   -
Repurchase and cancellation of shares   (3,240)   -   -   -   -   -   (3,240)
Premium paid on share repurchase   -   -   -   -   -   (9,406)   (9,406)
Share-based payments   -   2,160   -   -   -   -   2,160
Dividends on common shares   -   -   -   -   -   (14,677)   (14,677)
Dividends on deferred share units   -   53   -   -   -   (53)   -
                             
Balance as at September 30, 2011 $ 176,094 $ 25,900 $ 67,413 $ 4,124 $ (2,402) $ 957,728 $ 1,228,857
                             
*Accumulated other comprehensive income                            

DOREL INDUSTRIES INC.            
CONSOLIDATED STATEMENTS OF CASH FLOWS            
ALL FIGURES IN THOUSANDS OF US $            
                         
    Third Quarters Ended   Nine Months Ended    
    September  30,
2011
  September 30,
2010
  September  30,
2011
  September 30,
2010
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
                         
CASH PROVIDED BY (USED IN):                        
                         
OPERATING ACTIVITIES                        
Net income   $ 23,074   $ 30,649   $ 77,231   $ 101,780
Items not involving cash:                        
  Depreciation and amortization     14,093     13,050     41,705     38,233
  Amortization of deferred financing costs     (270)     112     376     191
  Accretion expense on contingent consideration and put option liabilities     523     784     1,610     1,725
  Change of assumptions on contingent consideration and put option liabilities     (113)     -     (1,086)     -
  Unrealized (gains) losses due to foreign exchange exposure on contingent consideration
and put option liabilities
    (546)     (162)     (1,067)     319
  Other finance expenses     4,136     4,417     14,636     11,321
  Income taxes expense     (8,690)     (2,167)     5,246     19,618
  Share-based payments     546     1,224     1,941     3,372
  Pension and post-retirement defined benefit plans     824     721     2,516     2,353
  Loss (gain) on disposal of property, plant and equipment     33     891     (26)     893
      33,610     49,519     143,082     179,805
Net changes in non-cash balances related to operations:                        
  Trade and other receivables     36,061     48,890     (27,027)     (11,497)
  Inventories     45,692     (71,500)     63,014     (129,256)
  Prepaid expenses     (2,610)     (133)     (4,146)     (2,564)
  Trade and other payables     (39,764)     (27,700)     (30,950)     70,810
  Pension and post-retirement benefit obligations     (411)     (866)     (2,510)     (2,289)
  Provisions, other financial liabilities and other long-term liabilities     (74)     (1,117)     (691)     (823)
      38,894     (52,426)     (2,310)     (75,619)
  Income taxes paid     (4,489)     (3,983)     (23,692)     (27,620)
  Income taxes received     579     146     1,069     3,838
  Interest paid     (2,191)     (2,411)     (12,301)     (7,924)
                         
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES     66,403     (9,155)     105,848     72,480
                         
FINANCING ACTIVITIES                        
  Bank indebtedness     (6,500)     7,581     (8,282)     8,236
  Increase of long-term debt     -     28,679     -     228,679
  Repayments of long-term debt     (29,244)     (10,000)     (21,123)     (230,122)
  Repayments on contingent consideration and put option liabilities     (2,431)     -     (2,431)     -
  Share repurchase     (10,089)     (6,541)     (12,646)     (13,235)
  Issuance of share capital     27     1,053     429     4,707
  Dividends on common shares     (4,897)     (4,912)     (14,677)     (13,977)
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES     (53,134)     15,860     (58,730)     (15,712)
                         
INVESTING ACTIVITIES                        
  Acquisition of businesses     -     (220)     -     (220)
  Additions to property, plant and equipment     (8,061)     (6,811)     (23,012)     (22,906)
  Additions to intangible assets     (4,996)     (5,002)     (14,821)     (14,299)
CASH USED IN INVESTING ACTIVITIES     (13,057)     (12,033)     (37,833)     (37,425)
                         
  Effect of exchange rate changes on cash and cash equivalents     988     6,131     745     (4,400)
                         
NET INCREASE IN CASH AND CASH EQUIVALENTS     1,200     803     10,030     14,943
                         
Cash and cash equivalents, beginning of period     24,578     33,987     15,748     19,847
                         
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 25,778   $ 34,790   $ 25,778   $ 34,790

 
DOREL INDUSTRIES INC.
INDUSTRY SEGMENTED INFORMATION
THIRD QUARTERS ENDED SEPTEMBER 30
ALL FIGURES IN THOUSANDS OF US $
                                   
    Total Juvenile Recreational / Leisure Home Furnishings
    2011 2010 2011 2010 2011 2010 2011 2010
    (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Total revenue   $ 575,828 $ 569,455 $ 227,080 $ 248,421 $ 209,823 $ 172,530 $ 138,925 $ 148,504
Cost of sales     462,975   447,068   176,991   182,799   162,768   133,110   123,216   131,159
Gross profit     112,853   122,387   50,089   65,622   47,055   39,420   15,709   17,345
Selling expenses     47,742   41,762   19,394   19,292   23,967   18,186   4,381   4,284
General and administrative expenses     36,373   35,088   20,188   18,353   12,203   11,435   3,982   5,300
Research and development expenses     7,048   6,931   5,573   5,534   877   688   598   709
Operating profit     21,690   38,606 $ 4,934 $ 22,443 $ 10,008 $ 9,111 $ 6,748 $ 7,052
Finance expenses     4,659   5,201                        
Corporate expenses     2,647   4,923                        
Income taxes     (8,690)   (2,167)                        
                                   
Net income   $ 23,074 $ 30,649                        
                                   
Earnings per Share                                  
  Basic     $0.71   $0.93                        
  Diluted     $0.71   $0.92                        
                                   
Depreciation and amortization included in operating profit   $ 14,049 $ 13,004 $ 10,300 $ 8,903 $ 2,318 $ 2,749 $ 1 ,431 $ 1,352
 
 
DOREL INDUSTRIES INC.
INDUSTRY SEGMENTED INFORMATION
NINE MONTHS ENDED SEPTEMBER 30
ALL FIGURES IN THOUSANDS OF US $
                                   
    Total Juvenile   Recreational / Leisure Home Furnishings
    2011 2010 2011 2010 2011 2010 2011 2010
    (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Total revenue   $ 1,802,621 $ 1,773,463 $ 740,665 $ 794,005 $ 659,344 $ 569,095 $ 402,612 $ 410,363
Cost of sales     1,412,036   1,360,953   557,220   575,795   500,702   432,033   354,114   353,125
Gross profit     390,585   412,510   183,445   218,210   158,642   137,062   48,498   57,238
Selling expenses     139,133   126,651   60,649   58,806   65,643   55,633   12,841   12,212
General and administrative expenses     115,795   112,677   61,460   60,734   41,369   38,113   12,966   13,830
Research and development expenses     22,378   21,423   17,875   17,126   2,577   2,125   1,926   2,172
Operating profit     113,279   151,759 $ 43,461 $ 81,544 $ 49,053 $ 41,191 $ 20,765 $ 29,024
Finance expenses     16,246   13,046                        
Corporate expenses     14,556   17,315                        
Income taxes     5,246   19,618                        
                                   
Net income   $ 77,231 $ 101,780                        
                                   
Earnings per Share                                  
  Basic     $2.37   $3.09                        
  Diluted     $2.36   $3.06                        
                                   
Depreciation and amortization included in operating profit   $ 41,571 $ 38,115 $ 30,455 $ 26,898 $ 6,874 $ 7,143 $ 4,242 $ 4,074

SOURCE DOREL INDUSTRIES INC.



More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.