Dorel reports 2011 fourth quarter and full year earnings

EXCHANGES
TSX: DII.B, DII.A

  • Bicycle business drives profits, Home Furnishings has strong quarter
  • Inventories back to traditional levels
  • Free cash flow for the year improved by US$88 million

MONTREAL, March 8, 2012 /PRNewswire/ - Dorel Industries Inc. (TSX: DII.B DII.A) today announced results for the fourth quarter and year ended December 30, 2011. Revenue for the fourth quarter increased 4.1% to US$561.6 million from US$539.5 million a year ago. Net income rose 5.5% to US$27.4 million or $US0.85 per diluted share from US$25.9 million, or US$0.79 per diluted share last year.

Revenue for the full year grew 2.2% to US$2.4 billion as compared to US$2.3 billion in 2010. Net income decreased 18.1% to US$104.6 million, or US$3.21 per diluted share from US$127.7 million or US$3.85 per diluted share last year. Net income includes US$12.2 million recorded as a reduction in corporate general and administrative expenses. This non-taxable amount is from a change in the assumed estimated future acquisition price on contingent consideration and put option liabilities related to certain past business acquisitions.

Commenting on the results, Dorel CEO and President, Martin Schwartz stated: "Versus the third quarter, the Juvenile segment did reverse the year's downward earnings trend, although results were not yet where we had hoped they would be. Demand for juvenile products in the U.S. has increased somewhat. In Europe, despite the general negative economic environment, Dorel Europe improved its performance over the third quarter and maintained market share. Dorel Chile, established after our November 2011 transaction with the Silfa Group, has been accretive to earnings, even with its contribution limited to the month of December.

"In Recreational / Leisure, a shift in the timing of the introduction of new model year bikes meant sales for the quarter were down slightly versus last year, but this business remains very solid in both the independent bicycle dealer (IBD) and mass market channels. A clear indication of the success of our R&D efforts was the recognition by "Tour", a prestigious German bicycle trade magazine, of the Cannondale Super Six Evo Ultimate. It was awarded the top score in a review of "The Best Road Bikes in the World over the Past Ten Years". This is the first time this magazine has given this award which was based on ten years of reviews of over 2000 bikes. Home Furnishings had a very good quarter and we are pleased to see that demand has once again picked up," concluded Mr. Schwartz.

         
Summary of Financial Highlights
Fourth Quarters Ended December 30
All figures in thousands of US $, except per share amounts
  2011 2010 Change
%
Total revenue 561,608 539,523 4.1%
Net income 27,362 25,947 5.5%
  Per share - Basic 0.85 0.79 7.6%
  Per share - Diluted 0.85 0.79 7.6%
Average number of shares outstanding -      
diluted weighted average 32,130,001 33,038,961  
       
       
Summary of Financial Highlights
For the years Ended December 30
All figures in thousands of US $, except per share amounts
  2011 2010 Change
%
Total revenue  2,364,229 2,312,986 2.2%
Net income 104,593 127,727 -18.1%
  Per share - Basic 3.22 3.89 -17.2%
  Per share - Diluted 3.21 3.85 -16.6%
Average number of shares outstanding -      
diluted weighted average 32,621,583 33,218,267  


Juvenile Segment

           
Fourth Quarters Ended December 30
  2011 2010  
  $ % of
rev.
$ % of
rev.
Change
%
Total revenue 239,532     236,204   1.4%
Gross profit 63,673 26.6%    63,202 26.8% 0.7%
Operating profit 10,390 4.3%    14,926 6.3% -30.4%
           
           
For the years Ended December 30
  2011 2010  
  $ % of
rev.
$ % of
rev.
Change
%
Total revenue 980,197   1,030,209   -4.9%
Gross profit 247,118 25.2% 281,412 27.3% -12.2%
Operating profit 53,851 5.5% 96,470 9.4% -44.2%


Fourth quarter
Fourth quarter revenue increased 1.4%. However, excluding the impact of foreign exchange and the acquired sales of Dorel Chile, the organic revenue decline was approximately 2%. The decline was in most markets, the notable exception being in the US, which improved sales over both year-over-year and sequentially, as the retail environment began to stabilize. In Europe, local currency sales decreased by approximately 5%, with sales in Southern Europe facing the greatest challenges.  Gross margin dollars were slightly higher than in the prior year, but earnings declined by US$4.5 million principally due to an increase in operating expenses. The main reasons were higher product liability costs, professional fees and other costs incurred for the Dorel Chile acquisition and a US$1.4 million impairment of goodwill related to Dorel Brazil. The fourth quarter includes one month of Dorel Chile results, and the acquisition was immediately accretive to earnings.

Full year
2011 Juvenile revenues decreased 4.9% compared to 2010 levels. Excluding the impact of foreign exchange and the fourth quarter Dorel Chile acquisition, the organic revenue decline for the segment was 8.5%. The decline was in all divisions, but the majority of the segment's decline was in the U.S. As for revenues, the majority of the operating profit decrease in 2011 was due to lower gross margin dollars on lower sales and higher costs in the U.S.  Europe faced similar challenges, though the drop in earnings was less acute. In Brazil, revenues declined due to the reduced enforcement of local car seat usage and as a result, demand dropped, resulting in price discounting and a less profitable product mix. Selling, general and administrative expenses also increased in 2011. A large portion of this increase was strategic spending related to new business acquisitions and developing a stronger presence in the U.S. independent specialist channel.

Recreational / Leisure Segment

           
Fourth Quarters Ended December 30
  2011 2010  
  $ % of
rev.
$ % of
rev.
Change %
Total revenue 202,410   205,892   -1.7%
Gross profit 46,410 22.9% 46,491 22.6% -0.2%
Operating profit 11,604 5.7% 10,638 5.2% 9.1%
           
           
For the years Ended December 30
  2011 2010  
  $ % of
rev.
$ % of
rev.
Change
%
Total revenue 861,754   774,987   11.2%
Gross profit 205,052 23.8% 183,553 23.7% 11.7%
Operating profit 60,657 7.0% 51,829 6.7% 17.0%

Fourth quarter
Fourth quarter revenue declined by US$3.5 million, or 1.7%. In the mass market channel, sales declined in the low single digits. In the IBD channel, sales were down less than 1% year-over-year as there was a shift of some orders from the fourth quarter to the preceding third quarter. Despite the revenue decline, gross margin dollars were consistent with the prior year. Operating profit for the quarter increased by US$1.0 million as operating expenses were lower in 2011, mostly due to the timing of a promotional campaign in the fourth quarter of 2010 that did not re-occur in 2011.

Full year
The revenue increase of 11.2% to US$861.8 million was due mainly to a sales improvement of over 25% in the IBD distribution channel. This growth was driven by new products that were exceptionally well received by the market place. Sales also benefited from strong marketing, improvements in supply chain and distribution, and enhanced dealer support. Cycling Sports Group (CSG) sales were up in all markets, with most of the growth outside North America, which comprises over 50% of CSG revenue. Sales of Pacific Cycle products, servicing the mass merchant and sporting goods channels, were relatively flat with the prior year.

Supporting the revenue and gross margin dollar increase in the year was enhanced spending in selling and marketing and as a result, selling expenses increased in the year. Despite the increase, both selling and general and administrative expenses declined in 2011 by a combined 30 basis points. Earnings were also affected by a decline in profitability of approximately US$3 million at the segment's apparel division which markets the SUGOI brand. The decrease was due mainly to a write-down of excess inventory from prior model years and costs of US$1.8 million related to the strategic decision to outsource the "custom manufacturing" business to a third party.

Home Furnishings Segment

           
Fourth Quarters Ended December 30
  2011 2010  
  $ % of
rev.
$ % of
rev.
Change
%
Total revenue 119,666   97,427   22.8%
Gross profit 17,091 14.3% 11,845 12.2% 44.3%
Operating profit 8,486 7.1% 5,563 5.7% 52.5%
           
           
For the years Ended December 30
  2011 2010  
  $ % of
rev.
$ % of
rev.
Change
%
Total revenue 522,278   507,790   2.9%
Gross profit 65,589 12.6% 69,083 13.6% -5.1%
Operating profit 29,251 5.6% 34,587 6.8% -15.4%


Fourth quarter
Revenue in the fourth quarter recovered markedly year-over-year, increasing 22.8% to US$119.7 million. In the prior year, the comparable quarter of 2010 was particularly affected by a slowdown at retail and as a result customer replenishment orders were reduced. With the improved retail furniture environment in the US, customers once again gravitated toward Dorel's home furnishings product lines. The period's increase was driven by higher sales of imported furniture items and particularly strong sales to the Internet retail channel. Operating profit was driven by higher gross margin dollars on increased sales, lower freight rates, reduced warehousing costs made possible by significant inventory level reductions and the fact that in 2010, fixed overhead absorption was reduced due to the lower sales volumes.

Full year
Revenues were up 2.9%, reaching US$522.3 million compared to US$507.8 million the prior year. Within the segment, the mix of sales did vary from the prior year. Sales at Cosco Home & Office decreased due to the decision to exit unprofitable product SKUs as it became strategically advantageous to no longer sell these items. More than offsetting this was strong sales growth of imported furniture items in principally the categories of futons, mattresses, bunk beds and upholstered items. Full year operating profit declined in 2011 as gross margins were lower on higher input costs and less favourable exchange rates.

Other
2011 results include an income amount of US$12.2 million, of which $US11.1 million was recorded in the fourth quarter and which is recorded as an income in general and administrative expenses within the corporate results. This amount, which is non-taxable, was due to a change of assumptions on contingent consideration and put option liabilities related to certain past business acquisitions. In particular, the contingent consideration and put option liabilities with regards to Dorel Brazil, IGC (Australia) and Hot Wheels (CSG U.K.) have been reduced based on lower estimated future earnings when the financial liabilities will be resolved. These amounts have been recorded as a reduction of other financial liabilities on the statement of financial position.

The contingent consideration and put option liabilities established at the outset are recorded at net present value. With the passage of time, to increase the liability to the amount assumed to be eventually paid, an amount is recorded in finance expenses. As a result of these new reduced liabilities, the finance expenses pertaining to these above entities will be approximately US$1.2 million lower annually going forward.

For the year, cash flow provided by operating activities more than doubled to US$162.5 million. This compares to US$78.9 million recorded in 2010, an increase of US$83.6 million. Free cash flow, a non-GAAP financial measure defined as cash flow from operating activities less capital expenditures, share repurchases and dividend payments, was US$77.4 million for the year. This compares to negative US$10.3 million in the prior year. This was despite lower year-over-year after-tax earnings of US$23.1 million and was principally due to improved working capital management driven by 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 December 30, 2011 was US$442.4 million. This inventory reduction alone generated cash flow of US$81.4 million in the year.

In 2011 the Company's effective tax rate was 8.1% as compared to 9.8% in 2010.

Outlook
"In Juvenile in particular, we are challenged by declining birth rates and fragile economies in most of the Company's markets. However, throughout the year we continued to focus on the long term, as evidenced by aggressively broadening our market through acquisitions such as Dorel Chile in South America and Poltrade in Eastern Europe, and in focusing on markets such as the specialist channel in the U.S. and the fast growing Internet retail channel. In Juvenile we did see an improvement in the fourth quarter over the third, an indication of an improving outlook. Sales thus far in 2012 are slightly ahead of 2011", stated Mr. Schwartz.

"We expect South America to become an important contributor to earnings with the establishment of Dorel Chile late in the year and improvements are expected in Brazil. For the Juvenile segment as a whole, we are concerned about the cost environment, as evidenced by recent increases in oil prices affecting resin, transportation costs and other key inputs of our juvenile products, and as such remain cautious at this time about 2012.

"Dorel's bicycle business had another very strong year, significantly improving on 2010's positive results. We are confident this is sustainable and that the Recreational / Leisure segment will continue to deliver growth. To help ensure this, we will continue to invest in research and development and promote our brands through new innovative marketing throughout the world, and thus further penetrate our markets. In Home Furnishings, we are cautiously optimistic. The year ended on a strong note and 2012 has started well. Sales and POS levels at major customers for the first two months were up from prior year.

"By most measures 2011 was not an acceptable year for Dorel. While others may have cut back to help short-term earnings at the expense of long term gain, we did not. We were able to focus on long-term objectives and expanded our global reach, improved our products and supported our brands. We were also able to generate good cash flow, allowing us to make these investments. This long term vision will help us in 2012 and we anticipate improved earnings from our operations," concluded Mr. Schwartz.

Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, March 8, 2012 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 4506003# on your phone. This tape recording will be available on Thursday, March 8, 2012 as of 4:00 P.M. until 11:59 P.M. on Thursday, March 15, 2012.

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

Profile
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle company. Now in its 50th year, 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 has annual sales of over US$2.3 billion and employs 5,000 people in facilities located in twenty-two countries 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
  December 30,
2011
  December 30,
2010
  (unaudited)   (unaudited)
           
ASSETS          
CURRENT ASSETS          
  Cash and cash equivalents $ 29,764   $ 15,748
  Trade and other receivables   403,664     356,507
  Inventories   442,409     510,068
  Other financial assets   9,867     2,554
  Income taxes receivable   17,811     14,096
  Prepaid expenses   21,858     17,823
    925,373     916,796
           
NON-CURRENT ASSETS          
  Property, plant and equipment   158,363     158,752
  Intangible assets   411,171     396,354
  Goodwill   568,849     554,528
  Deferred tax assets   31,096     24,046
  Other assets   1,717     2,215
    1,171,196     1,135,895
  $ 2,096,569   $ 2,052,691
           
LIABILITIES          
CURRENT LIABILITIES          
  Bank indebtedness $ 20,130   $ 30,515
  Trade and other payables   323,552     323,588
  Other financial liabilities   13,065     4,203
  Income taxes payable   2,315     13,154
  Long-term debt   17,279     10,667
  Provisions   37,096     43,232
    413,437     425,359
           
NON-CURRENT LIABILITIES          
  Long-term debt   298,160     319,281
  Pension & post-retirement benefit obligations   35,258     32,056
  Deferred tax liabilities   79,702     68,145
  Provisions   1,876     1,780
  Other financial liabilites   33,141     31,253
  Other long-term liabilities   5,340     2,966
    453,477     455,481
           
EQUITY          
SHARE CAPITAL   174,782     178,816
CONTRIBUTED SURPLUS   26,445     23,776
ACCUMULATED OTHER COMPREHENSIVE INCOME   58,842     66,938
RETAINED EARNINGS   969,586     902,321
    1,229,655     1,171,851
  $ 2,096,569   $ 2,052,691

 
DOREL INDUSTRIES INC.
CONSOLIDATED INCOME STATEMENTS
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
                       
  Fourth Quarters Ended   Twelve Months Ended
  December 30,
2011
  December 30,
2010
  December 30,
2011
  December 30,
2010
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
                       
Sales $ 558,031   $ 536,194   $ 2,352,250   $ 2,301,393
Licensing and commission income   3,577     3,329     11,979     11,593
TOTAL REVENUE   561,608     539,523     2,364,229     2,312,986
                       
Cost of sales   434,434     417,985     1,846,470     1,778,938
GROSS PROFIT   127,174     121,538     517,759     534,048
                       
                       
Selling expenses   45,165     47,470     185,868     176,292
General and administrative expenses    35,426     39,517     164,207     167,338
Research and development expenses   9,849     8,427     32,227     29,850
OPERATING PROFIT   36,734     26,124     135,457     160,568
                       
Finance expenses   5,413     5,881     21,659     18,927
INCOME BEFORE INCOME TAXES   31,321     20,243     113,798     141,641
                       
Income taxes expense   3,959     (5,704)     9,205     13,914
NET INCOME $ 27,362   $ 25,947   $ 104,593   $ 127,727
                       
EARNINGS PER SHARE                      
  Basic $ 0.85   $ 0.79   $ 3.22   $ 3.89
  Diluted $ 0.85   $ 0.79   $ 3.21   $ 3.85
                       
SHARES OUTSTANDING                      
  Basic - weighted average   32,034,721     32,701,316     32,456,275     32,855,191
  Diluted - weighted average   32,130,001     33,038,961     32,621,583     33,218,267
                       
                       
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ALL FIGURES IN THOUSANDS OF US $
                       
  Fourth Quarters Ended   Twelve Months Ended
  December 30,
2011
  December 30,
2010
  December 30,
2011
  December 30,
2010
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
                       
NET INCOME $ 27,362   $ 25,947   $ 104,593   $ 127,727
                       
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
  (14,653)     (5,192)     (15,210)     (28,870)
                       
                       
Net changes in cash flow hedges:                      
Net change in unrealized gains (losses) on derivatives designated
as cash flow hedges
  (7,980)     3,558     3,866     (4,415)
Reclassification to income   284     244     1,027     968
Reclassification to the related non financial asset   10,524     1,270     4,826     (320)
Deferred income taxes   (870)     (1,589)     (2,605)     1,840
    1,958     3,483     7,114     (1,927)
                       
Defined benefit plans:                      
Actuarial gains (losses) on defined benefit plans   (8,152)     (887)     (8,158)     (3,613)
Deferred income taxes   3,318     320     3,234     1,301
    (4,834)     (567)     (4,924)     (2,312)
                       
TOTAL OTHER COMPREHENSIVE LOSS   (17,529)     (2,276)     (13,020)     (33,109)
                       
TOTAL COMPREHENSIVE INCOME $ 9,833   $ 23,671   $ 91,573   $ 94,618



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*
Retained
Earnings
Total
Equity
  (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)   -   -   (28,870)   (1,927)   127,727   96,930
Defined Benefit Plans actuarial gains and losses, net of tax   -   -   -   -   (2,312)   (2,312)
Issued under stock option plan   5,755   -   -   -   -   5,755
Reclassification from contributed surplus due to exercise
of stock options
  1,402   (1,402)   -   -   -   -
Repurchase and cancellation of shares   (3,157)     -   -   -   (3,157)
Premium paid on share repurchase   -     -   -   (14,120)   (14,120)
Share-based payments   -   4,812   -   -     4,812
Dividends on common shares   -   -   -   -   (18,895)   (18,895)
Dividends on deferred share units   -   55   -   -   (55)   -
                         
Balance as at December 30, 2010 $ 178,816 $ 23,776 $ 67,970 $ (1,032) $ 902,321   $ 1,171,851
                         
Total comprehensive income (loss)   -   -   (15,210)   7,114   104,593   96,497
Defined Benefit Plans actuarial gains and losses, net of tax   -   -   -   -   (4,924)   (4,924)
Issued under stock option plan   429   -   -   -   -   429
Reclassification from contributed surplus due to exercise
of stock options
  89   (89)   -   -   -   -
Repurchase and cancellation of shares   (4,552)   -   -   -   -   (4,552)
Premium paid on share repurchase   -   -   -   -   (12,847)   (12,847)
Share-based payments   -   2,686   -   -   -   2,686
Dividends on common shares   -   -   -   -   (19,485)   (19,485)
Dividends on deferred share units   -   72   -   -   (72)   -
                         
Balance as at December 30, 2011 $ 174,782 $ 26,445 $ 52,760 $ 6,082 $ 969,586 $ 1,229,655
                         
*Accumulated other comprehensive income                        


DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
ALL FIGURES IN THOUSANDS OF US $
                       
  Fourth Quarters Ended     Twelve Months Ended
  December 30,
2011
  December 30,
2010
  December 30,
2011
  December 30,
2010
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
                       
CASH PROVIDED BY (USED IN):                      
                       
OPERATING ACTIVITIES                      
Net income $ 27,362   $ 25,947   $ 104,593   $ 127,727
Items not involving cash:                      
  Depreciation and amortization   12,160     12,953     53,865     51,186
  Amortization of deferred financing costs   156     133     532     324
  Impairment losses of goodwill   1,372     -     1,372     -
  Accretion expense on contingent consideration and put option liabilities   599     846     2,209     2,571
  Change of assumptions on contingent consideration and put option liabilities   (11,131)     (112)     (12,217)     (112)
  Unrealized (gains) losses due to foreign exchange exposure on contingent
consideration and put option liabilities
  259     148     (808)     467
  Other finance expenses   4,283     4,711     18,919     16,032
  Income taxes expense   3,959     (5,704)     9,205     13,914
  Share-based payments   526     1,103     2,467     4,475
  Pension and post-retirement defined benefit plans   (3,989)     586     (1,473)     2,939
  Loss on disposal of property, plant and equipment   880     177     854     1,070
    36,436     40,788     179,518     220,593
Net changes in non-cash balances related to operations:                      
  Trade and other receivables   (10,656)     (3,199)     (37,683)     (14,696)
  Inventories   18,419     17,435     81,433     (111,821)
  Prepaid expenses   12     1,821     (4,134)     (743)
  Trade and other payables   18,836     (38,097)     (12,114)     32,713
  Pension and post-retirement benefit obligations   (572)     (241)     (3,082)     (2,530)
  Provisions, other financial long-term liabilities and other long-term liabilities   (1,185)     765     (1,876)     (58)
    24,854     (21,516)     22,544     (97,135)
                       
  Income taxes paid   (4,489)     (5,709)     (28,181)     (33,329)
  Income taxes received   6,067     (314)     7,136     3,524
  Interest paid   (6,239)     (6,830)     (18,540)     (14,754)
                       
CASH PROVIDED BY OPERATING ACTIVITIES   56,629     6,419     162,477     78,899
                       
FINANCING ACTIVITIES                      
  Bank indebtedness   (1,495)     20,236     (9,777)     28,472
  Increase of long-term debt   6,268     -         200,000
  Repayments of long-term debt   -     (19,048)     (14,855)     (220,491)
  Repayments of contingent consideration and put option liabilities   -     -     (2,431)     -
  Financing costs   (57)     (296)     (22)     (1,968)
  Share repurchase   (4,753)     (4,042)     (17,399)     (17,277)
  Issuance of share capital   -     1,048     429     5,755
  Dividends on common shares   (4,808)     (4,918)     (19,485)     (18,895)
CASH USED IN FINANCING ACTIVITIES   (4,845)     (7,020)     (63,540)     (24,404)
                       
INVESTING ACTIVITIES                      
  Acquisition of business   (36,319)     -     (36,319)     (220)
  Additions to property, plant and equipment   (4,319)     (12,559)     (27,331)     (35,465)
  Additions to intangible assets   (5,969)     (4,916)     (20,825)     (17,543)
CASH USED IN INVESTING ACTIVITIES   (46,607)     (17,475)     (84,475)     (53,228)
                       
  Effect of exchange rate changes on cash and cash equivalents   (1,191)     (966)     (446)     (5,366)
                       
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   3,986     (19,042)     14,016     (4,099)
                       
Cash and cash equivalents, beginning of period   25,778     34,790     15,748     19,847
                       
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 29,764   $ 15,748   $ 29,764   $ 15,748

 

DOREL INDUSTRIES INC.
INDUSTRY SEGMENTED INFORMATION
FOURTH QUARTERS ENDED DECEMBER 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 $ 561,608 $ 539,523 $ 239,532 $ 236,204 $ 202,410 $ 205,892 $ 119,666 $ 97,427
Cost of sales   434,434   417,985   175,859   173,002   156,000   159,401   102,575   85,582
Gross profit   127,174   121,538   63,673   63,202   46,410   46,491   17,091   11,845
Selling expenses   44,607   46,843   22,480   22,916   18,034   20,135   4,093   3,792
General and administrative expenses   42,238   35,141   22,623   18,727   15,714   14,651   3,901   1,763
Research and development expenses   9,849   8,427   8,180   6,633   1,058   1,067   611   727
Operating profit   30,480   31,127 $ 10,390 $ 14,926 $ 11,604 $ 10,638 $ 8,486 $ 5,563
Finance expenses   5,413   5,881                        
Corporate expenses   (6,254)   5,003                        
Income taxes   3,959   (5,704)                        
                                 
Net income $ 27,362 $ 25,947                        
                                 
Earnings per Share                                
  Basic $ 0.85 $ 0.79                        
  Diluted $ 0.85 $ 0.79                        
                                 
Impairment of losses of goodwill included in operating profit $ 1,372 $ - $ 1,372 $ - $ - $ - $ - $ -
Depreciation and amortization included in operating profit $ 12,112 $ 12,907 $ 9,921 $ 9,463 $ 1,377 $ 2,322 $ 814 $ 1,122
 
DOREL INDUSTRIES INC.
INDUSTRY SEGMENTED INFORMATION
TWELVE MONTHS ENDED DECEMBER 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 $ 2,364,229 $ 2,312,986 $ 980,197 $ 1,030,209 $ 861,754 $ 774,987 $ 522,278 $ 507,790
Cost of sales   1,846,470   1,778,938   733,079   748,797   656,702   591,434   456,689   438,707
Gross profit   517,759   534,048   247,118   281,412   205,052   183,553   65,589   69,083
Selling expenses   183,740   173,494   83,129   81,722   83,677   75,768   16,934   16,004
General and administrative expenses   158,033   147,818   84,083   79,461   57,083   52,764   16,867   15,593
Research and development expenses   32,227   29,850   26,055   23,759   3,635   3,192   2,537   2,899
Operating profit   143,759   182,886 $ 53,851 $ 96,470 $ 60,657 $ 51,829 $ 29,251 $ 34,587
Finance expenses   21,659   18,927                        
Corporate expenses   8,302   22,318                        
Income taxes   9,205   13,914                        
                                 
Net income $ 104,593 $ 127,727                        
                                 
Earnings per Share                                
  Basic $ 3.22 $ 3.89                        
  Diluted $ 3.21 $ 3.85                        
                                 
Impairment losses of goodwill included in operating profit $ 1,372 $ - $ 1,372 $ - $ - $ - $ - $ -
Depreciation and amortization included in operating profit $ 53,683 $ 51,022 $ 40,376 $ 36,361 $ 8,251 $ 9,465 $ 5,056 $ 5,196

 

 

SOURCE DOREL INDUSTRIES INC.



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