- Revenues increase 8%
- Pre-tax earnings improve by 10%
EXCHANGES
TSX: DII.B, DII.A
MONTREAL, March 10 /PRNewswire-FirstCall/ - Dorel Industries Inc. (TSX: DII.B DII.A) today announced results for the fourth quarter and year ended December 30, 2010. Revenue for the fourth quarter decreased 1.1% to US$539.5 million from US$545.3 million a year ago. Net income rose 4.2% to US$25.2million, or US$0.76 per diluted share, from US$24.2 million, or US$0.73 per diluted share last year.
Revenue for the full year rose 8.1% to US$2.3 billion as compared to US$2.1 billion in 2009. Net income was up 19.2% to US$127.9 million, or US$3.85 per diluted share from US$107.2 million or US$3.21 per diluted share last year. Excluding the impact of business acquisitions and year-over-year foreign exchange rate variations, mainly in the Juvenile Segment, organic sales growth in 2010 exceeded 7%.
"The fourth quarter was difficult, but we are pleased with Dorel's full year performance. Our divisions effectively managed challenging economic conditions with value-oriented product offerings, a strong commitment to new product development and strategic brand support. In an environment of reduced consumer discretionary spending and rising input costs, Dorel was able to deliver revenue growth of over 8% and improved earnings over the prior year. If there was ever a test of the acceptance of Dorel's brands and products, the past two years have provided it. The fact that we have done well through this period speaks volumes to our strong position in the many global markets in which we operate," commented Dorel CEO and President, Martin Schwartz.
"Despite this success, we were not satisfied with the performance of certain of our U.S. businesses that service mass market customers. Point-of-sale levels at these customers slowed in the second half and as a result the retailers reacted by not only reducing replenishment orders, but also by aiming to further cut their own in-store inventory levels. This left us with a lot of inventory at year end that we had anticipated selling in the fourth quarter. We also had to contend with higher container freight rates and raw material costs that impacted earnings. As we enter 2011 we will work through the extra inventory and we are expecting new products in 2011 to drive improvements in the months ahead."
Net income in 2010 was positively impacted by a lower tax rate as compared to 2009. A significant reason for the rate decrease was the recognition of incremental tax benefits of US$9.7 million pertaining to the resolution of several prior years' estimated tax positions. This non-cash amount, which represents US$0.29 per diluted share, was not recognized for accounting purposes in prior years and was only recorded in the fourth quarter of 2010 when the relevant tax authorities confirmed the recognition of these benefits.
Summary of Financial Highlights | ||||
Fourth Quarters Ended December 30 | ||||
All figures in thousands of US $, except per share amounts | ||||
2010 | 2009 | Change % |
||
Revenues | 539,523 | 545,303 | -1.1% | |
Net income | 25,236 | 24,211 | 4.2% | |
Per share - Basic | 0.77 | 0.73 | 5.5% | |
Per share - Diluted | 0.76 | 0.73 | 4.1% | |
Average number of shares outstanding - | 33,038,961 | 33,303,402 | ||
diluted weighted average | ||||
Summary of Financial Highlights | ||||
For the Years Ended December 30 | ||||
All figures in thousands of US $, except per share amounts | ||||
2010 | 2009 | Change % |
||
Revenues | 2,312,986 | 2,140,114 | 8.1% | |
Net income | 127,853 | 107,234 | 19.2% | |
Per share - Basic | 3.89 | 3.23 | 20.4% | |
Per share - Diluted | 3.85 | 3.21 | 19.9% | |
Average number of shares outstanding - | 33,218,267 | 33,400,540 | ||
diluted weighted average |
Juvenile Segment
Fourth Quarters Ended December 30 | |||||
2010 | 2009 | ||||
$ | % of rev. | $ | % of rev. | Change % |
|
Revenues | 236,204 | 248,521 | -5.0% | ||
Gross Profit | 62,861 | 26.6% | 69,860 | 28.1% | -10.0% |
Earnings from Operations | 14,575 | 6.2% | 20,963 | 8.4% | -30.5% |
For the Years Ended December 30 | |||||
2010 | 2009 | ||||
$ | % of rev. | $ | % of rev. | Change % |
|
Revenues | 1,030,209 | 995,014 | 3.5% | ||
Gross Profit | 280,050 | 27.2% | 274,497 | 27.6% | 2.0% |
Earnings from Operations | 95,068 | 9.2% | 92,534 | 9.3% | 2.7% |
Fourth Quarter
Juvenile revenue decreased 5% from the fourth quarter last year. However, excluding the impact of foreign exchange, the organic sales decline was less than 2%, due principally to a slowdown at retail in the U.S. The decline in the U.S. was also the principal driver of decreased earnings in the quarter. While sales in the segment's other markets increased, the gains did not fully offset the U.S. decline. Driven by car seat sales, European sales increased by 5% in local currency but declined 3.5% in U.S. dollars. In Canada, sales increased over last year and though less than 10% of total segment revenue, Brazil and Australia both posted increased fourth quarter sales.
Full year
2010 revenues grew by US$35.2 million or 3.5% compared to 2009. The segment's organic revenue increase was just above 4%, excluding the impact of foreign exchange. Growth was in all markets with the exception of the U.S. which encountered a difficult retail environment, particularly during the second half. Europe rebounded in 2010 and in Euros, recorded sales gains of almost 9%. When translated to U.S. dollars, the improvement was approximately 4%. The strength in Europe was in most markets with the exception of Spain where the economic recovery continued to lag behind the rest of the continent. Children's car seats remain Europe's core product and were the principal driver of the increased revenues.
In Canada, sales grew organically. Results were further boosted when converted to U.S. dollars due to the stronger Canadian dollar. In Australia, sales were helped by the stronger U.S. dollar, but in local currency were down as the retail market there was challenging. 2010 was the first year of full operations for Dorel Brazil and it was an excellent year as sales benefited from new car seat legislation that was enforced locally. Sales in Brazil were approximately US$27 million.
Prior year earnings were negatively impacted by out of period foreign exchange losses totaling US$12.6 million. As such, excluding these prior year losses, earnings year over year declined. While 2010 did not include such amounts, Dorel Europe did experience less favourable rates of exchange versus the Euro although this situation eased in the second half of the year. Earnings for the segment were also affected by higher year-over-year costs for certain raw materials, principally resin, and higher container freight rates.
As a result of recalls in the crib industry and new legislation banning drop-side cribs, Dorel has elected to cease the importation of cribs until the impact of these new regulations has been fully assessed. Though less than 2% of segment sales over the past two years, the negative impact of the crib business on earnings in 2010 was approximately US$5 million. As such, as the Company enters 2011 these costs will have much less of an impact.
Recreational / Leisure Segment
Fourth Quarters Ended December 30 | |||||
2010 | 2009 | ||||
$ | % of rev. | $ | % of rev. | Change % |
|
Revenues | 205,892 | 175,670 | 17.2% | ||
Gross Profit | 46,491 | 22.6% | 38,688 | 22.0% | 20.2% |
Earnings from Operations | 10,608 | 5.2% | 8,989 | 5.1% | 18.0% |
For the Years Ended December 30 | |||||
2010 | 2009 | ||||
$ | % of rev. | $ | % of rev. | Change % |
|
Revenues | 774,987 | 681,366 | 13.7% | ||
Gross Profit | 183,553 | 23.7% | 153,739 | 22.6% | 19.4% |
Earnings from Operations | 52,325 | 6.8% | 39,837 | 5.8% | 31.3% |
Fourth Quarter
Recreational/Leisure revenues increased by US$30.2 million or 17.2%. Organic sales were higher by almost 19% when the impact of varying rates of exchange rates relative to the U.S. dollar is excluded. Sales increased in the mass market category by almost 20%, supported by the successful Schwinn brand marketing campaign initiated earlier in the year and repeated in November to coincide with the holiday shopping period. Sales to IBD customers also grew by approximately 20% as successful new model introductions have been met with enthusiasm in both Europe and North America. Importantly, the gains are in the majority of the brands sold to IBD customers and are not limited only to Cannondale.
Earnings improved from last year based on increased sales and higher margins, but results at the Apparel Footwear Group ("AFG") were disappointing and were a drag on the segment's earnings. Despite its small size relative to the total segment, quarter-over-quarter earnings decreased by over US$2 million at AFG. Going into 2011, renewed focus on this business and earnings improvement initiatives are expected to help the segment's performance in 2011.
Full year
Revenues were up 13.7% to US$775.0 million, compared to US$681.4 million a year ago. Organic sales growth was approximately 11%. All divisions contributed to the increase, with the exception of AFG whose sales were flat. There were several reasons for the improvement. In North America, the successful Schwinn advertising campaign increased sales, particularly at mass merchants, contributing to single digit sales growth. The advertising spent for this initiative exceeded US$5 million for the year. Sales to large customers in Canada were up over 25% from the prior year and have more than doubled since 2008. Cycling Sports Group (CSG) sales to IBD customers in both the U.S. and Europe increased by over 20% with new product innovation driving sales of new models introduced in the year. Sell through at retail was strong and market penetration increased.
Earnings in the segment for the year increased by 31.3%, as many of the positive elements influencing the fourth quarter were prevalent throughout the year. The business model put in place soon after the Cannondale / Sugoi acquisition in 2008, began to pay dividends in 2010. A renewed focus on supporting the segment's many known brands and a clearer direction on new product development paid dividends in the form of improved earnings.
Home Furnishings Segment
Fourth Quarters Ended December 30 | |||||
2010 | 2009 | ||||
$ | % of rev. | $ | % of rev. | Change % |
|
Revenues | 97,427 | 121,112 | -19.6% | ||
Gross Profit | 11,870 | 12.2% | 23,931 | 19.8% | -50.4% |
Earnings from Operations | 5,588 | 5.7% | 12,090 | 10.0% | -53.8% |
For the Years Ended December 30 | |||||
2010 | 2009 | ||||
$ | % of rev. | $ | % of rev. | Change % |
|
Revenues | 507,790 | 463,734 | 9.5% | ||
Gross Profit | 69,179 | 13.6% | 77,308 | 16.7% | -10.5% |
Earnings from Operations | 34,683 | 6.8% | 36,696 | 7.9% | -5.5% |
Fourth Quarter
Home Furnishings' revenues were affected by a slowdown in retail at the majority of its customers. Replenishment orders were reduced and inventories at the retail level were cut by the segment's mass market customers. As a result, revenues in the quarter declined by 19.6% from the prior year. Earnings were also impacted as fixed overhead absorption was reduced by the lower sales and production levels. Compared to the prior year, input costs were also higher, particularly overseas freight costs, and this had a major impact on earnings. 2009 fourth quarter earnings benefited from a net gain of US$5.0 million related to the successful settlement of a claim against a law firm in conjunction with prior years' anti-dumping duties. If this figure is excluded from the prior year, the earnings decline was approximately 21% as opposed to the 53.8% recorded.
Full year
For the year, 2010 Home Furnishings' revenues increased 9.5%, reaching US$507.8 million, up from US$463.7 million the prior year. During the first half, the segment benefited from consumer tastes which focused on value priced furniture during the difficult economic period and as of the second quarter; revenues were up over 20%. However, in the fourth quarter many large customers reduced orders as retail sales slowed and in-store inventories rose. Earnings for the year were down by 5.5%, but when the prior year anti-dumping duties figure referenced above is considered, earnings actually improved by over 9%.
Of the three segments, Home Furnishings is by far the one most exposed to mass merchant consumers in North America. As such, it does not have other markets to lessen the impact of a large shift in consumer buying habits or customer initiatives on in stock levels.
Balance Sheet and Cash flow
The year-end inventory as at December 30, 2010 was US$510.1 million as compared to US$399.9 million in 2009. While the impact of order reductions in the U.S. was significant at approximately US$30 million, several other components account for the total increase. Firstly, last year's inventory levels were too low to adequately service the Company's customers, and as such of the US$110.2 million increase, approximately 35% - 40% was intentional to align inventories with business needs. The bulk of the remaining increase was due to 2011 inventory being brought in earlier than in the prior year. Finally, cost increases year-over-year added approximately 2% to 3% to total inventory value. As the Company enters 2011, these inventories are expected to sell through and should return to more normal levels.
Due mainly to the greater inventory and reduced earnings in the fourth quarter, free cash flow for the quarter was negative. There have been wide swings in free cash flow in the past three years, principally due to major variations in inventory levels from year to year. Low inventory levels at the beginning of 2010 adversely impacted cash as the Company built inventory to re-establish more normal operating levels. This was exacerbated by the situation described previously as retailers drastically reduced fourth quarter ordering, causing 2010 year end inventories to increase, and thereby reducing free cash flow. The situation in 2010 was similar to that experienced in 2008, which due to a very slow fourth quarter brought on by the economic crisis caused that year's ending inventories to rise, thereby also reducing cash flow in that year. Free cash flow is a non-GAAP financial measure defined as cash provided by operating activities, less dividends paid, shares repurchased, additions to property, plant and equipment, deferred development costs and intangible assets.
Outlook
In 2011, sales and earnings from operations in all three segments are expected to exceed 2010 levels. Additionally, the higher earnings and anticipated improved working capital position will provide for a positive free-cash flow in the year.
"Our bicycle business did well in 2010 and we foresee continued growth through 2011. The Recreational / Leisure Segment has had a good start to the year and are on track to improve their year-over-year performance. While a small part of the Recreational/Leisure Segment, we are focused on correcting issues at the Apparel Footwear Group. Juvenile operations in Europe and Canada have also started off well this year, while the U.S. remains sluggish. We anticipate a better second half overall in the segment, as there are several scheduled new juvenile product introductions that are expected to translate into increased sales. In Home Furnishings, the negative trend of the past several months was reversed in February, marking the best month since last year's second quarter. We are hopeful that Home Furnishings' full year will be solidly profitable," commented Mr. Schwartz.
"The higher input costs experienced in 2010 are not easing as we begin 2011. Upward pressure on commodities such as steel, resin, cotton and oil will force us to seek price increases. As experienced in the past, this can negatively affect margins until pricing is properly aligned with costs, and until new products incorporating the current higher input costs are available in the marketplace."
"First quarter inventory levels have already started to decrease, particularly in the Juvenile and Home Furnishings segments where they were highest. The situation mirrors that of year-end 2008 when inventory was at record high levels but was subsequently reduced during the first quarter of 2009. We have every confidence of an improvement again this year and that cash flow will be stronger as inventory levels are reduced."
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, March 10, 2011 at 1:00 P.M. Eastern Time. Interested parties can join the call by dialling 1-800-732-1073. 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 4418457# on your phone. This tape recording will be available on Thursday, March 10, 2011 as of 3:00 P.M. until 11:59 P.M. on Thursday, March 17, 2011.
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. 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$2.3 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 BALANCE SHEETS | ||||||
ALL FIGURES IN THOUSANDS OF US $ | ||||||
as at | as at | |||||
December 30, 2010 | December 30, 2009 | |||||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | $ | 15,748 | $ | 19,847 | ||
Accounts receivable | 359,061 | 349,990 | ||||
Income taxes receivable | 14,096 | 16,264 | ||||
Inventories | 510,068 | 399,866 | ||||
Prepaid expenses | 17,823 | 17,358 | ||||
Future income taxes | 42,444 | 38,042 | ||||
959,240 | 841,367 | |||||
PROPERTY, PLANT AND EQUIPMENT | 157,865 | 153,279 | ||||
INTANGIBLE ASSETS | 396,354 | 401,831 | ||||
GOODWILL | 554,386 | 569,824 | ||||
OTHER ASSETS | 28,115 | 35,879 | ||||
$ | 2,095,960 | $ | 2,002,180 | |||
LIABILITIES | ||||||
CURRENT LIABILITIES | ||||||
Bank indebtedness | $ | 30,515 | $ | 1,987 | ||
Accounts payable and accrued liabilities | 370,222 | 339,294 | ||||
Income taxes payable | 12,755 | 26,970 | ||||
Future income taxes | 1,252 | 85 | ||||
Current portion of long-term debt | 10,667 | 122,508 | ||||
425,411 | 490,844 | |||||
LONG-TERM DEBT | 319,281 | 227,075 | ||||
PENSION & POST-RETIREMENT BENEFIT OBLIGATIONS | 21,538 | 20,939 | ||||
FUTURE INCOME TAXES | 113,249 | 128,984 | ||||
OTHER LONG-TERM LIABILITIES | 35,999 | 25,139 | ||||
SHAREHOLDERS' EQUITY | ||||||
CAPITAL STOCK | 178,816 | 174,816 | ||||
CONTRIBUTED SURPLUS | 23,776 | 20,311 | ||||
RETAINED EARNINGS | 913,490 | 818,707 | ||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | 64,400 | 95,365 | ||||
977,890 | 914,072 | |||||
1,180,482 | 1,109,199 | |||||
$ | 2,095,960 | $ | 2,002,180 |
DOREL INDUSTRIES INC. | |||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS | |||||||||||||
Fourth Quarters Ended | Twelve Months Ended | ||||||||||||
December 30, 2010 | December 30, 2009 | December 30, 2010 | December 30, 2009 | ||||||||||
Sales | $ | 536,194 | $ | 542,137 | $ | 2,301,393 | $ | 2,125,459 | |||||
Licensing and commission income | 3,329 | 3,166 | 11,593 | 14,655 | |||||||||
TOTAL REVENUE | 539,523 | 545,303 | 2,312,986 | 2,140,114 | |||||||||
EXPENSES | |||||||||||||
Cost of sales | 418,301 | 412,824 | 1,780,204 | 1,634,570 | |||||||||
Selling, general and administrative expenses | 83,323 | 83,208 | 328,138 | 316,272 | |||||||||
Depreciation and amortization | 8,584 | 8,044 | 31,373 | 27,366 | |||||||||
Research and development costs | 3,660 | 6,362 | 13,626 | 17,184 | |||||||||
Interest | 5,881 | 3,860 | 18,927 | 16,375 | |||||||||
519,749 | 514,298 | 2,172,268 | 2,011,767 | ||||||||||
Income before income taxes | 19,774 | 31,005 | 140,718 | |
128,347 | ||||||||
Income taxes | (5,462) | 6,794 | 12,865 | 21,113 | |||||||||
NET INCOME | $ | 25,236 | $ | 24,211 | $ | 127,853 | $ | 107,234 | |||||
EARNINGS PER SHARE | |||||||||||||
Basic | $0.77 | $0.73 | $3.89 | $3.23 | |||||||||
Diluted | $0.76 | $0.73 | $3.85 | $3.21 | |||||||||
SHARES OUTSTANDING | |||||||||||||
Basic - weighted average | 32,701,316 | 33,037,554 | 32,855,191 | 33,232,606 | |||||||||
Diluted - weighted average | 33,038,961 | 33,303,402 | 33,218,267 | 33,400,540 | |||||||||
DOREL INDUSTRIES INC. | |||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||
ALL FIGURES IN THOUSANDS OF US $ | |||||||||||||
Fourth Quarters Ended | Twelve Months Ended | ||||||||||||
December 30, 2010 | December 30, 2009 | December 30, 2010 | December 30, 2009 | ||||||||||
NET INCOME | $ | 25,236 | $ | 24,211 | $ | 127,853 | $ | 107,234 | |||||
OTHER COMPREHENSIVE INCOME: | |||||||||||||
Cumulative translation adjustment: | |||||||||||||
Net change in unrealized foreign currency gains (losses) on translation of net investments in self-sustaining foreign operations, net of tax of nil | (5,255) | (9,547) | (29,038) | 11,331 | |||||||||
Net changes in cash flow hedges: | |||||||||||||
Net change in unrealized gains (losses) on derivatives designated as cash flow hedges | 3,558 | 981 | (4,415) | 861 | |||||||||
Reclassification to income or to the related non financial asset | 1,514 | 245 | 648 | 706 | |||||||||
Future income taxes | (1,589) | (452) | 1,840 | (672) | |||||||||
3,483 | 774 | (1,927) | 895 | ||||||||||
TOTAL OTHER COMPREHENSIVE INCOME | (1,772) | (8,773) | (30,965) | 12,226 | |||||||||
TOTAL COMPREHENSIVE INCOME | $ | 23,464 | $ | 15,438 | $ | 96,888 | $ | 119,460 |
DOREL INDUSTRIES INC. | ||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | ||||||
ALL FIGURES IN THOUSANDS OF US $ | ||||||
Twelve Months Ended | ||||||
December 30, 2010 | December 30, 2009 | |||||
CAPITAL STOCK | ||||||
Balance, beginning of year | $ | 174,816 | $ | 177,422 | ||
Issued under stock option plan | 5,755 | - | ||||
Reclassification from contributed surplus due to exercise of stock options | 1,402 | - | ||||
Repurchase and cancellation of shares | (3,157) | (2,606) | ||||
Balance, end of year | 178,816 | 174,816 | ||||
CONTRIBUTED SURPLUS | ||||||
Balance, beginning of year | 20,311 | 16,070 | ||||
Exercice of stock options | (1,402) | - | ||||
Stock-based compensation | 4,867 | 4,241 | ||||
Balance, end of year | 23,776 | 20,311 | ||||
RETAINED EARNINGS | ||||||
Balance, beginning of year | 818,707 | 738,113 | ||||
Net income | 127,853 | 107,234 | ||||
Adjustment to opening retained earnings from adopting a new accounting standard for inventories, net of tax of $1,415 |
- | (2,096) | ||||
Premium paid on share repurchase | (14,120) | (7,898) | ||||
Dividends on common shares | (18,895) | (16,614) | ||||
Dividends on deferred share units | (55) | (32) | ||||
Balance, end of year | 913,490 | 818,707 | ||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||
Balance, beginning of year | 95,365 | 83,139 | ||||
Total other comprehensive income | (30,965) | 12,226 | ||||
Balance, end of year | 64,400 | 95,365 | ||||
TOTAL SHAREHOLDERS' EQUITY | $ | 1,180,482 | $ | 1,109,199 | ||
DOREL INDUSTRIES INC. | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
ALL FIGURES IN THOUSANDS OF US $ | ||||||||||||||
Fourth Quarters Ended | Twelve Months Ended | |||||||||||||
December 30, 2010 | December 30, 2009 | December 30, 2010 | December 30, 2009 | |||||||||||
CASH PROVIDED BY (USED IN): | ||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||
Net income | $ | 25,236 | $ | 24,211 | $ | 127,853 | $ | 107,234 | ||||||
Items not involving cash: | ||||||||||||||
Depreciation and amortization | 12,929 | 14,356 | 51,091 | 49,191 | ||||||||||
Amortization of deferred financing costs | 133 | 91 | 324 | 266 | ||||||||||
Accretion expense on contingent considerations | 846 | - | 2,571 | - | ||||||||||
Future income taxes | (49) | 388 | (8,110) | (3,839) | ||||||||||
Stock based compensation | 1,119 | 1,297 | 4,530 | 3,840 | ||||||||||
Pension and post-retirement defined benefit plans | (114) | (694) | 1,001 | - | ||||||||||
Restructuring activities | - | (452) | - | (721) | ||||||||||
Loss on disposal of property, plant and equipment | 177 | 406 | 1,070 | 886 | ||||||||||
40,277 | 39,603 | 180,330 | 156,857 | |||||||||||
Net changes in non-cash balances related to operations: | ||||||||||||||
Accounts receivable | (2,476) | (3,552) | (12,789) | (27,312) | ||||||||||
Inventories | 17,435 | 14,699 | (111,821) | 113,630 | ||||||||||
Prepaid expenses | 1,845 | 265 | (743) | (378) | ||||||||||
Accounts payable, accruals and other long-term liabilities | (38,649) | 7,795 | 34,193 | (39,437) | ||||||||||
Income taxes | (12,312) | (2,464) | (11,152) | 1,156 | ||||||||||
(34,157) | 16,743 | (102,312) | 47,659 | |||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES | 6,120 | 56,346 | 78,018 | 204,516 | ||||||||||
FINANCING ACTIVITIES | ||||||||||||||
Bank indebtedness | 20,236 | (5,591) | 28,472 | (3,391) | ||||||||||
Increase of long-term debt | - | - | 200,000 | - | ||||||||||
Repayments of long-term debt | (19,048) | (57,280) | (220,491) | (110,522) | ||||||||||
Share repurchase | (4,042) | (4,515) | (17,277) | (10,504) | ||||||||||
Issuance of capital stock | 1,048 | - | 5,755 | - | ||||||||||
Dividends on common shares | (4,918) | (4,129) | (18,895) | (16,614) | ||||||||||
CASH USED IN FINANCING ACTIVITIES | (6,724) | (71,515) | (22,436) | (141,031) | ||||||||||
INVESTING ACTIVITIES | ||||||||||||||
Acquisition of businesses | - | (7,720) | (220) | (21,661) | ||||||||||
Additions to property, plant and equipment - net | (12,559) | (9,118) | (35,465) | (21,893) | ||||||||||
Additions to intangible assets | (5,212) | (2,960) | (19,511) | (18,753) | ||||||||||
CASH USED IN INVESTING ACTIVITIES | (17,771) | (19,798) | (55,196) | (62,307) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (667) | (1,331) | (4,485) | 1,703 | ||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (19,042) | (36,298) | (4,099) | 2,881 | ||||||||||
Cash and cash equivalents, beginning of year | 34,790 | 56,145 | 19,847 | 16,966 | ||||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 15,748 | $ | 19,847 | $ | 15,748 | $ | 19,847 |
DOREL INDUSTRIES INC. | |||||||||||||||||||||||||||
INDUSTRY SEGMENTED INFORMATION | |||||||||||||||||||||||||||
FOR THE FOURTH QUARTERS ENDED DECEMBER 30 | |||||||||||||||||||||||||||
ALL FIGURES IN THOUSANDS OF US $ | |||||||||||||||||||||||||||
Total | Juvenile | Recreational / Leisure | Home Furnishings | ||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Total revenue | $ | 539,523 | $ | 545,303 | $ | 236,204 | $ | 248,521 | $ | 205,892 | $ | 175,670 | $ | 97,427 | $ | 121,112 | |||||||||||
Cost of sales | 418,301 | 412,824 | 173,343 | 178,661 | 159,401 | 136,982 | 85,557 | 97,181 | |||||||||||||||||||
Selling, general and administrative | 78,253 | 76,068 | 39,724 | 37,392 | 33,157 | 27,816 | 5,372 | 10,860 | |||||||||||||||||||
Depreciation and amortization | 8,538 | 8,007 | 6,620 | 6,473 | 1,659 | 1,174 | 259 | 360 | |||||||||||||||||||
Research and development costs | 3,660 | 6,362 | 1,942 | 5,032 | 1,067 | 709 | 651 | 621 | |||||||||||||||||||
Earnings from operations | 30,771 | 42,042 | $ | 14,575 | $ | 20,963 | $ | 10,608 | $ | 8,989 | $ | 5,588 | $ | 12,090 | |||||||||||||
Interest | 5,881 | 3,860 | |||||||||||||||||||||||||
Corporate expenses | 5,116 | 7,177 | |||||||||||||||||||||||||
Income taxes | (5,462) | 6,794 | |||||||||||||||||||||||||
Net income | $ | 25,236 | $ | 24,211 | |||||||||||||||||||||||
Earnings per Share | |||||||||||||||||||||||||||
Basic | $0.77 | $0.73 | |||||||||||||||||||||||||
Diluted | $0.76 | $0.73 | |||||||||||||||||||||||||
Depreciation related to manufacturing activities included in Cost of sales |
$ | 4,345 | $ | 6,312 | $ | 2,842 | $ | 5,355 | $ | 663 | $ | 22 | $ | 840 | $ | 935 | |||||||||||
DOREL INDUSTRIES INC. | |||||||||||||||||||||||||||
INDUSTRY SEGMENTED INFORMATION | |||||||||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED DECEMBER 30 | |||||||||||||||||||||||||||
ALL FIGURES IN THOUSANDS OF US $ | |||||||||||||||||||||||||||
Total | Juvenile | Recreational / Leisure | Home Furnishings | ||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Total revenue | $ | 2,312,986 | $ | 2,140,114 | $ | 1,030,209 | $ | 995,014 | $ | 774,987 | $ | 681,366 | $ | 507,790 | $ | 463,734 | |||||||||||
Cost of sales | 1,780,204 | 1,634,570 | 750,159 | 720,517 | 591,434 | 527,627 | 438,611 | 386,426 | |||||||||||||||||||
Selling, general and administrative | 305,870 | 292,066 | 153,586 | 149,239 | 121,411 | 106,209 | 30,873 | 36,618 | |||||||||||||||||||
Depreciation and amortization | 31,210 | 27,227 | 23,567 | 20,776 | 6,625 | 5,009 | 1,018 | 1,442 | |||||||||||||||||||
Research and development costs | 13,626 | 17,184 | 7,829 | 11,948 | 3,192 | 2,684 | 2,605 | 2,552 | |||||||||||||||||||
Earnings from operations | 182,076 | 169,067 | $ | 95,068 | $ | 92,534 | $ | 52,325 | $ | 39,837 | $ | 34,683 | $ | 36,696 | |||||||||||||
Interest | 18,927 | 16,375 | |||||||||||||||||||||||||
Corporate expenses | 22,431 | 24,345 | |||||||||||||||||||||||||
Income taxes | 12,865 | 21,113 | |||||||||||||||||||||||||
Net income | $ | 127,853 | $ | 107,234 | |||||||||||||||||||||||
Earnings per Share | |||||||||||||||||||||||||||
Basic | $3.89 | $3.23 | |||||||||||||||||||||||||
Diluted | $3.85 | $3.21 | |||||||||||||||||||||||||
Depreciation related to manufacturing activities included in Cost of sales |
$ | 19,718 | $ | 21,825 | $ | 12,794 | $ | 15,564 | $ | 2,840 | $ | 2,006 | $ | 4,084 | $ | 4,255 | |||||||||||
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SOURCE DOREL INDUSTRIES INC.
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