Dorel reports record first half

08 Aug '08

5 min read

Dorel Industries Inc announced significant year-over-year improvement for the second quarter ended June 30, 2008 in both revenue and earnings. Revenue rose 29.3% to US$593.7 million, from US$459.0 million for the same period a year ago. Net income for the quarter was US$31.3 million or US$0.94 per diluted share compared to US$10.8 million or US$0.32 per diluted share in 2007.

Figures for both years include costs associated with previously announced restructuring activities at Dorel Europe and Ameriwood. Excluding these restructuring costs, net income for the second quarter of 2008 was US$31.9 million or US$0.96 per diluted share versus US$19.8 million or US$0.59 per diluted share in 2007.

Both revenue and net income for the first six months of the year were the highest in Company history.

Six month revenue rose 25.7% to US$1.15 billion, compared to US$914.7 million last year. Year-to-date net income was US$66.5 million or US$1.99 per diluted share, compared to US$38.8 million or US$1.17 per diluted share in 2007. Excluding restructuring costs, 2008 six month net income was US$67.6 million or US$2.03 per diluted share, compared to net income for the six months ending June 30, 2007 of US$49.1 million or US$1.48 per diluted share.

Dorel President and CEO Martin Schwartz stated the most recent results once again underline that Dorel's combination of varied businesses and price points are resistant to significant swings in the economy. "Considering the difficult North American economic environment and the continuing negativity around consumer spending habits, all three of our business segments have performed extraordinarily well.

People will always require juvenile products, and higher fuel prices, environmental concerns and a desire to be fit are increasing the popularity of bicycles. Our home furnishings products feature exceptional value at reasonable prices as consumers seek the most for their dollar. Clearly, there is continued strong demand for Dorel's products."

Mr. Schwartz also said that while input costs have been on the increase, most have been passed along to retailers. "Both we and our retail customer base were concerned about the impact of higher retail prices on the consumer. However, from what we have seen thus far, for the most part, demand at the retail level has not been hurt by the higher price points now in stores."

Revenue increased in both Europe and North America, with Europe accounting for approximately 60% of the overall improvement. Second quarter organic sales growth in Europe was 13.6% and is 12.7% year-to-date. The stronger Euro was also a contributor to revenue growth, increasing the European growth percentage to 28.0% for the quarter and 26.6% year-to-date.

Maxi-Cosi, Quinny and Bebe Confort branded products experienced solid market share gains in virtually all of the Company's European markets, and were particularly strong in Germany, France, and the United Kingdom. In North America, sales increased more than 11% for the quarter and 16.7% year-to-date. Growth was driven by DJG USA where sales were up across almost all product categories, particularly in car seats.

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