- Record cash flow from operations of US$205 million
- Continued focus on new product development
EXCHANGESTSX: DII.B, DII.A
</pre>
<p/>
<p><span class="xn-location">MONTREAL</span>, <span class="xn-chron">March 10</span> /CNW Telbec/ - Dorel Industries Inc. (TSX: DII.B DII.A) today announced results for the fourth quarter and year ended <span class="xn-chron">December 30, 2009</span>. Revenue for the fourth quarter increased 13.6% to US$545.3 million from US$479.9 million a year ago with pre-tax earnings of US$31.0 million compared to US$19.6 million, an increase of 58.5%. Net income rose 26.3% to US$24.2 million, or US$0.73 per diluted share, from US$19.2 million, or US$0.57 per diluted share last year.</p>
<p>Revenue for the year was slightly lower at US$2.1 billion as compared to US$2.2 billion in 2008. 2009 pre-tax income was US$128.3 million as compared to US$132.0 million in the prior year. Net income decreased 5.0% to US$107.2 million, or US$3.21 per diluted share from US$112.9 million or US$3.38 per diluted share. Organic revenue growth was approximately 7% in the fourth quarter and for the year was a decline of less than 3%.</p>
<p>As has been disclosed throughout the year, significant amounts pertaining to foreign exchange gains and losses across both 2009 and 2008 have had the impact of shifting reported earnings from one year to the other. In 2008 the Company recognized unrealized gains of US$10.5 million (after-tax US$7.4 million or US$0.22 per diluted share) on foreign exchange hedging instruments intended for use in 2009, which reversed in 2009, creating a loss in the current year. Over and above this, in 2009 the Company recorded an additional loss of US$4.2 million on 2010 foreign exchange contracts. The total after-tax negative impact on 2009 results was US$10.0 million or US$0.30 per diluted share. In addition, the fourth quarter results for 2009 include an after-tax net gain of US$2.9 million, or US$0.09 per diluted share, pertaining to the successful resolution of a claim.</p>
<p>"As we entered 2009 we were cautious, yet confident about Dorel's prospects. While we were prudent and focused on cost containment, we did not reduce in any way our commitment to new product development as we recognize that this remains a key driver for us. Despite the downturn, we have continued to allocate funds to business acquisitions and research and development, as we invest for the future. This resulted in the introduction of a number of excellent new products in 2009 which has further strengthened our competitive position in our core Juvenile and Recreational/Leisure segments. Our commitment was most recently evidenced by our announced US$20.8 million investment to be made over the next three years at our Columbus, Indiana car seat facility for a new Design and Development Competency Center," commented Dorel CEO and President, <span class="xn-person">Martin Schwartz</span>.</p>
<p>"We are extremely pleased with the 2009 results. If we exclude the amounts above in relation to our foreign exchange hedging program and the settlement of the claim, our normalized diluted earnings per share improved year over year to US$3.42 from US$3.16 in 2008. This improvement is reflected in our strong cash flow from operations which totalled a record US$205 million. Even after re-investing in the business in the form of capital expenditures and business acquisitions, funding our share buy back program and paying dividends to our shareholders, we reduced our debt levels by almost US$114 million," added <span class="xn-person">Mr. Schwartz</span>.</p>
<p/>
<pre>
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Summary of Financial Highlights
-------------------------------------------------------------------------
Fourth Quarters Ended December 30
-------------------------------------------------------------------------
All figures in thousands of US $, except per share amounts
2009 2008 Change %
-------------------------------------------------------------------------
Revenues 545,303 479,880 13.6%
Net income 24,211 19,167 26.3%
Per share - Basic 0.73 0.57 28.1%
Per share - Diluted 0.73 0.57 28.1%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Average number of shares
outstanding -
diluted weighted average 33,303,402 33,404,118
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Summary of Financial Highlights
-------------------------------------------------------------------------
For the Years Ended December 30
-------------------------------------------------------------------------
All figures in thousands of US $, except per share amounts
2009 2008 Change %
-------------------------------------------------------------------------
Revenues 2,140,114 2,181,880 -1.9%
Net income 107,234 112,855 -5.0%
Per share - Basic 3.23 3.38 -4.4%
Per share - Diluted 3.21 3.38 -5.0%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Average number of shares
outstanding -
diluted weighted average 33,400,540 33,398,892
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</pre>
<p/>
<p>Juvenile Segment</p>
<p/>
<pre>
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Fourth Quarters Ended December 30
-------------------------------------------------------------------------
2009 2008
-------------------------------------------------------------------------
$ % of rev. $ % of rev. Change %
Revenues 248,521 219,680 13.1%
Gross Profit 69,860 28.1% 59,828 27.2% 16.8%
Earnings from
operations 20,963 8.4% 25,823 11.8% -18.8%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For The Years Ended December 30
-------------------------------------------------------------------------
2009 2008
-------------------------------------------------------------------------
$ % of rev. $ % of rev. Change %
Revenues 995,014 1,073,722 -7.3%
Gross Profit 274,497 27.6% 309,680 28.8% -11.4%
Earnings from
operations 92,534 9.3% 126,837 11.8% -27.0%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</pre>
<p/>
<p>Fourth quarter</p>
<p/>
<p>Juvenile revenue increased by 13.1% over the prior year's quarter. After factoring in the currency impact in all geographies and the first quarter Baby Art acquisition, organic sales growth for the segment was approximately 5%. Dorel Juvenile Group USA had a particularly strong fourth quarter with sales increasing over 15% while in <span class="xn-location">Europe</span> sales were equal to 2008 levels in local currency. This was the first quarter in 2009 in which Dorel <span class="xn-location">Europe</span> met or exceeded prior year's sales levels.</p>
<p>Earnings from operations decreased by US$4.9 million, however, the prior year's quarter included greater mark-to-market gains on foreign exchange contracts. The fourth quarter of 2009 included higher selling, general and administrative (S,G & A) costs due to exchange on non-US expenses, higher selling costs as a function of greater sales levels and higher administrative expenses mainly attributable to personnel costs. Note that S,G & A costs in the fourth quarter of 2009 were consistent with third quarter levels. Due to heavier spending and capitalized research and development cost write-offs, R & D expense increased by US$3.3 million from last year.</p>
<p/>
<p>Full year</p>
<p/>
<p>2009 revenues decreased from the record 2008 levels by US$78.7 million or 7.3%. If the impact of foreign exchange and acquisitions is excluded, the organic revenue decline was approximately 4%. The decrease was a result of the overall difficult retail environment, the impact of which was most acute in <span class="xn-location">Europe</span> where the Company's product line is focused on mid to higher priced products. Consumers favoured lower cost items, and therefore the sales mix had the impact of lowering margins. Plans have been developed to have greater representation in the lower to middle price point categories.</p>
<p>In the <span class="xn-location">United States</span>, sales declined, but by less than 2%. The decline was due to a conscious effort to eliminate less profitable items. An important area of strength during the year was DJG's presence in the lower and middle priced categories. There were several key product launches in the year, including the new Air Protect(TM) technology. Sales in <span class="xn-location">Australia</span>, in local currency, increased by 13% over last year, and despite a lower average rate of exchange to the US dollar, sales still improved by almost 5%. The results of the start-up business in <span class="xn-location">Brazil</span> were not material, however the market has excellent potential and is seen as a strong contributor going forward.</p>
<p>The impact of the foreign exchange contracts referred to above is mostly within the Juvenile segment. In 2008 gains totalling US$8.9 million were recorded on contracts that matured in 2009. The reversal of these gains in 2009 totalled US$8.4 million. Over and above these amounts, in 2009 the Company recorded an additional loss of US$4.2 million on 2010 contracts. This is a year-over-year variation of US$21.5 million pertaining to these contracts. If these amounts are excluded, earnings from operations in 2009 and 2008 would have been US$105.1 and US$117.9 million respectively. The main driver of the decrease was the decline in European earnings, partially offset by North American earnings which improved due to a better product mix and a lower cost environment.</p>
<p/>
<p>Recreational/Leisure Segment</p>
<p/>
<pre>
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Fourth Quarters Ended December 30
-------------------------------------------------------------------------
2009 2008
-------------------------------------------------------------------------
$ % of rev. $ % of rev. Change %
Revenues 175,670 157,894 11.3%
Gross Profit 38,688 22.0% 33,691 21.3% 14.8%
Earnings from
operations 8,989 5.1% 3,172 2.0% 183.4%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For The Years Ended December 30
-------------------------------------------------------------------------
2009 2008
-------------------------------------------------------------------------
$ % of rev. $ % of rev. Change %
Revenues 681,366 656,613 3.8%
Gross Profit 153,739 22.6% 150,804 23.0% 1.9%
Earnings from
operations 39,837 5.8% 41,874 6.4% -4.9%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</pre>
<p/>
<p>Fourth quarter</p>
<p/>
<p>Recreational/Leisure segment revenues increased by US$17.8 million, or 11.3%. Approximately two-thirds of the increase was from new businesses acquired during the second half of the year with the balance from the segment's Independent Bicycle Dealers (IBD) business serviced by the Cycling Sports Group (CSG). Excluding acquisitions and driven by successful new products, CSG posted sales gains of over 25% versus last year. These increases were partially offset by lower sales by Pacific Cycle to the segment's mass merchant customers.</p>
<p>IBD sales did include a greater volume of less expensive, lower margin bicycles which dampened earnings within the CSG division. Despite the lower sales to mass merchants, Pacific Cycle posted improved earnings for the quarter as did the segment's CSG and Apparel Footwear Group (AFG) divisions. The overall significant year-over-year improvement was a clear sign that newer models, particularly in the CSG division, are being well accepted by dealers.</p>
<p/>
<p>Full year</p>
<p/>
<p>Revenues increased 3.8% to US$681.4 million in 2009 compared to US$656.6 million a year ago. This was due to sales growth within the CSG division as well as incremental revenues derived through the business acquisitions completed. Partially offsetting these increases was a sales drop to the segment's mass merchant customers. As a result, the overall segment organic sales decline for the year was just over 3%. Earnings declined despite a greater proportion of sales by CSG to the Company's IBD and sporting goods customers. With the recession, consumers purchased less high end products, trading down to lower priced items, which carry lower margins. In addition, some of the segment's competitors chose to discount their lines early in the year, resulting in an erosion of overall industry profitability.</p>
<p/>
<p>Home Furnishings Segment</p>
<p/>
<pre>
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Fourth Quarters Ended December 30
-------------------------------------------------------------------------
2009 2008
-------------------------------------------------------------------------
$ % of rev. $ % of rev. Change %
Revenues 121,112 102,306 18.4%
Gross Profit 23,931 19.8% 11,522 11.3% 107.7%
Earnings from
operations 12,090 10.0% 1,539 1.5% 685.6%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For The Years Ended December 30
-------------------------------------------------------------------------
2009 2008
-------------------------------------------------------------------------
$ % of rev. $ % of rev. Change %
Revenues 463,734 451,545 2.7%
Gross Profit 77,308 16.7% 50,915 11.3% 51.8%
Earnings from
operations 36,696 7.9% 7,964 1.8% 360.8%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</pre>
<p/>
<p>Fourth quarter</p>
<p/>
<p>Home Furnishings continued its strong year with a revenue increase of 18.4% over the fourth quarter of 2008. These increases were principally at Cosco Home & Office and Ameriwood. Earnings from operations in 2009 include the pre-tax amount of US$5.0 million, US$2.9 million after-tax, pertaining to the successful resolution of a pending claim against a major international law firm in regards to a breach of professional duty. Of this amount, the portion included in cost of sales positively impacts gross margins and excluding this amount would have been 14.5%, a 320 basis point improvement as the segment has improved its operations versus last year.</p>
<p/>
<p>Full year</p>
<p/>
<p>Revenues were up 2.7% from prior year to US$463.7 million. The fact that sales increased in a difficult economic environment is due to Dorel's focus on reasonably priced furniture sold primarily to mass merchants. The turnaround at Ameriwood's domestic ready-to-assemble (RTA) furniture operations, which began in 2008, led the way to profitability for the segment as a whole. Cosco Home & Office is re-focused on its core competency of metal folding furniture and step stools and as a result has cut costs considerably. In addition the resolution of the case referred to above and the related legal costs eliminates what had been a significant on-going expense.</p>
<p>Earnings were helped by a more favourable exchange rate in 2009 as two of the segment's plants are located in <span class="xn-location">Canada</span> and ship mainly to US based customers. It should be noted that as of the fourth quarter, these rates returned to 2008 levels and margins have moderated. Along with the successful business rationalization at Cosco Home & Office and foreign exchange, lower input costs and improved manufacturing operations also contributed to the earnings improvement.</p>
<p/>
<p>Taxes</p>
<p/>
<p>The Company's effective tax rate for 2009 was 16.4% as compared to 14.5% in 2008.</p>
<p/>
<p>Other</p>
<p/>
<p>The Company's cash flow from operating activities in 2009 was US$204.5 million, an increase from US$79.9 million in the prior year. The majority of this increase was due to a decrease in inventory levels, partially offset by increases in accounts receivable and decreases in accounts payable. The Company's investments in the business in the form of capital expenditures and business acquisitions totalled US$62.3 million. After funding the share buyback and dividend programs, debt levels were reduced by US$113.9 million in the year.</p>
<p>As at the 2008 year-end the Company had experienced a significant increase in inventory levels as retailers attempted to reduce their in-stock levels on-hand and as a result inventory levels rose. In 2009 as retailers began to replenish their stock levels, the Company's inventories declined accordingly throughout the year and, as was expected, inventories declined from US$509.5 million as at <span class="xn-chron">December 30, 2008</span> to US$399.9 million as at <span class="xn-chron">December 30, 2009</span>.</p>
<p/>
<p>Outlook</p>
<p/>
<p>"We have set in motion several opportunities in our Juvenile and Recreational/Leisure segments which we believe will continue to place us in a leadership position. In addition to the acquisitions made in our bicycle business, we foresee good opportunities for organic growth through the opening of new geographic markets and exciting new products. Dealer reaction to new model bicycles continues to be excellent, particularly in the Cycling Sports Group division. Significant changes and investment in our Apparel Footwear Group bode well for the future with an expansion into custom branded apparel," stated <span class="xn-person">Mr. Schwartz</span>.</p>
<p>"Response from retailers to Air Protect(TM) has been enthusiastic. There is significant potential with this technology. Dorel has committed to the creation of future platforms to further solidify our leadership position in the car seat category. New models will be developed at various price points. In <span class="xn-location">Europe</span>, equally exciting product introductions such as FamilyFix, Mila and Senzz, introduced last year, will allow for additional inroads in 2010. Each Juvenile division has additional innovative product launches planned throughout 2010. Globally, we will continue to develop emerging markets as we have done in <span class="xn-location">Australia</span> and <span class="xn-location">Brazil</span>. As such, 2010 looks positive and we expect sustainable growth.</p>
<p>"We intend to build on the successes achieved in Home Furnishings. Of note is the turnaround in Cosco Home & Office which is now focused on its proven core metal folding furniture and step stool lines. We will continue to provide excellent value to our customers through continued product development, sourcing efforts and emphasis on improving operational efficiencies.</p>
<p>"Various governmental and other agencies continue to predict that any recovery this year is likely to be slow. As such, over the course of 2010 the Company does not expect a significant improvement in the economy which will continue to impact consumers' buying habits. Dorel is not immune to these conditions, but as 2009 demonstrated, the nature of the great majority of the Company's products, and the customers to which Dorel's products are sold, will protect us to a certain extent," concluded <span class="xn-person">Mr. Schwartz</span>.</p>
<p/>
<p>Conference Call</p>
<p/>
<p>Dorel Industries Inc. will hold a conference call to discuss these results today, <span class="xn-chron">March 10, 2010</span> at <span class="xn-chron">1:00 P.M. Eastern Time</span>. Interested parties can join the call by dialling 1-888-231-8191. The conference call can also be accessed via live webcast at <a href="http://www.dorel.com">www.dorel.com</a> or <a href="http://www.newswire.ca">www.newswire.ca</a>. If you are unable to call in at this time, you may access a tape recording of the meeting by calling 1-800-642-1687 and entering the passcode 59159658 on your phone. This tape recording will be available on <span class="xn-chron">Wednesday, March 10, 2010</span> as of <span class="xn-chron">3:00 P.M.</span> until <span class="xn-chron">11:59 P.M.</span> on <span class="xn-chron">Wednesday, March 17, 2010</span>.</p>
<p/>
<p>Complete financial statements will be available on the Company's website, <a href="http://www.dorel.com">www.dorel.com</a>, and will be available through the SEDAR website.</p>
<p/>
<p>Profile</p>
<p/>
<p>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, Iron Horse and SUGOI in Recreational/Leisure. Dorel's Home Furnishings segment markets a wide assortment of furniture products, both domestically produced and imported. Dorel is a US$2.2 billion company with 4500 employees, facilities in nineteen countries, and sales worldwide.</p>
<p/>
<p>Caution Concerning Forward-Looking Statements</p>
<p/>
<p>Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Dorel Industries Inc. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. The business of the Company and these forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ from expected results. Important factors which could cause such differences may include, without excluding other considerations, increases in raw material costs, particularly for key input factors such as particle board and resins; increases in ocean freight container costs; failure of new products to meet demand expectations; changes to the Company's effective income tax rate as a result of changes in the anticipated geographic mix of revenues; the impact of price pressures exerted by competitors, and settlements for product liability cases which exceed the Company's insurance coverage limits. A description of the above mentioned items and certain additional risk factors are discussed in the Company's Annual MD&A and Annual Information Form, filed with the securities regulatory authorities. The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference. The Company's business, financial condition, or operating results could be materially adversely affected if any of these risks and uncertainties were to materialize. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.</p>
<p/>
<pre>
DOREL INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
ALL FIGURES IN THOUSANDS OF US $
as at as at
December 30, December 30,
2009 2008
------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 19,847 $ 16,966
Accounts receivable 349,990 316,267
Income taxes receivable 16,264 19,798
Inventories 399,866 509,467
Prepaid expenses 17,358 16,236
Future income taxes 38,042 37,342
------------ ------------
841,367 916,076
PROPERTY, PLANT AND EQUIPMENT 153,279 158,895
INTANGIBLE ASSETS 401,831 395,742
GOODWILL 569,824 540,187
OTHER ASSETS 35,879 19,573
------------ ------------
$ 2,002,180 $ 2,030,473
------------ ------------
------------ ------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness $ 1,987 $ 4,398
Accounts payable and accrued liabilities 339,294 380,915
Income taxes payable 26,970 30,164
Future income taxes 85 2,713
Current portion of long-term debt 322,508 8,879
------------ ------------
690,844 427,069
------------ ------------
LONG-TERM DEBT 27,075 450,704
------------ ------------
PENSION & POST-RETIREMENT BENEFIT OBLIGATIONS 20,939 20,072
------------ ------------
FUTURE INCOME TAXES 128,984 111,874
------------ ------------
OTHER LONG-TERM LIABILITIES 25,139 6,010
------------ ------------
SHAREHOLDERS' EQUITY
CAPITAL STOCK 174,816 177,422
------------ ------------
CONTRIBUTED SURPLUS 20,311 16,070
------------ ------------
RETAINED EARNINGS 818,707 738,113
ACCUMULATED OTHER COMPREHENSIVE INCOME 95,365 83,139
------------ ------------
914,072 821,252
------------ ------------
1,109,199 1,014,744
------------ ------------
$ 2,002,180 $ 2,030,473
------------ ------------
------------ ------------
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, December 30, December 30, December 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Sales $ 542,137 $ 475,781 $ 2,125,459 $ 2,164,767
Licensing and
commission income 3,166 4,099 14,655 17,113
------------ ------------ ------------ ------------
TOTAL REVENUE 545,303 479,880 2,140,114 2,181,880
------------ ------------ ------------ ------------
EXPENSES
Cost of sales 412,824 374,839 1,634,570 1,670,481
Selling, general
and administrative
expenses 81,215 68,343 316,168 316,782
Depreciation and
amortization 8,044 7,244 27,366 26,510
Research and
development costs 8,337 4,607 17,184 13,245
Restructuring costs 18 (724) 104 726
Interest on
long-term debt 3,367 5,772 14,969 21,162
Other interest 493 239 1,406 961
------------ ------------ ------------ ------------
514,298 460,320 2,011,767 2,049,867
------------ ------------ ------------ ------------
Income before
income taxes 31,005 19,560 128,347 132,013
Income taxes 6,794 393 21,113 19,158
------------ ------------ ------------ ------------
NET INCOME $ 24,211 $ 19,167 $ 107,234 $ 112,855
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
EARNINGS PER SHARE
Basic $ 0.73 $ 0.57 $ 3.23 $ 3.38
------- ------- ------- -------
------- ------- ------- -------
Diluted $ 0.73 $ 0.57 $ 3.21 $ 3.38
------- ------- ------- -------
------- ------- ------- -------
SHARES OUTSTANDING
Basic -
weighted average 33,037,554 33,402,192 33,232,606 33,398,544
Diluted -
weighted average 33,303,402 33,404,118 33,400,540 33,398,892
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ALL FIGURES IN THOUSANDS OF US $
Fourth Quarters Ended Twelve Months Ended
------------------------- -------------------------
December 30, December 30, December 30, December 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
NET INCOME $ 24,211 $ 19,167 $ 107,234 $ 112,855
------------ ------------ ------------ ------------
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 (9,547) (10,337) 11,331 (23,348)
Portion included in
income as a result
of reductions in net
investments in self-
sustaining foreign
operations - - - (384)
------------ ------------ ------------ ------------
(9,547) (10,337) 11,331 (23,732)
------------ ------------ ------------ ------------
Net changes in cash
-------------------
flow hedges:
------------
Net change in
unrealized gains
(losses) on
derivatives
designated as
cash flow hedges 981 - 861 -
Reclassification
to income 245 - 706 -
Future income taxes (452) - (672) -
------------ ------------ ------------ ------------
774 - 895 -
------------ ------------ ------------ ------------
TOTAL OTHER
COMPREHENSIVE INCOME (8,773) (10,337) 12,226 (23,732)
------------ ------------ ------------ ------------
COMPREHENSIVE INCOME $ 15,438 $ 8,830 $ 119,460 $ 89,123
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
ALL FIGURES IN THOUSANDS OF US $
Twelve Months Ended
-------------------------
December 30, December 30,
2009 2008
------------ ------------
CAPITAL STOCK
Balance, beginning of year $ 177,422 $ 177,271
Issued under stock option plan - 151
Repurchase and cancellation of shares (2,606) -
------------ ------------
Balance, end of year 174,816 177,422
------------ ------------
CONTRIBUTED SURPLUS
Balance, beginning of year 16,070 11,623
Stock-based compensation 4,241 4,447
------------ ------------
Balance, end of year 20,311 16,070
------------ ------------
RETAINED EARNINGS
Balance, beginning of year 738,113 641,981
Net income 107,234 112,855
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 (7,898) -
Dividends on common shares (16,614) (16,707)
Dividends on deferred share units (32) (16)
------------ ------------
Balance, end of year 818,707 738,113
------------ ------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year 83,139 106,871
Total other comprehensive income 12,226 (23,732)
------------ ------------
Balance, end of year 95,365 83,139
------------ ------------
TOTAL SHAREHOLDERS' EQUITY $ 1,109,199 $ 1,014,744
------------ ------------
------------ ------------
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
ALL FIGURES IN THOUSANDS OF US $
Fourth Quarters Ended Twelve Months Ended
--------------------------------------------------
December 30, December 30, December 30, December 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
CASH PROVIDED BY
(USED IN):
OPERATING ACTIVITIES
Net income $ 24,211 $ 19,167 $ 107,234 $ 112,855
Items not
involving cash:
Depreciation and
amortization 14,356 10,939 49,191 45,854
Amortization of
deferred
financing costs 91 212 266 362
Future income
taxes 388 (370) (3,839) 2,156
Stock based
compensation 1,297 709 3,840 4,447
Pension and
post-retirement
defined benefit
plans (694) (1,144) - (27)
Restructuring
activities (452) (2,590) (721) (6,849)
Exchange gain
from reduction
of net investments
in foreign
operations - - - (384)
Loss (gain) on
disposal of
property, plant
and equipment 406 (44) 886 (24)
------------ ------------ ------------ ------------
39,603 26,879 156,857 158,390
Net changes in
non-cash balances
related to
operations:
Accounts
receivable (3,552) 23,397 (27,312) 28,223
Inventories 14,699 (59,156) 113,630 (121,027)
Prepaid expenses 265 1,387 (378) 677
Accounts payable,
accruals and
other liabilities 7,795 18,808 (39,437) 22,105
Income taxes (2,464) (3,834) 1,156 (8,485)
------------ ------------ ------------ ------------
16,743 (19,398) 47,659 (78,507)
------------ ------------ ------------ ------------
CASH PROVIDED BY
OPERATING ACTIVITIES 56,346 7,481 204,516 79,883
------------ ------------ ------------ ------------
FINANCING ACTIVITIES
Bank indebtedness (5,591) 418 (3,391) (1,055)
Increase of
long-term debt - 3,538 - 266,297
Repayments of
long-term debt (57,280) 156 (110,522) (62,400)
Share repurchase (4,515) - (10,504) -
Issuance of
capital stock - 4 - 155
Dividends on
common shares (4,129) (4,176) (16,614) (16,707)
------------ ------------ ------------ ------------
CASH PROVIDED BY
(USED IN) FINANCING
ACTIVITIES (71,515) (60) (141,031) 186,290
------------ ------------ ------------ ------------
INVESTING ACTIVITIES
Acquisition of
companies (7,720) (7,648) (21,661) (226,190)
Additions to
property, plant and
equipment - net (9,118) (9,402) (21,893) (26,518)
Intangible assets (2,960) (5,940) (18,753) (20,929)
------------ ------------ ------------ ------------
CASH USED IN
INVESTING ACTIVITIES (19,798) (22,990) (62,307) (273,637)
------------ ------------ ------------ ------------
Effect of exchange
rate changes on
cash and cash
equivalents (1,331) 2,080 1,703 1,917
------------ ------------ ------------ ------------
NET INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS (36,298) (13,489) 2,881 (5,547)
Cash and cash
equivalents,
beginning of period 56,145 30,455 16,966 22,513
------------ ------------ ------------ ------------
CASH AND CASH
EQUIVALENTS,
END OF PERIOD $ 19,847 $ 16,966 $ 19,847 $ 16,966
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
DOREL INDUSTRIES INC.
INDUSTRY SEGMENTED INFORMATION
FOR THE FOURTH QUARTERS ENDED DECEMBER 30
ALL FIGURES IN THOUSANDS OF US $
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Total Juvenile
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2009 2008 2009 2008
Total revenue $ 545,303 $ 479,880 $ 248,521 $ 219,680
Cost of sales 412,824 374,839 178,661 159,852
Selling, general
and administrative 76,050 65,069 37,374 27,893
Depreciation and
amortization 8,007 7,213 6,473 5,144
Research and
development costs 6,362 2,949 5,032 1,692
Restructuring costs 18 (724) 18 (724)
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Earnings from
operations 42,042 30,534 $ 20,963 $ 25,823
-------------------------
-------------------------
Interest 3,860 6,011
Corporate expenses 7,177 4,963
Income taxes 6,794 393
-------------------------
Net income $ 24,211 $ 19,167
-------------------------
-------------------------
Earnings per Share
------------------
Basic $ 0.73 $ 0.57
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Diluted $ 0.73 $ 0.57
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Recreational / Leisure Home Furnishings
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2009 2008 2009 2008
Total revenue $ 175,670 $ 157,894 $ 121,112 $ 102,306
Cost of sales 136,982 124,203 97,181 90,784
Selling, general
and administrative 27,816 28,002 10,860 9,174
Depreciation and
amortization 1,174 1,839 360 230
Research and
development costs 709 678 621 579
Restructuring costs 0 0 0 0
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Earnings from
operations $ 8,989 $ 3,172 $ 12,090 $ 1,539
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DOREL INDUSTRIES INC.
INDUSTRY SEGMENTED INFORMATION
FOR THE TWELVE MONTHS ENDED DECEMBER 30
ALL FIGURES IN THOUSANDS OF US $
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Total Juvenile
---------------------------------------------------
2009 2008 2009 2008
Total revenue $ 2,140,114 $ 2,181,880 $ 995,014 $ 1,073,722
Cost of sales 1,634,570 1,670,481 720,517 764,042
Selling, general
and administrative 291,962 294,338 149,135 154,164
Depreciation and
amortization 27,227 26,415 20,776 20,041
Research and
development costs 17,184 13,245 11,948 7,928
Restructuring costs 104 726 104 710
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Earnings from
operations 169,067 176,675 $ 92,534 $ 126,837
-------------------------
-------------------------
Interest 16,375 22,123
Corporate expenses 24,345 22,539
Income taxes 21,113 19,158
-------------------------
Net income $ 107,234 $ 112,855
-------------------------
-------------------------
Earnings per Share
------------------
Basic $ 3.23 $ 3.38
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Diluted $ 3.21 $ 3.38
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Recreational / Leisure Home Furnishings
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2009 2008 2009 2008
Total revenue $ 681,366 $ 656,613 $ 463,734 $ 451,545
Cost of sales 527,627 505,809 386,426 400,630
Selling, general
and administrative 106,209 101,886 36,618 38,288
Depreciation and
amortization 5,009 4,708 1,442 1,666
Research and
development costs 2,684 2,336 2,552 2,981
Restructuring costs - - - 16
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Earnings from
operations $ 39,837 $ 41,874 $ 36,696 $ 7,964
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For further information: MaisonBrison: Rick Leckner, (514) 731-0000; Dorel Industries Inc.: Jeffrey Schwartz, (514) 934-3034
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