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Posted: Fri May 28, 2010 12:00 am Post subject: Dorel Building Additional Growth |
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*** Dorel Building Additional Growth ***
Montreal, Canada -- 05/28/2010
Coming off a record first quarter, Dorel Industries Inc.
(TSX: DII.B, DII.A) is intent on growing and has maintained
the required investments for the future.
Dorel President and CEO, Martin Schwartz, reported to shareholders
today that the Company has remained committed to product
development innovation, despite the recession.
"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.
This positions us well for the months ahead."
Mr. Schwartz noted that all three Company segments experienced
significant increases during the most recent quarter, ended March 31,
2010. "In recent months we've seen improving sales momentum in
our Juvenile segment both in North America and in Europe. We are
maintaining, if not slightly growing market share due to our great
products and our diversity of recognized brands. Dorel Europe has
begun to benefit from the improving economies in most European
countries as well as from the impact of successful new juvenile
product launches."
Bike sales in high gear
Dorel's Recreational/Leisure segment also turned in a solid report
card for the first three months. Bike sales were up US$20 million
year-over-year, with significant improvement at the mass merchant
level.
The iconic Schwinn brand is currently being promoted through a
national multi-million dollar advertising campaign. The Cycling Sport
Group's (CSG) sales have also increased as new Cannondale models
were enthusiastically received.
"There is every indication that this momentum will continue over
the next few months," commented Mr. Schwartz. "The Cannondale
product is the best it's been in years and the results are clear.
A record number of new dealers have been added since January,
many in key US markets such as Los Angles, Northern California
and Colorado. Another growth path is our new Apparel Footwear
Group (AFG), which combines the branded apparel of SUGOI,
Cannondale, GT, Schwinn, IronHorse and Mongoose, in both
custom and its regular offerings. We've barely scratched the
surface in the expanding custom market and expect to triple
this business within 5 years."
Just two weeks ago, Dorel officially unveiled its new 70,000 square
foot state-of-the-art equipped apparel facility in Burnaby, BC. The
opportunity to significantly upgrade AFG's operations with a new
and improved facility positions the division for global growth.
Home Furnishings remains a strong contributor
Home Furnishings also turned in a superior performance with first
quarter year-over-year revenue up over 17% and earnings from
operations jumping to US$10.7 million from US$4.4 million.
"This dramatic improvement is another example of how Dorel's
entrepreneurial style can turn around under-performing businesses.
Our opening price point products have been attractive to existing
and new consumers seeking to fill their basic furniture needs, and
underlines how we serve price-conscious consumers."
Further car seat innovations coming
Mr. Schwartz further told the annual meeting audience, "Innovation,
expertise, and a commitment to quality make our reputation first
class and our products the choice of millions around the world."
He explained that all North American car seat R&D and product
development is to be consolidated in Columbus, Indiana by
September in a new US$21 million Design and Development
Competency Centre for children's car seats.
"This will drive additional technological advancements and important
innovations for child passenger safety. Important projects are already
on the drawing board."
First quarter 2010 results released earlier this month set records
in both revenue and net income. Revenue grew 13.5% to just over
US$596 million and net income increased 33% to US$37.4 million.
Outlook
"Consumer confidence has risen in many of Dorel's markets including
in most of Europe. While margins could be affected by rising commodity
and freight costs, the momentum we have established so far this year
positions us to benefit from further new product introductions and our
brand equity," stated CFO, Jeffrey Schwartz.
He also noted that Dorel management is very confident that a deal
will be closed by next month with the Company's bankers concerning
its revolving debt. Earlier this year Dorel refinanced its long-term debt
by issuing US$200 million of Senior Guaranteed Notes at fixed rates.
Earlier this month Dorel's Board decided to increase the
quarterly dividend by 20% to US$0.60 per share per annum.
In his concluding remarks, Martin Schwartz stated that Dorel has
grown through significant acquisitions. "We continue to keep our
eyes open for companies in our sectors that are the proper fit.
While there is nothing imminent, Dorel has the balance sheet and
the capability to digest another key transaction. The management
structure we put in place two years ago was designed with this in
mind. We must ensure that we capitalize on further opportunities,
deliver long-term sustainable growth and above all, maximize
shareholder value."
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 billion company with 4500 employees, facilities in nineteen
countries, and sales worldwide. _________________ BMX News Reporter, An Array Of People
Reporting The BMX News & Information
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