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DOREL REPORTS SOLID THIRD QUARTER RESULTS · PDF file DOREL REPORTS SOLID THIRD QUARTER RESULTS Third quarter operating profit improves in all segments year-over-year Dorel Home Furnishings

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    C O M M U N I Q U É DOREL JUVENILE

    Maxi-Cosi

    Bébé Confort

    Quinny

    Safety 1st

    Tiny Love

    BabyArt

    Cosco

    Infanti

    Mother’s Choice

    Voyage DOREL SPORTS

    Cannondale

    Schwinn

    Mongoose

    GT

    Caloi

    SUGOI DOREL HOME FURNISHINGS

    Ameriwood

    Altra Furniture

    Cosco Home & Office

    Dorel Home Products

    Signature Sleep

    Dorel Living

    EXCHANGES

    TSX: DII.B, DII.A CONTACTS:

    MaisonBrison Communications Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034

    DOREL REPORTS SOLID THIRD QUARTER RESULTS

     Third quarter operating profit improves in all segments year- over-year

     Dorel Home Furnishings posts another strong quarter

     Year-to-date results strengthen Company’s financial position

    Montreal, November 3, 2016 — Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the third quarter and nine months ended September 30, 2016. Third quarter revenue was US$671.3 million, down 1.2% from US$679.3 million from the corresponding quarter last year. Adjusted net income was US$20.6 million or US$0.63 per diluted share, compared to adjusted net income of US$15.5 million or US$0.48 per diluted share a year ago. Reported net income was US$15.9 million or US$0.49 per diluted share, compared to a reported net loss of US$8.8 million or US$0.27 per diluted share last year. For the nine months, revenue was US$1.95 billion, a decrease of 3.0% compared to US$2.01 billion last year. Adjusted net income increased to US$54.9 million or US$1.68 per diluted share, compared to adjusted net income of US$43.9 million or US$1.35 per diluted share a year ago. Reported net loss year-to-date was US$6.0 million or US$0.19 per diluted share, compared to net income of US$19.1 million or US$0.59 per diluted share in 2015. The Company is presenting adjusted financial information, excluding the impairment losses on goodwill and intangible assets, restructuring, other costs and remeasurement of forward purchase agreement liabilities, as it believes this provides a more meaningful comparison of its core business performance between the periods presented. These previously announced items are detailed in the attached tables of the press release and the third quarter includes restructuring, other costs and losses on the remeasurement of forward purchase agreement liabilities totaling US$6.4 million pre-tax or US$0.14 per diluted share. Contained within this press release are reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. “Third quarter earnings improvements were led by on-going gains at Dorel Home Furnishings, higher gross margins at Dorel Juvenile, as well as a strong performance at Pacific Cycle and reduced bicycle industry discounting at Cycling Sports Group (CSG). In addition, the progress during the first nine months in all of our businesses has bolstered our financial position. Year-over-year nine month cash flows from operating activities improved by US$93.5 million, due primarily to enhanced management of our inventory levels. This has resulted in a significant strengthening in our financial position,” commented Martin Schwartz, Dorel President and CEO.

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    2016 2015

    $ $ Change %

    Total revenue 671,273 679,287 (1.2% )

    Net income (loss) 15,866 (8,757) 281.2%

    Per share - Basic 0.49 (0.27) 281.5%

    Per share - Diluted 0.49 (0.27) 281.5%

    Adjusted net income 20,647 15,469 33.5%

    Per share - Basic 0.64 0.48 33.3%

    Per share - Diluted 0.63 0.48 31.3%

    Number of shares outstanding –

    Basic weighted average 32,359,496 32,322,011

    Diluted weighted average 32,615,350 32,322,011

    2016 2015

    $ $ Change %

    Total revenue 1,954,436 2,014,419 (3.0% )

    Net income (loss) (6,044) 19,090 (131.7% )

    Per share - Basic (0.19) 0.59 (132.2% )

    Per share - Diluted (0.19) 0.59 (132.2% )

    Adjusted net income 54,851 43,889 25.0%

    Per share - Basic 1.70 1.36 25.0%

    Per share - Diluted 1.68 1.35 24.4%

    Number of shares outstanding –

    Basic weighted average 32,346,051 32,321,887

    Diluted weighted average 32,346,051 32,522,810

    All figures in thousands of US $, except per share amounts

    Summary of Financial Information (unaudited)

    Third Quarters Ended September 30

    All figures in thousands of US $, except per share amounts

    Summary of Financial Information (unaudited)

    Nine Months Ended September 30

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    Dorel Home Furnishings

    All figures in thousands of US $

    $ % of rev. $ % of rev. Change %

    Total revenue 187,961 165,492 13.6%

    Gross profit 30,728 16.3% 21,401 12.9% 43.6%

    Operating profit 16,703 8.9% 10,122 6.1% 65.0%

    All figures in thousands of US $

    $ % of rev. $ % of rev. Change %

    Total revenue 525,903 480,994 9.3%

    Gross profit 87,310 16.6% 62,696 13.0% 39.3%

    Operating profit 46,918 8.9% 28,357 5.9% 65.5%

    Third Quarters Ended September 30 (unaudited)

    2016 2015

    Nine Months Ended September 30 (unaudited)

    2016 2015

    Third quarter revenue grew US$22.5 million or 13.6% to US$188.0 million. All divisions recorded year-over-year revenue improvement due to strong on-line sales, which represented 44% of total segment sales compared to 37% of sales in 2015. For the nine months, on-line sales represented 43% of total segment sales compared to 34% a year ago. Sales to the brick and mortar channel were flat during the quarter. For the nine months, revenue grew US$44.9 million or 9.3% to US$525.9 million, driven by on-going e-commerce growth, far exceeding reductions in brick and mortar sales. All divisions contributed to the substantial operating profit growth of 65.0% for the quarter and 65.5% year-to-date, mainly driven by e-commerce sales at improved margins. This was partly offset by, among other items, higher selling and general and administrative expenses in line with the segment’s sales increase, including increased spending on information technology to support e-commerce growth.

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    Dorel Juvenile

    All figures in thousands of US $

    $ % of rev. $ % of rev. Change %

    Total revenue 232,601 247,296 (5.9% )

    Gross profit 78,413 33.7% 64,200 26.0% 22.1%

    Operating profit 12,400 5.3% 2,802 1.1% 342.5%

    Adjusted gross profit 78,413 33.7% 65,067 26.3% 20.5%

    Adjusted operating profit 13,551 5.8% 7,852 3.2% 72.6%

    All figures in thousands of US $

    $ % of rev. $ % of rev. Change %

    Total revenue 724,811 786,910 (7.9% )

    Gross profit 226,107 31.2% 208,630 26.5% 8.4%

    Operating profit 37,512 5.2% 26,732 3.4% 40.3%

    Adjusted gross profit 226,107 31.2% 209,497 26.6% 7.9%

    Adjusted operating profit 48,948 6.8% 33,497 4.3% 46.1%

    Third Quarters Ended September 30 (unaudited)

    2016 2015

    Nine Months Ended September 30 (unaudited)

    2016 2015

    Third quarter revenue declined US$14.7 million or 5.9% to US$232.6 million and by US$62.1 million or 7.9% to US$724.8 million year-to-date. Organic revenue, excluding the impact of foreign exchange and planned reductions in third party sales at Dorel Juvenile China, declined by approximately 0.5% for the quarter and 1.7% for the nine months. For both periods, sales were higher in Latin America, but this was more than offset by declines in the U.S. and European markets. Notwithstanding the lower sales at Dorel Juvenile Europe, the division’s operating profit was considerably above expectations. Operating profit for the quarter rose by US$9.6 million to US$12.4 million and by US$10.8 million to US$37.5 million for the nine months. Excluding restructuring and other costs, adjusted operating profit increased by 72.6% to US$13.6 million for the quarter and by 46.1% to US$48.9 million year-to-date, driven by higher margins due to favourable product mix and better pricing and production and purchasing improvements. US$2.0 million of this increase resulted from the net effect of lower costs for post-retirement benefits in the U.S. mainly offset by higher product liability costs. Several new products across various platforms were introduced at the Cologne, Germany international juvenile trade show where Dorel Juvenile was again a major exhibitor. The segment was also present at last month’s ABC Kids Expo in Las Vegas. Among the new products launched during the third quarter were the Maxi Cosi Adorra travel system in the U.S., to be rolled out next year in all markets; additions to the Quinny Rachel Zoe collection as well as a new Infanti car seat and travel system in Brazil and Chile. The Safety 1st “Grow and Go” and “Continuum” convertible car seats continue to drive stron