Posted by Editoress on 08/6/15
Dorel Industries Inc. (TSX:DII.B)(TSX:DII.A) today announced results for the second quarter and six months ended June 30, 2015. Total revenue for the quarter was US$669.6 million, up 2.1% from US$655.8 million recorded in the same period last year. Adjusted net income was US$16.6 million or US$0.51 per diluted share, compared to adjusted net income of US$19.8 million or US$0.61 per diluted share a year ago. Reported net income was US$16.2 million or US$0.50 per diluted share, compared to US$15.2 million or US$0.47 per diluted share in the second quarter of 2014.The net negative impact of foreign exchange on Dorel's earnings equated to approximately US$0.23 per diluted share for the second quarter and US$0.53 per diluted share for the first six months of 2015.
Revenue for the six months increased 2.4% to US$1.34 billion compared to US$1.30 billion last year. First half adjusted net income reached US$28.4 million or US$0.87 per diluted share, compared to adjusted net income of US$49.2 million or US$1.52 per diluted share last year. Reported net income for the period was US$27.8 million or US$0.86 per diluted share, compared to net income of US$40.0 million or US$1.24 per diluted share in the first half of 2014.
"In Home Furnishings we are having a breakout year with revenues increasing by 29.9% in the quarter and 23.1% year-to-date. Operating profit was up 65.3% and 36.9% in the quarter and six months respectively. Dorel's Juvenile and Sports segments continue to operate in an environment of challenging foreign exchange rates as the US dollar remains strong against practically all currencies. This had a significant effect on our earnings, impacting operating profit in the two segments combined by a net negative amount of approximately US$12 million in the second quarter alone, bringing the net negative FX year-to-date impact to approximately US$25 million. We have done a good job mitigating this impact with selective price increases and other proactive measures and our results reflect that. There have been numerous improvements at our Dorel Juvenile China factories and we are pleased with the progress of the integration process," said Dorel President & CEO, Martin Schwartz.
Second quarter Dorel Sports revenue decreased by US$35.2 million, or 12.3% to US$251.1 million compared to last year's US$286.2 million. Six month revenue decreased by US$46.6 million, or 8.8% to US$480.0 million from US$526.6 million a year ago. Organic revenue declined by approximately 5% in the quarter and 2% year-to-date, after removing the impact of varying foreign exchange rates year over year.
The Brazilian based Caloi division had double digit organic revenue growth in local currency as that division rebounded from last year's soft second quarter due to the negative impact of World Cup events. Sales also increased organically in Japan and the UK. Offsetting this, was organic sales decline in the quarter in Europe as dealers purchased inventory in the first quarter ahead of price increases implemented in April and in anticipation of the launch of new model-year 2016 products in the third quarter. New pricing on model year 2016 bicycles is being announced and the introductions have received excellent reviews from retailers and media. Sales decline in North America was due partly to a wet month of May as well as to mass customers reducing inventory levels in the sporting goods category.
Second quarter adjusted operating profit, excluding restructuring and other costs, decreased by US$7.7 million, or 42.1% to US$10.7 million, compared to US$18.4 million a year ago. For the six months, adjusted operating profit was down US$13.3 million, or 37.6% to US$22.0 million, compared to US$35.3 million in 2014. The US dollar appreciation against most of the currencies in Dorel's markets accounted for a net negative impact on the segment's operating profit of approximately US$7 million during the second quarter and US$14 million during the first six months.
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