May 8/14 12:35 pm - Dorel Bicycle Sales Rebound in First Quarter of 2014

Posted by Editoress on 05/8/14
 

Dorel Industries Inc. (TSX: DII.B, DII.A) today released results for the first quarter ended March 31, 2014. Total revenue increased 9% to US$647.7 million from US$594.2 million a year ago. Net income was US$24.8 million, up 11.1%, or US$0.77 per diluted share, compared to US$22.3 million or US$0.70 per diluted share in the first quarter of 2013.

"All three Dorel business segments improved during the first quarter, with the most dramatic gains in our Recreational/Leisure segment," stated Dorel President and CEO, Martin Schwartz. "Sales rebounded at both Cannondale Sports Group (CSG) and Pacific Cycle as the global bicycle market strengthened. Coupled with management's intense restructuring efforts and other cost containment initiatives, operating profit in the segment was up 71% over last year's first quarter. The recovery in CSG was driven by a strong performance in Europe and the UK due to an early start to spring abroad. The integration of our Caloi acquisition is going well but that business is very seasonal so the first quarter segment operating results were slightly negative with Caloi profitability only beginning in the second quarter."

First quarter Recreational/Leisure revenue rebounded strongly as the global bicycle market begins to bounce back. In particular, Cannondale Sports Group (CSG) Europe and UK did very well due to spring's early arrival abroad and favourable exchange rates. Organic revenue increased by approximately 8%, after removing the effect of acquisitions and excluding the impact of varying foreign exchange rates. Included in the first quarter is a restructuring charge of US$0.5 million as part of the segment's overall plan to enhance its competitiveness. It is expected that an additional US$2.6 million will be taken in restructuring charges through 2014.

Accordingly, Dorel has decided to promote Peter Woods from Interim Group President & CEO to Group President & CEO, Recreational/Leisure segment.

"We have had a strong first quarter as all our segments exceeded prior year earnings. In Recreational/Leisure, we have had a good start to the year, particularly in Europe. As we look to the full year, we believe the rebound will continue not just in Europe but also in North America in both the IBD and mass channels. In the second half we are also going to see the full benefit of our Caloi acquisition, so we remain confident about our return to much higher levels of profitability.