Dorel Reports Q4 and 2016 Year-End Results
Tweet
Share
E-mailMONTREAL, QUEBEC -- (Marketwired) -- 03/09/17 -- Dorel Industries Inc. (TSX: DII.B)(TSX: DII.A) today announced results for the fourth quarter and year ended December 30, 2016. Revenue for the fourth quarter was US$648.7 million down 3.0% from US$668.9 million a year ago. Adjusted net income for the fourth quarter was US$7.7 million or US$0.24 per diluted share compared to adjusted net income of US$14.1 million or US$0.43 per diluted share in the fourth quarter of 2015. Reported net loss for the quarter was US$5.6 million or US$0.17 per diluted share compared to reported net income of US$6.6 million or US$0.20 per diluted share a year ago.
Revenue for the full year was US$2.60 billion, down 3.0% from US$2.68 billion the previous year. Adjusted net income for the year rose slightly to US$58.3 million or US$1.79 per diluted share compared to adjusted net income of US$58.0 million or US$1.78 per diluted share in 2015. Reported net loss was US$11.6 million or US$0.36 per diluted share, compared to reported net income of US$25.7 million or US$0.79 per diluted share the previous year.
The Company is presenting adjusted financial information, excluding impairment losses on goodwill and intangible assets, restructuring and 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 this press release. The fourth quarter reported net loss included restructuring and other costs and loss on remeasurement of forward purchase agreement liabilities totaling US$18.1 million pre-tax or US$0.41 per diluted share. Excluding these items, adjusted income before income taxes was US$1.0 million compared to US$11.0 million a year ago. Contained within this press release are reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
The Company strengthened its statement of financial position throughout the year with cash provided by operating activities generating US$171.9 million, compared to US$78.7 million last year. Lowering inventory levels has been a prime focus, contributing to the improved cash flow. Year-over-year, the Company's net debt position (defined as long-term debt and bank indebtedness less cash and cash equivalents) has been reduced by approximately US$96.0 million. As a result, the indebtedness to adjusted EBITDA ratio improved to 2.28 from 3.06 in 2015 as detailed in the attached tables of this press release.
"Our management teams successfully navigated through challenging conditions in several markets in 2016. I am pleased with the results achieved across our business units. There was notable progress in inventory control and cash flow management. As such, we are considerably less leveraged than a year ago. It was another breakout year for Dorel Home and the segment has evolved from a traditional furniture company to one that understands today's marketplace with a best-in-class technological distribution platform for home products. Dorel Juvenile is changing to become more proactive in responding to industry trends, returning to its entrepreneurial origins. Management is simplifying the organization, concentrating on projects that generate profitable short-term revenue and materially accelerating our time to market. Despite the reduced top line at Dorel Sports, efforts at mitigating the headwinds in bikes were successful as fourth quarter adjusted operating profit increased almost 11%," stated Martin Schwartz, Dorel President and CEO.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Summary of Financial Information (unaudited)
----------------------------------------------------------------------------
Fourth Quarters Ended December 30
----------------------------------------------------------------------------
All figures in thousands of US $, except per share amounts
----------------------------------------------------------------------------
2016 2015 Change
----------------------------------------------------------------------------
$ $ %
Total revenue 648,749 668,938 (3.0%)
Net income (loss) (5,567) 6,614 (184.2%)
Per share - Basic (0.17) 0.20 (185.0%)
Per share - Diluted (0.17) 0.20 (185.0%)
Adjusted net income 7,740 14,116 (45.2%)
Per share - Basic 0.24 0.44 (45.5%)
Per share - Diluted 0.24 0.43 (44.2%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Number of shares outstanding -
Basic weighted average 32,373,809 32,332,643
Diluted weighted average 32,373,809 32,545,163
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Summary of Financial Information (unaudited)
----------------------------------------------------------------------------
Years Ended December 30
----------------------------------------------------------------------------
All figures in thousands of US $, except per share amounts
----------------------------------------------------------------------------
2016 2015 Change
----------------------------------------------------------------------------
$ $ %
Total revenue 2,603,185 2,683,357 (3.0%)
Net income (loss) (11,611) 25,704 (145.2%)
Per share - Basic (0.36) 0.80 (145.0%)
Per share - Diluted (0.36) 0.79 (145.6%)
Adjusted net income 58,251 58,005 0.4%
Per share - Basic 1.80 1.79 0.6%
Per share - Diluted 1.79 1.78 0.6%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Number of shares outstanding -
Basic weighted average 32,352,953 32,324,569
Diluted weighted average 32,352,953 32,527,632
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dorel Home
All figures in thousands of US $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth Quarters Ended December 30 (unaudited)
----------------------------------------------------------------------------
2015
2016 Restated(i) Change
----------------------------------------------------------------------------
$ % of rev. $ % of rev. %
Total revenue 177,049 173,848 1.8%
Gross profit 29,703 16.8% 25,976 14.9% 14.3%
Operating profit 13,769 7.8% 11,134 6.4% 23.7%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
All figures in thousands of US $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Years Ended December 30 (unaudited)
----------------------------------------------------------------------------
2015
2016 Restated(i) Change
----------------------------------------------------------------------------
$ % of rev. $ % of rev. %
Total revenue 735,247 685,805 7.2%
Gross profit 123,742 16.8% 94,509 13.8% 30.9%
Operating profit 64,180 8.7% 42,474 6.2% 51.1%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's furniture
was transferred from Dorel Juvenile to Dorel Home. Accordingly, the Company
has restated the segmented information for the fourth quarter and year ended
December 30, 2015.
Dorel Home fourth quarter revenue increased US$3.2 million, or 1.8% to US$177.0 million, representing the highest quarter in the segment's history. Full year revenue grew US$49.4 million, or 7.2% to US$735.2 million. The segment experienced growth in almost all product categories and posted another record quarter and full year of sales to on-line retailers, representing respectively 51% and 45% of total segment sales compared to 44% and 37% in 2015. This improvement far exceeded reductions in the brick and mortar channel.
For both periods, gross profit rose to 16.8%, an improvement of 190 basis points for the quarter and 300 basis points for the year, led by e-commerce growth throughout the year.
Fourth quarter operating profit rose US$2.6 million, or 23.7% and for the full year grew substantially by US$21.7 million, or 51.1%, mainly driven by higher e-commerce sales at improved margins. This was partly offset by higher information technology and administrative costs to support the segment's growth in e-commerce.
The segment has been rebranded as Dorel Home in view of its broadened product range and its evolution from a traditional furniture company to one offering today's marketplace a best-in-class technological distribution platform for home products in today's omni-channel marketplace.
Dorel Juvenile
All figures in thousands of US $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth Quarters Ended December 30 (unaudited)
----------------------------------------------------------------------------
2015
2016 Restated(i) Change
----------------------------------------------------------------------------
$ % of rev. $ % of rev. %
Total revenue 236,447 241,396 (2.1%)
Gross profit 71,240 30.1% 71,857 29.8% (0.9%)
Operating profit
(loss) (17,259) (7.3%) 1,395 0.6% (1,337.2%)
Adjusted gross
profit 71,240 30.1% 72,220 29.9% (1.4%)
Adjusted operating
profit (loss) (7,141) (3.0%) 8,560 3.5% (183.4%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
All figures in thousands of US $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Years Ended December 30 (unaudited)
----------------------------------------------------------------------------
2015
2016 Restated(i) Change
----------------------------------------------------------------------------
$ % of rev. $ % of rev. %
Total revenue 928,963 997,343 (6.9%)
Gross profit 290,618 31.3% 274,650 27.5% 5.8%
Operating profit 16,760 1.8% 25,144 2.5% (33.3%)
Adjusted gross
profit 290,618 31.3% 275,880 27.7% 5.3%
Adjusted operating
profit 31,314 3.4% 39,074 3.9% (19.9%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's furniture
was transferred from Dorel Juvenile to Dorel Home. Accordingly, the Company
has restated the segmented information for the fourth quarter and year ended
December 30, 2015.
Fourth quarter revenue declined by US$4.9 million, or 2.1% to US$236.4 million. Revenue was essentially flat with the prior year after removing the impact of varying exchange rates year-over-year and planned reductions in third party sales at Dorel Juvenile China. Full year revenue declined US$68.4 million, or 6.9% to US$929.0 million with organic revenue decreasing by approximately 1.5%. Lower 2016 sales in the U.S. and European markets were partly offset by growth in Canada and Latin America.
As a global player, Dorel Juvenile is re-aligning operations to be more agile and drive profitable sales growth with a more market-focused approach to better react to juvenile industry trends. Central to this change is allocating resources that create the greatest return. Overheads are being reduced and savings re-purposed to needed improvement in digital capabilities and enhanced brand support. The ability to develop and bring meaningful products to market faster is being improved by decreasing complexity, and maximizing our best-in-class product development and manufacturing capabilities.
In the fourth quarter, cost saving and cash generating opportunities were identified that resulted in US$10.1 million being recorded as restructuring and other costs. Of this amount, US$8.8 million was for a non-cash charge for the write-down of long-lived assets, with the majority of the balance being employee severance and termination benefits. Further restructuring is planned for 2017 with the consolidation of the Asian-based product development team in China and additional headcount reduction opportunities overall. In addition, certain licensed third party brands used in North America will be exited to allow for additional energy and financial resources to be dedicated to Dorel owned brands. Total future costs are estimated to be US$7.6 million. As a result of the restructuring initiatives initiated in 2015, the segment now expects to realize annualized cost savings of approximately US$13.0 million once the restructuring actions are completed in 2017. Dorel anticipates re-investing a significant portion of these savings to drive Dorel Juvenile's future revenues and earnings.
Included in general and administrative expenses in the fourth quarter were abnormally high product liability costs of US$10.2 million. This was also the case for the full year, as product liability costs increased by US$23.6 million due to several settlements and associated legal costs. The five-year average for these costs prior to 2016 was US$7.5 million and going forward, management expects product liability costs will return to no more than these average levels. Unusual amounts for the cancellation of product development projects, which did not meet the segment's new growth criteria, resulted in the write-down of certain deferred development costs. This, combined with expenses for employee severance not included within restructuring expenses, totaled US$7.8 million for the fourth quarter. Excluding these three items from earnings for the quarter, the segment's adjusted operating profit exceeded prior year. The after tax impact of these items represented US$12.0 million for the fourth quarter.
Fourth quarter operating loss was US$17.3 million compared to an operating profit of US$1.4 million a year ago. Excluding restructuring and other costs, adjusted operating loss for the quarter amounted to US$7.1 million compared to last year's adjusted operating profit of US$8.6 million. Full year operating profit declined US$8.4 million to US$16.8 million from last year. Excluding restructuring and other costs, adjusted operating profit decreased US$7.8 million to US$31.3 million. This decline was partly offset by higher margins, cost containment and increased savings from the segment's restructuring activities.
Dorel Sports
All figures in thousands of US $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth Quarters Ended December 30 (unaudited)
----------------------------------------------------------------------------
2016 2015 Change
----------------------------------------------------------------------------
$ % of rev. $ % of rev. %
Total revenue 235,253 253,694 (7.3%)
Gross profit 47,998 20.4% 51,298 20.2% (6.4%)
Operating profit 4,965 2.1% 8,423 3.3% (41.1%)
Adjusted gross profit 50,417 21.4% 51,298 20.2% (1.7%)
Adjusted operating
profit 10,153 4.3% 9,165 3.6% 10.8%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
All figures in thousands of US $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Years Ended December 30 (unaudited)
----------------------------------------------------------------------------
2016 2015 Change
----------------------------------------------------------------------------
$ % of rev. $ % of rev. %
Total revenue 938,975 1,000,209 (6.1%)
Gross profit 196,201 20.9% 212,339 21.2% (7.6%)
Operating profit
(loss) (33,930) (3.6%) 10,895 1.1% (411.4%)
Adjusted gross profit 201,322 21.4% 214,851 21.5% (6.3%)
Adjusted operating
profit 31,538 3.4% 42,007 4.2% (24.9%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth quarter revenue decreased US$18.4 million, or 7.3% to US$235.3 million. Organic revenue declined approximately 14.6% when removing currency rate fluctuations and the revenue gross-up generated by the transition of Cycling Sports Group (CSG) International business from a licensing model to a distribution platform. Since this year's third quarter, CSG International's shipments have been recognized as net sales and associated expenses in cost of sales. Previously these were recognized on a net basis in licensing and commission income.
The quarter's revenue decline was due primarily to the change in North American CSG dealers' purchasing habits to reduce their inventory prior to the cycling season which is expected to move fourth quarter orders to the first half of 2017. CSG inventories are now at appropriate levels. December 2016 Bicycle Products Supplier Association (BPSA) data indicates U.S. supplier inventories are down 24.0% and retailer inventory levels down 6.3%.
Full year revenue declined US$61.2 million, or 6.1% to US$939.0 million and organic revenue declined by approximately 8.4% when removing currency rate fluctuations and the above-mentioned revenue recognition change impact. The main causes were the change in dealers' purchasing patterns, industry-wide discounting due to excess inventories at suppliers and retailers during the first half of 2016 and a generally soft global bike market overall.
Fourth quarter operating profit declined US$3.5 million to US$5.0 million and adjusted operating profit increased US$1.0 million, or 10.8% to US$10.2 million when excluding restructuring and other costs. Margin improvements and cost controls offset the reduced sales impact to exceed the prior year's fourth quarter.
Year-to-date operating loss was US$33.9 million compared to an operating profit of US$10.9 million in 2015. Excluding impairment losses, restructuring and other costs, adjusted operating profit declined US$10.5 million, or 24.9% to US$31.5 million mainly from lower demand and reduced margins from discounting during the first half of 2016. Pacific Cycle had a good year, in part, due to improved supply chain efficiencies. Strategic pricing, cost controls as well as a better product mix allowed Caloi to increase its profitability.
Commencing this year, restructuring actions are expected to result in annualized savings of US$5.0 million. The goal is to refocus the business to deliver enhanced profitability during all business conditions.
Other
The Company's effective tax rates were recoveries of 46.2% in 2016 compared to (11.9)% in 2015. Excluding income taxes on impairment losses, restructuring and other costs and remeasurement of forward purchase agreement liabilities in both 2016 and 2015, the Company's adjusted tax rate were expenses of 7.1% and 3.6% respectively. The main causes of the variations were changes in the jurisdictions in which the Company generated its income and the recognition in 2015 of tax benefits as a result of a foreign reorganization.
Outlook
"As we enter 2017, all three of our business segments are positioned to improve earnings. Dorel Home had an exceptional 2016 and we remain bullish on their prospects. The on-going shift from traditional mass market brick and mortar sales to e-commerce has allowed this segment to improve its earnings significantly over the past two years. Given the continual growth of the e-commerce channel, we expect a further increase in earnings, but at a slower pace," stated Martin Schwartz, Dorel President & CEO.
"Dorel Juvenile's earnings are expected to improve in 2017 as last year's exceptionally high costs of product liability are unlikely to be repeated. We anticipate the changes put in place by Management to deliver improvements in speeding product to market and driving sales, while also controlling costs, should translate into improved earnings. Rising commodity prices, currency and the shrinking U.S. brick and mortar channels are a risk for the segment, but we are well positioned to manage these challenges as they arise.
"Dorel Sports worked throughout 2016 to position itself for a rebound in earnings in 2017. Excess inventories in the industry have been reduced and thus rampant discounting should not be repeated. Improvements made in cost control and supply chain management are expected to contribute to the operating profit, helping to offset any sales softness, should this occur. It is early in the year and visibility for the full year is difficult, but we are confident in the direction of the segment," concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, March 9, 2017 at 1:00 P.M. Eastern Time. Interested parties can join the call by dialling 1-877-223-4471. The conference call can also be accessed via live webcast at http://www.dorel.com/eng/events. If you are unable to call in at this time, you may access a recording of the meeting by calling 1-800-585-8367 and entering the passcode 51942662 on your phone. This recording will be available on Thursday, March 9, 2017 as of 4:00 P.M. until 11:59 P.M. on Thursday, March 16, 2017.
Complete consolidated financial statements as at December 30, 2016 will be available on the Company's website, www.dorel.com, and will be available through the SEDAR website.
Profile
Dorel Industries Inc. (TSX: DII.B)(TSX: DII.A) is a world class juvenile products and bicycle company. The Company's safety and lifestyle leadership is pronounced in both its Juvenile and Bicycle categories with an array of trend-setting, innovative products. Dorel Juvenile's powerfully branded products include global juvenile brands Safety 1st, Quinny, Maxi-Cosi and Tiny Love, complemented by regional brands such as Cosco, Bebe Confort and Infanti. In Dorel Sports, brands include Cannondale, Schwinn, GT, Mongoose, Caloi, IronHorse and SUGOI. Dorel Home markets include a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel Industries Inc. has annual sales of US$2.6 billion and employs approximately 10,000 people in facilities located in over twenty-five countries worldwide.
Caution Regarding Forward-Looking Statements
Certain statements included in this press release may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. Except as may be required by Canadian securities laws, Dorel does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Dorel's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Dorel cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits Dorel will derive from them. Forward-looking statements are provided in this press release for the purpose of giving information about Management's current expectations and plans and allowing investors and others to get a better understanding of Dorel's operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.
Forward-looking statements made in this press release are based on a number of assumptions that Dorel believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from Dorel's expectations expressed in or implied by the forward-looking statements include: general economic conditions; changes in product costs and supply channels; foreign currency fluctuations; customer and credit risk, including the concentration of revenues with a small number of customers; costs associated with product liability; changes in income tax legislation or the interpretation or application of those rules; the continued ability to develop products and support brand names; changes in the regulatory environment; continued access to capital resources and the related costs of borrowing; changes in assumptions in the valuation of goodwill and other intangible assets; and there being no certainty that Dorel's current dividend policy will be maintained. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in Dorel's annual Management Discussion and Analysis and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors outlined in the previously-mentioned documents are specifically incorporated herein by reference.
Dorel cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to Dorel or that Dorel currently deems to be immaterial may also have a material adverse effect on Dorel's business, financial condition or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Non-GAAP financial measures
As a result of impairment losses, restructuring and other costs and remeasurement of forward purchase agreement liabilities incurred in both 2016 and 2015, the Company is including in this press release the following non-GAAP financial measures: "adjusted cost of sales", "adjusted gross profit", "adjusted operating profit (loss)", "adjusted finance expenses", "adjusted income before income taxes", "adjusted income taxes (recovery) expense", "adjusted tax rate", "adjusted net income", and "adjusted earnings per basic and diluted share". The Company believes that this results in a more meaningful comparison of its core business performance between the periods presented. These non-GAAP financial measures do not have a standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other issuers. Contained within this press release are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
(All figures in tables below are in thousands of US$, except per share amounts)
Reconciliation of non-GAAP financial measures
---------------------------------------------------------------------------
Fourth Quarters Ended December 30,
---------------------------------------------------------------------------
2016
--------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 648,749 100.0 - 648,749 100.0
Cost of sales 499,808 77.0 (2,419) 497,389 76.7
---------------------------------------------------------------------------
GROSS PROFIT 148,941 23.0 2,419 151,360 23.3
Selling expenses 57,730 8.9 - 57,730 8.9
General and
administrative
expenses 69,219 10.7 - 69,219 10.7
Research and
development
expenses 14,463 2.2 - 14,463 2.2
Restructuring and
other costs 12,887 2.0 (12,887) - -
---------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) (5,358) (0.8) 15,306 9,948 1.5
Finance expenses 11,766 1.8 (2,840) 8,926 1.3
---------------------------------------------------------------------------
INCOME (LOSS)
BEFORE INCOME
TAXES (17,124) (2.6) 18,146 1,022 0.2
---------------------------------------------------------------------------
Income taxes
(recovery) expense (11,557) (1.7) 4,839 (6,718) (1.0)
Tax rate 67.5% - - (657.3%) -
---------------------------------------------------------------------------
NET INCOME (LOSS) (5,567) (0.9) 13,307 7,740 1.2
---------------------------------------------------------------------------
EARNINGS (LOSS) PER
SHARE
Basic (0.17) 0.41 0.24
---------------------------------------------------------------------------
Diluted (0.17) 0.41 0.24
---------------------------------------------------------------------------
SHARES OUTSTANDING
Basic - weighted
average 32,373,809 32,373,809
Diluted - weighted
average 32,373,809 32,630,255
---------------------------------------------------------------------------
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Fourth Quarters Ended December 30,
----------------------------------------------------------------------------
2015
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 668,938 100.0 - 668,938 100.0
Cost of sales 519,807 77.7 (363) 519,444 77.7
----------------------------------------------------------------------------
GROSS PROFIT 149,131 22.3 363 149,494 22.3
Selling expenses 60,578 9.1 - 60,578 9.1
General and
administrative
expenses 54,650 8.1 - 54,650 8.1
Research and
development
expenses 10,554 1.6 - 10,554 1.6
Restructuring and
other costs 7,544 1.1 (7,544) - -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) 15,805 2.4 7,907 23,712 3.5
Finance expenses 14,814 2.3 (2,069) 12,745 1.9
----------------------------------------------------------------------------
INCOME (LOSS)
BEFORE INCOME
TAXES 991 0.1 9,976 10,967 1.6
----------------------------------------------------------------------------
Income taxes
(recovery) expense (5,623) (0.9) 2,474 (3,149) (0.5)
Tax rate (567.4%) - - (28.7%) -
----------------------------------------------------------------------------
NET INCOME (LOSS) 6,614 1.0 7,502 14,116 2.1
----------------------------------------------------------------------------
EARNINGS (LOSS) PER
SHARE
Basic 0.20 0.24 0.44
----------------------------------------------------------------------------
Diluted 0.20 0.23 0.43
----------------------------------------------------------------------------
SHARES OUTSTANDING
Basic - weighted
average 32,332,643 32,332,643
Diluted - weighted
average 32,545,163 32,545,163
----------------------------------------------------------------------------
Reconciliation of non-GAAP financial measures
---------------------------------------------------------------------------
Years Ended December 30,
---------------------------------------------------------------------------
2016
-------------------------------------------------------
Impairment
losses,
restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 2,603,185 100.0 - 2,603,185 100.0
Cost of sales 1,992,624 76.5 (5,121) 1,987,503 76.3
---------------------------------------------------------------------------
GROSS PROFIT 610,561 23.5 5,121 615,682 23.7
Selling expenses 230,623 8.9 - 230,623 8.9
General and
administrative
expenses 244,631 9.4 - 244,631 9.4
Research and
development
expenses 39,092 1.5 - 39,092 1.5
Restructuring and
other costs 19,560 0.8 (19,560) - -
Impairment losses on
goodwill and
intangible assets 55,341 2.1 (55,341) - -
---------------------------------------------------------------------------
OPERATING PROFIT 21,314 0.8 80,022 101,336 3.9
Finance expenses 42,899 1.6 (4,265) 38,634 1.5
---------------------------------------------------------------------------
INCOME (LOSS) BEFORE
INCOME TAXES (21,585) (0.8) 84,287 62,702 2.4
---------------------------------------------------------------------------
Income taxes
(recovery) expense (9,974) (0.4) 14,425 4,451 0.2
Tax rate 46.2% - - 7.1% -
---------------------------------------------------------------------------
NET INCOME (LOSS) (11,611) (0.4) 69,862 58,251 2.2
---------------------------------------------------------------------------
EARNINGS (LOSS) PER
SHARE
Basic (0.36) 2.16 1.80
---------------------------------------------------------------------------
Diluted (0.36) 2.15 1.79
---------------------------------------------------------------------------
SHARES OUTSTANDING
Basic - weighted
average 32,352,953 32,352,953
Diluted - weighted
average 32,352,953 32,584,489
---------------------------------------------------------------------------
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Years Ended December 30,
----------------------------------------------------------------------------
2015
--------------------------------------------------------
Impairment
losses,
restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 2,683,357 100.0 - 2,683,357 100.0
Cost of sales 2,101,859 78.3 (3,742) 2,098,117 78.2
----------------------------------------------------------------------------
GROSS PROFIT 581,498 21.7 3,742 585,240 21.8
Selling expenses 235,030 8.8 - 235,030 8.8
General and
administrative
expenses 209,330 7.8 - 209,330 7.8
Research and
development
expenses 37,595 1.4 - 37,595 1.4
Restructuring and
other costs 14,790 0.5 (14,790) - -
Impairment losses on
goodwill and
intangible assets 26,510 1.0 (26,510) - -
----------------------------------------------------------------------------
OPERATING PROFIT 58,243 2.2 45,042 103,285 3.8
Finance expenses 35,277 1.3 7,810 43,087 1.5
----------------------------------------------------------------------------
INCOME (LOSS) BEFORE
INCOME TAXES 22,966 0.9 37,232 60,198 2.3
----------------------------------------------------------------------------
Income taxes
(recovery) expense (2,738) (0.1) 4,931 2,193 0.1
Tax rate (11.9%) - - 3.6% -
----------------------------------------------------------------------------
NET INCOME (LOSS) 25,704 1.0 32,301 58,005 2.2
----------------------------------------------------------------------------
EARNINGS (LOSS) PER
SHARE
Basic 0.80 0.99 1.79
----------------------------------------------------------------------------
Diluted 0.79 0.99 1.78
----------------------------------------------------------------------------
SHARES OUTSTANDING
Basic - weighted
average 32,324,569 32,324,569
Diluted - weighted
average 32,527,632 32,527,632
----------------------------------------------------------------------------
Details of impairment losses, restructuring and other costs and remeasurement of forward purchase agreement liabilities:
----------------------------------------------------------------------------
Fourth Quarters Ended Years Ended December
December 30, 30,
----------------------- ------------------------
2016 2015 2016 2015
$ $ $ $
----------------------------------------------------------------------------
Accelerated depreciation 57 - 57 -
Inventory markdowns 979 363 3,557 3,742
Other associated costs 619 - 619 -
----------------------------------------------------------------------------
Recorded within gross profit 1,655 363 4,233 3,742
----------------------------------------------------------------------------
Employee severance and
termination benefits 3,524 3,839 7,955 6,815
Accelerated depreciation 1,065 - 1,903 -
Write-down of long-lived
assets 8,353 2,196 8,777 3,196
Losses from the
remeasurement and disposals
of assets held for sale 107 - 190 -
Curtailments gain on net
pension defined benefit
liabilities (891) (326) (891) (326)
Other associated costs 430 1,016 586 1,451
----------------------------------------------------------------------------
Recorded within a separate
line in the consolidated
income statements 12,588 6,725 18,520 11,136
----------------------------------------------------------------------------
Total restructuring costs 14,243 7,088 22,753 14,878
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other costs recorded within
gross profit 764 - 888 -
----------------------------------------------------------------------------
Acquisition-related costs - 819 729 3,654
Other costs 299 - 311 -
----------------------------------------------------------------------------
Recorded within a separate
line in the consolidated
income statements 299 819 1,040 3,654
----------------------------------------------------------------------------
Total other costs 1,063 819 1,928 3,654
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total restructuring and
other costs 15,306 7,907 24,681 18,532
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Impairment losses on
goodwill and intangible
assets - - 55,341 26,510
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Loss (gain) on remeasurement
of forward purchase
agreement liabilities 2,840 2,069 4,265 (7,810)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total impairment losses,
restructuring and other
costs and remeasurement of
forward purchase agreement
liabilities before income
taxes (1) 18,146 9,976 84,287 37,232
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total impairment losses,
restructuring and other
costs and remeasurement of
forward purchase agreement
liabilities after income
taxes 13,307 7,502 69,862 32,301
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total impact on diluted
earnings (loss) per share (0.41) (0.23) (2.15) (0.99)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Includes non-cash
amounts of: 12,510 4,302 73,199 25,312
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dorel Juvenile
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Fourth Quarters Ended December 30,
----------------------------------------------------------------------------
2016
------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 236,447 100.0 - 236,447 100.0
Cost of sales 165,207 69.9 - 165,207 69.9
----------------------------------------------------------------------------
GROSS PROFIT 71,240 30.1 - 71,240 30.1
Selling expenses 31,146 13.2 - 31,146 13.2
General and
administrative
expenses 35,437 14.9 - 35,437 14.9
Research and
development expenses 11,798 5.0 - 11,798 5.0
Restructuring and
other costs 10,118 4.3 (10,118) - -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) (17,259) (7.3) 10,118 (7,141) (3.0)
----------------------------------------------------------------------------
Years Ended December 30,
----------------------------------------------------------------------------
2016
------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 928,963 100.0 - 928,963 100.0
Cost of sales 638,345 68.7 - 638,345 68.7
----------------------------------------------------------------------------
GROSS PROFIT 290,618 31.3 - 290,618 31.3
Selling expenses 115,132 12.4 - 115,132 12.4
General and
administrative
expenses 115,447 12.4 - 115,447 12.4
Research and
development expenses 28,725 3.1 - 28,725 3.1
Restructuring and
other costs 14,554 1.6 (14,554) - -
----------------------------------------------------------------------------
OPERATING PROFIT 16,760 1.8 14,554 31,314 3.4
----------------------------------------------------------------------------
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Fourth Quarters Ended December 30,
----------------------------------------------------------------------------
2015
Restated(i)
-------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
-------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 241,396 100.0 - 241,396 100.0
Cost of sales 169,539 70.2 (363) 169,176 70.1
----------------------------------------------------------------------------
GROSS PROFIT 71,857 29.8 363 72,220 29.9
Selling expenses 30,855 12.8 - 30,855 12.8
General and
administrative
expenses 24,950 10.3 - 24,950 10.3
Research and
development expenses 7,855 3.3 - 7,855 3.3
Restructuring and
other costs 6,802 2.8 (6,802) - -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) 1,395 0.6 7,165 8,560 3.5
----------------------------------------------------------------------------
Years Ended December 30,
----------------------------------------------------------------------------
2015
Restated(i)
-------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
-------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 997,343 100.0 - 997,343 100.0
Cost of sales 722,693 72.5 (1,230) 721,463 72.3
----------------------------------------------------------------------------
GROSS PROFIT 274,650 27.5 1,230 275,880 27.7
Selling expenses 114,511 11.5 - 114,511 11.5
General and
administrative
expenses 94,857 9.5 - 94,857 9.5
Research and
development expenses 27,438 2.8 - 27,438 2.8
Restructuring and
other costs 12,700 1.2 (12,700) - -
----------------------------------------------------------------------------
OPERATING PROFIT 25,144 2.5 13,930 39,074 3.9
----------------------------------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's furniture
was transferred from Dorel Juvenile to Dorel Home. Accordingly, the Company
has restated the segmented information for the fourth quarter and year ended
December 30, 2015.
Dorel Sports
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Fourth Quarters Ended December 30,
----------------------------------------------------------------------------
2016
-----------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 235,253 100.0 - 235,253 100.0
Cost of sales 187,255 79.6 (2,419) 184,836 78.6
----------------------------------------------------------------------------
GROSS PROFIT 47,998 20.4 2,419 50,417 21.4
Selling expenses 20,258 8.6 - 20,258 8.6
General and
administrative
expenses 18,270 7.8 - 18,270 7.8
Research and
development expenses 1,736 0.7 - 1,736 0.7
Restructuring and other
costs 2,769 1.2 (2,769) - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT 4,965 2.1 5,188 10,153 4.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Years Ended December 30,
----------------------------------------------------------------------------
2016
-----------------------------------------------------
Impairment
losses,
restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 938,975 100.0 - 938,975 100.0
Cost of sales 742,774 79.1 (5,121) 737,653 78.6
----------------------------------------------------------------------------
GROSS PROFIT 196,201 20.9 5,121 201,322 21.4
Selling expenses 91,247 9.7 - 91,247 9.7
General and
administrative
expenses 71,961 7.6 - 71,961 7.6
Research and
development expenses 6,576 0.7 - 6,576 0.7
Restructuring and other
costs 5,006 0.5 (5,006) - -
Impairment losses on
goodwill and
intangible assets 55,341 6.0 (55,341) - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT (LOSS) (33,930) (3.6) 65,468 31,538 3.4
----------------------------------------------------------------------------
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Fourth Quarters Ended December 30,
----------------------------------------------------------------------------
2015
----------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------- ----------------------------------------------------
$ % $ $ %
TOTAL REVENUE 253,694 100.0 - 253,694 100.0
Cost of sales 202,396 79.8 - 202,396 79.8
----------------------------------------------------------------------------
GROSS PROFIT 51,298 20.2 - 51,298 20.2
Selling expenses 24,226 9.5 - 24,226 9.5
General and
administrative
expenses 16,145 6.4 - 16,145 6.4
Research and
development expenses 1,762 0.7 - 1,762 0.7
Restructuring and other
costs 742 0.3 (742) - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT 8,423 3.3 742 9,165 3.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Years Ended December 30,
----------------------------------------------------------------------------
2015
----------------------------------------------------
Impairment
losses,
restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------- ----------------------------------------------------
$ % $ $ %
TOTAL REVENUE 1,000,209 100.0 - 1,000,209 100.0
Cost of sales 787,870 78.8 (2,512) 785,358 78.5
----------------------------------------------------------------------------
GROSS PROFIT 212,339 21.2 2,512 214,851 21.5
Selling expenses 98,819 9.9 - 98,819 9.9
General and
administrative
expenses 67,611 6.8 - 67,611 6.8
Research and
development expenses 6,414 0.6 - 6,414 0.6
Restructuring and other
costs 2,090 0.2 (2,090) - -
Impairment losses on
goodwill and
intangible assets 26,510 2.6 (26,510) - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT (LOSS) 10,895 1.1 31,112 42,007 4.2
----------------------------------------------------------------------------
The indebtedness to adjusted EBITDA ratio as at December 30, 2016 and 2015
were as follows:
December 30,
----------------------------------------------------------------------------
2016 2015
$ $
----------------------------------------------------------------------------
Bank indebtedness 49,490 54,471
Face value of long-term debt (excluding
convertible debentures) 292,707 386,448
Guarantees 22,733 34,056
Written put option and forward purchase
agreement liabilities (1) 22,645 22,034
----------------------------------------------------------------------------
Indebtedness 387,575 497,009
----------------------------------------------------------------------------
(1) Based on current earnings level
----------------------------------------------------------------------------
For the trailing four quarters
ended
December 30,
----------------------------------------------------------------------------
2016 2015
$ $
----------------------------------------------------------------------------
Net income (loss) (11,611) 25,704
Finance expenses 42,899 35,277
Income taxes recovery (9,974) (2,738)
Depreciation and amortization 53,186 58,801
Write-down of deferred development costs 5,590 -
Impairment losses on goodwill and intangible
assets 55,341 26,510
Restructuring and other costs 24,681 18,532
Unpaid product liability costs related to
judgments 9,550 -
Stock option plan expense 86 139
----------------------------------------------------------------------------
Adjusted EBITDA 169,748 162,225
----------------------------------------------------------------------------
Indebtedness to adjusted EBITDA ratio 2.28:1 3.06:1
----------------------------------------------------------------------------
For the purpose of the calculation of the ratio indebtedness / adjusted
EBITDA, the written put option and forward purchase agreement liabilities
are based on current earnings level as opposed to the fair value, which is a
function of earnings levels in future periods, and is reflected in the
consolidated financial statements.
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
as at as at
December 30, 2016 December 30, 2015
---------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 31,883 $ 33,182
Trade and other receivables 431,062 447,345
Inventories 549,688 584,986
Other financial assets 4,333 4,467
Income taxes receivable 14,466 12,985
Prepaid expenses 21,040 20,234
---------------------------------------
1,052,472 1,103,199
Assets held for sale 20,017 11,265
---------------------------------------
1,072,489 1,114,464
---------------------------------------
NON-CURRENT ASSETS
Property, plant and equipment 191,294 206,542
Intangible assets 427,587 465,447
Goodwill 435,790 476,330
Deferred tax assets 39,324 37,258
Other assets 6,148 4,904
---------------------------------------
1,100,143 1,190,481
---------------------------------------
$ 2,172,632 $ 2,304,945
---------------------------------------
---------------------------------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness $ 49,490 $ 54,471
Trade and other payables 437,009 434,178
Written put option and forward
purchase agreement liabilities 7,500 4,104
Other financial liabilities 569 895
Deferred revenue 6,475 -
Income taxes payable 15,143 15,590
Long-term debt 51,138 32,857
Provisions 63,169 34,267
---------------------------------------
630,493 576,362
---------------------------------------
NON-CURRENT LIABILITIES
Long-term debt 355,118 465,732
Net pension and post-retirement
defined benefit liabilities 35,206 43,058
Deferred tax liabilities 53,293 72,447
Provisions 1,681 1,702
Written put option and forward
purchase agreement liabilities 26,325 30,788
Other financial liabilities 1,115 1,890
Other long-term liabilities 13,302 10,569
---------------------------------------
486,040 626,186
---------------------------------------
EQUITY
Share capital 202,400 200,277
Contributed surplus 27,139 26,480
Accumulated other comprehensive
loss (113,840) (113,956)
Other equity 3,027 1,527
Retained earnings 937,373 988,069
---------------------------------------
1,056,099 1,102,397
---------------------------------------
$ 2,172,632 $ 2,304,945
---------------------------------------
---------------------------------------
DOREL INDUSTRIES INC.
CONSOLIDATED INCOME STATEMENTS
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Fourth Quarters Ended Years Ended
------------------------------------------------------------
December 30, December 30, December 30, December 30,
2016 2015 2016 2015
------------------------------------------------------------
Sales $ 647,559 $ 664,399 $ 2,596,062 $ 2,668,918
Licensing and
commission
income 1,190 4,539 7,123 14,439
------------------------------------------------------------
TOTAL REVENUE 648,749 668,938 2,603,185 2,683,357
Cost of sales
(1) 499,808 519,807 1,992,624 2,101,859
------------------------------------------------------------
GROSS PROFIT 148,941 149,131 610,561 581,498
Selling expenses 57,730 60,578 230,623 235,030
General and
administrative
expenses 69,219 54,650 244,631 209,330
Research and
development
expenses 14,463 10,554 39,092 37,595
Restructuring
and other costs
(1) 12,887 7,544 19,560 14,790
Impairment
losses on
goodwill and
intangible
assets - - 55,341 26,510
------------------------------------------------------------
OPERATING PROFIT
(LOSS) (5,358) 15,805 21,314 58,243
Finance expenses 11,766 14,814 42,899 35,277
------------------------------------------------------------
INCOME (LOSS)
BEFORE INCOME
TAXES (17,124) 991 (21,585) 22,966
Income taxes
recovery (11,557) (5,623) (9,974) (2,738)
------------------------------------------------------------
NET INCOME
(LOSS) $ (5,567)$ 6,614 $ (11,611)$ 25,704
------------------------------------------------------------
------------------------------------------------------------
EARNINGS (LOSS)
PER SHARE
Basic $ (0.17)$ 0.20 $ (0.36)$ 0.80
------------------------------------------------------------
Diluted $ (0.17)$ 0.20 $ (0.36)$ 0.79
------------------------------------------------------------
SHARES
OUTSTANDING
Basic -
weighted
average 32,373,809 32,332,643 32,352,953 32,324,569
Diluted -
weighted
average 32,373,809 32,545,163 32,352,953 32,527,632
(1)Restructuring
and other costs
charged to:
Cost of sales $ 2,419 $ 363 $ 5,121 $ 3,742
Expenses 12,887 7,544 19,560 14,790
------------------------------------------------------------
$ 15,306 $ 7,907 $ 24,681 $ 18,532
------------------------------------------------------------
------------------------------------------------------------
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Fourth Quarters Ended Years Ended
---------------------------- ----------------------------
December 30, December 30, December 30, December 30,
2016 2015 2016 2015
---------------------------- ----------------------------
NET INCOME (LOSS) $ (5,567)$ 6,614 $ (11,611)$ 25,704
----------------------------------------------------------
OTHER
COMPREHENSIVE
INCOME (LOSS):
Items that are or
may be
reclassified
subsequently to
net income:
Cumulative
translation
account:
Net change in
unrealized
foreign currency
gains (losses)
on translation of
net investments
in foreign
operations, net of
tax of nil (16,237) (8,602) 3,856 (80,464)
Net gains (losses)
on hedge of net
investments in
foreign
operations, net
of tax of nil (6,816) (3,523) (1,964) (15,215)
----------------------------------------------------------
(23,053) (12,125) 1,892 (95,679)
----------------------------------------------------------
Net changes in
cash flow hedges:
Net change in
unrealized gains
(losses) on
derivatives
designated as cash
flow hedges 5,418 3,774 4,395 5,264
Reclassification
to income 156 170 608 978
Reclassification
to the related
non-financial
asset (2,768) (510) (4,477) (5,894)
Deferred income
taxes (1,138) (1,108) (354) 152
----------------------------------------------------------
1,668 2,326 172 500
----------------------------------------------------------
Items that will
not be
reclassified to
net income:
Defined benefit
plans:
Remeasurements of
the net pension
and post-
retirement
defined benefit
liabilities 779 2,700 (2,913) 2,791
Deferred income
taxes (465) (959) 965 (989)
----------------------------------------------------------
314 1,741 (1,948) 1,802
----------------------------------------------------------
TOTAL OTHER
COMPREHENSIVE
INCOME (LOSS) (21,071) (8,058) 116 (93,377)
----------------------------------------------------------
TOTAL
COMPREHENSIVE
LOSS $ (26,638)$ (1,444) $ (11,495)$ (67,673)
----------------------------------------------------------
----------------------------------------------------------
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Attributable to equity holders of the
Company
--------------------------------------
Share Contributed
Capital Surplus
------------------------------------------------------------------
Balance as at December 30,
2014 $ 199,927 $ 25,691
------------------------------------------------------------------
Total comprehensive loss:
----------------------------
Net income - -
Other comprehensive income
(loss) - -
------------------------------------------------------------------
- -
------------------------------------------------------------------
Issued under stock option
plan 219 -
Reclassification from
contributed surplus due to
exercise
of stock options 70 (70)
Reclassification from
contributed surplus due to
settlement
of deferred share units 61 (101)
Share-based payments - 730
Remeasurement of written
put option liabilities - -
Dividends on common shares - -
Dividends on deferred share
units - 230
------------------------------------------------------------------
Balance as at December 30,
2015 $ 200,277 $ 26,480
------------------------------------------------------------------
------------------------------------------------------------------
Total comprehensive loss:
----------------------------
Net loss - -
Other comprehensive income
(loss) - -
------------------------------------------------------------------
- -
------------------------------------------------------------------
Issued under stock option
plan 1,534 -
Reclassification from
contributed surplus due to
exercise
of stock options 385 (385)
Reclassification from
contributed surplus due to
settlement
of deferred share units 204 (420)
Share-based payments - 1,197
Remeasurement of written
put option liabilities - -
Dividends on common shares - -
Dividends on deferred share
units - 267
------------------------------------------------------------------
Balance as at December 30,
2016 $ 202,400 $ 27,139
------------------------------------------------------------------
------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Attributable to equity holders of the Company
------------------------------------------------
Accumulated other
comprehensive income (loss)
------------------------------------------------
Cumulative Defined
Translation Cash Flow Benefit
Account Hedges Plans
----------------------------------------------------------------------------
Balance as at December 30,
2014 $ (8,842) $ 2,180 $ (13,917)
----------------------------------------------------------------------------
Total comprehensive loss:
----------------------------
Net income - - -
Other comprehensive income
(loss) (95,679) 500 1,802
----------------------------------------------------------------------------
(95,679) 500 1,802
----------------------------------------------------------------------------
Issued under stock option
plan - - -
Reclassification from
contributed surplus due to
exercise
of stock options - - -
Reclassification from
contributed surplus due to
settlement
of deferred share units - - -
Share-based payments - - -
Remeasurement of written
put option liabilities - - -
Dividends on common shares - - -
Dividends on deferred share
units - - -
----------------------------------------------------------------------------
Balance as at December 30,
2015 $ (104,521) $ 2,680 $ (12,115)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total comprehensive loss:
----------------------------
Net loss - - -
Other comprehensive income
(loss) 1,892 172 (1,948)
----------------------------------------------------------------------------
1,892 172 (1,948)
----------------------------------------------------------------------------
Issued under stock option
plan - - -
Reclassification from
contributed surplus due to
exercise
of stock options - - -
Reclassification from
contributed surplus due to
settlement
of deferred share units - - -
Share-based payments - - -
Remeasurement of written
put option liabilities - - -
Dividends on common shares - - -
Dividends on deferred share
units - - -
----------------------------------------------------------------------------
Balance as at December 30,
2016 $ (102,629) $ 2,852 $ (14,063)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Attributable to equity holders of the Company
-----------------------------------------------
Other Retained Total
Equity Earnings Equity
----------------------------------------------------------------------------
Balance as at December 30,
2014 $ 579 $ 1,001,366 $ 1,206,984
----------------------------------------------------------------------------
Total comprehensive loss:
----------------------------
Net income - 25,704 25,704
Other comprehensive income
(loss) - - (93,377)
----------------------------------------------------------------------------
- 25,704 (67,673)
----------------------------------------------------------------------------
Issued under stock option
plan - - 219
Reclassification from
contributed surplus due to
exercise
of stock options - - -
Reclassification from
contributed surplus due to
settlement
of deferred share units - - (40)
Share-based payments - - 730
Remeasurement of written
put option liabilities 948 - 948
Dividends on common shares - (38,771) (38,771)
Dividends on deferred share
units - (230) -
----------------------------------------------------------------------------
Balance as at December 30,
2015 $ 1,527 $ 988,069 $ 1,102,397
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total comprehensive loss:
----------------------------
Net loss - (11,611) (11,611)
Other comprehensive income
(loss) - - 116
----------------------------------------------------------------------------
- (11,611) (11,495)
----------------------------------------------------------------------------
Issued under stock option
plan - - 1,534
Reclassification from
contributed surplus due to
exercise
of stock options - - -
Reclassification from
contributed surplus due to
settlement
of deferred share units - - (216)
Share-based payments - - 1,197
Remeasurement of written
put option liabilities 1,500 - 1,500
Dividends on common shares - (38,818) (38,818)
Dividends on deferred share
units - (267) -
----------------------------------------------------------------------------
Balance as at December 30,
2016 $ 3,027 $ 937,373 $ 1,056,099
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Fourth Quarters Ended Years Ended
------------------------------------------------
December December December December
30, 30, 30, 30,
2016 2015 2016 2015
------------------------------------------------
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net income (loss) $ (5,567)$ 6,614 $ (11,611)$ 25,704
Items not involving cash:
Depreciation and
amortization 13,275 15,109 53,186 58,801
Impairment losses on
goodwill and intangible
assets - - 55,341 26,510
Unrealized losses (gains)
arising on financial
assets
and financial liabilities
classified as held for
trading (215) 143 197 (214)
Share-based payments 114 95 484 389
Defined benefit pension and
post-retirement costs (74) 1,671 (5,711) 4,119
Loss (gain) on disposal of
property, plant and
equipment 67 747 (1,286) 1,474
Write-down of deferred
development costs 5,590 - 5,590 -
Restructuring and other
costs 9,670 2,233 13,593 6,612
Finance expenses 11,766 14,814 42,899 35,277
Income taxes recovery (11,557) (5,623) (9,974) (2,738)
Net changes in balances
related to operations 62,833 59,672 75,254 (34,407)
Income taxes paid (3,830) (1,753) (20,257) (15,678)
Income taxes received 1,301 104 9,913 7,204
Interest paid (12,927) (23,089) (36,200) (34,683)
Interest received 62 88 447 346
------------------------------------------------
CASH PROVIDED BY OPERATING
ACTIVITIES 70,508 70,825 171,865 78,716
------------------------------------------------
FINANCING ACTIVITIES
Bank indebtedness (6,296) (4,998) (8,249) 40,312
Increase of long-term debt - - - 32,107
Repayments of long-term debt (53,109) (41,623) (98,749) (64,134)
Repayments of forward
purchase agreement
liabilities - - (4,414) -
Increase of written put
option liabilities - - 673 525
Financing costs (91) (342) (2,173) (2,205)
Issuance of share capital 869 219 1,479 219
Dividends on common shares (9,796) (9,681) (38,818) (38,771)
------------------------------------------------
CASH USED IN FINANCING
ACTIVITIES (68,423) (56,425) (150,251) (31,947)
------------------------------------------------
INVESTING ACTIVITIES
Acquisition of businesses - (590) 5,475 (2,326)
Additions to property, plant
and equipment (6,001) (9,692) (20,014) (34,309)
Disposals of property, plant
and equipment 12 417 1,564 974
Net proceeds from disposals
of assets held for sale 1,347 - 5,883 -
Additions to intangible
assets (4,061) (4,253) (16,165) (17,744)
------------------------------------------------
CASH USED IN INVESTING
ACTIVITIES (8,703) (14,118) (23,257) (53,405)
------------------------------------------------
Effect of foreign currency
exchange rate changes on
cashand cash equivalents (1,398) (1,801) 344 (7,283)
------------------------------------------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (8,016) (1,519) (1,299) (13,919)
Cash and cash equivalents,
beginning of period 39,899 34,701 33,182 47,101
------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 31,883 $ 33,182 $ 31,883 $ 33,182
------------------------------------------------
------------------------------------------------
Supplemental information on
net changes in balances
related to operations:
Trade and other receivables$ 10,783 $ 271 $ 7,351 $ 2,194
Inventories 28,421 92,127 31,823 6,491
Other financial assets (568) (482) 693 (333)
Prepaid expenses 1,080 14,247 (1,064) 3,777
Other assets 389 175 (163) (391)
Trade and other payables 2,689 (45,840) 3,241 (38,378)
Net pension and post-
retirement defined benefit
liabilities (42) (525) (3,896) (3,181)
Provisions, other financial
liabilities, deferred
revenue andother long-term
liabilities 20,081 (301) 37,269 (4,586)
------------------------------------------------
$ 62,833 $ 59,672 $ 75,254 $ (34,407)
------------------------------------------------
------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
FOURTH QUARTERS ENDED DECEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Total Dorel Juvenile
----------------------------------------------------
2016 2015 2016 2015
Restated(i)
Total revenue $ 648,749 $ 668,938 $ 236,447 $ 241,396
Cost of sales (1) 499,808 519,807 165,207 169,539
----------------------------------------------------
Gross profit 148,941 149,131 71,240 71,857
Selling expenses 57,477 60,196 31,146 30,855
General and
administrative expenses 62,639 49,885 35,437 24,950
Research and development
expenses 14,463 10,554 11,798 7,855
Restructuring and other
costs (1) 12,887 7,544 10,118 6,802
----------------------------------------------------
Operating profit (loss) 1,475 20,952 $ (17,259) $ 1,395
--------------------------
--------------------------
Finance expenses 11,766 14,814
Corporate expenses 6,833 5,147
Income taxes recovery (11,557) (5,623)
--------------------------
Net income (loss) $ (5,567) $ 6,614
--------------------------
--------------------------
Earnings (loss) per
share
------------------------
Basic $ (0.17) $ 0.20
--------------------------
--------------------------
Diluted $ (0.17) $ 0.20
--------------------------
--------------------------
----------------------------------------------------
Depreciation and
amortization included
in operating profit
(loss) $ 13,057 $ 14,925 $ 9,857 $ 10,998
----------------------------------------------------
Write-down of long-lived
assets included in
operating profit (loss) $ 13,943 $ 2,196 $ 13,943 $ 1,942
----------------------------------------------------
(1)Restructuring and
other costs charged to:
Cost of sales $ 2,419 $ 363 $ - $ 363
Expenses 12,887 7,544 10,118 6,802
----------------------------------------------------
$ 15,306 $ 7,907 $ 10,118 $ 7,165
----------------------------------------------------
----------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
FOURTH QUARTERS ENDED DECEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Dorel Sports Dorel Home
----------------------------------------------------
2016 2015 2016 2015
Restated(i)
Total revenue $ 235,253 $ 253,694 $ 177,049 $ 173,848
Cost of sales (1) 187,255 202,396 147,346 147,872
----------------------------------------------------
Gross profit 47,998 51,298 29,703 25,976
Selling expenses 20,258 24,226 6,073 5,115
General and
administrative expenses 18,270 16,145 8,932 8,790
Research and development
expenses 1,736 1,762 929 937
Restructuring and other
costs (1) 2,769 742 - -
----------------------------------------------------
Operating profit (loss) $ 4,965 $ 8,423 $ 13,769 $ 11,134
----------------------------------------------------
----------------------------------------------------
Finance expenses
Corporate expenses
Income taxes recovery
Net income (loss)
Earnings (loss) per
share
------------------------
Basic
Diluted
----------------------------------------------------
Depreciation and
amortization included
in operating profit
(loss) $ 2,592 $ 3,187 $ 608 $ 740
----------------------------------------------------
Write-down of long-lived
assets included in
operating profit (loss) $ - $ 254 $ - $ -
----------------------------------------------------
(1)Restructuring and
other costs charged to:
Cost of sales $ 2,419 $ - $ - $ -
Expenses 2,769 742 - -
----------------------------------------------------
$ 5,188 $ 742 $ - $ -
----------------------------------------------------
----------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's furniture
was transferred from Dorel Juvenile to Dorel Home. Accordingly, the Company
has restated the segmented information for the fourth quarter ended December
30, 2015.
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
YEARS ENDED DECEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Total Dorel Juvenile
--------------------------------------------------
2016 2015 2016 2015
Restated(i)
Total revenue $ 2,603,185 $ 2,683,357 $ 928,963 $ 997,343
Cost of sales (1) 1,992,624 2,101,859 638,345 722,693
--------------------------------------------------
Gross profit 610,561 581,498 290,618 274,650
Selling expenses 229,196 232,413 115,132 114,511
General and administrative
expenses 220,362 191,677 115,447 94,857
Research and development
expenses 39,092 37,595 28,725 27,438
Restructuring and other
costs (1) 19,560 14,790 14,554 12,700
Impairment losses on
goodwill and intangible
assets 55,341 26,510 - -
--------------------------------------------------
Operating profit (loss) 47,010 78,513 $ 16,760 $ 25,144
------------------------
------------------------
Finance expenses 42,899 35,277
Corporate expenses 25,696 20,270
Income taxes recovery (9,974) (2,738)
--------------------------
Net income (loss) $ (11,611) $ 25,704
--------------------------
--------------------------
Earnings (loss) per share
--------------------------
Basic $ (0.36) $ 0.80
--------------------------
--------------------------
Diluted $ (0.36) $ 0.79
--------------------------
--------------------------
--------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 52,365 $ 58,262 $ 37,404 $ 40,900
--------------------------------------------------
Write-down of long-lived
assets included in
operating profit (loss) $ 14,367 $ 3,196 $ 14,367 $ 1,992
--------------------------------------------------
(1)Restructuring and other
costs charged to:
Cost of sales $ 5,121 $ 3,742 $ - $ 1,230
Expenses 19,560 14,790 14,554 12,700
--------------------------------------------------
$ 24,681 $ 18,532 $ 14,554 $ 13,930
--------------------------------------------------
--------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
YEARS ENDED DECEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Dorel Sports Dorel Home
-------------------------------------------------
2016 2015 2016 2015
Restated(i)
Total revenue $ 938,975 $ 1,000,209 $ 735,247 $ 685,805
Cost of sales (1) 742,774 787,870 611,505 591,296
-------------------------------------------------
Gross profit 196,201 212,339 123,742 94,509
Selling expenses 91,247 98,819 22,817 19,083
General and administrative
expenses 71,961 67,611 32,954 29,209
Research and development
expenses 6,576 6,414 3,791 3,743
Restructuring and other
costs (1) 5,006 2,090 - -
Impairment losses on
goodwill and intangible
assets 55,341 26,510 - -
-------------------------------------------------
Operating profit (loss) $ (33,930) $ 10,895 $ 64,180 $ 42,474
-------------------------------------------------
-------------------------------------------------
Finance expenses
Corporate expenses
Income taxes recovery
Net income (loss)
Earnings (loss) per share
--------------------------
Basic
Diluted
-------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 11,015 $ 13,130 $ 3,946 $ 4,232
-------------------------------------------------
Write-down of long-lived
assets included in
operating profit (loss) $ - $ 1,204 $ - $ -
-------------------------------------------------
(1)Restructuring and other
costs charged to:
Cost of sales $ 5,121 $ 2,512 $ - $ -
Expenses 5,006 2,090 - -
-------------------------------------------------
$ 10,127 $ 4,602 $ - $ -
-------------------------------------------------
-------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's furniture
was transferred from Dorel Juvenile to Dorel Home. Accordingly, the Company
has restated the segmented information for the year ended December 30, 2015.
Contacts: MaisonBrison Communications Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034
Source: Dorel Industries Inc.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- After-Hours Movers: WDAY, ADSK, S, RBRK, MRVL, ULTA, GAP, AFRM
- Alerus Financial raises dividend, approves new buyback program
- Jiayin Group (JFIN) Reports Q2 Loss of RMB3.56
Create E-mail Alert Related Categories
Press ReleasesRelated Entities
Dividend, Earnings, Definitive AgreementSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
