Dorel Reports Second Quarter Results
- Dorel Home Furnishings continues to deliver strong results - Dorel Juvenile adjusted operating profit increases 9.5% - Dorel Sports announces changes to drive future enhanced profitability
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E-mailMONTREAL, QUEBEC -- (Marketwired) -- 08/04/16 -- Dorel Industries Inc. (TSX: DII.B)(TSX: DII.A) today announced results for the second quarter and six months ended June 30, 2016. Second quarter revenue was US$637.3 million, down 4.8% from US$669.6 million recorded in the same period a year ago. Adjusted net income was US$14.5 million or US$0.45 per diluted share, compared to adjusted net income of US$16.6 million or US$0.51 per diluted share last year. Reported net loss was US$38.6 million or US$1.19 per diluted share, compared to reported net income of US$16.2 million or US$0.50 per diluted share in the second quarter of 2015.
Revenue for the six months was US$1.28 billion, a decrease of 3.9% compared to US$1.34 billion last year. First half adjusted net income increased to US$34.2 million or US$1.05 per diluted share, compared to adjusted net income of US$28.4 million or US$0.87 per diluted share a year ago. Reported net loss for the period was US$21.9 million or US$0.68 per diluted share, compared to net income of US$27.8 million or US$0.86 per diluted share in the first half of 2015.
As detailed in the table below, the second quarter reported net loss includes impairment losses on goodwill and intangible assets, restructuring and other costs and remeasurement of forward purchase agreement liabilities totaling US$63.2 million pre-tax or US$1.64 per diluted share. Excluding these items, pre-tax adjusted income increased by 5.5% for the quarter to US$19.0 million from US$18.1 million last year.
The Company is presenting adjusted financial information as it believes that excluding these items provides a more meaningful comparison of its core business performance between the periods presented. Contained within this press release are reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
"Dorel Home Furnishings continued its consistent strong performance, further building shareholder value with sustained, strong on-line sales growth. Year-to-date the segment has grown revenues by 7%, with operating profit increasing 66%. Dorel Juvenile's solid operational performance, better than expected results in China and overall pricing reflecting current foreign exchange levels, resulted in the segment's adjusted operating profit exceeding our prior guidance for the quarter, and improving by almost 10% in earnings. At Dorel Sports we are making the required changes to ensure profitability and we are encouraged as our new model bicycles are being well accepted in the market," commented Martin Schwartz, Dorel President & CEO.
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Summary of Financial Information (unaudited)
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Second Quarters Ended June 30
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All figures in thousands of US $, except per share amounts
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2016 2015
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$ $ Change %
Total revenue 637,296 669,643 (4.8%)
Net income (loss) (38,644) 16,215 (338.3%)
Per share - Basic (1.19) 0.50 (338.0%)
Per share - Diluted (1.19) 0.50 (338.0%)
Adjusted net income 14,533 16,622 (12.6%)
Per share - Basic 0.45 0.51 (11.8%)
Per share - Diluted 0.45 0.51 (11.8%)
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Number of shares outstanding -
Basic weighted average 32,345,352 32,322,011
Diluted weighted average 32,345,352 32,519,877
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Summary of Financial Information (unaudited)
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Six Months Ended June 30
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All figures in thousands of US $, except per share amounts
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2016 2015
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$ $ Change %
Total revenue 1,283,163 1,335,132 (3.9%)
Net income (loss) (21,910) 27,847 (178.7%)
Per share - Basic (0.68) 0.86 (179.1%)
Per share - Diluted (0.68) 0.86 (179.1%)
Adjusted net income 34,204 28,421 20.3%
Per share - Basic 1.06 0.88 20.5%
Per share - Diluted 1.05 0.87 20.7%
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Number of shares outstanding -
Basic weighted average 32,339,292 32,321,825
Diluted weighted average 32,339,292 32,521,398
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Dorel Juvenile
All figures in thousands of US $
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Second Quarters Ended June 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 238,982 264,919 (9.8%)
Gross profit 74,661 31.2% 72,989 27.6% 2.3%
Operating profit 9,492 4.0% 14,755 5.6% (35.7%)
Adjusted operating
profit 16,812 7.0% 15,353 5.8% 9.5%
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All figures in thousands of US $
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Six Months Ended June 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change%
Total revenue 492,210 539,614 (8.8%)
Gross profit 147,694 30.0% 144,430 26.8% 2.3%
Operating profit 25,112 5.1% 23,930 4.4% 4.9%
Adjusted operating
profit 35,397 7.2% 25,645 4.8% 38.0%
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Dorel Juvenile's second quarter revenue was US$239.0 million, down 9.8% compared with US$264.9 million in 2015. Organic revenue decreased by approximately 4.0% after removing the impact of foreign exchange rate variations and planned reductions in third party sales at Dorel Juvenile China. Six-month revenue was US$492.2 million compared to US$539.6 million in 2015, a decrease of US$47.4 million. Organic revenue, as described above, declined by approximately 2.6%.
Gross profit rose in the second quarter to 31.2% from 27.6% in 2015 and year-to-date to 30.0% from 26.8% last year as pricing now better reflects current foreign exchange rate levels. In addition, the segment benefitted from production efficiencies and favourable purchasing initiatives which more than offset the negative impact on margins of lower sales volumes, principally in Europe and the U.S. Gross profit dollars increased by 2.3% for the second quarter and year-to-date which represented increases of US$1.7 million and US$3.3 million respectively.
Subsequent to the previously reported jury verdict in Marshall, Texas that awarded net damages as Dorel's portion in a car seat case, the parties have since agreed to a final settlement for an amount of US$19.0 million. As such, an expense of US$7.0 million net of insurance has been recorded in restructuring and other costs in the second quarter to reflect the Company's net expense as result of the settlement.
Operating profit for the second quarter decreased by US$5.3 million to US$9.5 million from last year due to the car seat settlement. Excluding restructuring and other costs, adjusted operating profit increased to US$16.8 million, or 9.5%. This was due to improved margins and to Dorel Juvenile China's contribution to improved earnings. Year-to-date, operating profit increased by US$1.2 million to US$25.1 million from the comparable period. Adjusted operating profit increased by US$9.8 million or 38.0% to US$35.4 million. Growth was driven by improved margins and by cost savings generated by the segment's on-going transformation into a more fully integrated operation.
In 2015, Dorel Juvenile initiated restructuring activities which are now expected to continue into 2017. Excess Chinese facilities are being made available for sale and further opportunities for headcount reductions have been identified, principally in China. The total costs related to these restructuring initiatives are estimated at US$24.5 million, of which US$10.3 million was recorded in 2015 and US$2.5 million in the first half of 2016. The expected remaining costs of US$11.7 million are non-cash losses on the planned disposal of the facilities in China estimated at US$9.0 million and costs of US$2.7 million related to employee severance and termination benefits principally in China. Annualized cost savings of approximately US$9.0 million are anticipated once the restructuring is completed.
Dorel Sports
All figures in thousands of US $
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Second Quarters Ended June 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 236,514 251,087 (5.8%)
Gross profit 48,841 20.7% 56,627 22.6% (13.7%)
Operating profit (loss) (49,967) (21.1%) 11,079 4.4% (551.0%)
Adjusted operating
profit 5,236 2.2% 10,655 4.2% (50.9%)
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All figures in thousands of US $
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Six Months Ended June 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 453,011 480,016 (5.6%)
Gross profit 96,339 21.3% 110,087 22.9% (12.5%)
Operating profit (loss) (44,713) (9.9%) 22,641 4.7% (297.5%)
Adjusted operating
profit 10,462 2.3% 22,017 4.6% (52.5%)
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Dorel Sports' second quarter revenue decreased by US$14.6 million or 5.8% to US$236.5 million compared to US$251.1 million last year. After removing the impact of varying year-over-year foreign exchange rates, organic revenue declined by approximately 4.8%. In the independent bicycle dealer (IBD) channel, Cycling Sports Group (CSG) global revenue declined versus prior year amid a soft and competitive North American market. While Cannondale branded bicycles' market share increased during the first half, continued industry-wide discounting due to excess inventories at the supplier and retailer levels impacted the segment's profitability. Caloi's sales declined due to the continued economic challenges in Brazil, including foreign exchange rate pressures.
Year-to-date revenue decreased by US$27.0 million, or 5.6% to US$453.0 million compared to last year's US$480.0 million. Organic revenue declined by approximately 3.7%, after removing the impact of varying foreign exchange rates year-over-year.
The segment has begun restructuring activities in the third quarter of 2016 which are estimated at US$9.5 million pre-tax, of which US$5.9 million is non-cash, to simplify and focus its business with a view to bolstering the bottom line. The segment's most significant initiatives are:
-- In the Chinese independent bike dealer channel, the business will move
distribution for its GT brand to a third-party distributor, similar to
the current route-to-market for the brand in many other countries across
the world.
-- By the end of Q4, the majority of Pacific Cycle's mass market and
distribution operations will be relocated from Illinois to Savannah,
Georgia to better serve customers.
-- Dorel Sports will also be exiting its three U.S. "Cannondale Sports"
named retail outlets.
In total, all restructuring actions will result in an approximate 4% reduction in Dorel Sports' global workforce. Annualized savings of US$5.0 million are anticipated, commencing next year. The goal of these activities is to refocus the business to deliver enhanced profitability during all business conditions.
In light of challenging market and highly competitive conditions in the independent bicycle dealer (IBD) channel and foreign exchange pressure, Dorel Sports has recorded a goodwill and intangible assets impairment charge of approximately US$55 million in the second quarter.
As such, the segment reported an operating loss in the second quarter of US$50.0 million compared to an operating profit of US$11.1 million in 2015. Year-to-date, the segment reported an operating loss of US$44.7 million compared to an operating profit of US$22.6 million last year.
Adjusted operating profit for the second quarter decreased to US$5.2 million from US$10.7 million due to a decrease in sales and a 190 basis point reduction in gross profit, which more than offset a 5.1% reduction in operating expenses. Six month adjusted operating profit decreased by US$11.5 million, or 52.5% to US$10.5 million from US$22.0 million in 2015.
"Dorel Sports is taking the necessary steps to maintain its strong position in the face of a continuing tough market. Results have been affected by sustained discounting in North America and the reality of depressed foreign exchange rates, as IBD sales outside the U.S. are significant. Nonetheless, we remain confident and excited about our bicycle business. The recently launched Cannondale Scalpel and Quick models have been well received and are selling at traditional margins. A new e-mountain bike has been introduced in Europe and will be shipped in the fourth quarter and we anticipate excellent reaction. The measures we are taking are expected to benefit the segment going forward," commented Martin Schwartz.
Dorel Home Furnishings
All figures in thousands of US $
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Second Quarters Ended June 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 161,800 153,637 5.3%
Gross profit 27,060 16.7% 20,621 13.4% 31.2%
Operating profit 13,747 8.5% 8,685 5.7% 58.3%
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All figures in thousands of US $
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Six Months Ended June 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 337,942 315,502 7.1%
Gross profit 56,582 16.7% 41,295 13.1% 37.0%
Operating profit 30,215 8.9% 18,235 5.8% 65.7%
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Second quarter revenue increased to US$161.8 million or 5.3% compared with US$153.6 million a year ago. For the first six months, revenue rose to US$337.9 million up US$22.4 million or 7.1% from US$315.5 million in 2015. The segment's sales to on-line retailers in the second quarter and for the six months continue to drive revenue growth and respectively represented 43.0% and 42.5% of total segment sales compared to 34.0% and 32.5% respectively for the comparable periods in 2015. This growth significantly exceeded reductions in sales through the brick and mortar channel. Due to the e-commerce growth, the segment is increasing its warehouse footprint in Savannah, Georgia.
Operating profit was US$13.7 million for the quarter and US$30.2 million year-to-date representing an increase of 58.3% and 65.7% respectively from the prior year. This was due to increased sales volume and improved mix partly offset by higher operating expenses.
Other
During the second quarter and six months, the Company's effective tax rates were 12.5% and 8.6% compared to prior year's 8.1% and 15.6% respectively. Excluding income taxes on impairment losses, restructuring and other costs, the adjusted tax rate for the quarter was 23.7% compared to last year's 7.9% and 20.0% for the first six months compared to 16.2% in 2015. Excluding the impact of impairment losses, the Company has stated that for the full year it expects its annual tax rate to be between 15% and 20%.
Quarterly dividend
Dorel's Board of Directors declared its regular quarterly dividend of US$0.30 per share on the outstanding number of the Company's Class A Multiple Voting Shares, Class B Subordinate Voting Shares, Deferred Share Units and cash-settled Performance Share Units. The dividend is payable on September 1, 2016 to shareholders of record as at the close of business on August 18, 2016.
Outlook
"Dorel Juvenile has delivered a strong improvement in earnings thus far this year and we expect this to continue into the second half. While sales growth is challenging in certain markets, improved sales mix, pricing and operational improvements are expected to generate significant earnings increases in the fourth quarter over last year, at a similar pace as reported thus far. Similarly in Home Furnishings, the positive performance for this segment will continue, and the second half will exceed last year," stated Mr. Schwartz."
"At Dorel Sports, we are seeing excess supplier inventory levels within the industry decreasing, therefore the pressure on margins experienced to date is now easing. Our own inventory is at much healthier levels with far fewer prior year models on hand. Based on enthusiastic initial dealer reaction, we are anticipating strong sell through on the model year 2017 line just introduced. This will also benefit margins, and, as such, we foresee adjusted operating profit to be much better than last year in the second half which will be mostly weighted in the fourth quarter."
"Overall, all three of our segments are poised to deliver double digit adjusted earnings growth in the second half versus last year. With the changes we have made, and will continue to make, we are optimistic about our results for the balance of the year," concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, August 4, 2016 at 1:00 P.M. Eastern Time. Interested parties can join the call by dialing 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 32271381 on your phone. This recording will be available on Thursday, August 4, 2016 as of 4:00 P.M. until 11:59 P.M. on Thursday, August 11, 2016.
Complete condensed consolidated interim financial statements as at June 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 Furnishings markets a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel Industries Inc. has annual sales of US$2.7 billion and employs approximately 10,450 people in facilities located in 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 operating profit", "adjusted finance expenses", "adjusted income before income taxes", "adjusted income taxes expense", "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
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Second quarters ended June 30
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2016
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Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
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$ % $ $ %
TOTAL REVENUE 637,296 100.0 - 637,296 100.0
Cost of sales 486,734 76.4 - 486,734 76.4
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GROSS PROFIT 150,562 23.6 - 150,562 23.6
Selling expenses 57,323 9.0 - 57,323 9.0
General and
administrative
expenses 56,193 8.8 - 56,193 8.8
Research and
development expenses 8,331 1.3 - 8,331 1.3
Restructuring and
other costs 7,182 1.1 (7,182) - -
Impairment losses on
goodwill and
intangible assets 55,341 8.7 (55,341) - -
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OPERATING PROFIT
(LOSS) (33,808) (5.3) 62,523 28,715 4.5
Finance expenses 10,378 1.6 (712) 9,666 1.5
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INCOME (LOSS) BEFORE
INCOME TAXES (44,186) (6.9) 63,235 19,049 3.0
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Income taxes expense
(recovery) (5,542) (0.8) 10,058 4,516 0.7
Tax rate 12.5% - - 23.7% -
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NET INCOME (LOSS) (38,644) (6.1) 53,177 14,533 2.3
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EARNINGS (LOSS) PER
SHARE
Basic (1.19) 1.64 0.45
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Diluted (1.19) 1.64 0.45
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SHARES OUTSTANDING
Basic - weighted
average 32,345,352 32,345,352
Diluted - weighted
average 32,345,352 32,580,339
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Reconciliation of non-GAAP financial measures
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Second quarters ended June 30
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2015
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Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
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$ % $ $ %
TOTAL REVENUE 669,643 100.0 - 669,643 100.0
Cost of sales 519,406 77.6 - 519,406 77.6
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GROSS PROFIT 150,237 22.4 - 150,237 22.4
Selling expenses 60,252 9.0 - 60,252 9.0
General and
administrative
expenses 52,279 7.8 - 52,279 7.8
Research and
development expenses 9,319 1.4 - 9,319 1.4
Restructuring and
other costs 174 - (174) - -
Impairment losses on
goodwill and
intangible assets - - - - -
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OPERATING PROFIT
(LOSS) 28,213 4.2 174 28,387 4.2
Finance expenses 10,566 1.6 (233) 10,333 1.5
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INCOME (LOSS) BEFORE
INCOME TAXES 17,647 2.6 407 18,054 2.7
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Income taxes expense
(recovery) 1,432 0.2 - 1,432 0.2
Tax rate 8.1% - - 7.9% -
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NET INCOME (LOSS) 16,215 2.4 407 16,622 2.5
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EARNINGS (LOSS) PER
SHARE
Basic 0.50 0.01 0.51
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Diluted 0.50 0.01 0.51
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SHARES OUTSTANDING
Basic - weighted
average 32,322,011 32,322,011
Diluted - weighted
average 32,519,877 32,519,877
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Reconciliation of non-GAAP financial measures
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Six months ended June 30
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2016
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Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
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$ % $ $ %
TOTAL REVENUE 1,283,163 100.0 - 1,283,163 100.0
Cost of sales 982,548 76.6 - 982,548 76.6
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GROSS PROFIT 300,615 23.4 - 300,615 23.4
Selling expenses 113,664 8.9 - 113,664 8.9
General and
administrative
expenses 107,813 8.3 - 107,813 8.3
Research and
development expenses 16,600 1.3 - 16,600 1.3
Restructuring and
other costs 10,119 0.8 (10,119) - -
Impairment losses on
goodwill and
intangible assets 55,341 4.3 (55,341) - -
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OPERATING PROFIT
(LOSS) (2,922) (0.2) 65,460 62,538 4.9
Finance expenses 21,056 1.7 (1,273) 19,783 1.6
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INCOME (LOSS) BEFORE
INCOME TAXES (23,978) (1.9) 66,733 42,755 3.3
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Income taxes expense
(recovery) (2,068) (0.2) 10,619 8,551 0.6
Tax rate 8.6% - - 20.0% -
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NET INCOME (LOSS) (21,910) (1.7) 56,114 34,204 2.7
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EARNINGS (LOSS) PER
SHARE
Basic (0.68) 1.74 1.06
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Diluted (0.68) 1.73 1.05
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SHARES OUTSTANDING
Basic - weighted
average 32,339,292 32,339,292
Diluted - weighted
average 32,339,292 32,572,105
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Reconciliation of non-GAAP financial measures
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Six months ended June 30
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2015
-------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
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$ % $ $ %
TOTAL REVENUE 1,335,132 100.0 - 1,335,132 100.0
Cost of sales 1,039,320 77.8 - 1,039,320 77.8
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GROSS PROFIT 295,812 22.2 - 295,812 22.2
Selling expenses 116,509 8.7 - 116,509 8.7
General and
administrative
expenses 108,435 8.2 - 108,435 8.2
Research and
development expenses 17,831 1.3 - 17,831 1.3
Restructuring and
other costs 1,091 0.1 (1,091) - -
Impairment losses on
goodwill and
intangible assets - - - - -
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OPERATING PROFIT
(LOSS) 51,946 3.9 1,091 53,037 4.0
Finance expenses 18,941 1.4 168 19,109 1.5
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INCOME (LOSS) BEFORE
INCOME TAXES 33,005 2.5 923 33,928 2.5
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Income taxes expense
(recovery) 5,158 0.4 349 5,507 0.4
Tax rate 15.6% - - 16.2% -
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NET INCOME (LOSS) 27,847 2.1 574 28,421 2.1
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EARNINGS (LOSS) PER
SHARE
Basic 0.86 0.02 0.88
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Diluted 0.86 0.01 0.87
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SHARES OUTSTANDING
Basic - weighted
average 32,321,825 32,321,825
Diluted - weighted
average 32,521,398 32,521,398
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The detail of impairment losses, restructuring and other costs and remeasurement of forward purchase agreement liabilities are presented below:
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Second quarters Six months ended
ended June 30 June 30
----------------------------------------
2016 2015 2016 2015
$ $ $ $
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Employee severance and termination
benefits 482 (59) 2,186 (259)
Write-down of long-lived assets - - 424 -
Losses (gains) from the
remeasurement and disposals of
assets held for sale (381) - (381) -
Other associated costs 81 (365) 161 (365)
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Total restructuring costs 182 (424) 2,390 (624)
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Acquisition-related costs - 598 729 1,715
U.S. car seat settlement 7,000 - 7,000 -
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Total other costs 7,000 598 7,729 1,715
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Total restructuring and other costs 7,182 174 10,119 1,091
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Impairment losses on goodwill and
intangible assets 55,341 - 55,341 -
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Finance expenses
Loss (gain) on remeasurement of
forward purchase agreement
liabilities 712 233 1,273 (168)
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Total impairment losses,
restructuring and other costs and
remeasurement of the forward
purchase agreement liabilities
before income taxes (1) 63,235 407 66,733 923
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Total impairment losses,
restructuring and other costs and
remeasurement of the forward
purchase agreement liabilities
after income taxes 53,177 407 56,114 574
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Total impact on diluted earnings
(loss) per share (1.64) (0.01) (1.73) (0.01)
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(1) Includes non-cash amounts of: 55,672 233 56,657 (168)
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Dorel Juvenile
Reconciliation of non-GAAP financial measures
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Second quarters ended June 30
----------------------------------------------------------------------------
2016
-------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
-------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 238,982 100.0 - 238,982 100.0
Cost of sales 164,321 68.8 - 164,321 68.8
----------------------------------------------------------------------------
GROSS PROFIT 74,661 31.2 - 74,661 31.2
Selling expenses 27,845 11.7 - 27,845 11.7
General and
administrative
expenses 24,135 10.0 - 24,135 10.0
Research and
development expenses 5,869 2.5 - 5,869 2.5
Restructuring and
other costs 7,320 3.0 (7,320) - -
----------------------------------------------------------------------------
OPERATING PROFIT 9,492 4.0 7,320 16,812 7.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dorel Juvenile
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Second quarters ended June 30
----------------------------------------------------------------------------
2015
-------------------------------------------------------
% of % of
Reported revenue Other costs Adjusted revenue
-------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 264,919 100.0 - 264,919 100.0
Cost of sales 191,930 72.4 - 191,930 72.4
----------------------------------------------------------------------------
GROSS PROFIT 72,989 27.6 - 72,989 27.6
Selling expenses 27,850 10.5 - 27,850 10.5
General and
administrative
expenses 23,034 8.8 - 23,034 8.8
Research and
development expenses 6,752 2.5 - 6,752 2.5
Restructuring and
other costs 598 0.2 (598) - -
----------------------------------------------------------------------------
OPERATING PROFIT 14,755 5.6 598 15,353 5.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30
----------------------------------------------------------------------------
2016
-------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
-------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 492,210 100.0 - 492,210 100.0
Cost of sales 344,516 70.0 - 344,516 70.0
----------------------------------------------------------------------------
GROSS PROFIT 147,694 30.0 - 147,694 30.0
Selling expenses 56,339 11.4 - 56,339 11.4
General and
administrative
expenses 44,418 9.1 - 44,418 9.1
Research and
development expenses 11,540 2.3 - 11,540 2.3
Restructuring and
other costs 10,285 2.1 (10,285) - -
----------------------------------------------------------------------------
OPERATING PROFIT 25,112 5.1 10,285 35,397 7.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30
----------------------------------------------------------------------------
2015
-------------------------------------------------------
% of % of
Reported revenue Other costs Adjusted revenue
-------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 539,614 100.0 - 539,614 100.0
Cost of sales 395,184 73.2 - 395,184 73.2
----------------------------------------------------------------------------
GROSS PROFIT 144,430 26.8 - 144,430 26.8
Selling expenses 56,668 10.5 - 56,668 10.5
General and
administrative
expenses 49,195 9.1 - 49,195 9.1
Research and
development expenses 12,922 2.4 - 12,922 2.4
Restructuring and
other costs 1,715 0.4 (1,715) - -
----------------------------------------------------------------------------
OPERATING PROFIT 23,930 4.4 1,715 25,645 4.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dorel Sports
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Second quarters ended June 30
----------------------------------------------------------------------------
2016
-------------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 236,514 100.0 - 236,514 100.0
Cost of sales 187,673 79.3 - 187,673 79.3
----------------------------------------------------------------------------
GROSS PROFIT 48,841 20.7 - 48,841 20.7
Selling expenses 23,953 10.1 - 23,953 10.1
General and
administrative
expenses 18,044 7.7 - 18,044 7.7
Research and
development expenses 1,608 0.7 - 1,608 0.7
Restructuring and
other costs (138) (0.1) 138 - -
Impairment losses on
goodwill and
intangible assets 55,341 23.4 (55,341) - -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) (49,967) (21.1) 55,203 5,236 2.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30
----------------------------------------------------------------------------
2016
-------------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 453,011 100.0 - 453,011 100.0
Cost of sales 356,672 78.7 - 356,672 78.7
----------------------------------------------------------------------------
GROSS PROFIT 96,339 21.3 - 96,339 21.3
Selling expenses 46,354 10.2 - 46,354 10.2
General and
administrative
expenses 36,343 8.1 - 36,343 8.1
Research and
development expenses 3,180 0.7 - 3,180 0.7
Restructuring and
other costs (166) - 166 - -
Impairment losses on
goodwill and
intangible assets 55,341 12.2 (55,341) - -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) (44,713) (9.9) 55,175 10,462 2.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dorel Sports
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Second quarters ended June 30
----------------------------------------------------------------------------
2015
-------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 251,087 100.0 - 251,087 100.0
Cost of sales 194,460 77.4 - 194,460 77.4
----------------------------------------------------------------------------
GROSS PROFIT 56,627 22.6 - 56,627 22.6
Selling expenses 26,615 10.6 - 26,615 10.6
General and
administrative
expenses 17,706 7.1 - 17,706 7.1
Research and
development expenses 1,651 0.7 - 1,651 0.7
Restructuring and
other costs (424) (0.2) 424 - -
Impairment losses on
goodwill and
intangible assets - - - - -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) 11,079 4.4 (424) 10,655 4.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30
----------------------------------------------------------------------------
2015
-------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 480,016 100.0 - 480,016 100.0
Cost of sales 369,929 77.1 - 369,929 77.1
----------------------------------------------------------------------------
GROSS PROFIT 110,087 22.9 - 110,087 22.9
Selling expenses 49,202 10.3 - 49,202 10.3
General and
administrative
expenses 35,754 7.4 - 35,754 7.4
Research and
development expenses 3,114 0.6 - 3,114 0.6
Restructuring and
other costs (624) (0.1) 624 - -
Impairment losses on
goodwill and
intangible assets - - - - -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) 22,641 4.7 (624) 22,017 4.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
as at as at
June 30, 2016 December 30, 2015
----------------- -----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 43,153 $ 33,182
Trade and other receivables 468,228 447,345
Inventories 581,406 584,986
Other financial assets 4,469 4,467
Income taxes receivable 9,459 12,985
Prepaid expenses 31,379 20,234
----------------- -----------------
1,138,094 1,103,199
Assets held for sale 8,689 11,265
----------------- -----------------
1,146,783 1,114,464
----------------- -----------------
NON-CURRENT ASSETS
Property, plant and equipment 201,377 206,542
Intangible assets 457,356 465,447
Goodwill 443,339 476,330
Deferred tax assets 40,054 37,258
Other assets 6,770 4,904
----------------- -----------------
1,148,896 1,190,481
----------------- -----------------
$ 2,295,679 $ 2,304,945
----------------- -----------------
----------------- -----------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness $ 50,663 $ 54,471
Trade and other payables 432,388 434,178
Written put option and forward
purchase agreement liabilities 4,727 4,104
Other financial liabilities 2,569 895
Income taxes payable 13,363 15,590
Long-term debt 34,531 32,857
Provisions 52,575 34,267
----------------- -----------------
590,816 576,362
----------------- -----------------
NON-CURRENT LIABILITIES
Long-term debt 474,500 465,732
Net pension and post-retirement
defined benefit liabilities 43,235 43,058
Deferred tax liabilities 63,808 72,447
Provisions 1,753 1,702
Written put option and forward
purchase agreement liabilities 29,874 30,788
Other financial liabilities 2,000 1,890
Other long-term liabilities 10,312 10,569
----------------- -----------------
625,482 626,186
----------------- -----------------
EQUITY
Share capital 200,906 200,277
Contributed surplus 27,329 26,480
Accumulated other comprehensive loss (94,954) (113,956)
Other equity (522) 1,527
Retained earnings 946,622 988,069
----------------- -----------------
1,079,381 1,102,397
----------------- -----------------
$ 2,295,679 $ 2,304,945
----------------- -----------------
----------------- -----------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENTS
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Second Quarters Ended Six Months Ended
------------------------------------------------
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
----------- ----------- ----------- -----------
Sales $ 635,666 $ 666,929 $ 1,278,238 $ 1,328,323
Licensing and commission
income 1,630 2,714 4,925 6,809
----------- ----------- ----------- -----------
TOTAL REVENUE 637,296 669,643 1,283,163 1,335,132
Cost of sales 486,734 519,406 982,548 1,039,320
----------- ----------- ----------- -----------
GROSS PROFIT 150,562 150,237 300,615 295,812
Selling expenses 57,323 60,252 113,664 116,509
General and administrative
expenses 56,193 52,279 107,813 108,435
Research and development
expenses 8,331 9,319 16,600 17,831
Restructuring and other
costs 7,182 174 10,119 1,091
Impairment losses on
goodwill and intangible
assets 55,341 - 55,341 -
----------- ----------- ----------- -----------
OPERATING PROFIT (LOSS) (33,808) 28,213 (2,922) 51,946
Finance expenses 10,378 10,566 21,056 18,941
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES (44,186) 17,647 (23,978) 33,005
Income taxes expense
(recovery) (5,542) 1,432 (2,068) 5,158
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (38,644) $ 16,215 $ (21,910) $ 27,847
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
EARNINGS (LOSS) PER SHARE
Basic ($1.19) $0.50 ($0.68) $0.86
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted ($1.19) $0.50 ($0.68) $0.86
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
SHARES OUTSTANDING
Basic - weighted average 32,345,352 32,322,011 32,339,292 32,321,825
Diluted - weighted average 32,345,352 32,519,877 32,339,292 32,521,398
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Second Quarters Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (38,644) $ 16,215 $ (21,910) $ 27,847
----------- ----------- ----------- -----------
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 (5,149) 10,456 16,847 (34,003)
Net gains (losses) on hedge
of net investments in
foreign operations, net of
tax of nil (4,003) 5,130 2,573 (11,821)
----------- ----------- ----------- -----------
(9,152) 15,586 19,420 (45,824)
----------- ----------- ----------- -----------
Net changes in cash flow
hedges:
Net change in unrealized
gains (losses) on
derivatives designated as
cash flow hedges 2,681 (4,117) (933) (233)
Reclassification to income 127 283 310 594
Reclassification to the
related non-financial asset (275) (1,876) (513) (5,472)
Deferred income taxes (633) 1,521 719 1,423
----------- ----------- ----------- -----------
1,900 (4,189) (417) (3,688)
----------- ----------- ----------- -----------
Items that will not be
reclassified to net income:
Defined benefit plans:
Remeasurements of the net
pension and post-retirement
defined benefit liabilities 10 (41) (3) 92
Deferred income taxes (5) 14 2 (30)
----------- ----------- ----------- -----------
5 (27) (1) 62
----------- ----------- ----------- -----------
TOTAL OTHER COMPREHENSIVE
INCOME (LOSS) (7,247) 11,370 19,002 (49,450)
----------- ----------- ----------- -----------
TOTAL COMPREHENSIVE INCOME
(LOSS) $ (45,891) $ 27,585 $ (2,908) $ (21,603)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM 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) - -
----------------------------------------------------------------------------
$ - $ -
----------------------------------------------------------------------------
Reclassification from contributed
surplus due to settlementof
deferred share units 61 (101)
Share-based payments - 531
Remeasurement of written put option
liabilities - -
Dividends on common shares - -
Dividends on deferred share units - 112
----------------------------------------------------------------------------
Balance as at June 30, 2015 $ 199,988 $ 26,233
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at December 30, 2015 $ 200,277 $ 26,480
----------------------------------------------------------------------------
Total comprehensive loss:
-------------------------------------
Net loss - -
Other comprehensive income (loss) - -
----------------------------------------------------------------------------
$ - $ -
----------------------------------------------------------------------------
Issued under stock option plan 441 -
Reclassification from contributed
surplus due to exercise
of stock options 127 (127)
Reclassification from contributed
surplus due to settlement
of deferred share units 61 (103)
Share-based payments - 943
Remeasurement of written put option
liabilities - -
Dividends on common shares - -
Dividends on deferred share units - 136
----------------------------------------------------------------------------
Balance as at June 30, 2016 $ 200,906 $ 27,329
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM 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) (45,824) (3,688) 62
----------------------------------------------------------------------------
$ (45,824) $ (3,688) $ 62
----------------------------------------------------------------------------
Reclassification from contributed
surplus due to settlementof
deferred share units - - -
Share-based payments - - -
Remeasurement of written put option
liabilities - - -
Dividends on common shares - - -
Dividends on deferred share units - - -
----------------------------------------------------------------------------
Balance as at June 30, 2015 $ (54,666) $ (1,508) $ (13,855)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at December 30, 2015 $ (104,521) $ 2,680 $ (12,115)
----------------------------------------------------------------------------
Total comprehensive loss:
-------------------------------------
Net loss - - -
Other comprehensive income (loss) 19,420 (417) (1)
----------------------------------------------------------------------------
$ 19,420 $ (417) $ (1)
----------------------------------------------------------------------------
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 June 30, 2016 $ (85,101) $ 2,263 $ (12,116)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM 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 - 27,847 27,847
Other comprehensive income (loss) - - (49,450)
----------------------------------------------------------------------------
$ - $ 27,847 $ (21,603)
----------------------------------------------------------------------------
Reclassification from contributed
surplus due to settlementof
deferred share units - - (40)
Share-based payments - - 531
Remeasurement of written put option
liabilities (262) - (262)
Dividends on common shares - (19,393) (19,393)
Dividends on deferred share units - (112) -
----------------------------------------------------------------------------
Balance as at June 30, 2015 $ 317 $ 1,009,708 $ 1,166,217
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at December 30, 2015 $ 1,527 $ 988,069 $ 1,102,397
----------------------------------------------------------------------------
Total comprehensive loss:
-------------------------------------
Net loss - (21,910) (21,910)
Other comprehensive income (loss) - - 19,002
----------------------------------------------------------------------------
$ - $ (21,910) $ (2,908)
----------------------------------------------------------------------------
Issued under stock option plan - - 441
Reclassification from contributed
surplus due to exercise
of stock options - - -
Reclassification from contributed
surplus due to settlement
of deferred share units - - (42)
Share-based payments - - 943
Remeasurement of written put option
liabilities (2,049) - (2,049)
Dividends on common shares - (19,401) (19,401)
Dividends on deferred share units - (136) -
----------------------------------------------------------------------------
Balance as at June 30, 2016 $ (522) $ 946,622 $ 1,079,381
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Second Quarters Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
----------- ----------- ----------- -----------
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net income (loss) $ (38,644) $ 16,215 $ (21,910) $ 27,847
Items not involving cash:
Depreciation and
amortization 13,415 14,445 26,460 28,735
Impairment losses on
goodwill and intangible
assets 55,341 - 55,341 -
Unrealized losses (gains)
arising on financial
assets and financial
liabilities classified as
held for trading 464 518 1,210 165
Share-based payments 117 119 230 190
Defined benefit pension
and post-retirement costs 1,169 808 2,130 1,633
Loss (gain) on disposal of
property, plant and
equipment 504 68 520 (18)
Restructuring and other
costs (381) - 43 -
Finance expenses 10,378 10,566 21,056 18,941
Income taxes expense
(recovery) (5,542) 1,432 (2,068) 5,158
Net change in balances
related to operations 38,180 (24,851) (10,684) (142,257)
Income taxes paid (8,852) (2,805) (12,292) (9,398)
Income taxes received 1,466 3,403 6,256 6,128
Interest paid (13,535) (2,968) (18,214) (6,810)
Interest received 119 33 205 173
----------- ----------- ----------- -----------
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 54,199 16,983 48,283 (69,513)
----------- ----------- ----------- -----------
FINANCING ACTIVITIES
Bank indebtedness 2,994 10,137 (8,638) 59,768
Increase of long-term debt - 56,938 31,154 123,997
Repayments of long-term debt (35,775) (58,172) (27,826) (61,978)
Repayments of forward
purchase agreement
liabilities - - (4,414) -
Increase of written put
option liabilities 673 - 673 525
Financing costs (199) (1,431) (1,939) (1,465)
Issuance of share capital 406 - 406 -
Dividends on common shares (9,699) (9,696) (19,401) (19,393)
----------- ----------- ----------- -----------
CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (41,600) (2,224) (29,985) 101,454
----------- ----------- ----------- -----------
INVESTING ACTIVITIES
Acquisition of businesses - - 5,475 (1,736)
Additions to property, plant
and equipment (4,569) (9,750) (9,811) (16,829)
Disposals of property, plant
and equipment 25 74 138 530
Net proceeds from disposals
of assets held for sale 2,981 - 2,981 -
Additions to intangible
assets (4,568) (5,186) (9,050) (9,675)
----------- ----------- ----------- -----------
CASH USED IN INVESTING
ACTIVITIES (6,131) (14,862) (10,267) (27,710)
----------- ----------- ----------- -----------
Effect of foreign currency
exchange rate changes on
cash
and cash equivalents (1,855) 1,226 1,940 (2,898)
----------- ----------- ----------- -----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 4,613 1,123 9,971 1,333
Cash and cash equivalents,
beginning of period 38,540 47,311 33,182 47,101
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 43,153 $ 48,434 $ 43,153 $ 48,434
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Supplemental information on
net changes in balances
related to operations:
Trade and other
receivables $ 21,535 $ 42,669 $ (8,446) $ (5,792)
Inventories (20,056) (33,486) 12,962 (67,608)
Other financial assets 1,133 (71) 5 112
Prepaid expenses 1,131 9 (10,836) (9,018)
Other assets (39) (51) (356) (82)
Trade and other payables 29,757 (31,829) (7,445) (52,587)
Net pension and post-
retirement defined
benefit liabilities (669) (584) (2,080) (1,985)
Provisions, other
financial liabilities and
other long-term
liabilities 5,388 (1,508) 5,512 (5,297)
----------- ----------- ----------- -----------
$ 38,180 $ (24,851) $ (10,684) $ (142,257)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
SECOND QUARTERS ENDED JUNE 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
------------------------------------------------
Total Dorel Juvenile
------------------------------------------------
2016 2015 2016 2015
Total revenue $ 637,296 $ 669,643 $ 238,982 $ 264,919
Cost of sales 486,734 519,406 164,321 191,930
------------------------------------------------
Gross profit 150,562 150,237 74,661 72,989
Selling expenses 56,958 59,012 27,845 27,850
General and administrative
expenses 49,478 47,213 24,135 23,034
Research and development
expenses 8,331 9,319 5,869 6,752
Restructuring and other
costs 7,182 174 7,320 598
Impairment losses on
goodwill and intangible
assets 55,341 - - -
------------------------------------------------
Operating profit (loss) (26,728) 34,519 $ 9,492 $ 14,755
------------------------
------------------------
Finance expenses 10,378 10,566
Corporate expenses 7,080 6,306
Income taxes expense
(recovery) (5,542) 1,432
------------------------
Net income (loss) $ (38,644) $ 16,215
------------------------
------------------------
Earnings (loss) per share
Basic ($1.19) $0.50
------------------------
------------------------
Diluted ($1.19) $0.50
------------------------
------------------------
------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 13,215 $ 14,399 $ 9,006 $ 9,836
------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
SECOND QUARTERS ENDED JUNE 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
------------------------------------------------
Dorel Sports Dorel Home Furnishings
------------------------------------------------
2016 2015 2016 2015
Total revenue $ 236,514 $ 251,087 $ 161,800 $ 153,637
Cost of sales 187,673 194,460 134,740 133,016
------------------------------------------------
Gross profit 48,841 56,627 27,060 20,621
Selling expenses 23,953 26,615 5,160 4,547
General and administrative
expenses 18,044 17,706 7,299 6,473
Research and development
expenses 1,608 1,651 854 916
Restructuring and other
costs (138) (424) - -
Impairment losses on
goodwill and intangible
assets 55,341 - - -
------------------------------------------------
Operating profit (loss) $ (49,967) $ 11,079 $ 13,747 $ 8,685
------------------------------------------------
------------------------------------------------
Finance expenses
Corporate expenses
Income taxes expense
(recovery)
Net income (loss)
Earnings (loss) per share
Basic
Diluted
------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 3,088 $ 3,362 $ 1,121 $ 1,201
------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
SIX MONTHS ENDED JUNE 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
------------------------------------------------
Total Dorel Juvenile
------------------------------------------------
2016 2015 2016 2015
Total revenue $ 1,283,163 $ 1,335,132 $ 492,210 $ 539,614
Cost of sales 982,548 1,039,320 344,516 395,184
------------------------------------------------
Gross profit 300,615 295,812 147,694 144,430
Selling expenses 112,836 114,559 56,339 56,668
General and administrative
expenses 95,105 97,525 44,418 49,195
Research and development
expenses 16,600 17,831 11,540 12,922
Restructuring and other
costs 10,119 1,091 10,285 1,715
Impairment losses on
goodwill and intangible
assets 55,341 - - -
------------------------------------------------
Operating profit (loss) 10,614 64,806 $ 25,112 $ 23,930
------------------------
------------------------
Finance expenses 21,056 18,941
Corporate expenses 13,536 12,860
Income taxes expense
(recovery) (2,068) 5,158
------------------------
Net income (loss) $ (21,910) $ 27,847
------------------------
------------------------
Earnings (loss) per share
Basic ($0.68) $0.86
------------------------
------------------------
Diluted ($0.68) $0.86
------------------------
------------------------
------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 26,059 $ 28,645 $ 17,896 $ 19,522
------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
SIX MONTHS ENDED JUNE 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
------------------------------------------------
Dorel Sports Dorel Home Furnishings
------------------------------------------------
2016 2015 2016 2015
Total revenue $ 453,011 $ 480,016 $ 337,942 $ 315,502
Cost of sales 356,672 369,929 281,360 274,207
------------------------------------------------
Gross profit 96,339 110,087 56,582 41,295
Selling expenses 46,354 49,202 10,143 8,689
General and administrative
expenses 36,343 35,754 14,344 12,576
Research and development
expenses 3,180 3,114 1,880 1,795
Restructuring and other
costs (166) (624) - -
Impairment losses on
goodwill and intangible
assets 55,341 - - -
------------------------------------------------
Operating profit (loss) $ (44,713) $ 22,641 $ 30,215 $ 18,235
------------------------------------------------
------------------------------------------------
Finance expenses
Corporate expenses
Income taxes expense
(recovery)
Net income (loss)
Earnings (loss) per share
Basic
Diluted
------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 5,926 $ 6,743 $ 2,237 $ 2,380
------------------------------------------------
Contacts: CONTACTS: MaisonBrison Communications Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034
Source: Dorel Industries Inc.
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