Dorel Reports Solid Third Quarter Results
- Third quarter operating profit improves in all segments year-over-year - Dorel Home Furnishings posts another strong quarter - Year-to-date results strengthen Company's financial position
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E-mailMONTREAL, QUEBEC -- (Marketwired) -- 11/03/16 -- Dorel Industries Inc. (TSX: DII.B)(TSX: DII.A) today announced results for the third quarter and nine months ended September 30, 2016. Third quarter revenue was US$671.3 million, down 1.2% from US$679.3 million from the corresponding quarter last year. Adjusted net income was US$20.6 million or US$0.63 per diluted share, compared to adjusted net income of US$15.5 million or US$0.48 per diluted share a year ago. Reported net income was US$15.9 million or US$0.49 per diluted share, compared to a reported net loss of US$8.8 million or US$0.27 per diluted share last year.
For the nine months, revenue was US$1.95 billion, a decrease of 3.0% compared to US$2.01 billion last year. Adjusted net income increased to US$54.9 million or US$1.68 per diluted share, compared to adjusted net income of US$43.9 million or US$1.35 per diluted share a year ago. Reported net loss year-to-date was US$6.0 million or US$0.19 per diluted share, compared to net income of US$19.1 million or US$0.59 per diluted share in 2015.
The Company is presenting adjusted financial information, excluding the impairment losses on goodwill and intangible assets, restructuring, other costs and remeasurement of forward purchase agreement liabilities, as it believes this provides a more meaningful comparison of its core business performance between the periods presented. These previously announced items are detailed in the attached tables of the press release and the third quarter includes restructuring, other costs and losses on the remeasurement of forward purchase agreement liabilities totaling US$6.4 million pre-tax or US$0.14 per diluted share. Contained within this press release are reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
"Third quarter earnings improvements were led by on-going gains at Dorel Home Furnishings, higher gross margins at Dorel Juvenile, as well as a strong performance at Pacific Cycle and reduced bicycle industry discounting at Cycling Sports Group (CSG). In addition, the progress during the first nine months in all of our businesses has bolstered our financial position. Year-over-year nine month cash flows from operating activities improved by US$93.5 million, due primarily to enhanced management of our inventory levels. This has resulted in a significant strengthening in our financial position," commented Martin Schwartz, Dorel President and CEO.
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Summary of Financial Information (unaudited)
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Third Quarters Ended September 30
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All figures in thousands of US $, except per share amounts
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2016 2015
----------------------------------------------------------------------------
$ $ Change %
Total revenue 671,273 679,287 (1.2%)
Net income (loss) 15,866 (8,757) 281.2%
Per share - Basic 0.49 (0.27) 281.5%
Per share - Diluted 0.49 (0.27) 281.5%
Adjusted net income 20,647 15,469 33.5%
Per share - Basic 0.64 0.48 33.3%
Per share - Diluted 0.63 0.48 31.3%
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Number of shares
outstanding -
Basic weighted average 32,359,496 32,322,011
Diluted weighted
average 32,615,350 32,322,011
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Summary of Financial Information (unaudited)
----------------------------------------------------------------------------
Nine Months Ended September 30
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All figures in thousands of US $, except per share amounts
----------------------------------------------------------------------------
2016 2015
----------------------------------------------------------------------------
$ $ Change %
Total revenue 1,954,436 2,014,419 (3.0%)
Net income (loss) (6,044) 19,090 (131.7%)
Per share - Basic (0.19) 0.59 (132.2%)
Per share - Diluted (0.19) 0.59 (132.2%)
Adjusted net income 54,851 43,889 25.0%
Per share - Basic 1.70 1.36 25.0%
Per share - Diluted 1.68 1.35 24.4%
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Number of shares
outstanding -
Basic weighted average 32,346,051 32,321,887
Diluted weighted
average 32,346,051 32,522,810
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Dorel Home Furnishings
All figures in
thousands of US $
----------------------------------------------------------------------------
Third Quarters Ended September 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 187,961 165,492 13.6%
Gross profit 30,728 16.3% 21,401 12.9% 43.6%
Operating profit 16,703 8.9% 10,122 6.1% 65.0%
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All figures in
thousands of US $
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Nine Months Ended September 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change%
Total revenue 525,903 480,994 9.3%
Gross profit 87,310 16.6% 62,696 13.0% 39.3%
Operating profit 46,918 8.9% 28,357 5.9% 65.5%
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Third quarter revenue grew US$22.5 million or 13.6% to US$188.0 million. All divisions recorded year-over-year revenue improvement due to strong on-line sales, which represented 44% of total segment sales compared to 37% of sales in 2015. For the nine months, on-line sales represented 43% of total segment sales compared to 34% a year ago. Sales to the brick and mortar channel were flat during the quarter. For the nine months, revenue grew US$44.9 million or 9.3% to US$525.9 million, driven by on-going e-commerce growth, far exceeding reductions in brick and mortar sales.
All divisions contributed to the substantial operating profit growth of 65.0% for the quarter and 65.5% year-to-date, mainly driven by e-commerce sales at improved margins. This was partly offset by, among other items, higher selling and general and administrative expenses in line with the segment's sales increase, including increased spending on information technology to support e-commerce growth.
Dorel Juvenile
All figures in
thousands of US $
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Third Quarters Ended September 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
%
Total revenue 232,601 247,296 (5.9)
Gross profit 78,413 33.7% 64,200 26.0% 22.1%
Operating profit 12,400 5.3% 2,802 1.1% 342.5%
Adjusted gross
profit 78,413 33.7% 65,067 26.3% 20.5%
Adjusted operating
profit 13,551 5.8% 7,852 3.2% 72.6%
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All figures in
thousands of US $
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Nine Months Ended September 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change%
%
Total revenue 724,811 786,910 (7.9)
Gross profit 226,107 31.2% 208,630 26.5% 8.4%
Operating profit 37,512 5.2% 26,732 3.4% 40.3%
Adjusted gross
profit 226,107 31.2% 209,497 26.6% 7.9%
Adjusted operating
profit 48,948 6.8% 33,497 4.3% 46.1%
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Third quarter revenue declined US$14.7 million or 5.9% to US$232.6 million and by US$62.1 million or 7.9% to US$724.8 million year-to-date. Organic revenue, excluding the impact of foreign exchange and planned reductions in third party sales at Dorel Juvenile China, declined by approximately 0.5% for the quarter and 1.7% for the nine months. For both periods, sales were higher in Latin America, but this was more than offset by declines in the U.S. and European markets. Notwithstanding the lower sales at Dorel Juvenile Europe, the division's operating profit was considerably above expectations.
Operating profit for the quarter rose by US$9.6 million to US$12.4 million and by US$10.8 million to US$37.5 million for the nine months. Excluding restructuring and other costs, adjusted operating profit increased by 72.6% to US$13.6 million for the quarter and by 46.1% to US$48.9 million year-to-date, driven by higher margins due to favourable product mix and better pricing and production and purchasing improvements. US$2.0 million of this increase resulted from the net effect of lower costs for post-retirement benefits in the U.S. mainly offset by higher product liability costs.
Several new products across various platforms were introduced at the Cologne, Germany international juvenile trade show where Dorel Juvenile was again a major exhibitor. The segment was also present at last month's ABC Kids Expo in Las Vegas. Among the new products launched during the third quarter were the Maxi Cosi Adorra travel system in the U.S., to be rolled out next year in all markets; additions to the Quinny Rachel Zoe collection as well as a new Infanti car seat and travel system in Brazil and Chile. The Safety 1st "Grow and Go" and "Continuum" convertible car seats continue to drive strong growth in the U.S. and Canada and will be introduced in Latin America next year.
Dorel Sports
All figures in thousands of US $
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Third Quarters Ended September 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 250,711 266,499 (5.9%)
Gross profit 51,864 20.7% 50,954 19.1% 1.8%
Operating profit
(loss) 5,818 2.3% (20,169) (7.6%) 128.8%
Adjusted gross
profit 54,566 21.8% 53,466 20.1% 2.1%
Adjusted operating
profit 10,923 4.4% 10,825 4.1% 0.9%
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All figures in
thousands of US $
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Nine Months Ended September 30 (unaudited)
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2016 2015
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$ % of rev. $ % of rev. Change %
Total revenue 703,722 746,515 (5.7%)
Gross profit 148,203 21.1% 161,041 21.6% (8.0%)
Operating profit
(loss) (38,895) (5.5%) 2,472 0.3% (1673.4%)
Adjusted gross
profit 150,905 21.4% 163,553 21.9% (7.7%)
Adjusted operating
profit 21,385 3.0% 32,842 4.4% (34.9%)
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Third quarter revenue decreased by US$15.8 million or 5.9% to US$250.7 million and by approximately 6.2% after removing the impact of varying foreign exchange rates year-over-year. During the quarter, the CSG International business transitioned from a licensing revenue recognition model to a distribution platform where shipments are recognized as net sales and associated expenses in cost of sales. Previously, these costs were netted in licensing and commission income. Excluding the revenue recognition change in the third quarter of 2016 and the foreign exchange rate variations, organic revenue declined by 10.7%.
Year-to-date revenue decreased US$42.8 million or 5.7% to US$703.7 million and by approximately 4.7% after excluding the impact of varying foreign exchange rates year-over-year. Organic revenue declined by approximately 6.4% when removing the impact of the change in the revenue recognition model and the variations of foreign exchange rates. For the quarter and nine months, the segment's lower sales can be attributed to a softer global bike market and changes in the North American independent bicycle dealer (IBD) retail environment as outlined in the outlook section of this press release.
Operating profit rose by US$26.0 million to US$5.8 million for the quarter and adjusted operating profit increased by 0.9% to US$10.9 million when excluding impairment losses, restructuring and other costs. The year-over-year increased operating profit was mainly driven by margin improvement at all divisions, particularly Pacific Cycle due to their new product introduction success and logistics efficiencies, and Caloi, as a result of price increases. Less discounting aided by reduced inventory levels at CSG also contributed to the improvement. The segment also reduced working capital and increased cash flow.
Year-to-date reported operating loss was US$38.9 million compared to a profit of US$2.5 million in 2015. Excluding impairment losses, restructuring and other costs, nine month adjusted operating profit declined by 34.9% to US$21.4 million.
Other
During the third quarter and nine months ended September 30, 2016, the Company's effective tax rates were expenses representing 18.7% and (35.5%) respectively compared to prior year's recovery of 20.6% for the quarter and year-to-date expense of 13.1%. Excluding income taxes on impairment losses, restructuring and other costs, the adjusted tax rate for the quarter was an expense of 20.4% compared to last year's recovery of 1.1% and an expense of 20.1% for the nine months of 2016 against an expense of 10.9% in 2015. Excluding the impact of impairment losses on goodwill and intangibles assets, restructuring and other costs and remeasurement of forward purchase agreement liabilities, 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 December 1, 2016 to shareholders of record as at the close of business on November 17, 2016.
Outlook
"Dorel's outlook for the balance of 2016 remains unchanged from the second quarter, led by Home Furnishings which is poised to improve operating profit by 50% over prior year. The momentum of the segment's positive performance will continue, though the pace of fourth quarter improvement will slow compared to prior quarters," stated Mr. Schwartz.
"In Juvenile, our turnaround from last year is on-track, and as stated after the second quarter, we expect the year to finish with improved adjusted earnings in the second half. Our third quarter was better than originally expected, consequently expectations are that the fourth quarter will be similar to last year's.
"In Dorel Sports, we are expecting a significant change in IBD retailers' purchasing patterns with fourth quarter orders moving to the first quarter of 2017. Therefore it is expected that there will be a reduction in second half CSG shipments which should result in year-over-year growth in the first half of 2017. For the Sports segment overall we believe the positive trend on adjusted operating profit will continue in the fourth quarter which will result in improved earnings compared to last year's fourth quarter," concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, November 3, 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 77134917 on your phone. This recording will be available on Thursday, November 3, 2016 as of 4:00 P.M. until 11:59 P.M. on Thursday, November 10, 2016.
Complete condensed consolidated interim financial statements as at September 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 10,000 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 cost of sales", "adjusted gross profit", "adjusted operating profit", "adjusted finance expenses", "adjusted income before income taxes", "adjusted income taxes 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
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Third Quarters Ended September 30
---------------------------------------------------------------------------
2016
------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 671,273 100.0 - 671,273 100.0
Cost of sales 510,268 76.0 (2,702) 507,566 75.6
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GROSS PROFIT 161,005 24.0 2,702 163,707 24.4
Selling expenses 59,229 8.8 - 59,229 8.8
General and
administrative
expenses 60,599 9.1 - 60,599 9.1
Research and
development expenses 8,029 1.2 - 8,029 1.2
Restructuring and
other costs 3,554 0.5 (3,554) - -
Impairment losses on
goodwill and
intangible assets - - - - -
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OPERATING PROFIT
(LOSS) 29,594 4.4 6,256 35,850 5.3
Finance expenses 10,077 1.5 (152) 9,925 1.4
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INCOME (LOSS) BEFORE
INCOME TAXES 19,517 2.9 6,408 25,925 3.9
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Income taxes expense
(recovery) 3,651 0.5 1,627 5,278 0.8
Tax rate 18.7% - - 20.4% -
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NET INCOME (LOSS) 15,866 2.4 4,781 20,647 3.1
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EARNINGS (LOSS) PER
SHARE
Basic 0.49 0.15 0.64
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Diluted 0.49 0.14 0.63
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SHARES OUTSTANDING
Basic - weighted 32,359,49 32,359,49
average 6 6
Diluted - weighted 32,615,35 32,615,35
average 0 0
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Reconciliation of
non-GAAP financial
measures
----------------------------------------------------------------------------
Third Quarters Ended September 30
----------------------------------------------------------------------------
2015
------------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
--------------------- ------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 679,287 100.0 - 679,287 100.0
Cost of sales 542,732 79.9 (3,379) 539,353 79.4
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GROSS PROFIT 136,555 20.1 3,379 139,934 20.6
Selling expenses 57,943 8.5 - 57,943 8.5
General and
administrative
expenses 46,245 6.8 - 46,245 6.8
Research and
development expenses 9,210 1.4 - 9,210 1.4
Restructuring and
other costs 6,155 0.9 (6,155) - -
Impairment losses on
goodwill and
intangible assets 26,510 3.9 (26,510) - -
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OPERATING PROFIT
(LOSS) (9,508) (1.4) 36,044 26,536 3.9
Finance expenses 1,522 0.2 9,711 11,233 1.6
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INCOME (LOSS) BEFORE
INCOME TAXES (11,030) (1.6) 26,333 15,303 2.3
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Income taxes expense
(recovery) (2,273) (0.3) 2,107 (166) -
Tax rate 20.6% - - (1.1%) -
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NET INCOME (LOSS) (8,757) (1.3) 24,226 15,469 2.3
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EARNINGS (LOSS) PER
SHARE
Basic (0.27) 0.75 0.48
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Diluted (0.27) 0.75 0.48
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SHARES OUTSTANDING
Basic - weighted 32,322,01 32,322,0
average 1 11
Diluted - weighted 32,322,01 32,530,1
average 1 60
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Reconciliation of non-GAAP financial measures
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Nine Months Ended September 30
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2016
------------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
1,954,43
TOTAL REVENUE 6 100.0 - 1,954,436 100.0
1,492,81
Cost of sales 6 76.4 (2,702) 1,490,114 76.2
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GROSS PROFIT 461,620 23.6 2,702 464,322 23.8
Selling expenses 172,893 8.8 - 172,893 8.8
General and
administrative
expenses 168,412 8.6 - 168,412 8.6
Research and
development expenses 24,629 1.3 - 24,629 1.3
Restructuring and
other costs 13,673 0.7 (13,673) - -
Impairment losses on
goodwill and
intangible assets 55,341 2.8 (55,341) - -
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OPERATING PROFIT 26,672 1.4 71,716 98,388 5.1
Finance expenses 31,133 1.6 (1,425) 29,708 1.6
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INCOME (LOSS) BEFORE
INCOME TAXES (4,461) (0.2) 73,141 68,680 3.5
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Income taxes expense 1,583 0.1 12,246 13,829 0.7
Tax rate (35.5%) - - 20.1% -
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NET INCOME (LOSS) (6,044) (0.3) 60,895 54,851 2.8
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EARNINGS (LOSS) PER
SHARE
Basic (0.19) 1.89 1.70
---------------------------------------------------------------------------
Diluted (0.19) 1.87 1.68
---------------------------------------------------------------------------
SHARES OUTSTANDING
Basic - weighted 32,346,0
average 51 32,346,051
Diluted - weighted 32,346,0
average 51 32,581,534
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Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Nine Months Ended September 30
----------------------------------------------------------------------------
2015
------------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
--------------------- ------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 2,014,419 100.0 - 2,014,419 100.0
Cost of sales 1,582,052 78.5 (3,379) 1,578,673 78.4
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GROSS PROFIT 432,367 21.5 3,379 435,746 21.6
Selling expenses 174,452 8.7 - 174,452 8.7
General and
administrative
expenses 154,680 7.7 - 154,680 7.7
Research and
development expenses 27,041 1.3 - 27,041 1.3
Restructuring and
other costs 7,246 0.4 (7,246) - -
Impairment losses on
goodwill and
intangible assets 26,510 1.3 (26,510) - -
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OPERATING PROFIT 42,438 2.1 37,135 79,573 3.9
Finance expenses 20,463 1.0 9,879 30,342 1.5
----------------------------------------------------------------------------
INCOME (LOSS) BEFORE
INCOME TAXES 21,975 1.1 27,256 49,231 2.4
----------------------------------------------------------------------------
Income taxes expense 2,885 0.2 2,457 5,342 0.2
Tax rate 13.1% - - 10.9% -
----------------------------------------------------------------------------
NET INCOME (LOSS) 19,090 0.9 24,799 43,889 2.2
----------------------------------------------------------------------------
EARNINGS (LOSS) PER
SHARE
Basic 0.59 0.77 1.36
----------------------------------------------------------------------------
Diluted 0.59 0.76 1.35
----------------------------------------------------------------------------
SHARES OUTSTANDING
Basic - weighted 32,321,88
average 7 32,321,887
Diluted - weighted 32,522,81
average 0 32,522,810
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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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Third Quarters Ended Nine Months Ended
September 30 September 30
------------------------- --------------------------
2016 2015 2016 2015
$ $ $ $
----------------------------------------------------------------------------
Inventory markdowns
recorded within gross
profit 2,578 3,379 2,578 3,379
----------------------------------------------------------------------------
Employee severance and
termination benefits 2,245 3,235 4,431 2,976
Accelerated depreciation 838 - 838 -
Write-down of long-lived
assets - 1,000 424 1,000
Losses from the
remeasurement and
disposals of assets
held for sale 464 - 83 -
Other associated costs (5) 800 156 435
----------------------------------------------------------------------------
Recorded within a
separate line in the
condensed consolidated
interim income
statements 3,542 5,035 5,932 4,411
----------------------------------------------------------------------------
Total restructuring
costs 6,120 8,414 8,510 7,790
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other costs recorded
within gross profit 124 - 124 -
----------------------------------------------------------------------------
Acquisition-related
costs - 1,120 729 2,835
U.S. car seat settlement - - 7,000 -
Other costs 12 - 12 -
----------------------------------------------------------------------------
Recorded within a
separate line in the
condensed consolidated
interim income
statements 12 1,120 7,741 2,835
----------------------------------------------------------------------------
Total other costs 136 1,120 7,865 2,835
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total restructuring and
other costs 6,256 9,534 16,375 10,625
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Impairment losses on
goodwill and intangible
assets - 26,510 55,341 26,510
----------------------------------------------------------------------------
Finance expenses
------------------------
Loss (gain) on
remeasurement of
forward purchase
agreement liabilities 152 (9,711) 1,425 (9,879)
----------------------------------------------------------------------------
Total impairment losses,
restructuring and other
costs and remeasurement
of forward purchase
agreement liabilities
before income taxes (1) 6,408 26,333 73,141 27,256
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total impairment losses,
restructuring and other
costs and remeasurement
of forward purchase
agreement liabilities
after income taxes 4,781 24,226 60,895 24,799
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total impact on diluted
earnings (loss) per
share (0.14) (0.75) (1.87) (0.76)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Includes non-cash
amounts of: 4,032 21,178 60,689 21,010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dorel Juvenile
Reconciliation of non-GAAP financial measures
---------------------------------------------------------------------------
Third Quarters Ended September 30
---------------------------------------------------------------------------
2016
------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 232,601 100.0 - 232,601 100.0
Cost of sales 154,188 66.3 - 154,188 66.3
---------------------------------------------------------------------------
GROSS PROFIT 78,413 33.7 - 78,413 33.7
Selling expenses 29,087 12.5 - 29,087 12.5
General and
administrative
expenses 30,388 13.1 - 30,388 13.1
Research and
development expenses 5,387 2.3 - 5,387 2.3
Restructuring and
other costs 1,151 0.5 (1,151) - -
---------------------------------------------------------------------------
OPERATING PROFIT 12,400 5.3 1,151 13,551 5.8
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Nine Months Ended September 30
---------------------------------------------------------------------------
2016
------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 724,811 100.0 - 724,811 100.0
Cost of sales 498,704 68.8 - 498,704 68.8
---------------------------------------------------------------------------
GROSS PROFIT 226,107 31.2 - 226,107 31.2
Selling expenses 85,426 11.8 - 85,426 11.8
General and
administrative
expenses 74,806 10.3 - 74,806 10.3
Research and
development expenses 16,927 2.3 - 16,927 2.3
Restructuring and
other costs 11,436 1.6 (11,436) - -
---------------------------------------------------------------------------
OPERATING PROFIT 37,512 5.2 11,436 48,948 6.8
---------------------------------------------------------------------------
Dorel Juvenile
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Third Quarters Ended September 30
----------------------------------------------------------------------------
2015
------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 247,296 100.0 - 247,296 100.0
Cost of sales 183,096 74.0 (867) 182,229 73.7
----------------------------------------------------------------------------
GROSS PROFIT 64,200 26.0 867 65,067 26.3
Selling expenses 28,051 11.3 - 28,051 11.3
General and
administrative
expenses 22,503 9.1 - 22,503 9.1
Research and
development expenses 6,661 2.7 - 6,661 2.7
Restructuring and
other costs 4,183 1.8 (4,183) - -
----------------------------------------------------------------------------
OPERATING PROFIT 2,802 1.1 5,050 7,852 3.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Nine Months Ended September 30
----------------------------------------------------------------------------
2015
------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 786,910 100.0 - 786,910 100.0
Cost of sales 578,280 73.5 (867) 577,413 73.4
----------------------------------------------------------------------------
GROSS PROFIT 208,630 26.5 867 209,497 26.6
Selling expenses 84,719 10.8 - 84,719 10.8
General and
administrative
expenses 71,698 9.0 - 71,698 9.0
Research and
development expenses 19,583 2.5 - 19,583 2.5
Restructuring and
other costs 5,898 0.8 (5,898) - -
----------------------------------------------------------------------------
OPERATING PROFIT 26,732 3.4 6,765 33,497 4.3
----------------------------------------------------------------------------
Dorel Sports
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
Third Quarters Ended September 30
----------------------------------------------------------------------------
2016
-----------------------------------------------------
Restructuring
% of and % of
Reported revenue other costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 250,711 100.0 - 250,711 100.0
Cost of sales 198,847 79.3 (2,702) 196,145 78.2
----------------------------------------------------------------------------
GROSS PROFIT 51,864 20.7 2,702 54,566 21.8
Selling expenses 24,635 9.8 - 24,635 9.8
General and
administrative
expenses 17,348 6.9 - 17,348 6.9
Research and
development expenses 1,660 0.7 - 1,660 0.7
Restructuring and
other costs 2,403 1.0 (2,403) - -
Impairment losses on
goodwill and
intangible assets - - - - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) 5,818 2.3 5,105 10,923 4.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Nine Months Ended September 30
----------------------------------------------------------------------------
2016
-----------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 703,722 100.0 - 703,722 100.0
Cost of sales 555,519 78.9 (2,702) 552,817 78.6
----------------------------------------------------------------------------
GROSS PROFIT 148,203 21.1 2,702 150,905 21.4
Selling expenses 70,989 10.1 - 70,989 10.1
General and
administrative
expenses 53,691 7.6 - 53,691 7.6
Research and
development expenses 4,840 0.7 - 4,840 0.7
Restructuring and
other costs 2,237 0.3 (2,237) - -
Impairment losses on
goodwill and
intangible assets 55,341 7.9 (55,341) - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) (38,895) (5.5) 60,280 21,385 3.0
----------------------------------------------------------------------------
Dorel Sports
Reconciliation of non-
GAAP financial
measures
----------------------------------------------------------------------------
Third Quarters Ended September 30
----------------------------------------------------------------------------
2015
------------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 266,499 100.0 - 266,499 100.0
Cost of sales 215,545 80.9 (2,512) 213,033 79.9
----------------------------------------------------------------------------
GROSS PROFIT 50,954 19.1 2,512 53,466 20.1
Selling expenses 25,391 9.5 - 25,391 9.5
General and
administrative
expenses 15,712 5.9 - 15,712 5.9
Research and
development expenses 1,538 0.6 - 1,538 0.6
Restructuring and
other costs 1,972 0.8 (1,972) - -
Impairment losses on
goodwill and
intangible assets 26,510 9.9 (26,510) - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) (20,169) (7.6) 30,994 10,825 4.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Nine Months Ended September 30
----------------------------------------------------------------------------
2015
------------------------------------------------------
Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
----------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 746,515 100.0 - 746,515 100.0
Cost of sales 585,474 78.4 (2,512) 582,962 78.1
----------------------------------------------------------------------------
GROSS PROFIT 161,041 21.6 2,512 163,553 21.9
Selling expenses 74,593 10.0 - 74,593 10.0
General and
administrative
expenses 51,466 6.9 - 51,466 6.9
Research and
development expenses 4,652 0.6 - 4,652 0.6
Restructuring and
other costs 1,348 0.2 (1,348) - -
Impairment losses on
goodwill and
intangible assets 26,510 3.6 (26,510) - -
- -
----------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) 2,472 0.3 30,370 32,842 4.4
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
as at as at
September 30, 2016 December 30, 2015
----------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 39,899 $ 33,182
Trade and other receivables 463,544 447,345
Inventories 589,431 584,986
Other financial assets 2,549 4,467
Income taxes receivable 10,783 12,985
Prepaid expenses 22,781 20,234
----------------------------------------
1,128,987 1,103,199
Assets held for sale 6,657 11,265
----------------------------------------
1,135,644 1,114,464
----------------------------------------
NON-CURRENT ASSETS
Property, plant and equipment 197,552 206,542
Intangible assets 457,272 465,447
Goodwill 446,558 476,330
Deferred tax assets 40,203 37,258
Other assets 6,569 4,904
----------------------------------------
1,148,154 1,190,481
----------------------------------------
$ 2,283,798 $ 2,304,945
----------------------------------------
----------------------------------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness $ 56,933 $ 54,471
Trade and other payables 446,075 434,178
Written put option and forward
purchase agreement liabilities 4,964 4,104
Other financial liabilities 1,274 895
Income taxes payable 13,520 15,590
Long-term debt 60,397 32,857
Provisions 63,318 34,267
----------------------------------------
646,481 576,362
----------------------------------------
NON-CURRENT LIABILITIES
Long-term debt 400,490 465,732
Net pension and post-retirement
defined benefit liabilities 37,537 43,058
Deferred tax liabilities 65,433 72,447
Provisions 1,785 1,702
Written put option and forward
purchase agreement liabilities 30,280 30,788
Other financial liabilities 1,751 1,890
Other long-term liabilities 12,292 10,569
----------------------------------------
549,568 626,186
----------------------------------------
EQUITY
Share capital 201,170 200,277
Contributed surplus 27,473 26,480
Accumulated other comprehensive loss (92,769) (113,956)
Other equity (928) 1,527
Retained earnings 952,803 988,069
----------------------------------------
1,087,749 1,102,397
----------------------------------------
$ 2,283,798 $ 2,304,945
----------------------------------------
----------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENTS
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Third Quarters Ended Nine Months Ended
------------------------------------------------------------
September 30, September 30, September 30, September 30,
2016 2015 2016 2015
------------------------------------------------------------
Sales $ 670,265 $ 676,196 $ 1,948,503 $ 2,004,519
Licensing and
commission
income 1,008 3,091 5,933 9,900
------------------------------------------------------------
TOTAL REVENUE 671,273 679,287 1,954,436 2,014,419
Cost of sales
(1) 510,268 542,732 1,492,816 1,582,052
------------------------------------------------------------
GROSS PROFIT 161,005 136,555 461,620 432,367
Selling expenses 59,229 57,943 172,893 174,452
General and
administrative
expenses 60,599 46,245 168,412 154,680
Research and
development
expenses 8,029 9,210 24,629 27,041
Restructuring
and other costs
(1) 3,554 6,155 13,673 7,246
Impairment
losses on
goodwill and
intangible
assets - 26,510 55,341 26,510
------------------------------------------------------------
OPERATING PROFIT
(LOSS) 29,594 (9,508) 26,672 42,438
Finance expenses 10,077 1,522 31,133 20,463
------------------------------------------------------------
INCOME (LOSS)
BEFORE INCOME
TAXES 19,517 (11,030) (4,461) 21,975
Income taxes
expense
(recovery) 3,651 (2,273) 1,583 2,885
------------------------------------------------------------
NET INCOME
(LOSS) $ 15,866 $ (8,757)$ (6,044)$ 19,090
------------------------------------------------------------
------------------------------------------------------------
EARNINGS (LOSS)
PER SHARE
Basic $ 0.49 $ (0.27)$ (0.19)$ 0.59
------------------------------------------------------------
Diluted $ 0.49 $ (0.27)$ (0.19)$ 0.59
------------------------------------------------------------
SHARES
OUTSTANDING
Basic -
weighted
average 32,359,496 32,322,011 32,346,051 32,321,887
Diluted -
weighted
average 32,615,350 32,322,011 32,346,051 32,522,810
(1)Restructuring
and other costs
charged to:
Cost of sales $ 2,702 $ 3,379 $ 2,702 $ 3,379
Expenses 3,554 6,155 13,673 7,246
------------------------------------------------------------
$ 6,256 $ 9,534 $ 16,375 $ 10,625
------------------------------------------------------------
------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Third Quarters Ended Nine Months Ended
------------------------ ------------------------
September September September September
30, 2016 30, 2015 30, 2016 30, 2015
------------------------ ------------------------
NET INCOME (LOSS) $ 15,866 $ (8,757) $ (6,044)$ 19,090
------------------------ ------------------------
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
3,246 (37,859) 20,093 (71,862)
Net gains (losses) on hedge
of net investments in
foreign operations, net of
tax of nil
2,279 129 4,852 (11,692)
------------------------ ------------------------
5,525 (37,730) 24,945 (83,554)
------------------------ ------------------------
Net changes in cash flow
hedges:
Net change in unrealized
gains (losses) on
derivatives designated as
cash flow hedges
(90) 1,723 (1,023) 1,490
Reclassification to income 142 214 452 808
Reclassification to the
related non-financial
asset (1,196) 88 (1,709) (5,384)
Deferred income taxes 65 (163) 784 1,260
------------------------ ------------------------
(1,079) 1,862 (1,496) (1,826)
------------------------ ------------------------
Items that will not be
reclassified to net
income:
Defined benefit plans:
Remeasurements of the net
pension and post-
retirement defined benefit
liabilities
(3,689) (1) (3,692) 91
Deferred income taxes 1,428 - 1,430 (30)
------------------------ ------------------------
(2,261) (1) (2,262) 61
------------------------ ------------------------
TOTAL OTHER COMPREHENSIVE
INCOME (LOSS) 2,185 (35,869) 21,187 (85,319)
------------------------ ------------------------
TOTAL COMPREHENSIVE INCOME
(LOSS) $ 18,051 $ (44,626) $ 15,143 $ (66,229)
-------------------------------------------------
-------------------------------------------------
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
Contributed
Share 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
settlement of deferred
share units
61 (101)
Share-based payments - 635
Remeasurement of written
put option liabilities - -
Dividends on common shares - -
Dividends on deferred share
units - 170
----------------------------------------------------------------------------
Balance as at September 30,
2015 $ 199,988 $ 26,395
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at December 30,
2015 $ 200,277 $ 26,480
----------------------------------------------------------------------------
Total comprehensive income:
-----------------------------
Net loss - -
Other comprehensive income
(loss) - -
----------------------------------------------------------------------------
$ - $ -
----------------------------------------------------------------------------
Issued under stock option
plan 645 -
Reclassification from
contributed surplus due to
exercise
of stock options
187 (187)
Reclassification from
contributed surplus due to
settlement of deferred
share units
61 (103)
Share-based payments - 1,083
Remeasurement of written
put option liabilities - -
Dividends on common shares - -
Dividends on deferred share
units - 200
----------------------------------------------------------------------------
Balance as at September 30,
2016 $ 201,170 $ 27,473
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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 Cash Defined
Translation 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) (83,554) (1,826) 61
----------------------------------------------------------------------------
$ (83,554) $ (1,826) $ 61
----------------------------------------------------------------------------
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 September 30,
2015 $ (92,396) $ 354 $ (13,856)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at December 30,
2015 $ (104,521) $ 2,680 $ (12,115)
----------------------------------------------------------------------------
Total comprehensive income:
-----------------------------
Net loss - - -
Other comprehensive income
(loss) 24,945 (1,496) (2,262)
----------------------------------------------------------------------------
$ 24,945 $ (1,496) $ (2,262)
----------------------------------------------------------------------------
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 September 30,
2016 $ (79,576) $ 1,184 $ (14,377)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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 - 19,090 19,090
Other comprehensive income
(loss) - - (85,319)
----------------------------------------------------------------------------
$ - $ 19,090 $ (66,229)
----------------------------------------------------------------------------
Reclassification from
contributed surplus due to
settlement of deferred
share units
- - (40)
Share-based payments - - 635
Remeasurement of written
put option liabilities 1,400 - 1,400
Dividends on common shares - (29,090) (29,090)
Dividends on deferred share
units - (170) -
----------------------------------------------------------------------------
Balance as at September 30,
2015 $ 1,979 $ 991,196 $ 1,113,660
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at December 30,
2015 $ 1,527 $ 988,069 $ 1,102,397
----------------------------------------------------------------------------
Total comprehensive income:
-----------------------------
Net loss - (6,044) (6,044)
Other comprehensive income
(loss) - - 21,187
----------------------------------------------------------------------------
$ - $ (6,044)$ 15,143
----------------------------------------------------------------------------
Issued under stock option
plan - - 645
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 - - 1,083
Remeasurement of written
put option liabilities (2,455) - (2,455)
Dividends on common shares - (29,022) (29,022)
Dividends on deferred share
units - (200) -
----------------------------------------------------------------------------
Balance as at September 30,
2016 $ (928) $ 952,803 $ 1,087,749
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Third Quarters Ended Nine Months Ended
-----------------------------------------------------------
September 30, September 30, September 30, September 30,
2016 2015 2016 2015
-----------------------------------------------------------
CASH PROVIDED BY
(USED IN):
OPERATING
ACTIVITIES
Net income (loss)$ 15,866 $ (8,757) $ (6,044) $ 19,090
Items not
involving cash:
Depreciation
and
amortization 13,451 14,957 39,911 43,692
Impairment
losses on
goodwill and
intangible
assets - 26,510 55,341 26,510
Unrealized
losses (gains)
arising on
financial
assets
and financial
liabilities
classified as
held for
trading
(798) (522) 412 (357)
Share-based
payments 140 104 370 294
Defined benefit
pension and
post-
retirement
costs (7,767) 815 (5,637) 2,448
Loss (gain) on
disposal of
property,
plant and
equipment (1,873) 745 (1,353) 727
Restructuring
and other
costs 3,880 4,379 3,923 4,379
Finance
expenses 10,077 1,522 31,133 20,463
Income taxes
expense
(recovery) 3,651 (2,273) 1,583 2,885
Net change in
balances related
to operations 23,105 48,178 12,421 (94,079)
Income taxes paid (4,135) (4,527) (16,427) (13,925)
Income taxes
received 2,356 972 8,612 7,100
Interest paid (5,059) (4,784) (23,273) (11,594)
Interest received 180 85 385 258
-----------------------------------------------------------
CASH PROVIDED BY
OPERATING
ACTIVITIES 53,074 77,404 101,357 7,891
-----------------------------------------------------------
FINANCING
ACTIVITIES
Bank indebtedness 6,685 (14,458) (1,953) 45,310
Increase of long-
term debt 560 504 978 72,721
Repayments of
long-term debt (49,528) (52,927) (46,618) (63,125)
Repayments of
forward purchase
agreement
liabilities - - (4,414) -
Increase of
written put
option
liabilities - - 673 525
Financing costs (143) (398) (2,082) (1,863)
Issuance of share
capital 204 - 610 -
Dividends on
common shares (9,621) (9,697) (29,022) (29,090)
-----------------------------------------------------------
CASH (USED IN)
PROVIDED BY
FINANCING
ACTIVITIES (51,843) (76,976) (81,828) 24,478
-----------------------------------------------------------
INVESTING
ACTIVITIES
Acquisition of
businesses - - 5,475 (1,736)
Additions to
property, plant
and equipment (4,202) (7,788) (14,013) (24,617)
Disposals of
property, plant
and equipment 1,414 27 1,552 557
Net proceeds from
disposals of
assets held for
sale 1,555 - 4,536 -
Additions to
intangible
assets (3,054) (3,816) (12,104) (13,491)
-----------------------------------------------------------
CASH USED IN
INVESTING
ACTIVITIES (4,287) (11,577) (14,554) (39,287)
-----------------------------------------------------------
Effect of foreign
currency
exchange rate
changes on cash
and cash
equivalents
(198) (2,584) 1,742 (5,482)
-----------------------------------------------------------
NET (DECREASE)
INCREASE IN CASH
AND CASH
EQUIVALENTS (3,254) (13,733) 6,717 (12,400)
Cash and cash
equivalents,
beginning of
period 43,153 48,434 33,182 47,101
-----------------------------------------------------------
CASH AND CASH
EQUIVALENTS, END
OF PERIOD $ 39,899 $ 34,701 $ 39,899 $ 34,701
-----------------------------------------------------------
-----------------------------------------------------------
Supplemental
information on
net changes in
balances related
to operations:
Trade and other
receivables $ 5,014 $ 7,715 $ (3,432) $ 1,923
Inventories (9,560) (18,028) 3,402 (85,636)
Other financial
assets 1,256 37 1,261 149
Prepaid
expenses 8,692 (1,452) (2,144) (10,470)
Other assets (196) (484) (552) (566)
Trade and other
payables 7,997 60,049 552 7,462
Net pension and
post-
retirement
defined
benefit
liabilities (1,774) (671) (3,854) (2,656)
Provisions,
other
financial
liabilities
and other
long-term
liabilities
11,676 1,012 17,188 (4,285)
-----------------------------------------------------------
$ 23,105 $ 48,178 $ 12,421 $ (94,079)
-----------------------------------------------------------
-----------------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
THIRD QUARTERS ENDED SEPTEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
----------------------------------------
Total Dorel Juvenile
----------------------------------------
2016 2015 2016 2015
Total revenue $ 671,273 $679,287 $ 232,601 $ 247,296
Cost of sales (1) 510,268 542,732 154,188 183,096
----------------------------------------
Gross profit 161,005 136,555 78,413 64,200
Selling expenses 58,883 57,658 29,087 28,051
General and administrative expenses 55,618 44,267 30,388 22,503
Research and development expenses 8,029 9,210 5,387 6,661
Restructuring and other costs (1) 3,554 6,155 1,151 4,183
Impairment losses on goodwill and
intangible assets - 26,510 - -
----------------------------------------
Operating profit (loss) 34,921 (7,245) $ 12,400 $ 2,802
--------------------
--------------------
Finance expenses 10,077 1,522
Corporate expenses 5,327 2,263
Income taxes expense (recovery) 3,651 (2,273)
--------------------
Net income (loss) $ 15,866 $ (8,757)
--------------------
--------------------
Earnings (loss) per share
------------------------------------
Basic $ 0.49 $ (0.27)
--------------------
--------------------
Diluted $ 0.49 $ (0.27)
--------------------
--------------------
----------------------------------------
Depreciation and amortization
included in operating profit (loss)$ 13,249 $ 14,692 $ 9,652 $ 10,381
----------------------------------------
(1)Restructuring and other costs
charged to:
Cost of sales $ 2,702 $ 3,379 $ - $ 867
Expenses 3,554 6,155 1,151 4,183
----------------------------------------
$ 6,256 $ 9,534 $ 1,151 $ 5,050
----------------------------------------
----------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
THIRD QUARTERS ENDED SEPTEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
----------------------------------------
Dorel Home
Dorel Sports Furnishings
----------------------------------------
2016 2015 2016 2015
Total revenue $ 250,711 $266,499 $ 187,961 $ 165,492
Cost of sales (1) 198,847 215,545 157,233 144,091
----------------------------------------
Gross profit 51,864 50,954 30,728 21,401
Selling expenses 24,635 25,391 5,161 4,216
General and administrative expenses 17,348 15,712 7,882 6,052
Research and development expenses 1,660 1,538 982 1,011
Restructuring and other costs (1) 2,403 1,972 - -
Impairment losses on goodwill and
intangible assets - 26,510 - -
----------------------------------------
Operating profit (loss) $ 5,818 $(20,169) $ 16,703 $ 10,122
----------------------------------------
----------------------------------------
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)$ 2,497 $ 3,200 $ 1,100 $ 1,111
----------------------------------------
(1)Restructuring and other costs
charged to:
Cost of sales $ 2,702 $ 2,512 $ - $ -
Expenses 2,403 1,972 - -
----------------------------------------
$ 5,105 $ 4,484 $ - $ -
----------------------------------------
----------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
NINE MONTHS ENDED SEPTEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
------------------------------------------
Total Dorel Juvenile
------------------------------------------
2016 2015 2016 2015
Total revenue $1,954,436 $2,014,419 $ 724,811 $ 786,910
Cost of sales (1) 1,492,816 1,582,052 498,704 578,280
------------------------------------------
Gross profit 461,620 432,367 226,107 208,630
Selling expenses 171,719 172,217 85,426 84,719
General and administrative
expenses 150,723 141,792 74,806 71,698
Research and development expenses 24,629 27,041 16,927 19,583
Restructuring and other costs (1) 13,673 7,246 11,436 5,898
Impairment losses on goodwill and
intangible assets 55,341 26,510 - -
------------------------------------------
Operating profit (loss) 45,535 57,561 $ 37,512 $ 26,732
--------------------
--------------------
Finance expenses 31,133 20,463
Corporate expenses 18,863 15,123
Income taxes expense 1,583 2,885
----------------------
Net income (loss) $ (6,044) $ 19,090
----------------------
----------------------
Earnings (loss) per share
----------------------------------
Basic $ (0.19) $ 0.59
----------------------
----------------------
Diluted $ (0.19) $ 0.59
----------------------
----------------------
------------------------------------------
Depreciation and amortization
included in operating profit
(loss) $ 39,308 $ 43,337 $ 27,548 $ 29,903
------------------------------------------
(1)Restructuring and other costs
charged to:
Cost of sales $ 2,702 $ 3,379 $ - $ 867
Expenses 13,673 7,246 11,436 5,898
------------------------------------------
$ 16,375 $ 10,625 $ 11,436 $ 6,765
------------------------------------------
------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
NINE MONTHS ENDED SEPTEMBER 30
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
------------------------------------------
Dorel SportsDorel Home Furnishings
------------------------------------------
2016 2015 2016 2015
Total revenue $703,722 $ 746,515 $ 525,903 $ 480,994
Cost of sales (1) 555,519 585,474 438,593 418,298
------------------------------------------
Gross profit 148,203 161,041 87,310 62,696
Selling expenses 70,989 74,593 15,304 12,905
General and administrative
expenses 53,691 51,466 22,226 18,628
Research and development expenses 4,840 4,652 2,862 2,806
Restructuring and other costs (1) 2,237 1,348 - -
Impairment losses on goodwill and
intangible assets 55,341 26,510 - -
------------------------------------------
Operating profit (loss) $(38,895) $ 2,472 $ 46,918 $ 28,357
------------------------------------------
------------------------------------------
Finance expenses
Corporate expenses
Income taxes expense
Net income (loss)
Earnings (loss) per share
----------------------------------
Basic
Diluted
------------------------------------------
Depreciation and amortization
included in operating profit
(loss) $ 8,423 $ 9,943 $ 3,337 $ 3,491
------------------------------------------
(1)Restructuring and other costs
charged to:
Cost of sales $ 2,702 $ 2,512 $ - $ -
Expenses 2,237 1,348 - -
------------------------------------------
$ 4,939 $ 3,860 $ - $ -
------------------------------------------
------------------------------------------
Contacts: MaisonBrison Communications Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034
Source: Dorel Industries Inc.
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