Dorel Reports Third Quarter Results
- Organic revenue increases at Dorel Juvenile - Dorel Home maintains revenue and earnings growth - Dorel Sports impacted by weak bike market
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E-mailMONTREAL, QUEBEC -- (Marketwired) -- 11/02/17 -- Dorel Industries Inc. (TSX: DII.B)(TSX: DII.A) today announced results for the third quarter and nine months ended September 30, 2017. Third quarter revenue was US$642.6 million, down 4.3% from US$671.3 million. Adjusted net income was US$14.5 million or US$0.44 per diluted share, compared to US$20.6 million or US$0.63 per diluted share a year ago. Reported net income was US$13.3 million or US$0.41 per diluted share, compared to US$15.9 million or US$0.49 per diluted share last year.
For the nine months, revenue was US$1.90 billion, a decrease of 2.8% compared to US$1.95 billion last year. Adjusted net income was US$49.7 million or US$1.52 per diluted share, compared to US$50.5 million or US$1.55 per diluted share a year ago. Reported net income year-to-date was US$33.6 million or US$1.03 per diluted share, compared to a reported net loss of US$6.0 million or US$0.19 per diluted share in 2016.
"We are pleased with the third quarter progress at Dorel Home and Dorel Juvenile. Dorel Home's positive revenue and earnings trend was maintained as on-line sales exceeded US$100 million for the quarter, again accounting for more than 50% of the segment's total revenue. The segment's focus on improving speed and efficiency of distribution continue to drive sales with major on-line retailers. Dorel Juvenile recorded its first quarter of organic revenue growth in several quarters. E-commerce growth is driving sales as Dorel Juvenile has adapted well to today's consumer, and as a result is gaining market share in this channel. Results at Dorel Sports declined as the segment is caught in the on-going weakness in the global bicycle market and a very challenging North American brick and mortar environment. Although the bicycle industry environment remains difficult, we expect Dorel Sports' fourth quarter to return to solid profitability. The Toys "R" Us situation resulted in an almost month-long sales disruption in all segments, but we have agreed on business terms with them going forward," stated Dorel President & CEO, Martin Schwartz.
The Company is presenting adjusted financial information, excluding impairment losses, restructuring and other costs, remeasurement of forward purchase agreement liabilities and loss on early extinguishment of long-term debt as it believes this provides a more meaningful comparison of its core business performance between the periods presented. These previously announced items are detailed in the attached tables of this press release. Contained within this press release are reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
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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 $, except per share amounts
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2017 2016 Change
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$ $ %
Total revenue 642,634 671,273 (4.3%)
Net income 13,294 15,866 (16.2%)
Per share - Basic 0.41 0.49 (16.3%)
Per share - Diluted 0.41 0.49 (16.3%)
Adjusted net income 14,538 20,647 (29.6%)
Per share - Basic 0.45 0.64 (29.7%)
Per share - Diluted 0.44 0.63 (30.2%)
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Number of shares outstanding -
Basic weighted average 32,403,980 32,359,496
Diluted weighted average 32,699,875 32,615,350
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Summary of Financial Information (unaudited)
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Nine Months Ended September 30,
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All figures in thousands of US $, except per share amounts
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2017 2016 Change
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$ $ %
Total revenue 1,900,616 1,954,436 (2.8%)
Net income (loss) 33,575 (6,044) 655.5%
Per share - Basic 1.04 (0.19) 647.4%
Per share - Diluted 1.03 (0.19) 642.1%
Adjusted net income 49,687 50,511 (1.6%)
Per share - Basic 1.53 1.56 (1.9%)
Per share - Diluted 1.52 1.55 (1.9%)
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Number of shares outstanding -
Basic weighted average 32,403,980 32,346,051
Diluted weighted average 32,676,194 32,346,051
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Dorel Home
All figures in thousands of US $
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Third Quarters Ended September 30 (unaudited)
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2016
2017 Restated(i) Change
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$ % of rev. $ % of rev. %
Total revenue 201,449 198,856 1.3%
Gross profit 35,408 17.6% 33,226 16.7% 6.6%
Operating profit 20,537 10.2% 18,005 9.1% 14.1%
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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
2017 Restated(i) Change
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$ % of rev. $ % of rev. %
Total revenue 589,644 558,198 5.6%
Gross profit 102,852 17.4% 94,039 16.8% 9.4%
Operating profit 57,017 9.7% 50,410 9.0% 13.1%
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(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's
furniture was transferred from Dorel Juvenile to Dorel Home.
Accordingly, the Company has restated the segmented information for the
third quarter and nine months ended September 30, 2016.
Third quarter revenue rose US$2.6 million, or 1.3%, to US$201.4 million. For the nine months, revenue grew US$31.4 million, or 5.6%, to US$589.6 million from US$558.2 million in 2016. Improvements were driven by increased sales in all divisions to on-line retailers. In the third quarter and for the nine months, on-line sales represented 51% and 50% of total segment revenue respectively compared to 44% and 43% for the comparable periods in 2016. Brick and mortar sales were down due mainly to the planned reduced exposure to a major mass merchant customer.
Gross profit, at 17.6% in the third quarter and 17.4% for the nine months, improved by 90 and 60 basis points respectively over last year's third quarter and year-to-date periods. The improved margins from increased on-line sales were partly offset by slightly higher input and warehousing costs.
Third quarter operating profit rose US$2.5 million, or 14.1%, to US$20.5 million from US$18.0 million a year ago which was driven by improved margins at several divisions from increased on-line sales, higher sales volumes and an overall net decrease in operating expenses. Year-to-date, operating profit increased US$6.6 million, or 13.1%, to US$57.0 million compared to US$50.4 million in the nine months of 2016.
Dorel Juvenile
All figures in thousands of US $
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Third Quarters Ended September 30 (unaudited)
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2016
2017 Restated(i) Change
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$ % of rev. $ % of rev. %
Total revenue 235,645 221,706 6.3%
Gross profit 69,601 29.5% 75,915 34.2% (8.3%)
Operating profit 10,155 4.3% 11,098 5.0% (8.5%)
Adjusted operating profit 11,355 4.8% 12,249 5.5% (7.3%)
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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
2017 Restated(i) Change
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$ % of rev. $ % of rev. %
Total revenue 682,363 692,516 (1.5%)
Gross profit 204,616 30.0% 219,378 31.7% (6.7%)
Operating profit 26,911 3.9% 34,020 4.9% (20.9%)
Adjusted gross profit 205,910 30.2% 219,378 31.7% (6.1%)
Adjusted operating profit 34,783 5.1% 38,456 5.6% (9.6%)
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(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's
furniture was transferred from Dorel Juvenile to Dorel Home.
Accordingly, the Company has restated the segmented information for the
third quarter and nine months ended September 30, 2016.
Third quarter revenue increased US$13.9 million, or 6.3%, to US$235.6 million compared with US$221.7 million last year. Excluding the positive impact of foreign exchange rates, organic revenue increased by approximately 4%, the first growth quarter since the fourth quarter of 2015. Revenue increased in the U.S. by high single digits despite the Toys "R" Us disruption, driven by growing e-commerce sales. Dorel Juvenile China revenue also increased due to improved delivery performance which resulted in higher intercompany sales of travel systems and to strong car seat sales to a third-party customer. Sales in Brazil increased significantly, while sales in Europe decreased slightly in Euro in the face of competitive pressure and the timing of new product launches. Year-to-date revenue has decreased by US$10.2 million, or 1.5%, to US$682.4 million.
The Zhongshan factory manufacturing process has been stabilized and capacity constraints have been minimized. Investments are being made in automation and quality control to further bolster efficiencies. Going forward, the facility will be more focused on building ahead, rather than dealing with backorders. Dorel Juvenile participated in important industry shows during the quarter, including Cologne, Germany and the CBME fair in Shanghai, China. At both, more products were displayed and more innovation was featured than in recent years. Reaction was highly positive from trade and customers, demonstrating strong confidence in Dorel Juvenile's brands and products.
The revolutionary Maxi-Cosi AxissFix Air, the world's first child car seat with integrated airbags, was launched two weeks ago throughout Europe. The ground-breaking safety technology sets a new standard in child car seats and puts Dorel at the forefront of innovation. In the event of a collision, the airbags will deploy and reduce the forces on a child's head and neck compared to standard forward-facing child car seats.
Last year's third quarter operating profit included a net positive impact of US$2.0 million from the net effect of a curtailment gain recorded for post-retirement defined benefits in the U.S. offset by higher product liability costs. Adjusted operating profit for the quarter, excluding restructuring and other costs as well as the net positive impact of US$2.0 million in 2016, increased by US$1.2 million, or 11.8%, to US$11.4 million from US$10.2 million a year ago. Operating profit decreased US$0.9 million, or 8.5%, to US$10.2 million, compared to US$11.1 million a year ago. Year-to-date operating profit declined US$7.1 million, or 20.9%, to US$26.9 million from US$34.0 million last year. Adjusted operating profit declined US$3.7 million, or 9.6%, to US$34.8 million from US$38.5 million for the nine months a year ago.
Dorel Sports
All figures in thousands of US $
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Third Quarters Ended September 30 (unaudited)
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2017 2016 Change
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$ % of rev. $ % of rev. %
Total revenue 205,540 250,711 (18.0%)
Gross profit 45,823 22.3% 51,864 20.7% (11.6%)
Operating profit 176 0.1% 5,818 2.3% (97.0%)
Adjusted gross profit 46,076 22.4% 54,566 21.8% (15.6%)
Adjusted operating profit 587 0.3% 10,923 4.4% (94.6%)
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All figures in thousands of US $
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Nine Months Ended September 30 (unaudited)
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2017 2016 Change
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$ % of rev. $ % of rev. %
Total revenue 628,609 703,722 (10.7%)
Gross profit 142,835 22.7%148,203 21.1% (3.6%)
Operating profit (loss) 15,218 2.4%(38,895) (5.5%) 139.1%
Adjusted gross profit 142,239 22.6%150,905 21.4% (5.7%)
Adjusted operating profit 15,720 2.5% 21,385 3.0% (26.5%)
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Third quarter revenue decreased US$45.2 million, or 18.0%, to US$205.5 million from US$250.7 million last year. Excluding the positive impact of foreign exchange rates, organic revenue declined by approximately 19%. Nine-month revenue decreased US$75.1 million, or 10.7%, to US$628.6 million compared to US$703.7 million a year ago. Organic revenue for the nine-month period declined by approximately 14% when removing foreign exchange fluctuations and the change in Cycling Sports Group (CSG) International's business model for which the revenue recognition transitioned from a licensing model to a distribution platform in the third quarter of 2016.
The revenue decline is attributed mainly to continued weakness in the global bicycle market, disruption in the North American retail environment and persistent inclement weather in the U.S. Pacific Cycle was affected by changing buying habits at certain major mass merchants, amidst a soft bicycle market and poor weather which began last spring, contributing to reduced consumer demand. As well, the September 2017 bankruptcy filing of Toys "R" Us halted shipments temporarily, pushing sales into the fourth quarter. Sales in CSG decreased on a continued reduction in discounted sales, as inventory management has improved significantly in 2017. CSG's closeout sales in the quarter represented 11.6% of sales volume in 2017 compared to 16.3% in the prior year's third quarter.
Versus prior year, third quarter operating profit declined by US$5.6 million to US$0.2 million and when excluding restructuring and other costs, adjusted operating profit declined by US$10.3 million to US$0.6 million. For the nine months, operating profit rose by US$54.1 million to US$15.2 million and when excluding impairment losses, restructuring and other costs, adjusted operating profit declined by US$5.7 million, or 26.5%, to US$15.7 million. The decline in adjusted operating profit for both the quarter and year-to-date when compared to 2016 are explained by lower revenue partly offset by improved margins which for the third quarter and year-to-date improved by 60 and 120 basis points to 22.4% and 22.6% respectively. This is due to continued inventory management improvement in terms of product mix and pricing actions in key markets.
Other
During the third quarter and nine months ended September 30, 2017, the Company's effective tax rates were 21.3% and 27.6% respectively versus 18.7% and (35.5)% for the same periods in the prior year. Excluding income taxes on impairment losses, restructuring and other costs, remeasurement of forward purchase agreement liabilities and loss on early extinguishment of long-term debt, the Company's third quarter adjusted tax rate was 21.4% in 2017 compared to 20.4% in 2016. The adjusted tax rate for the nine months was 23.8% in 2017 versus 18.1% in 2016. The main cause of the variation year-over-year of the adjusted tax rate is due to changes in the jurisdictions in which the Company generated its income. The Company is stating that for the full year it expects its annual adjusted tax rate to be between 20% and 25%. However, variations in earnings across quarters mean that this rate may vary significantly between quarters.
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, cash-settled Restricted Share Units and cash-settled Performance Share Units. The dividend is payable on November 30, 2017 to shareholders of record as at the close of business on November 16, 2017.
Outlook
"We are expecting a very good fourth quarter with all segments delivering improved adjusted operating profit versus last year. Dorel Home's momentum is expected to continue with both higher sales and earnings expected, driven by on-line sales," stated Dorel President & CEO, Martin Schwartz.
"Dorel Juvenile is introducing several significant new products in the fourth quarter and this should translate into improved earnings, which will be similar to our third quarter performance. Revenue for the quarter is expected to be flat compared to prior year as the benefit of our enhanced product pipeline will be seen mostly in 2018.
"Dorel Sports is expected to rebound from its disappointing third quarter and we believe at this point that fourth quarter adjusted operating profit should be in line with the fourth quarter of last year. Therefore, for the second half, adjusted operating profit for Dorel Sports will not exceed prior year as previously announced," concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, November 2, 2017 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 82912829 on your phone. This recording will be available on Thursday, November 2, 2017 as of 4:00 P.M. until 11:59 P.M. on Thursday, November 9, 2017.
Complete condensed consolidated interim financial statements as at September 30, 2017 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 global organization, operating three distinct businesses in juvenile products, bicycles and home products. Dorel's strength lies in the diversity, innovation and quality of its products as well as the superiority of its brands. Dorel Juvenile's powerfully branded products include global brands Safety 1st, Quinny, Maxi-Cosi and Tiny Love, complemented by regional brands such as Cosco, Bebe Confort and Infanti. Dorel Sports brands include Cannondale, Schwinn, GT, Mongoose, Caloi, IronHorse and SUGOI. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture. Dorel has annual sales of US$2.6 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 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, remeasurement of forward purchase agreement liabilities and loss on early extinguishment of long-term debt incurred in 2017 and 2016, 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 the 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,
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2017
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Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
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$ % $ $ %
TOTAL REVENUE 642,634 100.0 - 642,634 100.0
Cost of sales 491,802 76.5 (253) 491,549 76.5
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GROSS PROFIT 150,832 23.5 253 151,085 23.5
Selling expenses 60,899 9.5 - 60,899 9.5
General and
administrative
expenses 55,657 8.6 - 55,657 8.6
Research and
development
expenses 8,309 1.3 - 8,309 1.3
Restructuring and
other costs 1,358 0.3 (1,358) - -
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OPERATING PROFIT 24,609 3.8 1,611 26,220 4.1
Finance expenses 7,723 1.2 - 7,723 1.2
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INCOME BEFORE
INCOME TAXES 16,886 2.6 1,611 18,497 2.9
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Income taxes
expense 3,592 0.5 367 3,959 0.6
Tax rate 21.3% 21.4%
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NET INCOME 13,294 2.1 1,244 14,538 2.3
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EARNINGS PER SHARE
Basic 0.41 0.04 0.45
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Diluted 0.41 0.03 0.44
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SHARES OUTSTANDING
Basic - weighted
average 32,403,980 32,403,980
Diluted - weighted
average 32,699,875 32,699,875
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Reconciliation of non-GAAP financial measures
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Third Quarters Ended September 30,
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2016
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Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
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$ % $ $ %
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) - -
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OPERATING PROFIT 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 BEFORE
INCOME TAXES 19,517 2.9 6,408 25,925 3.9
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Income taxes
expense 3,651 0.5 1,627 5,278 0.8
Tax rate 18.7% 20.4%
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NET INCOME 15,866 2.4 4,781 20,647 3.1
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EARNINGS 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
average 32,359,496 32,359,496
Diluted - weighted
average 32,615,350 32,615,350
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Reconciliation of non-GAAP financial measures
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Nine Months Ended September 30,
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2017
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Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
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$ % $ $ %
TOTAL REVENUE 1,900,616 100.0 - 1,900,616 100.0
Cost of sales 1,450,313 76.3 (698) 1,449,615 76.3
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GROSS PROFIT 450,303 23.7 698 451,001 23.7
Selling expenses 174,177 9.2 - 174,177 9.2
General and
administrative
expenses 164,045 8.6 - 164,045 8.6
Research and
development
expenses 23,026 1.2 - 23,026 1.2
Restructuring and
other costs 7,676 0.4 (7,676) - -
Impairment losses
on goodwilland
intangible assets - - - - -
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OPERATING PROFIT 81,379 4.3 8,374 89,753 4.7
Finance expenses 35,026 1.9 (10,475) 24,551 1.3
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INCOME (LOSS)
BEFORE INCOME
TAXES 46,353 2.4 18,849 65,202 3.4
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Income taxes
expense 12,778 0.6 2,737 15,515 0.8
Tax rate 27.6% 23.8%
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NET INCOME (LOSS) 33,575 1.8 16,112 49,687 2.6
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EARNINGS (LOSS)
PER SHARE
Basic 1.04 0.49 1.53
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Diluted 1.03 0.49 1.52
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SHARES OUTSTANDING
Basic - weighted
average 32,403,980 32,403,980
Diluted - weighted
average 32,676,194 32,676,194
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Reconciliation of non-GAAP financial measures
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Nine Months Ended September 30,
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2016
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Impairment
losses,
restructuring
% of and % of
Reported revenue other costs Adjusted revenue
------------------ ---------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 1,954,436 100.0 - 1,954,436 100.0
Cost of sales 1,492,816 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 175,412 9.0 - 175,412 9.0
Research and
development
expenses 24,629 1.3 - 24,629 1.3
Restructuring and
other costs 6,673 0.3 (6,673) - -
Impairment losses
on goodwilland
intangible assets 55,341 2.8 (55,341) - -
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OPERATING PROFIT 26,672 1.4 64,716 91,388 4.7
Finance expenses 31,133 1.6 (1,425) 29,708 1.5
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INCOME (LOSS)
BEFORE INCOME
TAXES (4,461) (0.2) 66,141 61,680 3.2
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Income taxes
expense 1,583 0.1 9,586 11,169 0.6
Tax rate (35.5%) 18.1%
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NET INCOME (LOSS) (6,044) (0.3) 56,555 50,511 2.6
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EARNINGS (LOSS)
PER SHARE
Basic (0.19) 1.75 1.56
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Diluted (0.19) 1.74 1.55
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SHARES OUTSTANDING
Basic - weighted
average 32,346,051 32,346,051
Diluted - weighted
average 32,346,051 32,581,534
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The details of impairment losses, restructuring and other costs, remeasurement of forward purchase agreement liabilities and loss on early extinguishment of long-term debt recorded are presented below:
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Third Quarters
Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2017 2016 2017 2016
$ $ $ $
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Write-down of long-lived assets - - 368 -
Inventory markdowns 253 2,578 481 2,578
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Recorded within gross profit 253 2,578 849 2,578
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Employee severance and termination
benefits 818 2,245 4,218 4,431
Accelerated depreciation - 838 - 838
Write-down of long-lived assets - - - 424
Net losses from the remeasurement
and disposals of assets held for
sale - 464 622 83
Other associated costs 540 (5) 2,836 156
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Recorded within a separate line in
the condensed consolidated interim
income statements 1,358 3,542 7,676 5,932
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Total restructuring costs 1,611 6,120 8,525 8,510
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Other costs recorded within gross
profit - 124 (151) 124
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Acquisition-related costs - - - 729
Other costs - 12 - 12
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Recorded within a separate line in
the condensed consolidated interim
income statements - 12 - 741
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Total other costs - 136 (151) 865
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Total restructuring and other costs 1,611 6,256 8,374 9,375
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Impairment losses on goodwill and
intangible assets - - - 55,341
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Loss on remeasurement of forward
purchase agreement liabilities - 152 276 1,425
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Loss on early extinguishment of
long-term debt - - 10,199 -
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Total impairment losses,
restructuring and other costs,
remeasurement of forward purchase
agreement liabilities and loss on
early extinguishment of long-term
debt before income taxes(1) 1,611 6,408 18,849 66,141
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Total impairment losses,
restructuring and other costs,
remeasurement of forward purchase
agreement liabilities and loss on
early extinguishment of long-term
debt after income taxes 1,244 4,781 16,112 56,555
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total impact on diluted earnings
(loss) per share (0.03) (0.14) (0.49) (1.74)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1)Includes non-cash amounts of: 253 4,032 3,164 60,689
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dorel Juvenile
Reconciliation of non-GAAP financial measures
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Third Quarters Ended September 30,
---------------------------------------------------------------------------
2017
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 235,645 100.0 - 235,645 100.0
Cost of sales 166,044 70.5 - 166,044 70.5
---------------------------------------------------------------------------
GROSS PROFIT 69,601 29.5 - 69,601 29.5
Selling expenses 29,450 12.5 - 29,450 12.5
General and
administrative
expenses 22,920 9.7 - 22,920 9.7
Research and
development
expenses 5,876 2.5 - 5,876 2.5
Restructuring and
other costs 1,200 0.5 (1,200) - -
---------------------------------------------------------------------------
OPERATING PROFIT 10,155 4.3 1,200 11,355 4.8
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Dorel Juvenile
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Third Quarters Ended September 30,
----------------------------------------------------------------------------
2016
Restated (i)
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 221,706 100.0 - 221,706 100.0
Cost of sales 145,791 65.8 - 145,791 65.8
----------------------------------------------------------------------------
GROSS PROFIT 75,915 34.2 - 75,915 34.2
Selling expenses 28,615 12.9 - 28,615 12.9
General and
administrative
expenses 29,664 13.4 - 29,664 13.4
Research and
development
expenses 5,387 2.4 - 5,387 2.4
Restructuring and
other costs 1,151 0.5 (1,151) - -
----------------------------------------------------------------------------
OPERATING PROFIT 11,098 5.0 1,151 12,249 5.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Nine Months Ended September 30,
---------------------------------------------------------------------------
2017
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 682,363 100.0 - 682,363 100.0
Cost of sales 477,747 70.0 (1,294) 476,453 69.8
---------------------------------------------------------------------------
GROSS PROFIT 204,616 30.0 1,294 205,910 30.2
Selling expenses 86,743 12.7 - 86,743 12.7
General and
administrative
expenses 68,125 10.0 - 68,125 10.0
Research and
development
expenses 16,259 2.4 - 16,259 2.4
Restructuring and
other costs 6,578 1.0 (6,578) - -
---------------------------------------------------------------------------
OPERATING PROFIT 26,911 3.9 7,872 34,783 5.1
---------------------------------------------------------------------------
---------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Nine Months Ended September 30,
----------------------------------------------------------------------------
2016
Restated (i)
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 692,516 100.0 - 692,516 100.0
Cost of sales 473,138 68.3 - 473,138 68.3
----------------------------------------------------------------------------
GROSS PROFIT 219,378 31.7 - 219,378 31.7
Selling expenses 83,985 12.1 - 83,985 12.1
General and
administrative
expenses 80,010 11.6 - 80,010 11.6
Research and
development
expenses 16,927 2.4 - 16,927 2.4
Restructuring and
other costs 4,436 0.7 (4,436) - -
----------------------------------------------------------------------------
OPERATING PROFIT 34,020 4.9 4,436 38,456 5.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's
furniture was transferred from Dorel Juvenile to Dorel Home.
Accordingly, the Company has restated the segmented information for the
third quarter and nine months ended September 30, 2016.
Dorel Sports
Reconciliation of non-GAAP financial measures
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Third Quarters Ended September 30,
---------------------------------------------------------------------------
2017
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 205,540 100.0 - 205,540 100.0
Cost of sales 159,717 77.7 (253) 159,464 77.6
---------------------------------------------------------------------------
GROSS PROFIT 45,823 22.3 253 46,076 22.4
Selling expenses 24,644 12.0 - 24,644 12.0
General and
administrative
expenses 19,395 9.4 - 19,395 9.4
Research and
development
expenses 1,450 0.7 - 1,450 0.7
Restructuring and
other costs 158 0.1 (158) - -
---------------------------------------------------------------------------
OPERATING PROFIT 176 0.1 411 587 0.3
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Dorel Sports
Reconciliation of non-GAAP financial measures
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Third Quarters Ended September 30,
----------------------------------------------------------------------------
2016
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue 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) - -
----------------------------------------------------------------------------
OPERATING PROFIT 5,818 2.3 5,105 10,923 4.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Nine Months Ended September 30,
---------------------------------------------------------------------------
2017
---------------------------------------------------------
Restructuring
% of and other % of
Reported revenue costs Adjusted revenue
---------------------------------------------------------------------------
$ % $ $ %
TOTAL REVENUE 628,609 100.0 - 628,609 100.0
Cost of sales 485,774 77.3 596 486,370 77.4
---------------------------------------------------------------------------
GROSS PROFIT 142,835 22.7 (596) 142,239 22.6
Selling expenses 67,047 10.7 - 67,047 10.7
General and
administrative
expenses 55,532 8.8 - 55,532 8.8
Research and
development
expenses 3,940 0.6 - 3,940 0.6
Restructuring and
other costs 1,098 0.2 (1,098) - -
Impairment losses
on goodwill and
intangible assets - - - - -
---------------------------------------------------------------------------
OPERATING PROFIT
(LOSS) 15,218 2.4 502 15,720 2.5
---------------------------------------------------------------------------
---------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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 INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
As at As at
September 30, December 30,
2017 2016
-------------------- --------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 34,324 $ 31,883
Trade and other receivables 415,275 431,062
Inventories 645,554 549,688
Other financial assets 348 4,333
Income taxes receivable 14,612 14,466
Prepaid expenses 31,153 21,040
-------------------- --------------------
1,141,266 1,052,472
Assets held for sale 4,396 20,017
-------------------- --------------------
1,145,662 1,072,489
-------------------- --------------------
NON-CURRENT ASSETS
Property, plant and equipment 199,193 191,294
Intangible assets 441,320 427,587
Goodwill 455,370 435,790
Deferred tax assets 37,001 39,324
Other financial assets 546 -
Other assets 7,105 6,148
-------------------- --------------------
1,140,535 1,100,143
-------------------- --------------------
$ 2,286,197 $ 2,172,632
-------------------- --------------------
-------------------- --------------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness $ 59,633 $ 49,490
Trade and other payables 500,310 437,009
Forward purchase agreement
liabilities - 7,500
Other financial liabilities 5,832 569
Deferred revenue 4,712 6,475
Income taxes payable 12,026 15,143
Long-term debt 17,731 51,138
Provisions 45,161 63,169
-------------------- --------------------
645,405 630,493
-------------------- --------------------
NON-CURRENT LIABILITIES
Long-term debt 409,318 355,118
Net pension and post-retirement
defined benefit liabilities 36,243 35,206
Deferred tax liabilities 51,411 53,293
Provisions 1,929 1,681
Written put option liabilities 28,361 26,325
Other financial liabilities 433 1,115
Other long-term liabilities 10,895 13,302
-------------------- --------------------
538,590 486,040
-------------------- --------------------
EQUITY
Share capital 202,400 202,400
Contributed surplus 28,394 27,139
Accumulated other comprehensive
loss (71,141) (113,840)
Other equity 991 3,027
Retained earnings 941,558 937,373
-------------------- --------------------
1,102,202 1,056,099
-------------------- --------------------
$ 2,286,197 $ 2,172,632
-------------------- --------------------
-------------------- --------------------
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,
2017 2016 2017 2016
-------------- -------------- -------------- --------------
Sales $ 642,293 $ 670,265 $ 1,899,523 $ 1,948,503
Licensing and
commission
income 341 1,008 1,093 5,933
-------------- -------------- -------------- --------------
TOTAL REVENUE 642,634 671,273 1,900,616 1,954,436
Cost of sales (1) 491,802 510,268 1,450,313 1,492,816
-------------- -------------- -------------- --------------
GROSS PROFIT 150,832 161,005 450,303 461,620
Selling expenses 60,899 59,229 174,177 172,893
General and
administrative
expenses 55,657 60,599 164,045 175,412
Research and
development
expenses 8,309 8,029 23,026 24,629
Restructuring and
other costs (1) 1,358 3,554 7,676 6,673
Impairment losses
on goodwill and
intangible
assets - - - 55,341
-------------- -------------- -------------- --------------
OPERATING PROFIT 24,609 29,594 81,379 26,672
Finance expenses 7,723 10,077 35,026 31,133
-------------- -------------- -------------- --------------
INCOME (LOSS)
BEFORE INCOME
TAXES 16,886 19,517 46,353 (4,461)
Income taxes
expense 3,592 3,651 12,778 1,583
-------------- -------------- -------------- --------------
NET INCOME (LOSS)$ 13,294 $ 15,866 $ 33,575 $ (6,044)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
EARNINGS (LOSS)
PER SHARE
Basic $ 0.41 $ 0.49 $ 1.04 $ (0.19)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Diluted $ 0.41 $ 0.49 $ 1.03 $ (0.19)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
SHARES
OUTSTANDING
Basic -
weighted
average 32,403,980 32,359,496 32,403,980 32,346,051
Diluted -
weighted
average 32,699,875 32,615,350 32,676,194 32,346,051
(1)Restructuring
and other costs
charged to:
Cost of sales $ 253 $ 2,702 $ 698 $ 2,702
Expenses 1,358 3,554 7,676 6,673
-------------- -------------- -------------- --------------
$ 1,611 $ 6,256 $ 8,374 $ 9,375
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Third Quarters Ended Nine Months Ended
--------------------- ---------------------
September September September September
30, 2017 30, 2016 30, 2017 30, 2016
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 13,294 $ 15,866 $ 33,575 $ (6,044)
---------- ---------- ---------- ----------
OTHER COMPREHENSIVE INCOME:
Items that are or may be
reclassified subsequently to net
income:
Cumulative translation account:
---------------------------------
Net change in unrealized foreign
currency gains (losses) on
translation of net investments
in foreign operations, net of
tax of nil 16,772 3,246 38,422 20,093
Net gains (losses) on hedge of
net investments in foreign
operations, net of tax of nil 3,620 2,279 11,166 4,852
---------- ---------- ---------- ----------
20,392 5,525 49,588 24,945
---------- ---------- ---------- ----------
Net changes in cash flow hedges:
---------------------------------
Net change in unrealized gains
(losses) on derivatives
designated as cash flow hedges (3,606) (90) (8,657) (1,023)
Reclassification to income 66 142 205 452
Reclassification to the related
non-financial asset 1,643 (1,196) (628) (1,709)
Deferred income taxes 448 65 2,295 784
---------- ---------- ---------- ----------
(1,449) (1,079) (6,785) (1,496)
---------- ---------- ---------- ----------
Items that will not be
reclassified to net income:
Defined benefit plans:
---------------------------------
Remeasurements of the net pension
and post-retirement defined
benefit liabilities (41) (3,689) (151) (3,692)
Deferred income taxes 14 1,428 47 1,430
---------- ---------- ---------- ----------
(27) (2,261) (104) (2,262)
---------- ---------- ---------- ----------
TOTAL OTHER COMPREHENSIVE INCOME 18,916 2,185 42,699 21,187
---------- ---------- ---------- ----------
TOTAL COMPREHENSIVE INCOME $ 32,210 $ 18,051 $ 76,274 $ 15,143
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
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
Share Contributed Translation Flow
Capital Surplus Account Hedges
-------------------------------------------------------------------------
Balance as at December
30, 2015 $ 200,277 $ 26,480 $ (104,521) $ 2,680
-------------------------------------------------------------------------
Total comprehensive
income:
----------------------
Net loss - - - -
Other comprehensive
income (loss) - - 24,945 (1,496)
-------------------------------------------------------------------------
- - 24,945 (1,496)
-------------------------------------------------------------------------
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 $ (79,576) $ 1,184
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Balance as at
December 30, 2016 $ 202,400 $ 27,139 $ (102,629) $ 2,852
-------------------------------------------------------------------------
Total comprehensive
income:
----------------------
Net income - - - -
Other comprehensive
income (loss) - - 49,588 (6,785)
-------------------------------------------------------------------------
- - 49,588 (6,785)
-------------------------------------------------------------------------
Share-based payments - 1,030 - -
Remeasurement of
written put option
liabilities - - - -
Dividends on common
shares - - - -
Dividends on
deferred share
units - 225 - -
-------------------------------------------------------------------------
Balance as at
September 30, 2017 $ 202,400 $ 28,394 $ (53,041) $ (3,933)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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)
---------------
Defined
Benefit Other Retained Total
Plans Equity Earnings Equity
----------------------------------------------------------------------------
Balance as at December
30, 2015 $ (12,115) $ 1,527 $ 988,069 $ 1,102,397
----------------------------------------------------------------------------
Total comprehensive
income:
----------------------
Net loss - - (6,044) (6,044)
Other comprehensive
income (loss) (2,262) - - 21,187
----------------------------------------------------------------------------
(2,262) - (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 $ (14,377) $ (928) $ 952,803 $ 1,087,749
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at
December 30, 2016 $ (14,063) $ 3,027 $ 937,373 $ 1,056,099
----------------------------------------------------------------------------
Total comprehensive
income:
----------------------
Net income - - 33,575 33,575
Other comprehensive
income (loss) (104) - - 42,699
----------------------------------------------------------------------------
(104) - 33,575 76,274
----------------------------------------------------------------------------
Share-based payments - - - 1,030
Remeasurement of
written put option
liabilities - (2,036) - (2,036)
Dividends on common
shares - - (29,165) (29,165)
Dividends on
deferred share
units - - (225) -
----------------------------------------------------------------------------
Balance as at
September 30, 2017 $ (14,167) $ 991 $ 941,558 $ 1,102,202
----------------------------------------------------------------------------
----------------------------------------------------------------------------
DOREL INDUSTRIES INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
ALL FIGURES IN THOUSANDS OF US $
(unaudited)
Third Quarters Ended Nine Months Ended
------------------------- -------------------------
September September September September
30, 30, 30, 30,
2017 2016 2017 2016
------------ ------------ ------------ ------------
CASH PROVIDED BY (USED
IN):
OPERATING ACTIVITIES
Net income (loss) $ 13,294 $ 15,866 $ 33,575 $ (6,044)
Items not involving cash:
Depreciation and
amortization 12,612 13,451 37,016 39,911
Impairment losses on
goodwill and
intangible assets - - - 55,341
Unrealized losses
(gains) arising on
financial assets and
financial liabilities
classified as held for
trading 242 (798) 98 412
Share-based payments 98 140 194 370
Defined benefit pension
and post-retirement
costs 985 (7,767) 2,955 (5,637)
Loss (gain) on disposal
of property, plant and
equipment (1) (1,873) 181 (1,353)
Restructuring and other
costs 253 3,880 1,471 3,923
Finance expenses 7,723 10,077 35,026 31,133
Income taxes expense 3,592 3,651 12,778 1,583
Net changes in balances
related to operations
(1) 614 23,105 (49,098) 12,421
Income taxes paid (4,150) (4,135) (16,361) (16,427)
Income taxes received 6 2,356 4,911 8,612
Interest paid (4,215) (5,059) (21,452) (23,273)
Interest received 155 180 409 385
------------ ------------ ------------ ------------
CASH PROVIDED BY
OPERATING ACTIVITIES 31,208 53,074 41,703 101,357
------------ ------------ ------------ ------------
FINANCING ACTIVITIES
Bank indebtedness 4,502 6,685 7,202 (1,953)
Increase of long-term
debt - 560 208,782 978
Repayments of long-term
debt (14,534) (49,528) (193,751) (46,618)
Repayments of forward
purchase agreement
liabilities - - (7,857) (4,414)
Increase of written put
option liabilities - - - 673
Financing costs (54) (143) (2,760) (2,082)
Issuance of share capital - 204 - 610
Dividends on common
shares (9,723) (9,621) (29,165) (29,022)
------------ ------------ ------------ ------------
CASH USED IN FINANCING
ACTIVITIES (19,809) (51,843) (17,549) (81,828)
------------ ------------ ------------ ------------
INVESTING ACTIVITIES
Acquisition of businesses - - - 5,475
Additions to property,
plant and equipment (10,159) (4,202) (24,523) (14,013)
Disposals of property,
plant and equipment 66 1,414 248 1,552
Net proceeds from
disposals of assets held
for sale - 1,555 15,027 4,536
Additions to intangible
assets (5,476) (3,054) (14,103) (12,104)
------------ ------------ ------------ ------------
CASH USED IN INVESTING
ACTIVITIES (15,569) (4,287) (23,351) (14,554)
------------ ------------ ------------ ------------
Effect of foreign
currency exchange rate
changes on cashand cash
equivalents 321 (198) 1,638 1,742
------------ ------------ ------------ ------------
NET (DECREASE) INCREASE
IN CASH AND CASH
EQUIVALENTS (3,849) (3,254) 2,441 6,717
Cash and cash
equivalents, beginning
of period 38,173 43,153 31,883 33,182
------------ ------------ ------------ ------------
CASH AND CASH
EQUIVALENTS, END OF
PERIOD $ 34,324 $ 39,899 $ 34,324 $ 39,899
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
(1) Supplemental
information on net
changes in balances
related to operations:
Trade and other
receivables $ (1,664) $ 5,014 $ 29,425 $ (3,432)
Inventories (51,181) (9,560) (78,792) 3,402
Other financial assets (119) 1,256 (624) 1,261
Prepaid expenses 3,480 8,692 (8,577) (2,144)
Other assets (110) (196) (256) (552)
Trade and other
payables 54,554 7,997 35,803 552
Net pension and post-
retirement defined
benefit liabilities (683) (1,774) (3,146) (3,854)
Provisions, other
financial liabilities,
deferred revenue and
other long-term
liabilities (3,663) 11,676 (22,931) 17,188
------------ ------------ ------------ ------------
$ 614 $ 23,105 $ (49,098) $ 12,421
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
THIRD QUARTERS ENDED SEPTEMBER 30,
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Total Dorel Juvenile
------------------------------------------------
2017 2016 2017 2016
Restated(i)
Total revenue $ 642,634 $ 671,273 $ 235,645 $ 221,706
Cost of sales (1) 491,802 510,268 166,044 145,791
------------------------------------------------
Gross profit 150,832 161,005 69,601 75,915
Selling expenses 60,523 58,883 29,450 28,615
General and administrative
expenses 49,774 55,618 22,920 29,664
Research and development
expenses 8,309 8,029 5,876 5,387
Restructuring and other
costs (1) 1,358 3,554 1,200 1,151
------------------------------------------------
Operating profit 30,868 34,921 $ 10,155 $ 11,098
-------------------------
-------------------------
Finance expenses 7,723 10,077
Corporate expenses 6,259 5,327
Income taxes expense 3,592 3,651
-----------------------
Net income $ 13,294 $ 15,866
-----------------------
-----------------------
Earnings per share
Basic $ 0.41 $ 0.49
-----------------------
-----------------------
Diluted $ 0.41 $ 0.49
-----------------------
-----------------------
------------------------------------------------
Depreciation and
amortization included in
operating profit $ 12,409 $ 13,249 $ 9,031 $ 9,652
------------------------------------------------
------------------------------------------------
(1)Restructuring and other
costs charged to:
Cost of sales $ 253 $ 2,702 $ - $ -
Expenses 1,358 3,554 1,200 1,151
------------------------------------------------
$ 1,611 $ 6,256 $ 1,200 $ 1,151
------------------------------------------------
------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
THIRD QUARTERS ENDED SEPTEMBER 30,
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Dorel Sports Dorel Home
------------------------------------------------
2017 2016 2017 2016
Restated(i)
Total revenue $ 205,540 $ 250,711 $ 201,449 $ 198,856
Cost of sales (1) 159,717 198,847 166,041 165,630
------------------------------------------------
Gross profit 45,823 51,864 35,408 33,226
Selling expenses 24,644 24,635 6,429 5,633
General and administrative
expenses 19,395 17,348 7,459 8,606
Research and development
expenses 1,450 1,660 983 982
Restructuring and other
costs (1) 158 2,403 - -
------------------------------------------------
Operating profit $ 176 $ 5,818 $ 20,537 $ 18,005
------------------------------------------------
------------------------------------------------
Finance expenses
Corporate expenses
Income taxes expense
Net income
Earnings per share
Basic
Diluted
------------------------------------------------
Depreciation and
amortization included in
operating profit $ 2,329 $ 2,497 $ 1,049 $ 1,100
------------------------------------------------
------------------------------------------------
(1)Restructuring and other
costs charged to:
Cost of sales $ 253 $ 2,702 $ - $ -
Expenses 158 2,403 - -
------------------------------------------------
$ 411 $ 5,105 $ - $ -
------------------------------------------------
------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's
furniture was transferred from Dorel Juvenile to Dorel Home.
Accordingly, the Company has restated the segmented information for the
third quarter ended September 30, 2016.
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
NINE MONTHS ENDED SEPTEMBER 30,
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Total Dorel Juvenile
---------------------------------------------------
2017 2016 2017 2016
Restated(i)
Total revenue $ 1,900,616 $ 1,954,436 $ 682,363 $ 692,516
Cost of sales (1) 1,450,313 1,492,816 477,747 473,138
---------------------------------------------------
Gross profit 450,303 461,620 204,616 219,378
Selling expenses 172,921 171,719 86,743 83,985
General and
administrative expenses 147,534 157,723 68,125 80,010
Research and development
expenses 23,026 24,629 16,259 16,927
Restructuring and other
costs (1) 7,676 6,673 6,578 4,436
Impairment losses on
goodwill and intangible
assets - 55,341 - -
---------------------------------------------------
Operating profit (loss) 99,146 45,535 $ 26,911 $ 34,020
--------------------------
--------------------------
Finance expenses 35,026 31,133
Corporate expenses 17,767 18,863
Income taxes expense 12,778 1,583
-------------------------
Net income (loss) $ 33,575 $ (6,044)
-------------------------
-------------------------
Earnings (loss) per share
Basic $ 1.04 $ (0.19)
-------------------------
-------------------------
Diluted $ 1.03 $ (0.19)
-------------------------
-------------------------
---------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 36,412 $ 39,308 $ 26,442 $ 27,548
---------------------------------------------------
---------------------------------------------------
(1)Restructuring and
other costs charged to:
Cost of sales $ 698 $ 2,702 $ 1,294 $ -
Expenses 7,676 6,673 6,578 4,436
---------------------------------------------------
$ 8,374 $ 9,375 $ 7,872 $ 4,436
---------------------------------------------------
---------------------------------------------------
DOREL INDUSTRIES INC.
SEGMENTED INFORMATION
NINE MONTHS ENDED SEPTEMBER 30,
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
(unaudited)
Dorel Sports Dorel Home
---------------------------------------------------
2017 2016 2017 2016
Restated(i)
Total revenue $ 628,609 $ 703,722 $ 589,644 $ 558,198
Cost of sales (1) 485,774 555,519 486,792 464,159
---------------------------------------------------
Gross profit 142,835 148,203 102,852 94,039
Selling expenses 67,047 70,989 19,131 16,745
General and
administrative expenses 55,532 53,691 23,877 24,022
Research and development
expenses 3,940 4,840 2,827 2,862
Restructuring and other
costs (1) 1,098 2,237 - -
Impairment losses on
goodwill and intangible
assets - 55,341 - -
---------------------------------------------------
Operating profit (loss) $ 15,218 $ (38,895) $ 57,017 $ 50,410
---------------------------------------------------
---------------------------------------------------
Finance expenses
Corporate expenses
Income taxes expense
Net income (loss)
Earnings (loss) per share
Basic
Diluted
---------------------------------------------------
Depreciation and
amortization included in
operating profit (loss) $ 6,893 $ 8,423 $ 3,077 $ 3,337
---------------------------------------------------
---------------------------------------------------
(1)Restructuring and
other costs charged to:
Cost of sales $ (596) $ 2,702 $ - $ -
Expenses 1,098 2,237 - -
---------------------------------------------------
$ 502 $ 4,939 $ - $ -
---------------------------------------------------
---------------------------------------------------
(i) During the fourth quarter of 2016, the Company changed its internal
organization and the composition of its reportable segments. The design,
sourcing, manufacturing, distribution and retail of the children's
furniture was transferred from Dorel Juvenile to Dorel Home.
Accordingly, the Company has restated the segmented information for the
nine months ended September 30, 2016.
Contacts: MaisonBrison Communications Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034
Source: Dorel Industries Inc.
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