MONTREAL, QUEBEC--(Marketwired - June 20, 2016) - Dorel Industries Inc., (TSX:DII.B)(TSX:DII.A) today announced it is launching a vigorous appeal to the trial court, and if necessary, the 5th Circuit Court of Appeals, following a jury verdict Friday, June 17th in Marshall, Texas which awarded approximately US$29 million in net damages as Dorel's portion in the case. Dorel strongly disagrees with the jury award and is optimistic of a favorable outcome as the case continues to proceed through the legal system.
The trial related to a May, 2013 accident in which a child travelling in a Dorel car seat was seriously injured when the vehicle the child was in was struck by a driver who crossed the center line and collided with the vehicle in a horrific crash. There was substantial evidence produced that the child had not been properly secured by the shoulder straps at the time of the crash.
"The seat in question has an excellent safety record and has been used without incident. We stand by this product which meets all government standards," commented Dorel President and CEO, Martin Schwartz.
The Company stated it believes the verdict and judgment in the trial court stage of this case is erroneous and unjustified. It will present strong arguments which it expects will either overturn the judgment entirely or significantly reduce the liability assessed against the Company.
Should the appeal be unsuccessful, Dorel stated that its current insurance coverage would limit the Company's exposure to not more than US$6.0 million. It will record the potential impact in the Company's condensed consolidated interim second quarter financial statements. Dorel has a strong balance sheet and its financial position will not be materially affected by this case.
"Dorel is the world's largest car seat manufacturer and we take great pride in the excellent reputation for safety that we have earned globally. We design and produce juvenile products with one overriding objective-the safety of our children. Our hearts go out to the child and family involved in this most unfortunate accident. Dorel spends millions annually in its product development and test centers to ensure that our products are of the highest quality", concluded Mr. Schwartz.
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, Bébé Confort and Infanti. In Dorel Sports, brands include Cannondale, Schwinn, GT, Mongoose, Caloi, IronHorse and SUGOI. Dorel Home Furnishings markets a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel Industries Inc. has annual sales of US$2.7 billion and employs approximately 10,450 people in facilities located in twenty-five countries worldwide.
Caution Regarding Forward Looking Statements
Certain statements included in this press release may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. Except as may be required by Canadian securities laws, Dorel does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Dorel's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Dorel cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits Dorel will derive from them. Forward-looking statements are provided in this press release for the purpose of giving information about Management's current expectations and plans and allowing investors and others to get a better understanding of Dorel's operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.
Forward-looking statements made in this press release are based on a number of assumptions that Dorel believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from Dorel's expectations expressed in or implied by the forward-looking statements include: general economic conditions; changes in product costs and supply channels; foreign currency fluctuations; customer and credit risk, including the concentration of revenues with a small number of customers; costs associated with product liability; changes in income tax legislation or the interpretation or application of those rules; the continued ability to develop products and support brand names; changes in the regulatory environment; continued access to capital resources and the related costs of borrowing; changes in assumptions in the valuation of goodwill and other intangible assets; and there being no certainty that Dorel's current dividend policy will be maintained. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in Dorel's annual Management Discussion and Analysis and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors outlined in the previously-mentioned documents are specifically incorporated herein by reference.
Dorel cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to Dorel or that Dorel currently deems to be immaterial may also have a material adverse effect on Dorel's business, financial condition or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.