MONTREAL, QUEBEC--(Marketwired - Nov. 3, 2016) - 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.
| Summary of Financial Information (unaudited) | |||||||
| Third Quarters Ended September 30 | |||||||
| All figures in thousands of US $, except per share amounts | |||||||
| 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 | % | |||
| Number of shares outstanding - | |||||||
| Basic weighted average | 32,359,496 | 32,322,011 | |||||
| Diluted weighted average | 32,615,350 | 32,322,011 | |||||
| Summary of Financial Information (unaudited) | |||||||
| Nine Months Ended September 30 | |||||||
| 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 | % | |||
| Number of shares outstanding - | |||||||
| Basic weighted average | 32,346,051 | 32,321,887 | |||||
| Diluted weighted average | 32,346,051 | 32,522,810 | |||||
Dorel Home Furnishings
| All figures in thousands of US $ | ||||||||
| Third Quarters Ended September 30 (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| $ | % 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 | % |
| All figures in thousands of US $ | ||||||||
| Nine Months Ended September 30 (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| $ | % 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 | % |
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 $ | ||||||||
| Third Quarters Ended September 30 (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| $ | % 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 | % |
| All figures in thousands of US $ | ||||||||
| Nine Months Ended September 30 (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| $ | % 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 | % |
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 $ | ||||||||
| Third Quarters Ended September 30 (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| $ | % 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 | % |
| All figures in thousands of US $ | ||||||||
| Nine Months Ended September 30 (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| $ | % 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 | %) |
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, 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 10,000 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 | ||||||||||||||||||
| Third Quarters Ended September 30 | ||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||
| Reported | % of revenue |
Restructuring and other costs |
Adjusted | % of revenue |
Reported | % of revenue |
Impairment losses, restructuring and other costs |
Adjusted | % of revenue |
|||||||||
| $ | % | $ | $ | % | $ | % | $ | $ | % | |||||||||
| TOTAL REVENUE | 671,273 | 100.0 | - | 671,273 | 100.0 | 679,287 | 100.0 | - | 679,287 | 100.0 | ||||||||
| Cost of sales | 510,268 | 76.0 | (2,702 | ) | 507,566 | 75.6 | 542,732 | 79.9 | (3,379 | ) | 539,353 | 79.4 | ||||||
| GROSS PROFIT | 161,005 | 24.0 | 2,702 | 163,707 | 24.4 | 136,555 | 20.1 | 3,379 | 139,934 | 20.6 | ||||||||
| Selling expenses | 59,229 | 8.8 | - | 59,229 | 8.8 | 57,943 | 8.5 | - | 57,943 | 8.5 | ||||||||
| General and administrative expenses | 60,599 | 9.1 | - | 60,599 | 9.1 | 46,245 | 6.8 | - | 46,245 | 6.8 | ||||||||
| Research and development expenses | 8,029 | 1.2 | - | 8,029 | 1.2 | 9,210 | 1.4 | - | 9,210 | 1.4 | ||||||||
| Restructuring and other costs | 3,554 | 0.5 | (3,554 | ) | - | - | 6,155 | 0.9 | (6,155 | ) | - | - | ||||||
| Impairment losses on goodwill and intangible assets | - | - | - | - | - | 26,510 | 3.9 | (26,510 | ) | - | - | |||||||
| OPERATING PROFIT (LOSS) | 29,594 | 4.4 | 6,256 | 35,850 | 5.3 | (9,508 | ) | (1.4 | ) | 36,044 | 26,536 | 3.9 | ||||||
| Finance expenses | 10,077 | 1.5 | (152 | ) | 9,925 | 1.4 | 1,522 | 0.2 | 9,711 | 11,233 | 1.6 | |||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 19,517 | 2.9 | 6,408 | 25,925 | 3.9 | (11,030 | ) | (1.6 | ) | 26,333 | 15,303 | 2.3 | ||||||
| Income taxes expense (recovery) | 3,651 | 0.5 | 1,627 | 5,278 | 0.8 | (2,273 | ) | (0.3 | ) | 2,107 | (166 | ) | - | |||||
| Tax rate | 18.7 | % | - | - | 20.4 | % | - | 20.6 | % | - | - | (1.1 | %) | - | ||||
| NET INCOME (LOSS) | 15,866 | 2.4 | 4,781 | 20,647 | 3.1 | (8,757 | ) | (1.3 | ) | 24,226 | 15,469 | 2.3 | ||||||
| EARNINGS (LOSS) PER SHARE | ||||||||||||||||||
| Basic | 0.49 | 0.15 | 0.64 | (0.27 | ) | 0.75 | 0.48 | |||||||||||
| Diluted | 0.49 | 0.14 | 0.63 | (0.27 | ) | 0.75 | 0.48 | |||||||||||
| SHARES OUTSTANDING | ||||||||||||||||||
| Basic - weighted average | 32,359,496 | 32,359,496 | 32,322,011 | 32,322,011 | ||||||||||||||
| Diluted - weighted average | 32,615,350 | 32,615,350 | 32,322,011 | 32,530,160 | ||||||||||||||
| Reconciliation of non-GAAP financial measures | ||||||||||||||||||
| Nine Months Ended September 30 | ||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||
| Reported | % of revenue |
Impairment losses, restructuring and other costs |
Adjusted | % of revenue |
Reported | % of revenue |
Impairment losses, restructuring and other costs |
Adjusted | % of revenue |
|||||||||
| $ | % | $ | $ | % | $ | % | $ | $ | % | |||||||||
| TOTAL REVENUE | 1,954,436 | 100.0 | - | 1,954,436 | 100.0 | 2,014,419 | 100.0 | - | 2,014,419 | 100.0 | ||||||||
| Cost of sales | 1,492,816 | 76.4 | (2,702 | ) | 1,490,114 | 76.2 | 1,582,052 | 78.5 | (3,379 | ) | 1,578,673 | 78.4 | ||||||
| GROSS PROFIT | 461,620 | 23.6 | 2,702 | 464,322 | 23.8 | 432,367 | 21.5 | 3,379 | 435,746 | 21.6 | ||||||||
| Selling expenses | 172,893 | 8.8 | - | 172,893 | 8.8 | 174,452 | 8.7 | - | 174,452 | 8.7 | ||||||||
| General and administrative expenses | 168,412 | 8.6 | - | 168,412 | 8.6 | 154,680 | 7.7 | - | 154,680 | 7.7 | ||||||||
| Research and development expenses | 24,629 | 1.3 | - | 24,629 | 1.3 | 27,041 | 1.3 | - | 27,041 | 1.3 | ||||||||
| Restructuring and other costs | 13,673 | 0.7 | (13,673 | ) | - | - | 7,246 | 0.4 | (7,246 | ) | - | - | ||||||
| Impairment losses on goodwill and intangible assets | 55,341 | 2.8 | (55,341 | ) | - | - | 26,510 | 1.3 | (26,510 | ) | - | - | ||||||
| OPERATING PROFIT | 26,672 | 1.4 | 71,716 | 98,388 | 5.1 | 42,438 | 2.1 | 37,135 | 79,573 | 3.9 | ||||||||
| Finance expenses | 31,133 | 1.6 | (1,425 | ) | 29,708 | 1.6 | 20,463 | 1.0 | 9,879 | 30,342 | 1.5 | |||||||
| INCOME (LOSS) BEFORE INCOME TAXES | (4,461 | ) | (0.2 | ) | 73,141 | 68,680 | 3.5 | 21,975 | 1.1 | 27,256 | 49,231 | 2.4 | ||||||
| Income taxes expense | 1,583 | 0.1 | 12,246 | 13,829 | 0.7 | 2,885 | 0.2 | 2,457 | 5,342 | 0.2 | ||||||||
| Tax rate | (35.5 | %) | - | - | 20.1 | % | - | 13.1 | % | - | - | 10.9 | % | - | ||||
| NET INCOME (LOSS) | (6,044 | ) | (0.3 | ) | 60,895 | 54,851 | 2.8 | 19,090 | 0.9 | 24,799 | 43,889 | 2.2 | ||||||
| EARNINGS (LOSS) PER SHARE | ||||||||||||||||||
| Basic | (0.19 | ) | 1.89 | 1.70 | 0.59 | 0.77 | 1.36 | |||||||||||
| Diluted | (0.19 | ) | 1.87 | 1.68 | 0.59 | 0.76 | 1.35 | |||||||||||
| SHARES OUTSTANDING | ||||||||||||||||||
| Basic - weighted average | 32,346,051 | 32,346,051 | 32,321,887 | 32,321,887 | ||||||||||||||
| Diluted - weighted average | 32,346,051 | 32,581,534 | 32,522,810 | 32,522,810 | ||||||||||||||
The detail of impairment losses, restructuring and other costs and remeasurement of forward purchase agreement liabilities are presented below:
| Third Quarters Ended September 30 | Nine Months Ended 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 | 2015 | ||||||||||||
| Reported | % of revenue |
Restructuring and other costs |
Adjusted | % of revenue |
Reported | % of revenue |
Restructuring and other costs |
Adjusted | % of revenue |
||||
| $ | % | $ | $ | % | $ | % | $ | $ | % | ||||
| TOTAL REVENUE | 232,601 | 100.0 | - | 232,601 | 100.0 | 247,296 | 100.0 | - | 247,296 | 100.0 | |||
| Cost of sales | 154,188 | 66.3 | - | 154,188 | 66.3 | 183,096 | 74.0 | (867 | ) | 182,229 | 73.7 | ||
| GROSS PROFIT | 78,413 | 33.7 | - | 78,413 | 33.7 | 64,200 | 26.0 | 867 | 65,067 | 26.3 | |||
| Selling expenses | 29,087 | 12.5 | - | 29,087 | 12.5 | 28,051 | 11.3 | - | 28,051 | 11.3 | |||
| General and administrative expenses | 30,388 | 13.1 | - | 30,388 | 13.1 | 22,503 | 9.1 | - | 22,503 | 9.1 | |||
| Research and development expenses | 5,387 | 2.3 | - | 5,387 | 2.3 | 6,661 | 2.7 | - | 6,661 | 2.7 | |||
| Restructuring and other costs | 1,151 | 0.5 | (1,151 | ) | - | - | 4,183 | 1.8 | (4,183 | ) | - | - | |
| OPERATING PROFIT | 12,400 | 5.3 | 1,151 | 13,551 | 5.8 | 2,802 | 1.1 | 5,050 | 7,852 | 3.2 | |||
| Nine Months Ended September 30 | |||||||||||||
| 2016 | 2015 | ||||||||||||
| Reported | % of revenue |
Restructuring and other costs |
Adjusted | % of revenue |
Reported | % of revenue |
Restructuring and other costs |
Adjusted | % of revenue |
||||
| $ | % | $ | $ | % | $ | % | $ | $ | % | ||||
| TOTAL REVENUE | 724,811 | 100.0 | - | 724,811 | 100.0 | 786,910 | 100.0 | - | 786,910 | 100.0 | |||
| Cost of sales | 498,704 | 68.8 | - | 498,704 | 68.8 | 578,280 | 73.5 | (867 | ) | 577,413 | 73.4 | ||
| GROSS PROFIT | 226,107 | 31.2 | - | 226,107 | 31.2 | 208,630 | 26.5 | 867 | 209,497 | 26.6 | |||
| Selling expenses | 85,426 | 11.8 | - | 85,426 | 11.8 | 84,719 | 10.8 | - | 84,719 | 10.8 | |||
| General and administrative expenses | 74,806 | 10.3 | - | 74,806 | 10.3 | 71,698 | 9.0 | - | 71,698 | 9.0 | |||
| Research and development expenses | 16,927 | 2.3 | - | 16,927 | 2.3 | 19,583 | 2.5 | - | 19,583 | 2.5 | |||
| Restructuring and other costs | 11,436 | 1.6 | (11,436 | ) | - | - | 5,898 | 0.8 | (5,898 | ) | - | - | |
| OPERATING PROFIT | 37,512 | 5.2 | 11,436 | 48,948 | 6.8 | 26,732 | 3.4 | 6,765 | 33,497 | 4.3 | |||
| Dorel Sports | ||||||||||||||||
| Reconciliation of non-GAAP financial measures | ||||||||||||||||
| Third Quarters Ended September 30 | ||||||||||||||||
| 2016 | 2015 | |||||||||||||||
| Reported | % of revenue |
Restructuring and other costs |
Adjusted | % of revenue |
Reported | % of revenue |
Impairment losses, restructuring and other costs |
Adjusted | % of revenue |
|||||||
| $ | % | $ | $ | % | $ | % | $ | $ | % | |||||||
| TOTAL REVENUE | 250,711 | 100.0 | - | 250,711 | 100.0 | 266,499 | 100.0 | - | 266,499 | 100.0 | ||||||
| Cost of sales | 198,847 | 79.3 | (2,702 | ) | 196,145 | 78.2 | 215,545 | 80.9 | (2,512 | ) | 213,033 | 79.9 | ||||
| GROSS PROFIT | 51,864 | 20.7 | 2,702 | 54,566 | 21.8 | 50,954 | 19.1 | 2,512 | 53,466 | 20.1 | ||||||
| Selling expenses | 24,635 | 9.8 | - | 24,635 | 9.8 | 25,391 | 9.5 | - | 25,391 | 9.5 | ||||||
| General and administrative expenses | 17,348 | 6.9 | - | 17,348 | 6.9 | 15,712 | 5.9 | - | 15,712 | 5.9 | ||||||
| Research and development expenses | 1,660 | 0.7 | - | 1,660 | 0.7 | 1,538 | 0.6 | - | 1,538 | 0.6 | ||||||
| Restructuring and other costs | 2,403 | 1.0 | (2,403 | ) | - | - | 1,972 | 0.8 | (1,972 | ) | - | - | ||||
| Impairment losses on goodwill and intangible assets | - | - | - | - | - | 26,510 | 9.9 | (26,510 | ) | - | - | |||||
| - | - | - | - | |||||||||||||
| OPERATING PROFIT (LOSS) | 5,818 | 2.3 | 5,105 | 10,923 | 4.4 | (20,169 | ) | (7.6) | 30,994 | 10,825 | 4.1 | |||||
| Nine Months Ended September 30 | ||||||||||||||||
| 2016 | 2015 | |||||||||||||||
| Reported | % of revenue |
Impairment losses, restructuring and other costs |
Adjusted | % of revenue |
Reported | % of revenue |
Impairment losses, restructuring and other costs |
Adjusted | % of revenue |
|||||||
| $ | % | $ | $ | % | $ | % | $ | $ | % | |||||||
| TOTAL REVENUE | 703,722 | 100.0 | - | 703,722 | 100.0 | 746,515 | 100.0 | - | 746,515 | 100.0 | ||||||
| Cost of sales | 555,519 | 78.9 | (2,702 | ) | 552,817 | 78.6 | 585,474 | 78.4 | (2,512 | ) | 582,962 | 78.1 | ||||
| GROSS PROFIT | 148,203 | 21.1 | 2,702 | 150,905 | 21.4 | 161,041 | 21.6 | 2,512 | 163,553 | 21.9 | ||||||
| Selling expenses | 70,989 | 10.1 | - | 70,989 | 10.1 | 74,593 | 10.0 | - | 74,593 | 10.0 | ||||||
| General and administrative expenses | 53,691 | 7.6 | - | 53,691 | 7.6 | 51,466 | 6.9 | - | 51,466 | 6.9 | ||||||
| Research and development expenses | 4,840 | 0.7 | - | 4,840 | 0.7 | 4,652 | 0.6 | - | 4,652 | 0.6 | ||||||
| Restructuring and other costs | 2,237 | 0.3 | (2,237 | ) | - | - | 1,348 | 0.2 | (1,348 | ) | - | - | ||||
| Impairment losses on goodwill and intangible assets | 55,341 | 7.9 | (55,341 | ) | - | - | 26,510 | 3.6 | (26,510 | ) | - | - | ||||
| - | - | - | - | |||||||||||||
| OPERATING PROFIT (LOSS) | (38,895) | (5.5 | ) | 60,280 | 21,385 | 3.0 | 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, 2016 | September 30, 2015 | September 30, 2016 | September 30, 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 30, 2016 | September 30, 2015 | September 30, 2016 | September 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 | ||||||||||||||||||||||||
| Accumulated other | ||||||||||||||||||||||||
| comprehensive income (loss) | ||||||||||||||||||||||||
| Share Capital | Contributed Surplus |
Cumulative Translation Account |
Cash Flow Hedges |
Defined Benefit Plans |
Other Equity |
Retained Earnings |
Total Equity |
|||||||||||||||||
| Balance as at December 30, 2014 | $ | 199,927 | $ | 25,691 | $ | (8,842 | ) | $ | 2,180 | $ | (13,917 | ) | $ | 579 | $ | 1,001,366 | $ | 1,206,984 | ||||||
| Total comprehensive loss: | ||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | 19,090 | 19,090 | ||||||||||||||||
| Other comprehensive income (loss) | - | - | (83,554 | ) | (1,826 | ) | 61 | - | - | (85,319 | ) | |||||||||||||
| $ | - | $ | - | $ | (83,554 | ) | $ | (1,826 | ) | $ | 61 | $ | - | $ | 19,090 | $ | (66,229 | ) | ||||||
| Reclassification from contributed surplus due to settlement of deferred share units | ||||||||||||||||||||||||
| 61 | (101 | ) | - | - | - | - | - | (40 | ) | |||||||||||||||
| Share-based payments | - | 635 | - | - | - | - | - | 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 | - | - | - | - | (170 | ) | - | |||||||||||||||
| Balance as at September 30, 2015 | $ | 199,988 | $ | 26,395 | $ | (92,396 | ) | $ | 354 | $ | (13,856 | ) | $ | 1,979 | $ | 991,196 | $ | 1,113,660 | ||||||
| Balance as at December 30, 2015 | $ | 200,277 | $ | 26,480 | $ | (104,521 | ) | $ | 2,680 | $ | (12,115 | ) | $ | 1,527 | $ | 988,069 | $ | 1,102,397 | ||||||
| Total comprehensive income: | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (6,044 | ) | (6,044 | ) | ||||||||||||||
| Other comprehensive income (loss) | - | - | 24,945 | (1,496 | ) | (2,262 | ) | - | - | 21,187 | ||||||||||||||
| $ | - | $ | - | $ | 24,945 | $ | (1,496 | ) | $ | (2,262 | ) | $ | - | $ | (6,044 | ) | $ | 15,143 | ||||||
| Issued under stock option plan | 645 | - | - | - | - | - | - | 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 | ) | - | - | - | - | - | (42 | ) | |||||||||||||||
| Share-based payments | - | 1,083 | - | - | - | - | - | 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 | - | - | - | - | (200 | ) | - | |||||||||||||||
| Balance as at September 30, 2016 | $ | 201,170 | $ | 27,473 | $ | (79,576 | ) | $ | 1,184 | $ | (14,377 | ) | $ | (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, 2016 | September 30, 2015 | September 30, 2016 | September 30, 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 | Dorel Sports | Dorel Home Furnishings | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Total revenue | $ | 671,273 | $ | 679,287 | $ | 232,601 | $ | 247,296 | $ | 250,711 | $ | 266,499 | $ | 187,961 | $ | 165,492 | |||
| Cost of sales (1) | 510,268 | 542,732 | 154,188 | 183,096 | 198,847 | 215,545 | 157,233 | 144,091 | |||||||||||
| Gross profit | 161,005 | 136,555 | 78,413 | 64,200 | 51,864 | 50,954 | 30,728 | 21,401 | |||||||||||
| Selling expenses | 58,883 | 57,658 | 29,087 | 28,051 | 24,635 | 25,391 | 5,161 | 4,216 | |||||||||||
| General and administrative expenses | 55,618 | 44,267 | 30,388 | 22,503 | 17,348 | 15,712 | 7,882 | 6,052 | |||||||||||
| Research and development expenses | 8,029 | 9,210 | 5,387 | 6,661 | 1,660 | 1,538 | 982 | 1,011 | |||||||||||
| Restructuring and other costs (1) | 3,554 | 6,155 | 1,151 | 4,183 | 2,403 | 1,972 | - | - | |||||||||||
| Impairment losses on goodwill and intangible assets | - | 26,510 | - | - | - | 26,510 | - | - | |||||||||||
| Operating profit (loss) | 34,921 | (7,245 | ) | $ | 12,400 | $ | 2,802 | $ | 5,818 | $ | (20,169 | ) | $ | 16,703 | $ | 10,122 | |||
| 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 | $ | 2,497 | $ | 3,200 | $ | 1,100 | $ | 1,111 | |||
| (1)Restructuring and other costs charged to: | |||||||||||||||||||
| Cost of sales | $ | 2,702 | $ | 3,379 | $ | - | $ | 867 | $ | 2,702 | $ | 2,512 | $ | - | $ | - | |||
| Expenses | 3,554 | 6,155 | 1,151 | 4,183 | 2,403 | 1,972 | - | - | |||||||||||
| $ | 6,256 | $ | 9,534 | $ | 1,151 | $ | 5,050 | $ | 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 | Dorel Sports | Dorel Home Furnishings | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||
| Total revenue | $ | 1,954,436 | $ | 2,014,419 | $ | 724,811 | $ | 786,910 | $ | 703,722 | $ | 746,515 | $ | 525,903 | $ | 480,994 | ||
| Cost of sales (1) | 1,492,816 | 1,582,052 | 498,704 | 578,280 | 555,519 | 585,474 | 438,593 | 418,298 | ||||||||||
| Gross profit | 461,620 | 432,367 | 226,107 | 208,630 | 148,203 | 161,041 | 87,310 | 62,696 | ||||||||||
| Selling expenses | 171,719 | 172,217 | 85,426 | 84,719 | 70,989 | 74,593 | 15,304 | 12,905 | ||||||||||
| General and administrative expenses | 150,723 | 141,792 | 74,806 | 71,698 | 53,691 | 51,466 | 22,226 | 18,628 | ||||||||||
| Research and development expenses | 24,629 | 27,041 | 16,927 | 19,583 | 4,840 | 4,652 | 2,862 | 2,806 | ||||||||||
| Restructuring and other costs (1) | 13,673 | 7,246 | 11,436 | 5,898 | 2,237 | 1,348 | - | - | ||||||||||
| Impairment losses on goodwill and intangible assets | 55,341 | 26,510 | - | - | 55,341 | 26,510 | - | - | ||||||||||
| Operating profit (loss) | 45,535 | 57,561 | $ | 37,512 | $ | 26,732 | $ | (38,895 | ) | $ | 2,472 | $ | 46,918 | $ | 28,357 | |||
| 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 | $ | 8,423 | $ | 9,943 | $ | 3,337 | $ | 3,491 | ||
| (1)Restructuring and other costs charged to: | ||||||||||||||||||
| Cost of sales | $ | 2,702 | $ | 3,379 | $ | - | $ | 867 | $ | 2,702 | $ | 2,512 | $ | - | $ | - | ||
| Expenses | 13,673 | 7,246 | 11,436 | 5,898 | 2,237 | 1,348 | - | - | ||||||||||
| $ | 16,375 | $ | 10,625 | $ | 11,436 | $ | 6,765 | $ | 4,939 | $ | 3,860 | $ | - | $ | - | |||
Contact Information:
Rick Leckner
(514) 731-0000
Dorel Industries Inc.
Jeffrey Schwartz
(514) 934-3034