MONTREAL, QUEBEC--(Marketwired - Nov. 5, 2015) - Dorel Industries Inc. (TSX:DII.B)(TSX:DII.A) today announced results for the third quarter and nine months ended September 30, 2015. Revenue for the quarter was US$679.3 million compared to US$673.0 million a year ago. Adjusted net income was US$15.5 million or US$0.48 per diluted share versus adjusted net income of US$23.8 million or US$0.73 per diluted share last year. Reported net loss for the period was US$8.8 million or US$0.27 per diluted share compared to a net income of US$19.5 million or US$0.60 per diluted share in 2014. The net negative impact of foreign exchange on the third quarter 2015 operating profit was approximately US$12 million of which about US$14 million was in the Juvenile and Sports segments offset by a net positive impact of US$2 million in corporate expenses. After tax, this net negative impact on the diluted EPS for the third quarter represented US$0.28.
Total revenue for the nine months was US$2.01 billion compared to US$1.98 billion a year ago. Adjusted net income was US$43.9 million or US$1.35 per diluted share compared to adjusted net income of US$73.0 million or US$2.25 per diluted share last year. Reported net income year-to-date was US$19.1 million or US$0.59 per diluted share compared to US$59.5 million or US$1.83 per diluted share. The appreciation of the US dollar had a net negative impact of US$39 million on the operating profit of the Juvenile and Sports segments and a US$6 million net positive effect at the corporate level for a consolidated net negative impact of US$33 million or US$0.81 per diluted share.
The reported net (loss) income for the quarter and the nine months ended September 30, 2015 include impairment losses on goodwill and customer relationships related to Caloi in Brazil, restructuring and other costs. As such, the Company is presenting adjusted financial information in this press release as it believes that excluding these items is a more meaningful comparison of its core business performance between the periods presented. Please refer to the Non-GAAP financial measures section for the reconciliation to the most directly comparable financial measures calculated in accordance with GAAP.
| Summary of Financial Information | ||||||
| Third Quarters Ended September 30 | ||||||
| All figures in thousands of US $, except per share amounts | ||||||
| 2015 | 2014 | Change % | ||||
| Total revenue | 679,287 | 673,020 | 0.9 | % | ||
| Adjusted net income | 15,469 | 23,771 | (34.9 | %) | ||
| Per share - Basic | 0.48 | 0.74 | (35.1 | %) | ||
| Per share - Diluted | 0.48 | 0.73 | (34.2 | %) | ||
| Net income (loss) | (8,757 | ) | 19,480 | (145.0 | %) | |
| Per share - Basic | (0.27 | ) | 0.60 | (145.0 | %) | |
| Per share - Diluted | (0.27 | ) | 0.60 | (145.0 | %) | |
| Number of shares outstanding - | ||||||
| Basic weighted average | 32,322,011 | 32,305,379 | ||||
| Diluted weighted average | 32,322,011 | 32,493,300 | ||||
| Summary of Financial Information | |||||
| Nine Months Ended September 30 | |||||
| All figures in thousands of US $, except per share amounts | |||||
| 2015 | 2014 | Change % | |||
| Total revenue | 2,014,419 | 1,976,552 | 1.9 | % | |
| Adjusted net income | 43,889 | 72,975 | (39.9 | %) | |
| Per share - Basic | 1.36 | 2.27 | (40.1 | %) | |
| Per share - Diluted | 1.35 | 2.25 | (40.0 | %) | |
| Net income | 19,090 | 59,480 | (67.9 | %) | |
| Per share - Basic | 0.59 | 1.85 | (68.1 | %) | |
| Per share - Diluted | 0.59 | 1.83 | (67.8 | %) | |
| Number of shares outstanding - | |||||
| Basic weighted average | 32,321,887 | 32,180,681 | |||
| Diluted weighted average | 32,522,810 | 32,417,922 | |||
"The third quarter was characterized by another exceptional performance in our Dorel Home Furnishings business as well as continued currency headwinds which affected both Dorel Juvenile and Dorel Sports. To mitigate the currency issues, which amounted to approximately US$14 million in the quarter, both segments are successfully implementing selective price increases and are introducing new products at better margins. Dorel Juvenile continues to make significant changes at our factories in China and one year after the acquisition, senior management is pleased with the pace of progress, although more needs to be done. This investment in Dorel Juvenile China has become even more meaningful with last week's announcement that China is ending its one child rule. Despite current conditions in Brazil, we remain solidly committed to Dorel Sports' Caloi business. There is excellent market potentia l with our portfolio of bicycle brands to serve the world's fifth largest population. Our plan is to maximize cash flow while the economy recovers, placing us in an excellent position to benefit once things return to normal," stated Dorel President & CEO, Martin Schwartz.
Dorel Juvenile
| All figures in thousands of US $ | ||||||||
| Third Quarters Ended September 30 | ||||||||
| 2015 | 2014 | |||||||
| $ | % of rev. | $ | % of rev. | Change % | ||||
| Total revenue | 247,296 | 260,723 | (5.1 | %) | ||||
| Adjusted gross profit | 65,067 | 26.3 | % | 73,165 | 28.1 | % | (11.1 | %) |
| Adjusted operating profit | 7,852 | 3.2 | % | 17,145 | 6.6 | % | (54.2 | %) |
| Gross profit | 64,200 | 26.0 | % | 73,165 | 28.1 | % | (12.3 | %) |
| Operating profit | 2,802 | 1.1 | % | 16,112 | 6.2 | % | (82.6 | %) |
| All figures in thousands of US $ | ||||||||
| Nine Months Ended September 30 | ||||||||
| 2015 | 2014 | |||||||
| $ | % of rev. | $ | % of rev. | Change % | ||||
| Total revenue | 786,910 | 781,277 | 0.7 | % | ||||
| Adjusted gross profit | 209,497 | 26.6 | % | 222,356 | 28.5 | % | (5.8 | %) |
| Adjusted operating profit | 33,497 | 4.3 | % | 53,123 | 6.8 | % | (36.9 | %) |
| Gross profit | 208,630 | 26.5 | % | 222,356 | 28.5 | % | (6.2 | %) |
| Operating profit | 26,732 | 3.4 | % | 51,855 | 6.6 | % | (48.4 | %) |
Dorel Juvenile third quarter revenue decreased 5.1% to US$247.3 million from US$260.7 million a year ago. Organic revenue declined approximately 4% after removing the effect of the Dorel Juvenile China acquisition and the impact of varying exchange rates year-over- year. The decrease was mainly attributable to reduced sales in the United States and Canada where certain retailers reduced orders to lower their in-stock levels. This was partly offset by several Latin American divisions which posted double digit sales growth. Nine month revenue totalled US$786.9 million, compared to US$781.3 million last year. Year-to-date, organic revenue increased by approximately 2% led by Latin America, partly offset by slight declines in North America.
Adjusted operating profit for the quarter, excluding restructuring and other costs, was US$7.9 million compared to US$17.1 million last year, and included a full quarter of Dorel Juvenile China. This decline of 54.2% was principally due to Dorel Juvenile China and currency pressures as non-US based divisions saw their currencies weaken significantly against the US dollar, creating a net negative impact on operating profit of approximately US$4 million. Year-to-date adjusted operating profit, excluding restructuring and other costs was US$33.5 million, a decline of 36.9% from US$53.1 million in 2014. This was mainly due to foreign exchange which has had a nine month negative impact of approximately US$15 million.
In Europe, the Maxi-Cosi Pebble Plus baby car seat has emerged as the winner following October tests conducted by ADAC, TCS and ÖAMTC, Europe's major independent automobile clubs. The Pebble Plus received a rare 5 star rating in the safety category and finished with the top score overall in the group 0 category. This underlines Dorel Juvenile's expertise and leading position in the i-Size category and will resonate well with consumers across Europe. To further support the premium Quinny and Maxi-Cosi brands, a new designer line from reality TV star and stylist, Rachel Zoe, was unveiled and enthusiastically received by retailers at the recent ABC juvenile products show in Las Vegas.
The pace of change at Dorel Juvenile China is proceeding well, and more is being done to bring the factories to a best-in-class status. Experienced Asian managers have replaced most of the acquired management team and there has been a material change to a more performance-based culture for all employees.
Dorel Sports
| All figures in thousands of US $ | ||||||||
| Third Quarters Ended September 30 | ||||||||
| 2015 | 2014 | |||||||
| $ | % of rev. | $ | % of rev. | Change % | ||||
| Total revenue | 266,499 | 266,503 | (0.0 | %) | ||||
| Adjusted gross profit | 53,466 | 20.1 | % | 62,556 | 23.5 | % | (14.5 | %) |
| Adjusted operating profit | 10,825 | 4.1 | % | 20,174 | 7.6 | % | (46.3 | %) |
| Gross profit | 50,954 | 19.1 | % | 62,052 | 23.3 | % | (17.9 | %) |
| Operating profit (loss) | (20,169) | (7.6 | %) | 14,769 | 5.5 | % | (236.6 | %) |
| All figures in thousands of US $ | ||||||||
| Nine Months Ended September 30 | ||||||||
| 2015 | 2014 | |||||||
| $ | % of rev. | $ | % of rev. | Change % | ||||
| Total revenue | 746,515 | 793,100 | (5.9 | %) | ||||
| Adjusted gross profit | 163,553 | 21.9 | % | 191,017 | 24.1 | % | (14.4 | %) |
| Adjusted operating profit | 32,842 | 4.4 | % | 55,477 | 7.0 | % | (40.8 | %) |
| Gross profit | 161,041 | 21.6 | % | 189,842 | 23.9 | % | (15.2 | %) |
| Operating profit | 2,472 | 0.3 | % | 46,292 | 5.8 | % | (94.7 | %) |
Dorel Sports third quarter revenue remained flat at US$266.5 million, but was up approximately 9% after removing the impact of foreign exchange year-over-year. The main drivers of the increased revenue were in the independent bike dealer (IBD) channel due to increased demand of new model year 2016 higher margin bicycles. Caloi sales grew in Brazil as consumers were attracted to Caloi's strong brand equity in the lower price-point category. Sales of battery powered ride-ons in the US mass market channel continued to increase. Nine month revenue decreased 5.9% to US$746.5 million. Organic revenue increased approximately 2%, after removing the impact of varying foreign exchange rates year-over-year.
Third quarter adjusted operating profit of US$10.8 million was down US$9.3 million, or 46.3%. All major divisions saw their currencies weaken significantly against the US dollar which had a net negative impact on the segment's operating profit of approximately US$10 million. Year-to-date adjusted operating profit was US$32.8 million, a decline of 40.8% compared to last year. The net negative impact of foreign exchange for the first nine months was approximately US$24 million.
Cannondale won a 2015 Eurobike Gold Award for Best Road Race Bike for the new Slate Force CX1. The Eurobike Award is selected by an independent jury of industry experts and is one of the most prestigious design awards in the cycling industry. Cannondale also received the American "Interbike Road Bike of the Year" award for the SuperSix EVO Carbon Force Racing Edition.
Dorel Home Furnishings
| All figures in thousands of US $ | ||||||||
| Third Quarters Ended September 30 | ||||||||
| 2015 | 2014 | |||||||
| $ | % of rev. | $ | % of rev. | Change % | ||||
| Total revenue | 165,492 | 145,794 | 13.5 | % | ||||
| Gross profit | 21,401 | 12.9 | % | 16,277 | 11.2 | % | 31.5 | % |
| Operating profit | 10,122 | 6.1 | % | 5,473 | 3.8 | % | 84.9 | % |
| All figures in thousands of US $ | ||||||||
| Nine Months Ended September 30 | ||||||||
| 2015 | 2014 | |||||||
| $ | % of rev. | $ | % of rev. | Change % | ||||
| Total revenue | 480,994 | 402,175 | 19.6 | % | ||||
| Gross profit | 62,696 | 13.0 | % | 50,181 | 12.5 | % | 24.9 | % |
| Operating profit | 28,357 | 5.9 | % | 18,797 | 4.7 | % | 50.9 | % |
Dorel Home Furnishings third quarter revenue increased US$19.7 million or 13.5% to US$165.5 million, from US$145.8 million a year ago. Sales to brick and mortar stores were flat for the quarter while sales to on-line retailers continue to grow, benefitting all divisions, and representing over 37% of total segment sales. Year-to-date, segment revenue has increased US$78.8 million or 19.6% to US$481.0 million from US$402.2 million in 2014 driven by both the on-line and brick and mortar channels.
Third quarter and year-to-date operating profit was US$10.1 million and US$28.4 million, an increase of 84.9% and 50.9%, respectively. All divisions posted improved results with DHP, Cosco Home & Office and the Altra import division of Ameriwood experiencing substantial growth.
"The fact that the segment has maintained brick and mortar sales at current levels is an important achievement given today's retail environment. This stability plus the exceptional progress in our online business is driving Home Furnishings success," commented Mr. Schwartz.
| Impairment losses, restructuring and other costs: |
| (All figures are in thousands of US$, except per share amounts) |
| Third Quarters Ended September 30 |
Nine Months Ended September 30 |
|||||||
| 2015 | 2014 | 2015 | 2014 | |||||
| $ | $ | $ | $ | |||||
| Recorded as restructuring costs | 5,035 | 404 | 4,411 | 1,887 | ||||
| Restructuring costs recorded in cost of sales | 3,379 | 504 | 3,379 | 1,175 | ||||
| Total Restructuring Costs | 8,414 | 908 | 7,790 | 3,062 | ||||
| Acquisition-related costs | 1,120 | 1,039 | 2,835 | 1,452 | ||||
| Brixia investment write-down and other costs related to team sponsorship | - |
4,491 |
- |
5,939 |
||||
| Total Restructuring and Other costs | 9,534 | 6,438 | 10,625 | 10,453 | ||||
| Impairment losses on goodwill and customer relationships | 26,510 | - | 26,510 | - | ||||
| Finance Expenses | ||||||||
| Loss (gain) on remeasurement of forward purchase agreement liabilities | (9,711 |
) | (1,364 |
) | (9,879 |
) | 5,087 |
|
| Total impairment losses, restructuring and other costs and remeasurement of the forward purchase agreement liabilities before income taxes(1) | 26,333 |
5,074 |
27,256 |
15,540 |
||||
| Total impairment losses, restructuring and other costs and remeasurement of the forward purchase agreement liabilities after income taxes | 24,226 |
4,291 |
24,799 |
13,495 |
||||
| Total impact on diluted earnings per share | (0.75 | ) | (0.13 | ) | (0.76 | ) | (0.42 | ) |
| (1) Includes non-cash amounts of: | 21,178 | 2,536 | 21,010 | 10,574 | ||||
The third quarter includes restructuring charges of approximately US$8.4 million related to both the Dorel Juvenile and Dorel Sports segments and acquisition-related costs of US$1.1 million for the Juvenile segment. Dorel Juvenile has undertaken various restructuring initiatives which will continue over the balance of 2015 and into 2016. The segment will incur a total of approximately US$10.6 million pre-tax in restructuring charges, US$3.9 million of which was recorded in the third quarter. The major component is for severance costs as headcount is being reduced by approximately 700 employees globally, the majority at manufacturing facilities in China. Annualized cost savings of at least US$9.0 million are expected once the restructuring is completed in late 2016.
Dorel Sports recorded US$4.5 million pre-tax in restructuring charges in the quarter, of which US$3.5 million is non-cash, related to structural changes in both the Cycling Sports Group and SUGOI divisions. The SUGOI and Cannondale apparel product lines will be consolidated into a single global apparel portfolio with SUGOI as the primary brand and a move to a SUGOI center of excellence at a new location. An additional US$1.0 million charge is expected to be recorded in the fourth quarter. The restructuring initiatives are expected to be completed by the end of 2015 and will deliver annual cost savings of an estimated US$4.0 million.
In Brazil, as a result of the challenging economy and local market conditions, the rising inflation and the devaluation of the Brazil Real, assumptions on projected earnings and cash flow growth were revised for Caloi resulting in US$26.5 million pre-tax non-cash impairment losses on goodwill and customer relationships in Dorel Sports third quarter results. This situation also resulted in a remeasurement of the Caloi acquisition forward purchase agreement liability amounting to an unrealized gain of US$9.7 million reflected in finance expenses.
Other
The third quarter and nine months ended September 30, 2015 tax rates were a recovery of 20.6% and an expense of 13.1%, respectively (2014 - expenses of 19.4% and 18.5%, respectively). The main causes of the variations year-over-year are changes in the jurisdictions in which the Company generated its income, the non-deductible impairment of goodwill, the recognition of tax benefits related to tax losses following a Canadian reorganization and the decrease in the fair value adjustments related to the forward purchase agreement liabilities which are non-deductible for tax purposes. The Company has stated that for the full year it expects its annual tax rate to be between 12% and 17%.
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 3, 2015 to shareholders of record as at the close of business on November 19, 2015.
Outlook
"Despite challenges through much of 2015, Dorel Sports will turn the corner in the fourth quarter with increases over last year in both sales and earnings. Considerable changes have been made in the segment, new pricing has been implemented on 2016 model year bicycles and Dorel Sports has launched its largest ever number of new bicycle platforms. These new investments will pay off with the start of a new positive trend going forward. Foreign exchange remains unpredictable, however the segment is in a stronger position to face this issue," stated Mr. Schwartz.
The substantial growth trend established by Home Furnishings during the first nine months is expected to continue through the end of the year. All divisions have benefitted from an increase in ecommerce sales. Significantly, the segment has also succeeded in maintaining its level of sales in the brick and mortar channel. This combination should result in an excellent year for Home Furnishings.
"Sales and adjusted operating profit for Dorel Juvenile for the fourth quarter are expected to be at levels similar to those of the third quarter as foreign exchange rates are not showing signs of immediate recovery. Recently introduced new products are priced at current foreign exchange rate levels and this, along with the benefits of our restructuring activities initiated in the third quarter, will positively impact earnings as we begin 2016," concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, November 5, 2015 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 57395110 on your phone. This recording will be available on Thursday, November 5, 2015 as of 4:00 P.M. until 11:59 P.M. on Thursday, November 12, 2015.
Complete condensed consolidated interim financial statements as at September 30, 2015 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, Bébé Confort and Tiny Love, complemented by regional brands such as Cosco 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 10,800 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 few 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 and the restructuring and other costs incurred in both 2015 and 2014, 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", "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 are in thousands of US$, except per share amounts)
| Reconciliation of non-GAAP financial measures: | ||||||
| Results for the third quarter ended September 30, 2015 | ||||||
| Reported | Impairment losses, restructuring and other costs | Adjusted | ||||
| $ | $ | $ | ||||
| Total revenue | 679,287 | 679,287 | ||||
| Cost of sales | 542,732 | (3,379 | ) | 539,353 | ||
| GROSS PROFIT | 136,555 | 3,379 | 139,934 | |||
| Selling expenses | 57,943 | 57,943 | ||||
| General and administrative expenses | 46,245 | 46,245 | ||||
| Research and development expenses | 9,210 | 9,210 | ||||
| Restructuring and other costs | 6,155 | (6,155 | ) | - | ||
| Impairment losses on goodwill and customer relationships | 26,510 | (26,510 | ) | - | ||
| OPERATING PROFIT (LOSS) | (9,508 | ) | 36,044 | 26,536 | ||
| Finance expenses | 1,522 | 9,711 | 11,233 | |||
| INCOME (LOSS) BEFORE INCOME TAXES | (11,030 | ) | 26,333 | 15,303 | ||
| Income taxes (recovery) expense | (2,273 | ) | 2,107 | (166 | ) | |
| Tax rate | 20.6 | % | -1.1 | % | ||
| NET INCOME (LOSS) | (8,757 | ) | 24,226 | 15,469 | ||
| EARNINGS (LOSS) PER SHARE | ||||||
| Basic | (0.27 | ) | 0.75 | 0.48 | ||
| Diluted | (0.27 | ) | 0.75 | 0.48 | ||
| SHARES OUTSTANDING | ||||||
| Basic - weighted average | 32,322,011 | 32,322,011 | ||||
| Diluted - weighted average | 32,322,011 | 32,530,160 | ||||
| Results for the third quarter ended September 30, 2014 | ||||||
| Reported | Restructuring and other costs | Adjusted | ||||
| $ | $ | $ | ||||
| Total revenue | 673,020 | 673,020 | ||||
| Cost of sales | 521,526 | (504 | ) | 521,022 | ||
| GROSS PROFIT | 151,494 | 504 | 151,998 | |||
| Selling expenses | 57,118 | 57,118 | ||||
| General and administrative expenses | 49,347 | 49,347 | ||||
| Research and development expenses | 8,557 | 8,557 | ||||
| Restructuring and other costs | 5,934 | (5,934 | ) | - | ||
| OPERATING PROFIT | 30,538 | 6,438 | 36,976 | |||
| Finance expenses | 6,375 | 1,364 | 7,739 | |||
| INCOME BEFORE INCOME TAXES | 24,163 | 5,074 | 29,237 | |||
| Income taxes expense | 4,683 | 783 | 5,466 | |||
| Tax rate | 19.4 | % | 18.7 | % | ||
| NET INCOME | 19,480 | 4,291 | 23,771 | |||
| EARNINGS PER SHARE | ||||||
| Basic | 0.60 | 0.14 | 0.74 | |||
| Diluted | 0.60 | 0.13 | 0.73 | |||
| SHARES OUTSTANDING | ||||||
| Basic - weighted average | 32,305,379 | 32,305,379 | ||||
| Diluted - weighted average | 32,493,300 | 32,493,300 | ||||
| Reconciliation of non-GAAP financial measures: | ||||||
| Results for the nine months ended September 30, 2015 | ||||||
| Reported | Impairment losses, restructuring and other costs | Adjusted | ||||
| $ | $ | $ | ||||
| Total revenue | 2,014,419 | 2,014,419 | ||||
| Cost of sales | 1,582,052 | (3,379 | ) | 1,578,673 | ||
| GROSS PROFIT | 432,367 | 3,379 | 435,746 | |||
| Selling expenses | 174,452 | 174,452 | ||||
| General and administrative expenses | 154,680 | 154,680 | ||||
| Research and development expenses | 27,041 | 27,041 | ||||
| Restructuring and other costs | 7,246 | (7,246 | ) | - | ||
| Impairment losses on goodwill and customer relationships | 26,510 | (26,510 | ) | - | ||
| OPERATING PROFIT | 42,438 | 37,135 | 79,573 | |||
| Finance expenses | 20,463 | 9,879 | 30,342 | |||
| INCOME BEFORE INCOME TAXES | 21,975 | 27,256 | 49,231 | |||
| Income taxes expense | 2,885 | 2,457 | 5,342 | |||
| Tax rate | 13.1 | % | 10.9 | % | ||
| NET INCOME | 19,090 | 24,799 | 43,889 | |||
| EARNINGS PER SHARE | ||||||
| Basic | 0.59 | 0.77 | 1.36 | |||
| Diluted | 0.59 | 0.76 | 1.35 | |||
| SHARES OUTSTANDING | ||||||
| Basic - weighted average | 32,321,887 | 32,321,887 | ||||
| Diluted - weighted average | 32,522,810 | 32,522,810 | ||||
| Results for the nine months ended September 30, 2014 | ||||||
| Reported | Restructuring and other costs | Adjusted | ||||
| $ | $ | $ | ||||
| Total revenue | 1,976,552 | 1,976,552 | ||||
| Cost of sales | 1,514,173 | (1,175 | ) | 1,512,998 | ||
| GROSS PROFIT | 462,379 | 1,175 | 463,554 | |||
| Selling expenses | 174,332 | 174,332 | ||||
| General and administrative expenses | 152,955 | 152,955 | ||||
| Research and development expenses | 24,253 | 24,253 | ||||
| Restructuring and other costs | 9,278 | (9,278 | ) | - | ||
| OPERATING PROFIT | 101,561 | 10,453 | 112,014 | |||
| Finance expenses | 28,539 | (5,087 | ) | 23,452 | ||
| INCOME BEFORE INCOME TAXES | 73,022 | 15,540 | 88,562 | |||
| Income taxes expense | 13,542 | 2,045 | 15,587 | |||
| Tax rate | 18.5 | % | 17.6 | % | ||
| NET INCOME | 59,480 | 13,495 | 72,975 | |||
| EARNINGS PER SHARE | ||||||
| Basic | 1.85 | 0.42 | 2.27 | |||
| Diluted | 1.83 | 0.42 | 2.25 | |||
| SHARES OUTSTANDING | ||||||
| Basic - weighted average | 32,180,681 | 32,180,681 | ||||
| Diluted - weighted average | 32,417,922 | 32,417,922 | ||||
Dorel Juvenile
| Reconciliation of non-GAAP financial measures | Third quarters ended September 30 | |||||||||||||||||
| 2015 | 2014 | |||||||||||||||||
| Reported | Restruc- turing and other costs | Adjusted | Reported | Restruc-turing and other costs | Adjusted | |||||||||||||
| Total revenue | $ | 247,296 | $ | - | $ | 247,296 | $ | 260,723 | $ | - | $ | 260,723 | ||||||
| Cost of sales | 183,096 | (867 | ) | 182,229 | 187,558 | - | 187,558 | |||||||||||
| Gross profit | 64,200 | 867 | 65,067 | 73,165 | - | 73,165 | ||||||||||||
| Gross profit as a percentage of total revenue | 26.0 | % | 26.3 | % | 28.1 | % | 28.1 | % | ||||||||||
| Selling expenses | 28,051 | - | 28,051 | 28,225 | - | 28,225 | ||||||||||||
| General and administrative expenses | 22,503 | - | 22,503 | 22,163 | - | 22,163 | ||||||||||||
| Research and development expenses | 6,661 | - | 6,661 | 5,632 | - | 5,632 | ||||||||||||
| Restructuring and other costs | 4,183 | (4,183 | ) | - | 1,033 | (1,033 | ) | - | ||||||||||
| Operating profit | $ | 2,802 | $ | 5,050 | $ | 7,852 | $ | 16,112 | $ | 1,033 | $ | 17,145 | ||||||
| Operating profit as a percentage of total revenue | 1.1 | % | 3.2 | % | 6.2 | % | 6.6 | % | ||||||||||
| Reconciliation of non-GAAP financial measures | Nine months ended September 30 | |||||||||||||||||
| 2015 | 2014 | |||||||||||||||||
| Reported | Restruc- turing and other costs | Adjusted | Reported | Restruc-turing and other costs | Adjusted | |||||||||||||
| Total revenue | $ | 786,910 | $ | - | $ | 786,910 | $ | 781,277 | $ | - | $ | 781,277 | ||||||
| Cost of sales | 578,280 | (867 | ) | 577,413 | 558,921 | - | 558,921 | |||||||||||
| Gross profit | 208,630 | 867 | 209,497 | 222,356 | - | 222,356 | ||||||||||||
| Gross profit as a percentage of total revenue | 26.5 | % | 26.6 | % | 28.5 | % | 28.5 | % | ||||||||||
| Selling expenses | 84,719 | - | 84,719 | 85,939 | - | 85,939 | ||||||||||||
| General and administrative expenses | 71,698 | - | 71,698 | 67,142 | - | 67,142 | ||||||||||||
| Research and development expenses | 19,583 | - | 19,583 | 16,152 | - | 16,152 | ||||||||||||
| Restructuring and other costs | 5,898 | (5,898 | ) | - | 1,268 | (1,268 | ) | - | ||||||||||
| Operating profit | $ | 26,732 | $ | 6,765 | $ | 33,497 | $ | 51,855 | $ | 1,268 | $ | 53,123 | ||||||
| Operating profit as a percentage of total revenue | 3.4 | % | 4.3 | % | 6.6 | % | 6.8 | % | ||||||||||
Dorel Sports
| Reconciliation of non-GAAP financial measures | Third quarters ended September 30 | |||||||||||||||||
| 2015 | 2014 | |||||||||||||||||
| Reported | Impairment losses, restruc- turing and other costs | Adjusted | Reported | Restruc- turing and other costs | Adjusted | |||||||||||||
| Total revenue | $ | 266,499 | $ | - | $ | 266,499 | $ | 266,503 | $ | - | $ | 266,503 | ||||||
| Cost of sales | 215,545 | (2,512 | ) | 213,033 | 204,451 | (504 | ) | 203,947 | ||||||||||
| Gross profit | 50,954 | 2,512 | 53,466 | 62,052 | 504 | 62,556 | ||||||||||||
| Gross profit as a percentage of total revenue | 19.1 | % | 20.1 | % | 23.3 | % | 23.5 | % | ||||||||||
| Selling expenses | 25,391 | - | 25,391 | 24,281 | - | 24,281 | ||||||||||||
| General and administrative expenses | 15,712 | - | 15,712 | 16,209 | - | 16,209 | ||||||||||||
| Research and development expenses | 1,538 | - | 1,538 | 1,892 | - | 1,892 | ||||||||||||
| Restructuring and other costs | 1,972 | (1,972 | ) | - | 4,901 | (4,901 | ) | - | ||||||||||
| Impairment losses on goodwill and customer relationships | 26,510 | (26,510 | ) | - | - | - | - | |||||||||||
| Operating profit (loss) | $ | (20,169 | ) | $ | 30,994 | $ | 10,825 | $ | 14,769 | $ | 5,405 | $ | 20,174 | |||||
| Operating profit (loss) as a percentage of total revenue | -7.6 | % | 4.1 | % | 5.5 | % | 7.6 | % | ||||||||||
| Reconciliation of non-GAAP financial measures | Nine months ended September 30 | |||||||||||||||||
| 2015 | 2014 | |||||||||||||||||
| Reported | Impairment losses, restruc- turing and other costs | Adjusted | Reported | Restruc-turing and other costs | Adjusted | |||||||||||||
| Total revenue | $ | 746,515 | $ | - | $ | 746,515 | $ | 793,100 | $ | - | $ | 793,100 | ||||||
| Cost of sales | 585,474 | (2,512 | ) | 582,962 | 603,258 | (1,175 | ) | 602,083 | ||||||||||
| Gross profit | 161,041 | 2,512 | 163,553 | 189,842 | 1,175 | 191,017 | ||||||||||||
| Gross profit as a percentage of total revenue | 21.6 | % | 21.9 | % | 23.9 | % | 24.1 | % | ||||||||||
| Selling expenses | 74,593 | - | 74,593 | 74,141 | - | 74,141 | ||||||||||||
| General and administrative expenses | 51,466 | - | 51,466 | 56,222 | - | 56,222 | ||||||||||||
| Research and development expenses | 4,652 | - | 4,652 | 5,177 | - | 5,177 | ||||||||||||
| Restructuring and other costs | 1,348 | (1,348 | ) | - | 8,010 | (8,010 | ) | - | ||||||||||
| Impairment losses on goodwill and customer relationships | 26,510 | (26,510 | ) | - | - | - | - | |||||||||||
| Operating profit | $ | 2,472 | $ | 30,370 | $ | 32,842 | $ | 46,292 | $ | 9,185 | $ | 55,477 | ||||||
| Operating profit as a percentage of total revenue | 0.3 | % | 4.4 | % | 5.8 | % | 7.0 | % | ||||||||||
| DOREL INDUSTRIES INC. | |||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION | |||||||
| ALL FIGURES IN THOUSANDS OF US $ | |||||||
| (unaudited) | |||||||
| | as at September 30, 2015 | | as at December 30, 2014 | | |||
| ASSETS | |||||||
| CURRENT ASSETS | |||||||
| Cash and cash equivalents | $ | 34,701 | $ | 47,101 | |||
| Trade and other receivables | 445,265 | 474,704 | |||||
| Inventories | 681,777 | 633,022 | |||||
| Other financial assets | 3,179 | 4,299 | |||||
| Income taxes receivable | 11,930 | 15,731 | |||||
| Prepaid expenses | 34,318 | 25,343 | |||||
| 1,211,170 | 1,200,200 | ||||||
| Assets held for sale | 2,966 | 1,308 | |||||
| 1,214,136 | 1,201,508 | ||||||
| NON-CURRENT ASSETS | |||||||
| Property, plant and equipment | 210,105 | 226,893 | |||||
| Intangible assets | 476,048 | 519,798 | |||||
| Goodwill | 498,474 | 544,782 | |||||
| Other financial assets | - | 571 | |||||
| Deferred tax assets | 32,292 | 31,009 | |||||
| Other assets | 5,047 | 5,398 | |||||
| 1,221,966 | 1,328,451 | ||||||
| $ | 2,436,102 | $ | 2,529,959 | ||||
| LIABILITIES | |||||||
| CURRENT LIABILITIES | |||||||
| Bank indebtedness | $ | 60,220 | $ | 27,053 | |||
| Trade and other payables | 495,159 | 490,527 | |||||
| Written put option and forward purchase agreement liabilities | 2,918 | - | |||||
| Other financial liabilities | 2,762 | 1,655 | |||||
| Income taxes payable | 21,198 | 19,046 | |||||
| Long-term debt | 32,897 | 62,556 | |||||
| Provisions | 33,564 | 37,727 | |||||
| 648,718 | 638,564 | ||||||
| NON-CURRENT LIABILITIES | |||||||
| Long-term debt | 509,135 | 490,188 | |||||
| Net pension and post-retirement defined benefit liabilities | 45,180 | 46,128 | |||||
| Deferred tax liabilities | 75,688 | 89,199 | |||||
| Provisions | 1,677 | 1,765 | |||||
| Written put option and forward purchase agreement liabilities | 29,625 | 44,640 | |||||
| Other financial liabilities | 2,352 | 2,063 | |||||
| Other long-term liabilities | 10,067 | 10,428 | |||||
| 673,724 | 684,411 | ||||||
| EQUITY | |||||||
| Share capital | 199,988 | 199,927 | |||||
| Contributed surplus | 26,395 | 25,691 | |||||
| Accumulated other comprehensive income | (105,898 | ) | (20,579 | ) | |||
| Other equity | 1,979 | 579 | |||||
| Retained earnings | 991,196 | 1,001,366 | |||||
| 1,113,660 | 1,206,984 | ||||||
| $ | 2,436,102 | $ | 2,529,959 | ||||
| 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, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||
| Restated | Restated | ||||||||
| Sales | $ | 676,196 | $ | 669,923 | $ | 2,004,519 | $ | 1,966,496 | |
| Licensing and commission income | 3,091 | 3,097 | 9,900 | 10,056 | |||||
| TOTAL REVENUE | 679,287 | 673,020 | 2,014,419 | 1,976,552 | |||||
| Cost of sales(1) | 542,732 | 521,526 | 1,582,052 | 1,514,173 | |||||
| GROSS PROFIT | 136,555 | 151,494 | 432,367 | 462,379 | |||||
| Selling expenses | 57,943 | 57,118 | 174,452 | 174,332 | |||||
| General and administrative expenses | 46,245 | 49,347 | 154,680 | 152,955 | |||||
| Research and development expenses | 9,210 | 8,557 | 27,041 | 24,253 | |||||
| Restructuring and other costs(1) | 6,155 | 5,934 | 7,246 | 9,278 | |||||
| Impairment losses on goodwill and customer relationships | 26,510 | - | 26,510 | - | |||||
| OPERATING PROFIT (LOSS) | (9,508) | 30,538 | 42,438 | 101,561 | |||||
| Finance expenses | 1,522 | 6,375 | 20,463 | 28,539 | |||||
| INCOME (LOSS) BEFORE INCOME TAXES | (11,030) | 24,163 | 21,975 | 73,022 | |||||
| Income taxes (recovery) expense | (2,273) | 4,683 | 2,885 | 13,542 | |||||
| NET INCOME (LOSS) | $ | (8,757) | $ | 19,480 | $ | 19,090 | $ | 59,480 | |
| EARNINGS (LOSS) PER SHARE | |||||||||
| Basic | $ | (0.27) | $ | 0.60 | $ | 0.59 | $ | 1.85 | |
| Diluted | $ | (0.27) | $ | 0.60 | $ | 0.59 | $ | 1.83 | |
| SHARES OUTSTANDING | |||||||||
| Basic - weighted average | 32,322,011 | 32,305,379 | 32,321,887 | 32,180,681 | |||||
| Diluted - weighted average | 32,322,011 | 32,493,300 | 32,522,810 | 32,417,922 | |||||
| (1)Restructuring and other costs charged to: | |||||||||
| Cost of sales | $ | 3,379 | $ | 504 | $ | 3,379 | $ | 1,175 | |
| Expenses | 6,155 | 5,934 | 7,246 | 9,278 | |||||
| $ | 9,534 | $ | 6,438 | $ | 10,625 | $ | 10,453 | ||
| DOREL INDUSTRIES INC. | ||||||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||
| ALL FIGURES IN THOUSANDS OF US $ | ||||||||||||
| (unaudited) | ||||||||||||
| Third Quarters Ended | Nine Months Ended | |||||||||||
| September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||
| NET INCOME (LOSS) | $ | (8,757 | ) | $ | 19,480 | $ | 19,090 | $ | 59,480 | |||
| 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 | (37,730 | ) | (51,891 | ) | (83,554 | ) | (51,782 | ) | ||||
| Net changes in cash flow hedges: | ||||||||||||
| Net change in unrealized gains (losses) on derivatives designated as cash flow hedges | 1,723 | 7,085 | 1,490 | 6,146 | ||||||||
| Reclassification to income | 214 | 208 | 808 | 688 | ||||||||
| Reclassification to the related non-financial asset | 88 | (494 | ) | (5,384 | ) | 983 | ||||||
| Deferred income taxes | (163 | ) | (2,008 | ) | 1,260 | (2,235 | ) | |||||
| 1,862 | 4,791 | (1,826 | ) | 5,582 | ||||||||
| Items that will not be reclassified to net income: | ||||||||||||
| Defined benefit plans: | ||||||||||||
| Remeasurements of the net pension and post-retirement defined benefit liabilities | (1 | ) | 107 | 91 | 116 | |||||||
| Deferred income taxes | - | (30 | ) | (30 | ) | (33 | ) | |||||
| (1 | ) | 77 | 61 | 83 | ||||||||
| TOTAL OTHER COMPREHENSIVE LOSS | (35,869 | ) | (47,023 | ) | (85,319 | ) | (46,117 | ) | ||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | $ | (44,626 | ) | $ | (27,543 | ) | $ | (66,229 | ) | $ | 13,363 | |
| 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 | ||||||||||||||||||||||
| Share Capital | Contributed Surplus | Cumulative Translation Account | Cash Flow Hedges | Defined Benefit Plans | Other Equity | Retained Earnings | Total Equity | |||||||||||||||
| Balance as at December 30, 2013 | $ | 190,458 | $ | 26,994 | $ | 75,378 | $ | (2,154 | ) | $ | (5,400 | ) | $ | - | $ | 1,061,484 | $ | 1,346,760 | ||||
| Total comprehensive income: | ||||||||||||||||||||||
| Net income | - | - | - | - | - | - | 59,480 | 59,480 | ||||||||||||||
| Other comprehensive income (loss) | - | - | (51,782 | ) | 5,582 | 83 | - | - | (46,117 | ) | ||||||||||||
| $ | - | $ | - | $ | (51,782 | ) | $ | 5,582 | $ | 83 | $ | - | $ | 59,480 | $ | 13,363 | ||||||
| Issued under stock option plan | 7,065 | - | - | - | - | - | - | 7,065 | ||||||||||||||
| Reclassification from contributed surplus due to exercise of stock options | 1,881 | (1,881 | ) | - | - | - | - | - | - | |||||||||||||
| Reclassification from contributed surplus due to settlement of deferred share units | 264 | (484 | ) | - | - | - | - | - | (220 | ) | ||||||||||||
| Share-based payments | - | 719 | - | - | - | - | - | 719 | ||||||||||||||
| Dividends on common shares | - | - | - | - | - | - | (28,957 | ) | (28,957 | ) | ||||||||||||
| Dividends on deferred share units | - | 147 | - | - | - | - | (147 | ) | - | |||||||||||||
| Balance as at September 30, 2014 | $ | 199,668 | $ | 25,495 | $ | 23,596 | $ | 3,428 | $ | (5,317 | ) | $ | - | $ | 1,091,860 | $ | 1,338,730 | |||||
| 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 | ||||
| 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, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||
| Restated | Restated | ||||||||||||
| CASH PROVIDED BY (USED IN): | |||||||||||||
| OPERATING ACTIVITIES | |||||||||||||
| Net income (loss) | $ | (8,757 | ) | $ | 19,480 | $ | 19,090 | $ | 59,480 | ||||
| Items not involving cash: | |||||||||||||
| Depreciation and amortization | 14,957 | 14,797 | 43,692 | 44,509 | |||||||||
| Impairment losses on goodwill and customer relationships | 26,510 | - | 26,510 | - | |||||||||
| Unrealized losses (gains) arising on financial assets | |||||||||||||
| and financial liabilities classified as held for trading | (522 | ) | (613 | ) | (357 | ) | (75 | ) | |||||
| Finance expenses | 1,522 | 6,375 | 20,463 | 28,539 | |||||||||
| Restructuring and other costs | 9,534 | 6,438 | 10,625 | 10,453 | |||||||||
| Income taxes (recovery) expense | (2,273 | ) | 4,683 | 2,885 | 13,542 | ||||||||
| Share-based payments | 104 | 69 | 294 | 575 | |||||||||
| Defined benefit pension and post-retirement costs | 815 | 821 | 2,448 | 2,525 | |||||||||
| Loss (gain) on disposal of property, plant and equipment | 745 | (11 | ) | 727 | 9 | ||||||||
| 42,635 | 52,039 | 126,377 | 159,557 | ||||||||||
| Net changes in balances related to operations: | |||||||||||||
| Trade and other receivables | 7,715 | 1,974 | 1,923 | (9,355 | ) | ||||||||
| Inventories | (18,028 | ) | (8,625 | ) | (85,636 | ) | (40,241 | ) | |||||
| Other financial assets | 37 | (252 | ) | 149 | (429 | ) | |||||||
| Prepaid expenses | (1,452 | ) | 3,134 | (10,470 | ) | (3,369 | ) | ||||||
| Other assets | (484 | ) | 1,061 | (566 | ) | 2,133 | |||||||
| Trade and other payables | 58,601 | 20,966 | 4,299 | 12,438 | |||||||||
| Net pension and post-retirement defined benefit liabilities | (671 | ) | (603 | ) | (2,656 | ) | (2,755 | ) | |||||
| Provisions, other financial liabilities and other long-term liabilities | (2,695 | ) | (2,124 | ) | (7,368 | ) | (8,602 | ) | |||||
| 43,023 | 15,531 | (100,325 | ) | (50,180 | ) | ||||||||
| Income taxes paid | (4,527 | ) | (3,310 | ) | (13,925 | ) | (21,854 | ) | |||||
| Income taxes received | 972 | 395 | 7,100 | 6,840 | |||||||||
| Interest paid | (4,784 | ) | (5,548 | ) | (11,594 | ) | (18,938 | ) | |||||
| Interest received | 85 | 301 | 258 | 575 | |||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES | 77,404 | 59,408 | 7,891 | 76,000 | |||||||||
| FINANCING ACTIVITIES | |||||||||||||
| Bank indebtedness | (14,458 | ) | 4,663 | 45,310 | (32,531 | ) | |||||||
| Increase of long-term debt | 504 | - | 72,721 | 106,083 | |||||||||
| Repayments of long-term debt | (52,927 | ) | (40,932 | ) | (63,125 | ) | (26,237 | ) | |||||
| Increase of written put option and forward purchase agreement liabilities | - | - | 525 | - | |||||||||
| Financing costs | (398 | ) | (93 | ) | (1,863 | ) | (1,384 | ) | |||||
| Issuance of share capital | - | 149 | - | 7,050 | |||||||||
| Dividends on common shares | (9,697 | ) | (9,691 | ) | (29,090 | ) | (28,957 | ) | |||||
| CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (76,976 | ) | (45,904 | ) | 24,478 | 24,024 | |||||||
| INVESTING ACTIVITIES | |||||||||||||
| Acquisition of businesses | - | (150 | ) | (1,736 | ) | (54,743 | ) | ||||||
| Additions to property, plant and equipment | (7,788 | ) | (7,964 | ) | (24,617 | ) | (26,048 | ) | |||||
| Disposals of property, plant and equipment | 27 | 294 | 557 | 862 | |||||||||
| Additions to intangible assets | (3,816 | ) | (6,193 | ) | (13,491 | ) | (16,269 | ) | |||||
| CASH USED IN INVESTING ACTIVITIES | (11,577 | ) | (14,013 | ) | (39,287 | ) | (96,198 | ) | |||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (2,584 | ) | (4,739 | ) | (5,482 | ) | (8,290 | ) | |||||
| NET DECREASE IN CASH | |||||||||||||
| AND CASH EQUIVALENTS | (13,733 | ) | (5,248 | ) | (12,400 | ) | (4,464 | ) | |||||
| Cash and cash equivalents, beginning of period | 48,434 | 40,858 | 47,101 | 40,074 | |||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 34,701 | $ | 35,610 | $ | 34,701 | $ | 35,610 | |||||
| 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 | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||
| (Restated) | (Restated) | (Restated) | ||||||||||||||||
| Total revenue | $ | 679,287 | $ | 673,020 | $ | 247,296 | $ | 260,723 | $ | 266,499 | $ | 266,503 | $ | 165,492 | $ | 145,794 | ||
| Cost of sales (1) | 542,732 | 521,526 | 183,096 | 187,558 | 215,545 | 204,451 | 144,091 | 129,517 | ||||||||||
| Gross profit | 136,555 | 151,494 | 64,200 | 73,165 | 50,954 | 62,052 | 21,401 | 16,277 | ||||||||||
| Selling expenses | 57,658 | 56,480 | 28,051 | 28,225 | 25,391 | 24,281 | 4,216 | 3,974 | ||||||||||
| General and administrative expenses | 44,267 | 44,169 | 22,503 | 22,163 | 15,712 | 16,209 | 6,052 | 5,797 | ||||||||||
| Research and development expenses | 9,210 | 8,557 | 6,661 | 5,632 | 1,538 | 1,892 | 1,011 | 1,033 | ||||||||||
| Restructuring and other costs (1) | 6,155 | 5,934 | 4,183 | 1,033 | 1,972 | 4,901 | - | - | ||||||||||
| Impairment losses on goodwill and customer relationships | 26,510 | - | - | - | 26,510 | - | - | - | ||||||||||
| Operating profit (loss) | (7,245 | ) | 36,354 | $ | 2,802 | $ | 16,112 | $ | (20,169 | ) | $ | 14,769 | $ | 10,122 | $ | 5,473 | ||
| Finance expenses | 1,522 | 6,375 | ||||||||||||||||
| Corporate expenses | 2,263 | 5,816 | ||||||||||||||||
| Income taxes (recovery) expense | (2,273 | ) | 4,683 | |||||||||||||||
| Net income (loss) | $ | (8,757 | ) | $ | 19,480 | |||||||||||||
| Earnings (loss) per share | ||||||||||||||||||
| Basic | $ | (0.27 | ) | $ | 0.60 | |||||||||||||
| Diluted | $ | (0.27 | ) | $ | 0.60 | |||||||||||||
| Depreciation and amortization included in operating profit (loss) | $ | 14,692 | $ | 14,753 | $ | 10,381 | $ | 9,760 | $ | 3,200 | $ | 3,837 | $ | 1,111 | $ | 1,156 | ||
| (1)Restructuring and other costs charged to: | ||||||||||||||||||
| Cost of sales | $ | 3,379 | $ | 504 | $ | 867 | $ | - | $ | 2,512 | $ | 504 | $ | - | $ | - | ||
| Expenses | 6,155 | 5,934 | 4,183 | 1,033 | 1,972 | 4,901 | - | - | ||||||||||
| $ | 9,534 | $ | 6,438 | $ | 5,050 | $ | 1,033 | $ | 4,484 | $ | 5,405 | $ | - | $ | - | |||
| 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 | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||
| (Restated) | (Restated) | (Restated) | ||||||||||||||
| Total revenue | $ | 2,014,419 | $ | 1,976,552 | $ | 786,910 | $ | 781,277 | $ | 746,515 | $ | 793,100 | $ | 480,994 | $ | 402,175 |
| Cost of sales (1) | 1,582,052 | 1,514,173 | 578,280 | 558,921 | 585,474 | 603,258 | 418,298 | 351,994 | ||||||||
| Gross profit | 432,367 | 462,379 | 208,630 | 222,356 | 161,041 | 189,842 | 62,696 | 50,181 | ||||||||
| Selling expenses | 172,217 | 172,165 | 84,719 | 85,939 | 74,593 | 74,141 | 12,905 | 12,085 | ||||||||
| General and administrative expenses | 141,792 | 139,739 | 71,698 | 67,142 | 51,466 | 56,222 | 18,628 | 16,375 | ||||||||
| Research and development expenses | 27,041 | 24,253 | 19,583 | 16,152 | 4,652 | 5,177 | 2,806 | 2,924 | ||||||||
| Restructuring and other costs (1) | 7,246 | 9,278 | 5,898 | 1,268 | 1,348 | 8,010 | - | - | ||||||||
| Impairment losses on goodwill and customer relationships | 26,510 | - | - | - | 26,510 | - | - | - | ||||||||
| Operating profit | 57,561 | 116,944 | $ | 26,732 | $ | 51,855 | $ | 2,472 | $ | 46,292 | $ | 28,357 | $ | 18,797 | ||
| Finance expenses | 20,463 | 28,539 | ||||||||||||||
| Corporate expenses | 15,123 | 15,383 | ||||||||||||||
| Income taxes expense | 2,885 | 13,542 | ||||||||||||||
| Net income | $ | 19,090 | $ | 59,480 | ||||||||||||
| Earnings per share | ||||||||||||||||
| Basic | $ | 0.59 | $ | 1.85 | ||||||||||||
| Diluted | $ | 0.59 | $ | 1.83 | ||||||||||||
| Depreciation and amortization included in operating profit | $ | 43,337 | $ | 44,378 | $ | 29,903 | $ | 30,357 | $ | 9,943 | $ | 10,705 | $ | 3,491 | $ | 3,316 |
| (1)Restructuring and other costs charged to: | ||||||||||||||||
| Cost of sales | $ | 3,379 | $ | 1,175 | $ | 867 | $ | - | $ | 2,512 | $ | 1,175 | $ | - | $ | - |
| Expenses | 7,246 | 9,278 | 5,898 | 1,268 | 1,348 | 8,010 | - | - | ||||||||
| $ | 10,625 | $ | 10,453 | $ | 6,765 | $ | 1,268 | $ | 3,860 | $ | 9,185 | $ | - | $ | - | |
Contact Information:
Rick Leckner
(514) 731-0000
Dorel Industries Inc.
Jeffrey Schwartz
(514) 934-3034