Dorel Industries Inc.
TSX : DII.A
TSX : DII.B

Dorel Industries Inc.

January 29, 2015 08:30 ET

Strength of U.S. Dollar Expected to Impact Dorel in 2015

Business fundamentals remain strong

MONTREAL, QUEBEC--(Marketwired - Jan. 29, 2015) - Dorel Industries Inc. (TSX:DII.B)(TSX:DII.A) today stated that the surge in the value of the U.S. dollar versus the majority of the Company's other operating currencies is expected to have a significant negative effect on Dorel's earnings through 2015. As an international consumer products company, the increase in the value of the U.S. dollar impacts both cost of sales for Dorel's international divisions that purchase in U.S. dollars and sell in local currencies, as well as Dorel's reported earnings translated into U.S. dollars.

"Dorel has pursued an aggressive strategy of expanding our juvenile and bicycle businesses to markets around the world, notably into Europe, South America and Asia. This has greatly benefited us over several years and continues to do so as we are consistently building market share. Just over half of our net income is derived from these regions. Since November, when we reported our third quarter results, the U.S. dollar has continued to strengthen to its highest level in many years versus several major currencies and we expect this to impact us through the current year," stated Dorel President & CEO, Martin Schwartz.

In 2014, the Euro was an exception to most other currencies against the U.S. dollar with a significant decline in value only occurring in December. However, this decline has continued into 2015. The Euro is currently at its lowest level in five years and therefore is expected to depress Dorel's 2015 results.

Mr. Schwartz explained that while it is too early in the year to quantify the impact of foreign exchange, there are mitigating factors which are expected to ease the situation somewhat. "New products currently being launched reflect the currency factor and are priced accordingly; further, we are working with many of our retail partners on implementing suitable price increases. Recent reductions in oil prices and many commodities will help offset the higher U.S. dollar as will the strength of the U.S. economy, where all three of our segments have a significant presence. Our Home Furnishings segment will benefit from the strong U.S. dollar as a portion of our products are manufactured in Canada and sold in the U.S.," concluded Mr. Schwartz.

Dorel will announce full-year 2014 results on March 16, 2015.

Profile

Dorel Industries Inc. (TSX:DII.B)(TSX:DII.A) is a world class juvenile products and bicycle company. Dorel creates style and excitement in equal measure to safety, quality and value. The Company's lifestyle leadership position is pronounced in both its Juvenile and Bicycle categories with an array of trend-setting products. Dorel'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's Home Furnishings segment markets a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel has annual sales of US$2.4 billion and employs approximately 10,500 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.

Contact Information

  • MaisonBrison Communications
    Rick Leckner
    (514) 731-0000

    Dorel Industries Inc.
    Jeffrey Schwartz
    (514) 934-3034