Dorel Reports Third Quarter ResultsMontreal, Quebec -
- Lower sales in North America as major brick and mortar customers attempt to reduce inventories
- Continued strength of U.S. dollar results in US$14.0 million negative foreign exchange impact at Dorel Juvenile
- Dorel Home concludes agreement to sell building in Cornwall, Ontario for CDN$46.1 million and subsequently enters into multi-year lease
Montréal, November 4, 2022 — Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the third quarter and nine months ended September 30, 2022.
Third quarter revenue was US$374.1 million, down 14.4% from US$437.2 million last year. Reported net loss from continuing operations was US$36.7 million or US$1.13 per diluted share, compared to US$68.0 million or US$2.09 per diluted share last year. Adjusted net loss from continuing operations was US$34.7 million or US$1.07 per diluted share, compared to US$66.8 million or US$2.06 per diluted share a year ago. Last year’s third quarter loss included US$61.7 million, or US$1.90 per diluted share as the result of an unfavourable tax assessment.
Nine-month revenue from continuing operations was US$1.23 billion, a decrease of 7.1% compared to US$1.32 billion last year. Reported net loss from continuing operations year-to-date was US$77.6 million or US$2.38 per diluted share, compared to US$82.2 million or US$2.53 per diluted share in 2021. Nine-month adjusted net loss1 from continuing operations was US$71.2 million or US$2.19 per diluted share, compared to US$70.8 million or US$2.18 per diluted share a year ago.
“It was a difficult quarter as we saw a significant drop in orders from our U.S. brick and mortar retail partners. These customers are reacting to the overall negative economic environment and poor consumer sentiment by focusing on reducing their in-store inventory levels across many product categories, including ours. We are also carrying excess inventories as the supply chain bottlenecks have eased, resulting in a considerable influx of merchandise as we entered the third quarter. At Dorel Home, this situation started in the second quarter and we responded with promotional activities in an effort to reduce inventory. The drop in orders at Dorel Juvenile in the U.S. was much more than we expected, after what was a tremendous second quarter. This coupled with the U.S. dollar strengthening even more in the third quarter were the two biggest drivers of our underperformance. Further, consumers in Europe are much more cautious due to the continued instability abroad and the particularly acute fall in the value of the Euro and Pound Sterling. As we move forward, our focus for the balance of the year will be to drive sales to reduce inventories and generate cash to prepare for 2023 where we anticipate lower input costs and a return to more normal ordering levels,” stated Dorel President & CEO, Martin Schwartz.
1This is a non-GAAP financial ratio or measure with no standardized meaning prescribed by IFRS and therefore is unlikely to be comparable to similar measures presented by other issuers. Refer to the section “Definition and reconciliation of non-GAAP financial ratios and measures” in this press release.