Dorel revises second quarter bicycle expectations
Montreal, Quebec - 6/13/2013
Dorel Industries Inc. today stated that second quarter earnings in its Recreational/Leisure segment will be weaker than anticipated. The continued poor weather across the U.S., Canada and Europe has led to lower than expected sales volumes, particularly in the independent bicycle dealer channel. This situation is now being further compounded by widespread discounting by competitors in the bicycle industry. As a result of the soft first half, full year earnings in bicycles will not, as previously indicated, exceed 2012 levels. Performance of the Company’s two other segments, Juvenile and Home Furnishings remain on track as outlined in the press release of May 9, 2013.
Dorel has initiated significant cost reductions across the Recreational/Leisure segment. This includes a headcount reduction of some 50 positions worldwide, roughly 5% of the segment’s workforce. As a result, Dorel will record a second quarter one-time charge of approximately US$ 2 million for
“These issues in bicycles are mainly related to matters beyond our control. Our bicycle products are proven and our brands remain very strong. Cannondale continues to attract both excitement and highly positive comments,” stated Dorel President and CEO, Martin Schwartz. “The reality is that we are now into mid-June and the weather has not improved sufficiently which means that we will be unable to make up the accumulated year-to-date sales shortfall. With the cost reductions being implemented, we are optimistic that bicycle earnings in the second half will increase double digit over last year.”
Dorel will announce second quarter results on August 9, 2013.