Dorel reports second quarter 2014
Montreal, Quebec - 8/6/2014
Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the second quarter and six months ended June 30, 2014. Total revenue for the quarter was US$655.8 million, up 9.2% from US$600.4 million recorded in the same period last year. Net income was US$15.2 million or US$0.47 per diluted share, an increase of 14.9% from US$13.2 million or US$0.41 per diluted share reported for the same period a year ago. Revenue for the six months increased 9.1% to US$1.3 billion compared to US$1.2 billion last year. Net income reached US$40 million or US$1.24 per diluted share, compared to US$35.5 million or US$1.11 per diluted share in 2013.
“The momentum of the first quarter in the Recreational/Leisure segment carried into the second quarter as revenue grew by strong double digits and operating profit rose significantly,” said Dorel President and CEO, Martin Schwartz. “Overall we are pleased with the earnings from operations for our three segments, however the costs related to the Caloi acquisition has resulted in our earnings to be lower than we hoped to see.
“Caloi’s first half of the year performance was close to plan with a loss from operations at the segment level of US$0.8 million. Caloi was affected by the slowing economy in Brazil and consumers’ focus on the month-long World Cup which shifted attention away from the bicycle business. Caloi is executing well and is growing its market share. We are expecting the bulk of the earnings to come in the fourth quarter as it is both the start of summer and Christmas in Brazil. Despite the softening Brazilian economy, we expect Caloi to grow versus last year and we are confident regarding its future contributions to the segment as we firmly believe this transaction will be a good long-term investment in Dorel’s future.”
The impact of Caloi decreased Dorel’s earnings by US$10.3 million net of tax for the six months ended June 30, 2014 which is mainly comprised of the US$0.8 million loss from operations at the segment level, cash interest costs and US$6.0 million of non-cash charges including accretion interest and unrealized foreign exchange losses on put option liabilities.
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