Dorel Reports First Quarter 2018 Results
Montreal, Quebec - 5/4/2018
Dorel Industries Inc. (TSX: DII.B, DII.A) today released results for the first quarter ended March 31, 2018. Total revenue was US$642.3 million compared to US$646.7 million a year ago. Reported net income was US$4.7 million, or US$0.14 per diluted share, compared to US$8.8 million or US$0.27 per diluted share last year. Adjusted net income, was US$5.5 million or US$0.17 per diluted share compared to US$22.7 million or US$0.69 per diluted share for the first quarter of 2017. Removing the impact of Toys“R”Us, adjusted net income was US$15.0 million or US$0.46 per diluted share compared to US$22.7 million or US$0.69 per diluted share for the first quarter of 2017.
The liquidation of Toys“R”Us in the U.S. resulted in a first quarter impairment loss on trade accounts receivable of US$12.5 million, or US$0.29 per diluted share, comprising of US$2.1 million within Dorel Home, US$3.8 million within Dorel Juvenile and US$6.6 million within Dorel Sports. This was in addition to the US$3.8 million recorded by Dorel in the fourth quarter of 2017.
“As we reported in March, all of our business units are being affected by the Toys“R”Us situation. We estimate that company-wide sales were reduced by approximately US$7 million in the quarter. The Toys“R”Us liquidation in the U.S. may cause a market disruption in the short-term, but we believe this situation will stabilize, and both the Juvenile and Sports business will shift to other retailers or other channels during the second half. While we were anticipating a slower start to the year, the first quarter was more difficult than originally expected at Dorel Juvenile and Dorel Sports. Dorel Home had a solid quarter with a slow start in January, followed by revenue acceleration in the rest of the quarter and into April. Their warehouse network processed a record number of packages in the e-commerce channel in March. There are numerous exciting new products being launched through 2018 and we feel that these introductions, coupled with our strong brand recognition, will find traction with consumers,” stated Dorel President & CEO, Martin Schwartz.
The Company is presenting adjusted financial information, excluding restructuring and other costs, remeasurement of forward purchase agreement liabilities and loss on early extinguishment of long-term debt, as it believes this provides a more meaningful comparison of its core business performance between the periods presented. These previously announced items are detailed in the attached tables of this press release. Contained within this press release are reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
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