Dorel Completes Record Year
Montreal, Quebec - 3/10/2011
Dorel Industries Inc. (TSX: DII.B DII.A) today announced results for the fourth quarter and year ended December 30, 2010. Revenue for the fourth quarter decreased 1.1% to US$539.5 million from US$545.3 million a year ago. Net income rose 4.2% to US$25.2million, or US$0.76 per diluted share, from US$24.2 million, or US$0.73 per diluted share last year.
Revenue for the full year rose 8.1% to US$2.3 billion as compared to US$2.1 billion in 2009. Net income was up 19.2% to US$127.9 million, or US$3.85 per diluted share from US$107.2 million or US$3.21 per diluted share last year. Excluding the impact of business acquisitions and year-over-year foreign exchange rate variations, mainly in the Juvenile Segment, organic sales growth in 2010 exceeded 7%.
“The fourth quarter was difficult, but we are pleased with Dorel’s full year performance. Our divisions effectively managed challenging economic conditions with value- oriented product offerings, a strong commitment to new product development and strategic brand support. In an environment of reduced consumer discretionary spending and rising input costs, Dorel was able to deliver revenue growth of over 8% and improved earnings over the prior year. If there was ever a test of the acceptance of Dorel’s brands and products, the past two years have provided it. The fact that we have done well through this period speaks volumes to our strong position in the many global markets in which we operate,” commented Dorel CEO and President, Martin Schwartz.
“Despite this success, we were not satisfied with the performance of certain of our U.S. businesses that service mass market customers. Point-of-sale levels at these customers slowed in the second half and as a result the retailers reacted by not only reducing replenishment orders, but also by aiming to further cut their own in-store inventory levels. This left us with a lot of inventory at year end that we had anticipated selling in the fourth quarter. We also had to contend with higher container freight rates and raw material costs that impacted earnings. As we enter 2011 we will work through the extra inventory and we are expecting new products in 2011 to drive improvements in the months ahead.”
Net income in 2010 was positively impacted by a lower tax rate as compared to 2009. A significant reason for the rate decrease was the recognition of incremental tax benefits of US$9.7 million pertaining to the resolution of several prior years’ estimated tax positions. This non-cash amount, which represents US$0.29 per diluted share, was not recognized for accounting purposes in prior years and was only recorded in the fourth quarter of 2010 when the relevant tax authorities confirmed the recognition of these benefits.