Dorel Completes Successful Year
Montreal, Quebec - 3/10/2010
Dorel Industries Inc. (TSX: DII.B DII.A) today announced results for the fourth quarter and year ended December 30, 2009. Revenue for the fourth quarter increased 13.6% to US$545.3 million from US$479.9 million a year ago with pre-tax earnings of US$31.0 million compared to US$19.6 million, an increase of 58.5%. Net income rose 26.3% to US$24.2 million, or US$0.73 per diluted share, from US$19.2 million, or US$0.57 per diluted share last year.
Revenue for the year was slightly lower at US$2.1 billion as compared to US$2.2 billion in 2008. 2009 pre-tax income was US$128.3 million as compared to US$132.0 million in the prior year. Net income decreased 5.0% to US$107.2 million, or US$3.21 per diluted share from US$112.9 million or US$3.38 per diluted share. Organic revenue growth was approximately 7% in the fourth quarter and for the year was a decline of less than 3%.
As has been disclosed throughout the year, significant amounts pertaining to foreign exchange gains and losses across both 2009 and 2008 have had the impact of shifting reported earnings from one year to the other. In 2008 the Company recognized unrealized gains of US$10.5 million (after-tax US$7.4 million or US$0.22 per diluted share) on foreign exchange hedging instruments intended for use in 2009, which reversed in 2009, creating a loss in the current year. Over and above this, in 2009 the Company recorded an additional loss of US$4.2 million on 2010 foreign exchange contracts. The total after-tax negative impact on 2009 results was US$10.0 million or US$0.30 per diluted share. In addition, the fourth quarter results for 2009 include an after-tax net gain of US$2.9 million, or US$0.09 per diluted share, pertaining to the successful resolution of a claim.
1 “As we entered 2009 we were cautious, yet confident about Dorel’s prospects. While we were prudent and focused on cost containment, we did not reduce in any way our commitment to new product development as we recognize that this remains a key driver for us. Despite the downturn, we have continued to allocate funds to business acquisitions and research and development, as we invest for the future. This resulted in the introduction of a number of excellent new products in 2009 which has further strengthened our competitive position in our core Juvenile and Recreational/Leisure segments. Our commitment was most recently evidenced by our announced US$20.8 million investment to be made over the next three years at our Columbus, Indiana car seat facility for a new Design and Development Competency Center,” commented Dorel CEO and President, Martin Schwartz.
“We are extremely pleased with the 2009 results. If we exclude the amounts above in relation to our foreign exchange hedging program and the settlement of the claim, our normalized diluted earnings per share improved year over year to US$3.42 from US$3.16 in 2008. This improvement is reflected in our strong cash flow from operations which totalled a record US$205 million. Even after re-investing in the business in the form of capital expenditures and business acquisitions, funding our share buy back program and paying dividends to our shareholders, we reduced our debt levels by almost US$114 million,” added Mr. Schwartz.