Dorel reports second quarter results



    
    - Strong earnings from operations despite environment
    - New products, new bicycle brand to increase Dorel's competitive
      position
    - Excluding mark-to-market losses on foreign exchange contracts, Q2 EPS
      is US$1.01

    EXCHANGES
    TSX: DII.B, DII.A
    

    MONTREAL, Aug. 12 /CNW Telbec/ - Dorel Industries Inc. (TSX: DII.B DII.A)
today announced its results for the second quarter ended June 30, 2009. Net
income was US$24.8 million or US$0.74 per diluted share compared with US$31.3
million or US$0.94 per diluted share for the corresponding quarter of 2008. As
described below, the 2009 results include significant mark-to-market losses on
foreign exchange contracts. These losses totaled US$12.6 million in the second
quarter and represent an after tax amount of US$0.27 per diluted share.
Excluding these losses, diluted EPS for the second quarter this year would
have been US$1.01. This earnings improvement was despite a decline in revenues
for the period which slipped 7.2% to US$551.1 million from US$593.7 million
for the same period a year ago.
    Year-to-date net income was US$52.8 million or US$1.58 per diluted share
compared to US$66.5 million or US$1.99 per diluted share for the first half of
2008. Excluding year-to-date mark-to-market losses on foreign exchange
contracts, earnings were US$61.3 million, or US$1.84 per diluted share. First
half revenue was US$1.076 billion or a decrease of 6.4% from the US$1.150
billion last year.
    To protect itself from variations in foreign exchange rates and their
impact on the Company's cash flow, it enters into foreign exchange forward
contracts and other types of derivative financial instruments, the great
majority of which are at Dorel Europe within the Juvenile segment. As the
Company does not follow the accounting practice of "hedge accounting",
non-cash "mark-to-market" gains and losses are recognized, representing the
difference between the contracted exchange rate and the market rate on these
instruments at the end of a given accounting period. Therefore, the gains and
losses on these instruments are recognized relative to fluctuations in current
exchange rates as opposed to the date of maturity of the contracts, when the
cash flow impact is recorded. The majority of the unrealized losses booked in
2009 thus far pertain to contracts that were in place as of December 30, 2008
on which the related unrealized gains were recorded in 2008.
    "For the second consecutive quarter we have surpassed our internal
earnings forecasts due to the implementation of stringent cost constraint
measures, a focus on working capital management and a more stable cost
environment. While sales are down, a significant percentage of the decrease is
attributable to foreign exchange translation. High-end bicycle sales are still
not where we want them to be as consumers remain selective in their
discretionary spending. Overall, our divisions are performing well
notwithstanding the challenging economy. Product development remains a key
driver for Dorel. Exciting new products, such as our revolutionary Safety 1st
Air Protect car seat, are being introduced to the market. At this year's Tour
de France two members of Team Liquigas, riding Cannondale's new 2010 SuperSix
road bike, finished in the top ten and a third took the prestigious King of
the Mountains Polkadot Jersey. This is the first time ever that a Cannondale
sponsored team had two riders finish in the top ten. These are examples of how
our R&D commitment will further grow our strong competitive position,"
commented Dorel CEO and President, Martin Schwartz.

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Summary of Financial Highlights
    -------------------------------------------------------------------------
                        Second Quarters Ended June 30
    -------------------------------------------------------------------------
         All figures in thousands of US $, except per share amounts
                                             2009         2008       Change %
    -------------------------------------------------------------------------
    Revenues                              551,123      593,724         -7.2%
    Net income                             24,764       31,347        -21.0%
      Per share - Basic                      0.74         0.94        -21.3%
      Per share - Diluted                    0.74         0.94        -21.3%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of shares
     outstanding - diluted weighted
     average                           33,388,415   33,397,745
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Summary of Financial Highlights
    -------------------------------------------------------------------------
                           Six Months Ended June 30
    -------------------------------------------------------------------------
         All figures in thousands of US $, except per share amounts
                                             2009         2008       Change %
    -------------------------------------------------------------------------
    Revenues                            1,076,353    1,149,758         -6.4%
    Net income                             52,793       66,480        -20.6%
      Per share - Basic                      1.58         1.99        -20.6%
      Per share - Diluted                    1.58         1.99        -20.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of shares
     outstanding - diluted weighted
     average                           33,384,027   33,397,717
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Juvenile Segment

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                        Second Quarters Ended June 30
    -------------------------------------------------------------------------
                                    2009                2008
    -------------------------------------------------------------------------
                                  $  % of rev.        $  % of rev.   Change %
    Revenues                244,672             282,204               -13.3%
    Gross Profit             59,593      24.4%   77,474      27.5%    -23.1%
    Earnings from
     operations              16,725       6.8%   29,571      10.5%    -43.4%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                           Six Months Ended June 30
    -------------------------------------------------------------------------
                                    2009                2008
    -------------------------------------------------------------------------
                                  $  % of rev.        $  % of rev.   Change %
    Revenues                498,633             590,887               -15.6%
    Gross Profit            132,303      26.5%  168,492      28.5%    -21.5%
    Earnings from
     operations              45,445       9.1%   66,303      11.2%    -31.5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Earnings in the Juvenile segment declined from 2008 levels, but include a
significant proportion of the Company's overall mark-to-market losses on
foreign exchange contracts. In the second quarter this amount was US$12.7
million, whereas 2008 included a small gain of US$1.1 million. If these
amounts are excluded from the results, earnings improved over last year
despite the decline in sales revenue. This improvement was due principally to
improved gross margins made possible through more stable product costs and an
improved product mix.
    The decrease in Juvenile revenue was in both North America and Europe,
but was most acute in Europe. Sales outside of the US comprise more than half
of the segment's total; therefore the strength of the US dollar has a
significant effect on both revenues and earnings. Second quarter European
sales declined 22% year-over-year, with more than half due to the impact of
foreign exchange. Excluding this, the true organic revenue decline was
approximately 9% in Europe and approximately 6% for the segment as a whole.
Year-to-date, approximately half of the sales decline was also due to the
impact of foreign exchange as European sales decreased 24%, but organically
the decline was approximately 11%, and for the segment as a whole, the organic
decline was approximately 8%.
    Subsequent to the end of the quarter, the new Safety 1st Air Protect(TM)
was revealed. Air Protect(TM) is the most innovative and groundbreaking safety
feature ever offered in a car seat. Developed in conjunction with Kettering
University's renowned Crash Safety Center, Air Protect(TM) is designed to
protect children in side impact collisions, putting a state-of-the-art layer
of air protection where it's needed most, around the child's head.

    
    Recreational/Leisure

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                        Second Quarters Ended June 30
    -------------------------------------------------------------------------
                                    2009                2008
    -------------------------------------------------------------------------
                                  $  % of rev.        $  % of rev.   Change %
    Revenues                199,093             195,073                 2.1%
    Gross Profit             44,252      22.2%   45,623      23.4%     -3.0%
    Earnings from
     operations              16,009       8.0%   17,252       8.8%     -7.2%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                           Six Months Ended June 30
    -------------------------------------------------------------------------
                                    2009                2008
    -------------------------------------------------------------------------
                                  $  % of rev.        $  % of rev.   Change %
    Revenues                360,521             335,533                 7.4%
    Gross Profit             81,280      22.5%   80,122      23.9%      1.4%
    Earnings from
     operations              25,986       7.2%   32,062       9.6%    -19.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Second quarter Recreational / Leisure revenue increased by 2.1% over
2008, and year-to-date this increase was 7.4%. Excluding the impact of new
business acquisitions and foreign exchange variations, the segment's organic
revenue decline was approximately 5% for the quarter and 4% year-to-date.
Revenues within the segment's core bicycle business at the mass merchant level
were down from the prior year, but these declines were offset by the
contribution of the parts and accessories business that was acquired late in
June of 2008. Bicycle sales by the Cycling Sports Group to the Company's
Independent Bike Dealers (IBD) and sporting goods customers were also down as
consumers are purchasing less of the Company's high-end product or are trading
down to lower priced items. The Company also believes that the poor weather
that was experienced in most of North America throughout May and June also has
a negative impact on sales.
    Gross margins and earnings from operations for the quarter decreased from
2008, as did the year-to-date results. Gross margin declines for the quarter
and year-to-date were due principally to a less profitable product mix as
consumers shifted to lower price point products. Gross margins in the quarter
were further negatively impacted by foreign exchange variations including a
mark-to-market loss of US$1.1 million on foreign exchange contracts. Costs
associated with the previously announced re-organization of the segment in the
quarter totalled approximately US$0.3 million.
    In July and August the Company announced the acquisitions of certain
assets of Iron Horse Bicycles, based in the United States, and
Australian-based distributor Gemini Bicycles. The Iron Horse transaction of
US$5.2 million comprised of inventory and various trademarks and trade names,
including the well-recognized "Iron Horse" brand. At a cost of US$2.2 million,
the assets acquired in the Gemini purchase will be merged with Cannondale's
existing Australian operations under the new Cycling Sports Group (CSG)
Australia division and will be dedicated to the Independent Bike Dealer (IBD)
channel.
    "I am particularly proud of our successes at this year's Tour de France.
Two riders on Team Liquigas riding Cannondales finished in the top ten with
Vincenzo Nibali placing seventh and Roman Kreuziger placing ninth. In
addition, Franco Pellizotti won the prestigious King of the Mountains Polka
Dot Jersey. As we approach the 2010 model year, early reaction to our new IBD
product line has been outstanding and our pre-delivery order level is up
significantly from last year at this time. Based on the feedback we have
received thus far, we believe we will increase our bike sales next year to the
IBD retail chain, regardless of the economic situation," commented Mr.
Schwartz.

    
    Home Furnishings

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                        Second Quarters Ended June 30
    -------------------------------------------------------------------------
                                    2009                2008
    -------------------------------------------------------------------------
                                  $  % of rev.        $  % of rev.   Change %
    Revenues                107,358             116,447                -7.8%
    Gross Profit             17,270      16.1%   14,348      12.3%     20.4%
    Earnings from
     operations               7,713       7.2%    3,561       3.1%    116.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                           Six Months Ended June 30
    -------------------------------------------------------------------------
                                    2009                2008
    -------------------------------------------------------------------------
                                  $  % of rev.        $  % of rev.   Change %
    Revenues                217,199             223,338                -2.7%
    Gross Profit             30,742      14.2%   25,884      11.6%     18.8%
    Earnings from
     operations              12,098       5.6%    4,501       2.0%    168.8%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    While all of the segment's divisions posted second quarter sales that
were flat or down from last year, earnings more than doubled. The earnings
improvement was driven by Ameriwood as that division continued to show
consistent sales and earnings of domestically produced furniture, helping
factory efficiencies and resultant earnings. Gross margins and earnings were
aided by the more favourable rate of exchange of the Canadian dollar versus
the US dollar as two of the Segment's plants are located in Canada and sell
the majority of their product to US based customers. Included in the 2009 cost
of sales figures are mark-to-market gains on foreign exchange contracts of
US$1.1 million in the second quarter and US$2.2 million year-to-date.
    Year-to-date revenues were also down versus last year, though less so
with a decline of 2.7%. As in the quarter, gross margins and earnings improved
despite the lower sales levels due to a more favourable dollar and
improvements at Ameriwood.

    Cash flow

    During the first half of 2009, cash flow from operating activities was
US$75.0 million an improvement of 17.4% over the US$63.9 million that was
provided by operations in the corresponding period of 2008. As the Company
anticipated, inventory levels remained in line with the first quarter at
US$423.0 million, down from US$509.5 million at year end. Free cash flow,
defined as cash flow from operating activities less, capital expenditures and
dividends, for the first six months of the year was US$49.4 million an
improvement of almost 50% over the first half of 2008.

    Quarterly Dividend

    The Board of Directors of Dorel declared its regular quarterly dividend
of US$0.125 per share on the outstanding number of the Company's Class A
Multiple Voting Shares, Class B Subordinate Voting Shares and Deferred Share
Units. The dividend is payable on September 9, 2009 to shareholders of record
as at the close of business on August 26, 2009.

    Outlook

    "Year-to-date our various businesses have generally performed well,
particularly in light of the prevailing general economic conditions. A
continuous focus on product development over the past 18 months has been
instrumental in securing important additional placements at retailers. Though
the challenges within the Recreational / Leisure segment are expected to
remain through the balance of 2009, we continue to look forward to a solid
second half and we remain on track to generate significant free cash flow in
the year.
    "Throughout 2009 we have remained committed to the long-term vision that
we hold for Dorel. We are putting into place an improved infrastructure at our
Recreational / Leisure segment and have continued to focus on new product
development and have broadened our product line. We have added valuable brands
with Iron Horse in bicycles and HopHop in Juvenile and we have established new
distribution platforms in Brazil and Australia. We are investing for the
future and believe strongly that the benefits will be seen in 2010 and
beyond," concluded Mr. Schwartz.

    Conference Call

    Dorel Industries Inc. will hold a conference call to discuss these
results today, August 12, 2009 at 1:00 P.M. Eastern Time. Interested parties
can join the call by dialling 1-800-732-9307. The conference call can also be
accessed via live webcast at www.dorel.com , www.newswire.ca or www.q1234.com.
If you are unable to call in at this time, you may access a tape recording of
the meeting by calling 1-877-289-8525 and entering the passcode 21312631# on
your phone. This tape recording will be available on Thursday, August 12, 2009
as of 3:00 P.M. until 11:59 P.M. on Thursday, August 19, 2009.

    
    Complete financial statements will be available on the Company's website,
    www.dorel.com, and will be available through the SEDAR websites.
    

    Profile

    Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile
products and bicycle company. Established in 1962, Dorel creates style and
excitement in equal measure to safety, quality and value. The Company's
lifestyle leadership position is pronounced in both its Juvenile and Bicycle
categories with an array of trend-setting products. Dorel's powerfully branded
products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in
Juvenile, as well as Cannondale, Schwinn, GT, Mongoose and SUGOI in
Recreational/Leisure. Dorel's Home Furnishings segment markets a wide
assortment of furniture products, both domestically produced and imported.
Dorel is a US$2.2 billion company with 4700 employees, facilities in eighteen
countries, and sales worldwide.

    Caution Concerning Forward-Looking Statements

    Except for historical information provided herein, this press release may
contain information and statements of a forward-looking nature concerning the
future performance of Dorel Industries Inc. These statements are based on
suppositions and uncertainties as well as on management's best possible
evaluation of future events. The business of the Company and these
forward-looking statements are subject to a number of risks and uncertainties
that could cause actual results to differ from expected results. Important
factors which could cause such differences may include, without excluding
other considerations, increases in raw material costs, particularly for key
input factors such as particle board and resins; increases in ocean freight
container costs; failure of new products to meet demand expectations; changes
to the Company's effective income tax rate as a result of changes in the
anticipated geographic mix of revenues; the impact of price pressures exerted
by competitors, and settlements for product liability cases which exceed the
Company's insurance coverage limits. A description of the above mentioned
items and certain additional risk factors are discussed in the Company's
Annual MD&A and Annual Information Form, filed with the securities regulatory
authorities. The risk factors outlined in the previously mentioned documents
are specifically incorporated herein by reference. The Company's business,
financial condition, or operating results could be materially adversely
affected if any of these risks and uncertainties were to materialize. Given
these risks and uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.


    
                            DOREL INDUSTRIES INC.
                         CONSOLIDATED BALANCE SHEETS
                       ALL FIGURES IN THOUSANDS OF US $

                                                        as at         as at
                                                      June 30,  December 30,
                                                         2009          2008
                                                  ------------- -------------
                                                   (unaudited)     (audited)

    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                   $    43,713   $    16,966
      Accounts receivable                             374,718       316,267
      Income taxes receivable                          16,134        19,798
      Inventories                                     423,015       509,467
      Prepaid expenses                                 20,293        16,236
      Future income taxes                              43,823        37,342
                                                  ------------- -------------
                                                      921,696       916,076

    PROPERTY, PLANT AND EQUIPMENT                     152,497       158,895
    INTANGIBLE ASSETS                                 396,541       395,742
    GOODWILL                                          544,058       540,187
    OTHER ASSETS                                       14,230        19,573
                                                  ------------- -------------
                                                  $ 2,029,022   $ 2,030,473
                                                  ------------- -------------
                                                  ------------- -------------

    LIABILITIES
    CURRENT LIABILITIES
      Bank indebtedness                           $    10,342   $     4,398
      Accounts payable and accrued liabilities        351,866       380,915
      Income taxes payable                             33,165        30,164
      Future income taxes                                   -         2,713
      Current portion of long-term debt                63,892         8,879
                                                  ------------- -------------
                                                      459,265       427,069
                                                  ------------- -------------

    LONG-TERM DEBT                                    377,696       450,704
                                                  ------------- -------------
    PENSION & POST-RETIREMENT BENEFIT OBLIGATIONS      20,018        20,072
                                                  ------------- -------------
    FUTURE INCOME TAXES                               109,555       111,874
                                                  ------------- -------------
    OTHER LONG-TERM LIABILITIES                         6,000         6,010
                                                  ------------- -------------

    SHAREHOLDERS' EQUITY
    CAPITAL STOCK                                     176,348       177,422
                                                  ------------- -------------
    CONTRIBUTED SURPLUS                                17,929        16,070
                                                  ------------- -------------
    RETAINED EARNINGS                                 778,036       738,113
    ACCUMULATED OTHER COMPREHENSIVE INCOME             84,175        83,139
                                                  ------------- -------------
                                                      862,211       821,252
                                                  ------------- -------------
                                                    1,056,488     1,014,744
                                                  ------------- -------------
                                                  $ 2,029,022   $ 2,030,473
                                                  ------------- -------------
                                                  ------------- -------------


                            DOREL INDUSTRIES INC.
                      CONSOLIDATED STATEMENTS OF INCOME
         ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS

                            Second Quarters Ended        Six Months Ended
                         ------------------------- --------------------------
                             June 30,     June 30,     June 30,     June 30,
                                2009         2008         2009         2008
                         ------------ ------------ ------------ -------------
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)

    Sales                $   547,253  $   590,742  $ 1,068,668  $ 1,141,775
    Licensing and
     commission income         3,870        2,982        7,685        7,983
                         ------------ ------------ ------------ -------------

    TOTAL REVENUE            551,123      593,724    1,076,353    1,149,758
                         ------------ ------------ ------------ -------------

    EXPENSES
      Cost of sales          430,008      456,279      832,028      875,260
      Selling, general
       and administrative
       expenses               77,953       81,604      155,177      162,033
      Depreciation and
       amortization            6,311        7,275       11,990       13,293
      Research and
       development costs       2,573        2,508        5,048        5,221
      Restructuring costs         70          802           72        1,625
      Interest on
       long-term debt          4,092        5,332        8,151       10,037
      Other interest             313          619          506          522
                         ------------ ------------ ------------ -------------
                             521,320      554,419    1,012,972    1,067,991
                         ------------ ------------ ------------ -------------

    Income before income
     taxes                    29,803       39,305       63,381       81,767

    Income taxes               5,039        7,958       10,588       15,287
                         ------------ ------------ ------------ -------------

    NET INCOME           $    24,764  $    31,347  $    52,793  $    66,480
                         ------------ ------------ ------------ -------------
                         ------------ ------------ ------------ -------------

    EARNINGS PER SHARE
      Basic              $      0.74  $      0.94  $      1.58  $      1.99
                         ------------ ------------ ------------ -------------
                         ------------ ------------ ------------ -------------
      Diluted            $      0.74  $      0.94  $      1.58  $      1.99
                         ------------ ------------ ------------ -------------
                         ------------ ------------ ------------ -------------

    SHARES OUTSTANDING
      Basic - weighted
       average            33,312,383   33,397,192   33,356,817   33,397,192
      Diluted - weighted
       average            33,388,415   33,397,745   33,384,027   33,397,717



                            DOREL INDUSTRIES INC.
               CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                       ALL FIGURES IN THOUSANDS OF US $

                            Second Quarters Ended        Six Months Ended
                         ------------------------- --------------------------
                             June 30,     June 30,     June 30,     June 30,
                                2009         2008         2009         2008
                         ------------ ------------ ------------ -------------
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)


    NET INCOME           $    24,764  $    31,347  $    52,793  $    66,480
                         ------------ ------------ ------------ -------------

    OTHER COMPREHENSIVE
     INCOME:
    Cumulative
    ----------
     translation
     -----------
     adjustment:
     -----------
    Net change in
     unrealized foreign
     currency gains
     (losses) on
     translation of net
     investments in
     self-sustaining
     foreign operations,
     net of tax of nil        27,786       (1,842)         658       28,221

    Portion included in
     income as a result
     of reductions in
     net investments in
     self-sustaining
     foreign operations,
     net of tax of nil             -         (384)           -         (384)
                         ------------ ------------ ------------ -------------
                              27,786       (2,226)         658       27,837
                         ------------ ------------ ------------ -------------

    Net changes in cash
     flow hedges:
    Net change in
     unrealized gains
     (losses) on
     derivatives
     designated as cash
     flow hedges               1,372            -          841            -
    Reclassification to
     income                      221            -          221            -
    Future income taxes       (1,026)           -         (684)           -
                         ------------ ------------ ------------ -------------
                                 567            -          378            -
                         ------------ ------------ ------------ -------------
    TOTAL OTHER
     COMPREHENSIVE
     INCOME                   28,353       (2,226)       1,036       27,837
                         ------------ ------------ ------------ -------------
    TOTAL COMPREHENSIVE
     INCOME              $    53,117  $    29,121  $    53,829  $    94,317
                         ------------ ------------ ------------ -------------
                         ------------ ------------ ------------ -------------


                            DOREL INDUSTRIES INC.
         CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                       ALL FIGURES IN THOUSANDS OF US $

                                                         Six Months Ended
                                                      June 30,      June 30,
                                                         2009          2008
                                                  ------------- -------------
                                                   (unaudited)   (unaudited)
    CAPITAL STOCK
      Balance, beginning of period                $   177,422   $   177,271
      Repurchase and cancellation of shares            (1,074)            -
                                                  ------------- -------------
      Balance, end of period                          176,348       177,271
                                                  ------------- -------------

    CONTRIBUTED SURPLUS
      Balance, beginning of period                     16,070        11,623
      Stock-based compensation                          1,859         2,630
                                                  ------------- -------------
      Balance, end of period                           17,929        14,253
                                                  ------------- -------------

    RETAINED EARNINGS
      Balance, beginning of period                    738,113       641,981
      Net income                                       52,793        66,480
      Adjustment to opening retained earnings
       from adopting a new accounting standard
       for inventories, net of tax of $1,415           (2,096)            -
      Premium paid on share repurchase                 (2,401)            -
      Dividends on common shares                       (8,360)       (8,358)
      Dividends on deferred share units                   (13)           (7)
                                                  ------------- -------------
      Balance, end of period                          778,036       700,096
                                                  ------------- -------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME
      Balance, beginning of period                     83,139       106,871
      Total other comprehensive income                  1,036        27,837
                                                  ------------- -------------
      Balance, end of period                           84,175       134,708
                                                  ------------- -------------

    TOTAL SHAREHOLDERS' EQUITY                    $ 1,056,488   $ 1,026,328
                                                  ------------- -------------
                                                  ------------- -------------


                            DOREL INDUSTRIES INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                       ALL FIGURES IN THOUSANDS OF US $

                            Second Quarters Ended        Six Months Ended
                         ------------------------- --------------------------
                             June 30,     June 30,     June 30,     June 30,
                                2009         2008         2009         2008
                         ------------ ------------ ------------ -------------
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)

    CASH PROVIDED BY
     (USED IN):

    OPERATING ACTIVITIES
    Net income           $    24,764  $    31,347  $    52,793  $    66,480
    Items not involving
     cash:
      Depreciation and
       amortization           11,371       12,704       21,839       23,790
      Amortization of
       deferred financing
       costs                      56           47          106          106
      Future income taxes     (4,566)       4,331       (6,591)         660
      Stock based
       compensation              852        1,149        1,458        2,630
      Pension and
       post-retirement
       defined benefit
       plans                     910          789        1,596          820
      Restructuring
       activities                (26)      (1,193)        (113)      (1,877)
      Exchange gain from
       reduction of net
       investments in
       foreign operations          -         (384)           -         (384)
      Loss on disposal of
       property, plant and
       equipment                 403            4          409           24
                         ------------ ------------ ------------ -------------
                              33,764       48,794       71,497       92,249

    Net changes in
     non-cash balances
     related to
     operations:
      Accounts receivable      9,674       24,022      (56,887)     (45,518)
      Inventories              2,506      (25,145)      86,580       (8,472)
      Prepaid expenses          (608)        (903)      (3,673)        (140)
      Accounts payable,
       accruals and other
       liabilities            26,586        7,805      (28,903)      23,615
      Income taxes             5,138       (1,079)       6,367        2,138
                         ------------ ------------ ------------ -------------
                              43,296        4,700        3,484      (28,377)
                         ------------ ------------ ------------ -------------

    CASH PROVIDED BY
     OPERATING ACTIVITIES     77,060       53,494       74,981       63,872
                         ------------ ------------ ------------ -------------

    FINANCING ACTIVITIES
      Bank indebtedness        1,434        4,941        5,218        3,931
      Increase of
       long-term debt              -        5,782            -      257,957
      Repayments of
       long-term debt        (42,091)      (6,400)     (18,263)     (61,556)
      Share repurchase        (3,433)           -       (3,475)           -
      Dividends on common
       shares                 (4,161)      (4,179)      (8,360)      (8,358)
                         ------------ ------------ ------------ -------------
    CASH (USED IN)
     PROVIDED BY
     FINANCING ACTIVITIES    (48,251)         144      (24,880)     191,974
                         ------------ ------------ ------------ -------------

    INVESTING ACTIVITIES
      Acquisition of
       subsidiary
       companies                   4      (31,270)      (6,484)    (218,082)
      Additions to
       property, plant
       and equipment -
       net                    (5,519)      (6,543)      (6,860)     (11,824)
      Intangible assets       (5,538)      (5,743)     (10,379)     (10,377)
                         ------------ ------------ ------------ -------------
    CASH USED IN
     INVESTING
     ACTIVITIES              (11,053)     (43,556)     (23,723)    (240,283)
                         ------------ ------------ ------------ -------------

      Effect of exchange
       rate changes on
       cash and cash
       equivalents             3,467         (826)         369          758
                         ------------ ------------ ------------ -------------

    NET INCREASE IN CASH
     AND CASH EQUIVALENTS     21,223        9,256       26,747       16,321

    Cash and cash
     equivalents,
     beginning of period      22,490       29,578       16,966       22,513
                         ------------ ------------ ------------ -------------

    CASH AND CASH
     EQUIVALENTS, END OF
     PERIOD              $    43,713  $    38,834  $    43,713  $    38,834
                         ------------ ------------ ------------ -------------
                         ------------ ------------ ------------ -------------


                            DOREL INDUSTRIES INC.
                       INDUSTRY SEGMENTED INFORMATION
                    FOR THE SECOND QUARTERS ENDED JUNE 30
                       ALL FIGURES IN THOUSANDS OF US $

                         ----------------------------------------------------
                                     Total                   Juvenile
                         ----------------------------------------------------
                                2009         2008         2009         2008
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)

    Total revenue        $   551,123  $   593,724  $   244,672  $   282,204
    Cost of sales            430,008      456,279      185,079      204,730
    Selling, general and
     administrative           71,718       76,496       36,117       40,270
    Depreciation and
     amortization              6,307        7,255        4,742        5,116
    Research and
     development costs         2,573        2,508        1,939        1,720
    Restructuring costs           70          802           70          797
                         ----------------------------------------------------
    Earnings from
     operations               40,447       50,384  $    16,725  $    29,571
                                                   --------------------------
                                                   --------------------------
    Interest                   4,405        5,951
    Corporate expenses         6,239        5,128
    Income taxes               5,039        7,958
                         --------------------------
    Net income           $    24,764  $    31,347
                         --------------------------
                         --------------------------

    Earnings per Share
    ------------------
      Basic              $      0.74  $      0.94
                         ------------ ------------
                         ------------ ------------
      Diluted            $      0.74  $      0.94
                         ------------ ------------
                         ------------ ------------

                         ----------------------------------------------------
                              Recreational / Leisure       Home Furnishings
                         ----------------------------------------------------
                                2009         2008         2009         2008
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)

    Total revenue        $   199,093  $   195,073  $   107,358  $   116,447
    Cost of sales            154,841      149,450       90,088      102,099
    Selling, general and
     administrative           27,049       26,836        8,552        9,390
    Depreciation and
     amortization              1,194        1,535          371          604
    Research and
     development costs             -            -          634          788
    Restructuring costs            -            -            -            5
                         ----------------------------------------------------
    Earnings from
     operations          $    16,009  $    17,252  $     7,713  $     3,561
                         ----------------------------------------------------
                         ----------------------------------------------------


                            DOREL INDUSTRIES INC.
                       INDUSTRY SEGMENTED INFORMATION
                       FOR THE SIX MONTHS ENDED JUNE 30
                       ALL FIGURES IN THOUSANDS OF US $

                         ----------------------------------------------------
                                     Total                   Juvenile
                         ----------------------------------------------------
                                2009         2008         2009         2008
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)

    Total revenue        $ 1,076,353  $ 1,149,758  $   498,633  $   590,887
    Cost of sales            832,028      875,260      366,330      422,395
    Selling, general and
     administrative          143,714      151,534       74,275       87,410
    Depreciation and
     amortization             11,962       13,252        8,733        9,521
    Research and
     development costs         5,048        5,221        3,778        3,686
    Restructuring costs           72        1,625           72        1,572
                         ----------------------------------------------------
    Earnings from
     operations               83,529      102,866  $    45,445  $    66,303
                                                   --------------------------
                                                   --------------------------
    Interest                   8,657       10,559
    Corporate expenses        11,491       10,540
    Income taxes              10,588       15,287
                         --------------------------
    Net income           $    52,793  $    66,480
                         --------------------------
                         --------------------------

    Earnings per Share
    ------------------
      Basic              $      1.58  $      1.99
                         ------------ ------------
                         ------------ ------------
      Diluted            $      1.58  $      1.99
                         ------------ ------------
                         ------------ ------------


                         ----------------------------------------------------
                               Recreational / Leisure    Home Furnishings
                         ----------------------------------------------------
                                2009         2008         2009         2008
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)

    Total revenue        $   360,521  $   335,533  $   217,199  $   223,338
    Cost of sales            279,241      255,411      186,457      197,454
    Selling, general and
     administrative           52,783       45,423       16,656       18,701
    Depreciation and
     amortization              2,511        2,637          718        1,094
    Research and
     development costs             -            -        1,270        1,535
    Restructuring costs            -            -            -           53
                         ----------------------------------------------------
    Earnings from
     operations          $    25,986  $    32,062  $    12,098  $     4,501
                         ----------------------------------------------------
                         ----------------------------------------------------
    




For further information:

For further information: MaisonBrison: Rick Leckner, (514) 731-0000;
Dorel Industries Inc.: Jeffrey Schwartz, (514) 934-3034

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MaisonBrison Communications

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Dorel Industries Inc.

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