Dorel reports strong 2007 results



    
    - Adjusted net income of US$100.1 million, the highest in history
    - Adjusted pre-tax earnings top US$125 million
    - Juvenile segment revenues approach record US$1 billion, earnings from
      operations best ever
    - Free cash flow exceeds US$116 million

    EXCHANGES TSX: DII.B, DII.A
    

    MONTREAL, March 11 /CNW Telbec/ - Dorel Industries Inc.
(TSX: DII.B DII.A) today announced full results for the fourth quarter and
year ended December 30, 2007. On March 4, 2008 the Company pre-released
certain fiscal 2007 financial information in advance of a series of investor
meetings. On an adjusted basis, fiscal 2007 net income was US$100.1 million,
an increase of US$8.1 million from 2006 levels and the highest level ever
recorded in Dorel's history. The Juvenile segment was a major factor in this
success, and for the year it recorded revenues of US$963.6 million and just
over US$114 million in adjusted earnings from operations, both all time
records. The Recreational/Leisure segment also improved with a 10.0% gain in
revenues and a 26.8% increase in earnings from operations.
    Revenue for the fourth quarter increased 2.4% to US$458.9 million from
US$447.9 million a year ago. In the fourth quarter, net income grew 3.1% to
US$22.3 million, or US$0.67 per diluted share compared to US$21.7 million, or
US$0.66 per diluted share in the fourth quarter of 2006. These results include
the previously announced restructuring costs at Dorel Europe and Ameriwood
Industries. Therefore adjusted net income, excluding these costs, for the
fourth quarter was US$24.0 million or US$0.72 per diluted share compared to
adjusted net income of US$24.4 million or US$0.74 per diluted share a year
ago.
    Full year revenue was US$1.81 billion versus last year's US$1.77 billion.
2007 net income was basically flat at US$87.5 million or US$2.63 per diluted
share, compared to 2006 net earnings of US$88.9 million or US$2.70 per diluted
share. However, excluding the above mentioned restructuring costs in both
years, 2007 adjusted net income was US$100.1 million or US$3.01 per diluted
share compared to adjusted net income of US$92.0 million or US$2.80 per
diluted share last year. Pre-tax earnings for the year were also up
considerably over 2006 levels. On an adjusted basis for the fourth quarter
pre-tax earnings increased 18.3% to US$31.1 million and for the year the
increase was 19.8%, reaching US$125.8 million.
    "The solid 2007 results underline the growing contribution of the
Company's core Juvenile and Recreational/Leisure segments. We are encouraged
by this strong showing as we continue to further unlock value within the
Company with these two business segments. We are already a world leader in
juvenile in our categories and this performance, combined with our recent
acquisition of Cannondale and SUGUOi, solidifies our leadership position as a
world class bicycle company as well," said Dorel CEO and President, Martin
Schwartz.

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Summary of Financial Highlights
    -------------------------------------------------------------------------
                      Fourth Quarters Ended December 30
    -------------------------------------------------------------------------
         All figures in thousands of US $, except per share amounts

                                            2007          2006       Change %
    -------------------------------------------------------------------------
    Revenues                             458,853       447,930           2.4%
    Adjusted net income(*)                23,995        24,370          -1.5%
    Per share - Basic                       0.72          0.74          -2.7%
    Per share - Diluted                     0.72          0.74          -2.7%
    Net income                            22,348        21,675           3.1%
    Per share - Basic                       0.67          0.66           1.5%
    Per share - Diluted                     0.67          0.66           1.5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of shares
     outstanding -
     diluted weighted average         33,397,773    32,861,757
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*)adjusted to exclude after-tax impact of restructuring costs


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Summary of Financial Highlights
    -------------------------------------------------------------------------
                       For The Years Ended December 30
    -------------------------------------------------------------------------
         All figures in thousands of US $, except per share amounts

                                            2007          2006       Change %
    -------------------------------------------------------------------------
    Revenues                           1,813,672     1,771,168           2.4%
    Adjusted net income(*)               100,092        92,025           8.8%
    Per share - Basic                       3.01          2.80           7.5%
    Per share - Diluted                     3.01          2.80           7.5%
    Net income                            87,492        88,865          -1.5%
    Per share - Basic                       2.63          2.70          -2.6%
    Per share - Diluted                     2.63          2.70          -2.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of shares
     outstanding -
     diluted weighted average         33,293,248    32,860,760
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*)adjusted to exclude after-tax impact of restructuring costs


    Juvenile Segment

    The Juvenile segment had its most successful year ever, as revenues
reached almost US$1 billion, finishing the year at US$963.6 million, up 8.4%
from 2006. Full year earnings from operations were US$106.2 million, an
increase of 15.4% over 2006. Excluding restructuring costs in France and
Italy, 2007 earnings from operations rose 19.2% to US$114.4 million compared
to US$96.0 million a year ago. Fourth quarter revenue increased 9.9% to
US$248.0 million from US$225.7 million last year. Earnings from operations in
the quarter were US$25.8 million up from US$19.2 million the year before, a
34.2% increase. Adjusted earnings from operations for the quarter rose 20.6%
to US$28.0 million from US$23.2 million in 2006.
    The year's success was driven by Dorel Europe where organic sales growth
was just over 10%. In U.S. dollars this increase was over 20% due to the
strong Euro and British Pound. The increase was principally due to sales gains
in car seats and strollers as the investments made in new product development
proved successful. The majority of these increases were in the United Kingdom,
Germany as well as several eastern European countries as this relatively new
market continues to be penetrated. These gains compensated for a decline in
North American revenues.
    Gross margins for the Juvenile segment as a whole were 30.6% in 2007 as
compared to 29.7% in 2006, due principally to the improvement in Europe.
Selling general and administrative costs increased over 2006 levels from
US$132.7 million to US$143.0 million. The increase resulted from higher costs
in Europe due to greater sales activity and the higher rate of exchange in
2007, as well as the addition of the Australian business in the year.
Offsetting these increases was a decline in product liability costs in the
United States of US$8.6 million. These costs totalled US$16.6 million in 2007
and US$25.2 million in 2006.

    Recreational / Leisure Segment

    Revenue for the year in the Recreational / Leisure segment increased by
10.0% to US$374.8 million from US$340.7 million the year before. Earnings from
operations jumped 26.8% to US$33.0 million from US$26.0 million a year ago.
For the fourth quarter, revenue was US$85.8 million, an 11.6% increase from
the previous year's US$76.9 million. In the fourth quarter, earnings from
operations were essentially flat at US$5.8 million as compared to
US$5.9 million the year before.
    For the year, the improvement was due to success in both the mass merchant
and Independent Bicycle Dealers (IBD) channels. The majority of the increase
came from several key mass customers as sales rebounded after declines in
2006. Sales were also strong with certain warehouse club customers, a
relatively new distribution channel for this segment. These increases, at both
existing and new customers, were driven by bicycle sales, although other
recreational product lines continue to be explored and added in an attempt to
diversify sales of the segment.
    Gross margins for the year increased by 70 basis points. However fiscal
2006 included a one-time US$3.5 million inventory write-down, therefore
margins were, in fact, consistent with the prior year. Selling, general and
administrative expenses rose moderately from US$36.9 million in 2006 to
US$38.3 million in 2007. However as a percentage of revenue this represents a
decrease of 60 basis points as 2007 sales volume increases outpaced additional
spending.

    Home Furnishings Segment

    Total 2007 revenue was US$475.3 million versus US$541.9 million the prior
year, a 12.3% decrease. Earnings from operations in 2007 were US$17.2 million,
a 44.8% decrease from US$31.2 million in 2006. Adjusted earnings from
operations for the year were down 11.8% to US$28.1 million compared to last
year's US$31.9 million. Revenue for the fourth quarter was US$125.0 million,
down 13.9% from last year's US$145.3 million. Despite the revenue decline,
earnings from operations were US$10.4 million as compared to US$8.9 million in
2006. Adjusted earnings from operations for the fourth quarter rose 19.9% to
US$10.7 million from US$8.9 million.
    During the year the slowdown in the U.S. housing industry negatively
impacted this segment. The two divisions experiencing the greatest sales
decline were Ameriwood and Dorel Asia, both of which experienced decreases
exceeding 10%. Cosco Home & Office and Dorel Home Products were less affected
and combined were essentially flat with the prior year. Even though sales were
lower, adjusted gross margins for the segment increased by 70 basis points to
15.6% from 14.9% in 2006. Despite the decline in earnings, this segment was a
strong contributor to the Company's free cash flow in 2007.

    Restructuring costs

    The Company is including adjusted earnings figures in this press release
that are considered non-GAAP financial measures, as it believes this results
in a more meaningful comparison of its core business performance between the
periods presented. Therefore the terms "adjusted gross margin", "adjusted
earnings from operations", "adjusted pre-tax income, "adjusted net income" and
"adjusted net income per diluted share" should be considered as non-GAAP
financial measures. Where applicable the segmented results presented exclude
restructuring costs and use the term "adjusted" when describing these results.
    For the fourth quarter and full year, the combined after-tax impact of the
previously announced restructuring initiatives in Juvenile (Dorel Europe) and
Home Furnishings (Ameriwood) is US$1.6 million or US$0.05 per diluted share
and US$12.6 million or US$0.38 per diluted share respectively. A complete
reconciliation of adjusted earnings to GAAP earnings is attached at the end of
this press release.

    Other

    The Company had its strongest cash flow year in history, generating a
record US$167.3 million in cash flow provided by operating activities. This
was an increase of US$60.6 million or 56.8% from the US$106.7 million posted
in 2006. Free cash flow, a non-GAAP financial measure, defined as cash
provided by operating activities less dividends paid, additions to property,
plant & equipment, deferred development costs and intangibles, plus or minus
variations in funds held by ceding insurer, was US$116.2 million in 2007
versus US$83.4 million, an improvement of US$32.8 million. The 2007 free cash
flow amount is net of dividends of US$12.5 million, the first year in which
Dorel has paid a dividend.
    As a result of the Company's strong free cash flow, debt reduction meant
total interest costs declined in 2007 to US$23.5 million from US$29.9 million
in 2006. The Company's average interest rate on its long-term borrowings and
revolving facilities in 2007 was approximately 6.4%, as compared to the
average of 6.7% in 2006. In 2007 the Company's effective tax rate was 17.9% as
compared to 11.4% in 2006. The reasons for the increase in the rate were
twofold. First, there were a greater proportion of earnings in higher tax rate
jurisdictions in 2007 versus 2006 and second, unlike in 2006, the Company was
unable to apply certain tax losses.

    Outlook

    On February 4, 2008, Dorel announced the acquisition of the Cannondale
Bicycle Corporation and SUGOi Performance Apparel. This resulted in the
establishment of a new Recreational/Leisure division, the Cannondale Sports
Group, with an exclusive focus on the Independent Bicycle Dealers (IBD)
channel.
    "Our 2007 success stems from the combined strength of our Juvenile and
Recreational/Leisure businesses. The acquisition of Cannondale and SUGOi
fortifies our position and stature in the bicycle industry and underlines our
commitment to further unlock shareholder value by concentrating on Dorel's
core segments, which provide the greatest potential. The new Cannondale Sports
Group will build on Cannondale's strengths to grow significantly within the
IBD channel. Our intention is to build a world-class company and to offer a
line of products that will be desired by both dealers and consumers.
    "We will continue to strive to optimize the results of each of our
segments and we will devote the necessary resources to ensure their growth and
development. The current economic situation, particularly in the US, does not
allow for the accurate prediction of consumer trends and hence the outlook for
the complete year cannot be seen with clarity. Nonetheless, we have not
witnessed any slowdown of consumer spending in Dorel's products during the
first two months of 2008," concluded Mr. Schwartz.

    Conference Call

    Dorel Industries Inc. will hold a conference call to discuss these results
today, March 11, 2008 at 1:30 P.M. Eastern Time. Interested parties can join
the call by dialling 1-800-733-7560. 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 21264785# on your
phone. This tape recording will be available on Tuesday, March 11, 2008 as of
5:00 P.M. until 11:59 P.M. on Tuesday, March 18, 2008.

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

    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. In the Juvenile segment,
Dorel's powerfully branded products such as Quinny, Maxi-Cosi, Safety 1st and
Bébé Confort have shown the way to safety, originality and fashion. Similarly,
its highly popular brands such as Cannondale, Schwinn, GT, Mongoose and SUGOi
have made Dorel a principal player with both independent bicycle dealers and
mass merchants. Dorel's Home Furnishings segment markets a wide assortment of
furniture products, both domestically produced and imported. The Company
exerts relentless innovation and marketing flair across all of its divisions.
Dorel is a $2 billion company with forty-six hundred employees, facilities in
seventeen countries, and sales worldwide.
    US operations include Dorel Juvenile Group USA; the Cannondale Sports
Group; Pacific Cycle; Ameriwood Industries which produces ready-to-assemble
furniture; Altra Furniture; and Cosco Home & Office. In Canada, Dorel operates
Dorel Distribution Canada and Dorel Home Products. Abroad, operations include
Dorel Europe and IGC in Australia, a manufacturer and distributor of juvenile
products. Dorel Asia sources and imports home furnishings products. Dorel
China has eight offices which oversee the sourcing, engineering and logistics
of the Company's Asian supplier chain.

    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 in Canada and the U.S. 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.


                         CONSOLIDATED BALANCE SHEETS
                       ALL FIGURES IN THOUSANDS OF US $

                                                         as at         as at
                                                      December      December
                                                      30, 2007      30, 2006
                                                  ------------- -------------
                                                      (audited)     (audited)

    ASSETS
    CURRENT ASSETS
    Cash and cash equivalents                     $     22,513  $     25,925
    Accounts receivable                                286,924       294,731
    Income taxes receivable                              6,519         8,264
    Inventories                                        322,332       326,540
    Prepaid expenses                                    10,538         9,652
    Future income taxes                                 35,228        29,046
                                                  ------------- -------------
                                                       684,054       694,158

    PROPERTY, PLANT AND EQUIPMENT                      140,362       142,002
    INTANGIBLE ASSETS                                  276,383       261,966
    GOODWILL                                           525,235       501,356
    OTHER ASSETS                                        31,870        27,924
                                                  ------------- -------------
                                                  $  1,657,904  $  1,627,406
                                                  ------------- -------------
                                                  ------------- -------------

    LIABILITIES
    CURRENT LIABILITIES
    Bank indebtedness                             $      5,836  $      3,733
    Accounts payable and accrued liabilities           325,938       326,915
    Income taxes payable                                25,532        10,742
    Balance of sale payable                                  -           605
    Future Income Taxes                                    136             -
    Current portion of long-term debt                   62,906         7,832
                                                  ------------- -------------
                                                       420,348       349,827
                                                  ------------- -------------

    LONG-TERM DEBT                                     192,385       375,135
                                                  ------------- -------------
    PENSION & POST-RETIREMENT BENEFIT OBLIGATIONS       20,942        20,370
                                                  ------------- -------------
    FUTURE INCOME TAXES                                 79,635        74,833
                                                  ------------- -------------
    OTHER LONG-TERM LIABILITIES                          6,848         7,719
                                                  ------------- -------------

    SHAREHOLDERS' EQUITY
    CAPITAL STOCK                                      177,271       162,555
    CONTRIBUTED SURPLUS                                 11,623         6,061
    RETAINED EARNINGS                                  641,981       567,020
    ACCUMULATED OTHER COMPREHENSIVE INCOME             106,871        63,886
                                                  ------------- -------------
                                                       748,852       630,906
                                                  ------------- -------------
                                                       937,746       799,522
                                                  ------------- -------------
                                                  $  1,657,904  $  1,627,406
                                                  ------------- -------------
                                                  ------------- -------------



                      CONSOLIDATED STATEMENTS OF INCOME
         ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS

                          Fourth Quarters Ended       Twelve Months Ended
                      ---------------------------  --------------------------
                       December 30,  December 30,  December 30,  December 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
                        (unaudited)   (unaudited)     (audited)     (audited)

    Sales             $    454,831  $    442,719  $  1,792,611  $  1,748,032

    Licensing and
     commission income       4,022         5,211        21,061        23,136
                      ------------- ------------- ------------- -------------

    TOTAL REVENUE          458,853       447,930     1,813,672     1,771,168
                      ------------- ------------- ------------- -------------

    EXPENSES
      Cost of sales        348,236       341,223     1,375,418     1,363,421
      Selling, general
       and administrative
       expenses             62,035        62,614       244,798       228,765
      Depreciation and
       amortization         10,635         9,868        39,844        36,969
      Research and
       development costs     2,581         1,459         9,009         8,169
      Restructuring costs    1,753         3,671        14,509         3,671
      Interest on
       long-term debt        5,106         6,771        23,782        29,594
      Other interest           (79)           71          (316)          305
                      ------------- ------------- ------------- -------------
                           430,267       425,677     1,707,044     1,670,894
                      ------------- ------------- ------------- -------------

    Income before
     income taxes           28,586        22,253       106,628       100,274

    Income taxes             6,238           578        19,136        11,409
                      ------------- ------------- ------------- -------------

    NET INCOME        $     22,348  $     21,675  $     87,492  $     88,865
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    EARNINGS PER SHARE
      Basic           $       0.67  $       0.66  $       2.63  $       2.70
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
      Diluted         $       0.67  $       0.66  $       2.63  $       2.70
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    SHARES OUTSTANDING
      Basic -
       weighted
       average          33,397,192    32,861,107    33,285,990    32,860,375
      Diluted -
       weighted
       average          33,397,773    32,861,757    33,293,248    32,860,760




               CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                       ALL FIGURES IN THOUSANDS OF US $

                         Fourth Quarters Ended        Twelve Months Ended
                      ---------------------------  --------------------------
                       December 30,  December 30,  December 30,  December 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
                        (unaudited)   (unaudited)     (audited)     (audited)


    NET INCOME        $     22,348  $     21,675  $     87,492  $     88,865

    OTHER
     COMPREHENSIVE
     INCOME:
      Net change
       in unrealized
       foreign
       currency gains
       on translation
       of net
       investments in
       self-sustaining
       foreign
       operations, net
       of tax of nil        15,227        15,502        42,985        37,726
      Portion
       included
       in income as
       a result of
       reductions
       in net
       investments in
       self-sustaining
       foreign
       operations                -        (1,985)            -        (1,985)
                      ------------- ------------- ------------- -------------
                            15,227        13,517        42,985        35,741
                      ------------- ------------- ------------- -------------

    COMPREHENSIVE
     INCOME           $     37,575  $     35,192  $    130,477  $    124,606
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------



         CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                       ALL FIGURES IN THOUSANDS OF US $

                                                       Twelve Months Ended
                                                  ---------------------------
                                                   December 30,  December 30,
                                                          2007          2006
                                                  ------------- -------------
                                                      (audited)     (audited)
    CAPITAL STOCK
      Balance, beginning of period                $    162,555  $    162,503
      Issued under stock option plan                    14,716            52
                                                  ------------- -------------
      Balance, end of period                           177,271       162,555
                                                  ------------- -------------

    CONTRIBUTED SURPLUS
      Balance, beginning of period                       6,061         3,639
      Stock-based compensation                           5,562         2,422
                                                  ------------- -------------
      Balance, end of period                            11,623         6,061
                                                  ------------- -------------

    RETAINED EARNINGS
      Balance, beginning of period                     567,020       478,155
      Net income                                        87,492        88,865
      Dividends on common shares                       (12,524)            -
      Dividends on deferred share units                     (7)            -
                                                  ------------- -------------
      Balance, end of period                           641,981       567,020
                                                  ------------- -------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME
      Balance, beginning of period                      63,886        28,145
      Other comprehensive income                        42,985        35,741
                                                  ------------- -------------
      Balance, end of period                           106,871        63,886
                                                  ------------- -------------

    TOTAL SHAREHOLDERS' EQUITY                    $    937,746  $    799,522
                                                  ------------- -------------
                                                  ------------- -------------



                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                       ALL FIGURES IN THOUSANDS OF US $

                         Fourth Quarters Ended       Twelve Months Ended
                      ---------------------------  --------------------------
                       December 30,  December 30,  December 30,  December 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
                        (unaudited)   (unaudited)     (audited)     (audited)

    CASH PROVIDED BY
     (USED IN):

    OPERATING
     ACTIVITIES
    Net income        $     22,348  $     21,675  $     87,492  $     88,865
    Items not
     involving cash:
      Depreciation
       and amortization     10,635         9,868        39,844        36,969
      Amortization
       of deferred
       financing costs          68            38           217           512
      Future income
       taxes                (2,880)         (524)       (7,282)        3,531
      Stock based
       compensation          1,636           513         5,562         2,422
      Pension and
       post-retirement
       defined benefit
        plan                   198          (427)        1,346         1,368
      Restructuring
       activities            1,351         4,347        15,436         3,840
      Exchange gain
       from reduction
       of net
       investments
       in foreign
       operations                -          (746)            -        (1,985)
      Loss on disposal
       of property,
       plant and
       equipment               239           411           243           601
                      ------------- ------------- ------------- -------------
                            33,595        35,155       142,858       136,123
    Net changes in
     non-cash
     balances
     related to
     operations:
      Accounts
       receivable            5,252       (16,319)       19,811           188
      Inventories           (2,354)       (3,610)       13,137       (39,752)
      Prepaid expenses      (1,943)           32          (126)        1,053
      Accounts
       payable,
       accruals
       and other
       liabilities          28,570        24,626       (23,707)       10,810
      Income taxes           9,288          (460)       15,367        (1,701)
                      ------------- ------------- ------------- -------------
                            38,813         4,269        24,482       (29,402)
                      ------------- ------------- ------------- -------------

    CASH PROVIDED
     BY OPERATING
     ACTIVITIES             72,408        39,424       167,340       106,721
                      ------------- ------------- ------------- -------------

    FINANCING
     ACTIVITIES
      Bank
       indebtedness          1,419        (3,377)        1,577        (1,136)
      Long-term
       debt                (69,772)      (21,397)     (136,036)      (64,787)
      Dividends on
       common shares        (4,175)            -       (12,524)            -
      Issuance of
       capital stock             -             8        14,698            42
                      ------------- ------------- ------------- -------------
    CASH USED
     IN FINANCING
     ACTIVITIES            (72,528)      (24,766)     (132,285)      (65,881)
                      ------------- ------------- ------------- -------------

    INVESTING
     ACTIVITIES
      Acquisition
       of subsidiary
       companies                46             -        (2,786)       (4,946)
      Additions to
       property,
       plant and
       equipment
       - net                (8,712)       (1,237)      (22,269)      (14,334)
      Deferred
       development
       costs                (4,093)       (4,470)      (14,470)      (10,628)
      Funds held
       by ceding
       insurer                   -             -             -         3,647
      Intangible
       assets                 (551)          558        (1,871)       (2,034)
                      ------------- ------------- ------------- -------------
    CASH USED IN
     INVESTING
     ACTIVITIES            (13,310)       (5,149)      (41,396)      (28,295)
                      ------------- ------------- ------------- -------------

      Effect of
       exchange
       rate
       changes
       on cash
       and cash
       equivalents           1,083           380         2,929         1,035
                      ------------- ------------- ------------- -------------

    NET (DECREASE)
     INCREASE IN
     CASH AND CASH
     EQUIVALENTS           (12,347)        9,889        (3,412)       13,580

    Cash and cash
     equivalents,
     beginning of
     period                 34,860        16,036        25,925        12,345
                      ------------- ------------- ------------- -------------

    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD    $     22,513  $     25,925  $     22,513  $     25,925
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------



                       INDUSTRY SEGMENTED INFORMATION
                  FOR THE FOURTH QUARTERS ENDED DECEMBER 30
                       ALL FIGURES IN THOUSANDS OF US $

                      -------------------------------------------------------
                                    Total                      Juvenile
                      -------------------------------------------------------
                              2007          2006          2007          2006
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    Total Revenue     $    458,853  $    447,930  $    247,983  $    225,700
                      -------------------------------------------------------
    Cost of sales          348,236       341,223       174,809       156,699
    Selling,
     general and
     administrative         53,656        57,686        35,029        36,757
    Depreciation
     and amortization       10,612         9,844         8,856         8,596
    Research and
     development costs       2,581         1,459         1,954           750
    Restructuring costs      1,753         3,671         1,529         3,671
                      -------------------------------------------------------
    Earnings from
     Operations             42,015        34,047  $     25,806  $     19,227
                                                  ---------------------------
                                                  ---------------------------
    Interest                 5,027         6,842
    Corporate
     expenses                8,402         4,952
    Income taxes             6,238           578
                      --------------------------
    Net income        $     22,348  $     21,675
                      --------------------------
                      --------------------------

    Earnings per Share
    ------------------
      Basic           $       0.67  $       0.66
                      ------------  ------------
                      ------------  ------------
      Diluted         $       0.67  $       0.66
                      ------------  ------------
                      ------------  ------------



    Reconciliation to
    -----------------
     non-GAAP financial
     ------------------
     measures
     --------
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    Earnings from
     Operations
     as above         $     42,015  $     34,047  $     25,806  $     19,227
    Restructuring
     costs                   1,753         3,671         1,529         3,671
    Restructuring
     costs in cost
     of sales                  753           353           668           329
                      -------------------------------------------------------
    Adjusted
     earnings from
     Operations             44,521        38,071  $     28,003  $     23,227
                                                  ---------------------------
                                                  ---------------------------
    Interest                 5,027         6,842
    Corporate expenses       8,402         4,952
    Income taxes -
     as above                6,238           578
    Income taxes
     on restructuring
     costs                     859         1,329
                      --------------------------
    Adjusted
     net income       $     23,995  $     24,370
                      --------------------------
                      --------------------------

    Adjusted Earnings
    -----------------
     per Share
     ---------
      Basic           $       0.72  $       0.74
                      ------------  ------------
                      ------------  ------------
      Diluted         $       0.72  $       0.74
                      ------------  ------------
                      ------------  ------------



                      -------------------------------------------------------
                                Recreational /                  Home
                                   Leisure                   Furnishings
                      -------------------------------------------------------
                              2007          2006          2007          2006
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    Total Revenue     $     85,836  $     76,943  $    125,034  $    145,287
                      -------------------------------------------------------
    Cost of sales           70,267        61,799       103,160       122,725
    Selling,
     general and
     administrative          9,325         8,931         9,302        11,998
    Depreciation
     and amortization          412           282         1,344           966
    Research and
     development costs           -             -           627           709
    Restructuring costs          -             -           224             -
                      -------------------------------------------------------
    Earnings from
     Operations       $      5,832  $      5,931  $     10,377  $      8,889
                      -------------------------------------------------------
                      -------------------------------------------------------
    Interest
    Corporate
     expenses
    Income taxes

    Net income



    Earnings per Share
    ------------------
      Basic


      Diluted



    Reconciliation to
    -----------------
     non-GAAP financial
     ------------------
     measures
     --------
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    Earnings from
     Operations
     as above         $      5,832  $      5,931  $     10,377  $      8,889
    Restructuring
     costs                       -             -           224             -
    Restructuring
     costs in cost
     of sales                    -             -            85            24
                      -------------------------------------------------------
    Adjusted earnings
     from Operations  $      5,832  $      5,931  $     10,686  $      8,913
                      -------------------------------------------------------
                      -------------------------------------------------------
    Interest
    Corporate expenses
    Income taxes -
     as above
    Income taxes
     on restructuring
     costs

    Adjusted
     net income

    Adjusted Earnings
    -----------------
     per Share
     ---------
      Basic


      Diluted



                       INDUSTRY SEGMENTED INFORMATION
                       FOR THE YEARS ENDED DECEMBER 30
                       ALL FIGURES IN THOUSANDS OF US $

                      -------------------------------------------------------
                                    Total                      Juvenile
                      -------------------------------------------------------
                              2007          2006          2007          2006
                          (audited)     (audited)     (audited)     (audited)
    Total Revenue     $  1,813,672  $  1,771,168  $    963,572  $    888,534
                      -------------------------------------------------------
    Cost of sales        1,375,418     1,363,421       668,248       625,032
    Selling,
     general and
     administrative        218,661       209,886       143,043       132,651
    Depreciation
     and amortization       39,755        36,876        32,171        29,849
    Research and
     development costs       9,009         8,169         6,364         5,331
    Restructuring costs     14,509         3,671         7,575         3,671
                      -------------------------------------------------------
    Earnings from
     Operations            156,320       149,145  $    106,171  $     92,000
                                                  ---------------------------
                                                  ---------------------------
    Interest                23,466        29,899
    Corporate expenses      26,226        18,972
    Income taxes            19,136        11,409
                      --------------------------

    Net income        $     87,492  $     88,865
                      --------------------------
                      --------------------------

    Earnings per Share
    ------------------
      Basic           $       2.63  $       2.70
                      ------------  ------------
                      ------------  ------------
      Diluted         $       2.63  $       2.70
                      ------------  ------------
                      ------------  ------------



    Reconciliation to
    -----------------
     non-GAAP financial
     ------------------
     measures
     --------
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    Earnings from
     Operations
     as above         $    156,320  $    149,145  $    106,171  $     92,000
    Restructuring
     costs                  14,509         3,671         7,575         3,671
    Restructuring
     costs in cost
     of sales                4,675         1,069           668           329
                      -------------------------------------------------------
    Adjusted
     earnings from
     Operations            175,504       153,885  $    114,414  $     96,000
                                                  ---------------------------
                                                  ---------------------------
    Interest                23,466        29,899
    Corporate expenses      26,226        18,972
    Income taxes -
     as above               19,136        11,409
    Income taxes
     on restructuring
     costs                   6,584         1,580
                      --------------------------

    Adjusted net
     income           $    100,092  $     92,025
                      --------------------------
                      --------------------------

    Adjusted Earnings
    -----------------
     per Share
     ---------
      Basic           $       3.01  $       2.80
                      ------------  ------------
                      ------------  ------------
      Diluted         $       3.01  $       2.80
                      ------------  ------------
                      ------------  ------------



                      -------------------------------------------------------
                                Recreational /                  Home
                                   Leisure                   Furnishings
                      -------------------------------------------------------
                              2007          2006          2007          2006
                          (audited)     (audited)     (audited)     (audited)
    Total Revenue     $    374,783  $    340,696  $    475,317  $    541,938
                      -------------------------------------------------------
    Cost of sales          301,835       276,718       405,335       461,671
    Selling,
     general and
     administrative         38,260        36,907        37,358        40,328
    Depreciation
     and amortization        1,736         1,079         5,848         5,948
    Research and
     development costs           -             -         2,645         2,838
    Restructuring costs          -             -         6,934             -
                      -------------------------------------------------------
    Earnings from
     Operations       $     32,952  $     25,992  $     17,197  $     31,153
                      -------------------------------------------------------
                      -------------------------------------------------------



    Reconciliation to
    -----------------
     non-GAAP financial
     ------------------
     measures
     --------
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    Earnings from
     Operations
     as above         $     32,952  $     25,992  $     17,197  $     31,153
    Restructuring
     costs                       -             -         6,934             -
    Restructuring
     costs in
     cost of sales               -             -         4,007           740
                      -------------------------------------------------------
    Adjusted earnings
     from Operations  $     32,952  $     25,992  $     28,138  $     31,893
                      -------------------------------------------------------
                      -------------------------------------------------------
    




For further information:

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

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Dorel Industries Inc.

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