Other segments remain on track
TSX: DII.B, DII.A
MONTREAL, June 13, 2013 /CNW Telbec/ - Dorel Industries Inc. (TSX: DII.B
DII.A) today stated that second quarter earnings in its
Recreational/Leisure segment will be weaker than anticipated. The
continued poor weather across the U.S., Canada and Europe has led to
lower than expected sales volumes, particularly in the independent
bicycle dealer channel. This situation is now being further compounded
by widespread discounting by competitors in the bicycle industry. As a
result of the soft first half, full year earnings in bicycles will not,
as previously indicated, exceed 2012 levels. Performance of the
Company's two other segments, Juvenile and Home Furnishings remain on
track as outlined in the press release of May 9, 2013.
Dorel has initiated significant cost reductions across the
Recreational/Leisure segment. This includes a headcount reduction of
some 50 positions worldwide, roughly 5% of the segment's workforce. As
a result, Dorel will record a second quarter one-time charge of
approximately US$ 2 million for severance.
"These issues in bicycles are mainly related to matters beyond our
control. Our bicycle products are proven and our brands remain very
strong. Cannondale continues to attract both excitement and highly
positive comments," stated Dorel President and CEO, Martin Schwartz.
"The reality is that we are now into mid-June and the weather has not
improved sufficiently which means that we will be unable to make up the
accumulated year-to-date sales shortfall. With the cost reductions
being implemented, we are optimistic that bicycle earnings in the
second half will increase double digit over last year."
Dorel will announce second quarter results on August 9, 2013.
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle
company. 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, IronHorse and SUGOI in
Recreational/Leisure. Dorel's Home Furnishings segment markets a wide
assortment of both domestically produced and imported furniture
products, principally within North America. Dorel has annual sales of
US$2.5 billion and employs 5,400 people in facilities located in
twenty-four countries worldwide.
Caution Regarding Forward Looking Statements
Certain statements included in this press release may constitute
"forward-looking statements" within the meaning of applicable Canadian
securities legislation. Except as may be required by Canadian
securities laws, Dorel does not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Forward-looking statements, by
their very nature, are subject to numerous risks and uncertainties and
are based on several assumptions which give rise to the possibility
that actual results could differ materially from Dorel's expectations
expressed in or implied by such forward-looking statements and that the
objectives, plans, strategic priorities and business outlook may not be
achieved. As a result, Dorel cannot guarantee that any forward-looking
statement will materialize. Forward-looking statements are provided in
this press release for the purpose of giving information about
Management's current expectations and plans and allowing investors and
others to get a better understanding of Dorel's operating environment.
However, readers are cautioned that it may not be appropriate to use
such forward-looking statements for any other purpose.
Forward-looking statements made in this press release are based on a
number of assumptions that Dorel believed were reasonable on the day it
made the forward-looking statements. Factors that could cause actual
results to differ materially from the Company's expectations expressed
in or implied by the forward-looking statements include: general
economic conditions; changes in product costs and supply channel;
foreign currency fluctuations; customer and credit risk including the
concentration of revenues with few customers; costs associated with
product liability; changes in income tax legislation or the
interpretation or application of those rules; the continued ability to
develop products and support brand names; changes in the regulatory
environment; continued access to capital resources and the related
costs of borrowing; changes in assumptions in the valuation of goodwill
and other intangible assets and subject to dividends being declared by
the Board of Directors, there can be no certainty that Dorel's Dividend
Policy will be maintained. These and other risk factors that could
cause actual results to differ materially from expectations expressed
in or implied by the forward-looking statements are discussed in
Dorel's annual MD&A and Annual Information Form filed with the
applicable Canadian securities regulatory authorities. The risk factors
outlined in the previously mentioned documents are specifically
incorporated herein by reference.
Dorel cautions readers that the risks described above are not the only
ones that could impact it. Additional risks and uncertainties not
currently known to Dorel or that Dorel currently deems to be immaterial
may also have a material adverse effect on our business, financial
condition or results of operations. Given these risks and
uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.
Except as otherwise indicated, forward-looking statements do not reflect
the potential impact of any non-recurring or other unusual items or of
any dispositions, mergers, acquisitions, other business combinations or
other transactions that may be announced or that may occur after the
date hereof. The financial impact of these transactions and
non-recurring and other unusual items can be complex and depends on the
facts particular to each of them. Dorel therefore cannot describe the
expected impact in a meaningful way or in the same way Dorel presents
known risks affecting the business.
SOURCE: Dorel Industries Inc.
For further information:
Dorel Industries Inc.