Dorel performs well during first quarter 2009


    - Inventory levels reduced by US$90 million since year-end
    - Home Furnishings experiences best quarter since Q4 2007

    MONTREAL, May 7 /CNW Telbec/ - Dorel Industries Inc. (TSX: DII.B DII.A)
today released results for the first quarter ended March 31, 2009. Revenues
for the period were US$525.2 million, down 5.5% from last year's US$556.0
million. Net income was US$28.0 million or US$0.84 per diluted share, compared
to US$35.1 million or US$1.05 per diluted share for the first quarter of 2008.
Dorel CEO and President Martin Schwartz stated that Dorel put in a solid first
quarter performance considering the economic environment.
    "We reached and surpassed several important internal objectives which had
been established for the quarter. Our earnings are ahead of plan and we have
reduced our record level of inventory by US$90 million, exceeding our
expectations as we made significant progress in reducing these high levels
created by retailers drastically cutting their in-stock levels last year. This
will translate into a much improved cash flow as we move through 2009. We are
building on the progress made in our Home Furnishings businesses in the past
year and expect the earnings seen thus far to continue to improve. In
addition, we will take further costs out of operations throughout the
organization. In light of the reality of the current economic situation, we
are pleased where point-of-sale (POS) levels are at our major North American
customers as consumers recognize the value of many of our various product
lines," commented Mr. Schwartz.

                       Summary of Financial Highlights
                        First Quarters Ended March 31
    All figures in thousands of US $, except per share amounts
                                                2009        2008     Change %
    Revenues                                 525,230     556,034        -5.5%
    Net income                                28,029      35,133       -20.2%
      Per share - Basic                         0.84        1.05       -20.0%
      Per share - Diluted                       0.84        1.05       -20.0%
    Average number of shares outstanding
     - diluted weighted average           33,419,225  33,397,803

    Juvenile Segment

                        First Quarters Ended March 31
                                 2009                  2008
                            $      % of rev.      $      % of rev.    Change%
    Revenues             253,961               308,684                 -17.7%
    Gross Profit          72,710       28.6%    91,018       29.5%     -20.1%
    Earnings from
     operations           28,720       11.3%    36,732       11.9%     -21.8%

    The Juvenile revenue decrease of 17.7% occurred in both North America and
Europe, but was most acute in Europe. If the impact of foreign exchange is
excluded, for the segment as a whole, the revenue decline was approximately
9%. Sales outside of the US make up more than half of the segment's total,
therefore the strength of the US dollar has a significant effect on both
revenues and earnings. European sales declined by 26% from last year, but more
than half of that decline was due to the impact of foreign exchange. Excluding
this factor, the true organic revenue decline in Europe was approximately 12%.
    Contributing to the first quarter's drop in sales was the fact that
retailers continued to hold back orders through most of January. Stock
replenishment improved later in the quarter in North America but has remained
soft in Europe, particularly in export markets. The gross margin decline of 90
basis points was the result of lower margins in Canada, due to the stronger US
dollar, and the higher proportion of North American sales as opposed to
Europe. On a standalone basis, gross margins were actually higher in both
Europe and the US, however the lower proportion of high margin European sales
had the effect of reducing margins for the segment as a whole.
    Results at DJG in the US in the first quarter were particularly strong.
Their earnings exceeded plan and order levels on hand heading into the second
quarter are strong. DJG has secured new placements and they are expected to
continue the solid start to the year. In Canada there are challenges around
the strength of the US dollar, but business itself is looking more positive
going forward.


                        First Quarters Ended March 31
                                 2009                  2008
                            $      % of rev.      $      % of rev.    Change%
    Revenues             161,428               140,459                  14.9%
    Gross Profit          37,028       22.9%    34,498       24.6%       7.3%
    Earnings from
     operations            9,977        6.2%    14,810       10.5%     -32.6%

    Total Recreational/Leisure revenue was up 14.9% for the first quarter
while earnings from operations decreased 32.6%. Organic revenue experienced a
decline, but was concentrated at mass merchant customers which were slower to
replenish their inventory levels in bikes as compared to the other segments.
Sales through the IBD channel and SUGOI experienced organic growth of 8% and
9% respectively. Gross margins decreased by 170 basis points due principally
to a less profitable product mix as consumers shifted to lower price point
product. Expenses increased considerably as the segment continued to invest in
its infrastructure and in product innovation, however given the environment we
are keenly aware of the importance of cutting costs wherever possible and are
actively reducing spending as needed.
    As part of that program, last month, Dorel announced a multi-faceted
Worldwide Centres of Excellence program in a continuation of its strategy to
become the global innovation leader in the recreation and leisure markets. A
major component of the plan is the expansion of the Bethel, CT facility into a
world-class innovation center. All North American product development,
marketing and business management for the Cannondale, Schwinn, GT and Mongoose
brands sold to the IBD channel is being consolidated at Bethel. The centre for
the development of bicycles for the mass market remains in Madison, Wisconsin.

    Home Furnishings

                        First Quarters Ended March 31
                                 2009                  2008
                            $      % of rev.      $      % of rev.    Change%
    Revenues             109,841               106,891                   2.8%
    Gross Profit          13,472       12.3%    11,537       10.8%      16.8%
    Earnings from
     operations            4,385        4.0%       940        0.9%     366.5%

    Home Furnishings experienced its best quarter since the fourth quarter of
2007. The revenue increase was due to higher sales of Ameriwood's
ready-to-assemble (RTA) furniture. RTA demand remained strong as consumers
seek value-added products, and was driven by increases at certain mass
merchant customers and do-it-yourself (DIY) retailers. The majority of the
earnings improvement was also attributable to Ameriwood as the gross margin
improvement of 150 basis points for the segment as a whole was due primarily
to them benefiting from the lower value of the Canadian dollar versus the US
dollar, as well as improved manufacturing productivity.
    Efforts to improve Cosco Home & Office's performance are bringing
results. Operations and product offerings are more focused and several new
important listings have been garnered. While the division still expects to
lose money in 2009, plans are well on track for a return to profitability next
    Going forward, the Home Furnishings segment is expected to continue its
strong start to the year. As an example, several divisions have commitments
from various retailers for significant "back to college" programs that will
lead to incremental sales.


    - As retailers began to replenish their stock levels in the first quarter
      of 2009, orders that were delayed in the fourth quarter of 2008 were
      filled. As a result, in the first quarter of 2009 inventories declined
      US$89.8 million. As of March 31 inventories are US$419.7 million
      compared to US$509.5 million as at December 30, 2008. The benefit of
      the inventory reduction will be seen through the balance of the year
      and will be a major contributor to the Company's expected cash flow
      target of at least $150 million for the year.

    - Based on an analysis of how to best grow the Schwinn brand within the
      Power Sports category, the decision has been made to re-focus efforts
      on the motor scooter business and license the brand to a recognized
      leader. As such, in April the Company signed a licensing agreement with
      Tomberlin PowerGroup International, of Augusta, GA, to become the
      exclusive US distributor of Schwinn Motor Scooters and related

      Tomberlin PowerGroup offers a full line of both on and off road
      vehicles that include Tomberlin ATV's and Utility Vehicles. It was
      determined that an agreement with a proven industry leader such as
      Tomberlin was the best long term strategy and will assure the growth of
      Schwinn as one America's best known brands within the category.

    - 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 June 4, 2009 to
      shareholders of record as at the close of business on May 21, 2009.


    "The year has started off well for us and all of our management teams are
extremely focused on performance. The positive results of our efforts are
apparent in the first quarter figures. Given the context of the economic
situation, we are more than satisfied with the start to the year. Consumers
have again demonstrated their preference for our value-added product lines in
the opening and mid-price point categories, where we generate the majority of
our revenue. Juvenile remains an excellent, profitable business as parents
consistently put their families first. We are seeing recovery in North
American juvenile markets, with POS levels remaining relatively steady and
where we are picking up listings from competitors. The slowdown started later
in Europe and, as such, it appears recovery there will lag the US. We are
quite optimistic for the balance of 2009 in Juvenile and have a number of
innovative new products in the pipeline. As stated in our year-end results
release issued in March, non-cash unrealized gains on foreign exchange
contracts in the amount of US$10.5 million pre-tax or US$7.4 million after tax
were recognized in 2008 that pertain to 2009. While this is still expected to
negatively affect the current year, the impact was not material in the first
quarter, but will impact the balance of the year," stated Mr. Schwartz.
    "The situation in bikes remains unpredictable as consumer buying patterns
have been inconsistent. Meanwhile we have made important investments in this
segment for the future, while at the same time being highly prudent with
expenses. One exception, however, is in product development, particularly with
Recreation/Leisure's new Worldwide Centres of Excellence strategy. In Home
Furnishings, indications point to a good 2009 led by Ameriwood which is now a
solid money maker. The expertise that turned around that operation is now
being focused on Cosco Home & Office.
    "Even after considering all of the issues in 2009, our full year outlook
remains unchanged. We are committed to reducing expenses and to building cash
flow, which we anticipate will be at least US$150 million this year. We also
expect input costs will remain stable through 2009," concluded Mr. Schwartz.

    Conference Call

    Dorel Industries Inc. will hold a conference call to discuss these
results today, May 7, 2009 at 1:00 P.M. Eastern Time. Interested parties can
join the call by dialling 1-800-814-4860. The conference call can also be
accessed via live webcast at , or
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 21304925# on
your phone. This tape recording will be available on Thursday, May 7, 2009 as
of 3:30 P.M. until 11:59 P.M. on Thursday, May 14, 2009.

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


    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
                                                      March 31,  December 30,
                                                          2009          2008
                                                  ------------- -------------
                                                    (unaudited)     (audited)

      Cash and cash equivalents                   $     22,490  $     16,966
      Accounts receivable                              377,877       316,267
      Income taxes receivable                           17,150        19,798
      Inventories                                      419,661       509,467
      Prepaid expenses                                  19,028        16,236
      Future income taxes                               38,499        37,342
                                                  ------------- -------------
                                                       894,705       916,076

    PROPERTY, PLANT AND EQUIPMENT                      151,876       158,895
    INTANGIBLE ASSETS                                  387,792       395,742
    GOODWILL                                           532,309       540,187
    OTHER ASSETS                                        18,811        19,573
                                                  ------------- -------------
                                                  $  1,985,493  $  2,030,473
                                                  ------------- -------------
                                                  ------------- -------------

      Bank indebtedness                           $      8,623  $      4,398
      Accounts payable and accrued liabilities         319,955       380,915
      Income taxes payable                              28,158        30,164
      Future income taxes                                1,295         2,713
      Current portion of long-term debt                 63,833         8,879
                                                  ------------- -------------
                                                       421,864       427,069
                                                  ------------- -------------

    LONG-TERM DEBT                                     419,792       450,704
                                                  ------------- -------------
                                                  ------------- -------------
    FUTURE INCOME TAXES                                109,442       111,874
                                                  ------------- -------------
    OTHER LONG-TERM LIABILITIES                          5,107         6,010
                                                  ------------- -------------

    CAPITAL STOCK                                      177,403       177,422
                                                  ------------- -------------
    CONTRIBUTED SURPLUS                                 16,676        16,070
                                                  ------------- -------------
    RETAINED EARNINGS                                  759,819       738,113
    ACCUMULATED OTHER COMPREHENSIVE INCOME              55,822        83,139
                                                  ------------- -------------
                                                       815,641       821,252
                                                  ------------- -------------
                                                     1,009,720     1,014,744
                                                  ------------- -------------
                                                  $  1,985,493  $  2,030,473
                                                  ------------- -------------
                                                  ------------- -------------

                            DOREL INDUSTRIES INC.

                                                       Three Months Ended

                                                      March 31,     March 31,
                                                          2009          2008
                                                  ------------- -------------
                                                    (unaudited)   (unaudited)

    Sales                                         $    521,415  $    551,033

    Licensing and commission income                      3,815         5,001
                                                  ------------- -------------

    TOTAL REVENUE                                      525,230       556,034
                                                  ------------- -------------
      Cost of sales                                    402,020       418,981
      Selling, general and administrative
       expenses                                         77,224        80,429
      Depreciation and amortization                      5,679         6,018
      Research and development costs                     2,475         2,713
      Restructuring costs                                    2           823
      Interest on long-term debt                         4,059         4,705
      Other interest                                       193           (97)
                                                  ------------- -------------
                                                       491,652       513,572
                                                  ------------- -------------

    Income before income taxes                          33,578        42,462

    Income taxes                                         5,549         7,329
                                                  ------------- -------------

    NET INCOME                                    $     28,029  $     35,133
                                                  ------------- -------------
                                                  ------------- -------------

      Basic                                       $       0.84  $       1.05
                                                  ------------- -------------
                                                  ------------- -------------
      Diluted                                     $       0.84  $       1.05
                                                  ------------- -------------
                                                  ------------- -------------

      Basic - weighted average                      33,401,744    33,397,192
      Diluted - weighted average                    33,419,225    33,397,803

                            DOREL INDUSTRIES INC.
                       ALL FIGURES IN THOUSANDS OF US $

                                                       Three Months Ended

                                                      March 31,     March 31,
                                                          2009          2008
                                                  ------------- -------------
                                                    (unaudited)   (unaudited)

    NET INCOME                                    $     28,029  $     35,133
                                                  ------------- -------------
    Cumulative translation adjustment:
    Net change in unrealized foreign currency
     (losses) gains on translation of net
     investments in self-sustaining foreign
     operations, net of tax of nil                     (27,128)       30,063
                                                  ------------- -------------
    Net changes in cash flow hedges:
    Net losses on derivatives designated as
     cash flow hedges, net of tax of $342                 (189)            -
    Reclassification to income                               -             -
                                                  ------------- -------------
                                                          (189)            -
                                                  ------------- -------------
    TOTAL OTHER COMPREHENSIVE INCOME                   (27,317)       30,063
                                                  ------------- -------------
    TOTAL COMPREHENSIVE INCOME                    $        712  $     65,196
                                                  ------------- -------------
                                                  ------------- -------------

                            DOREL INDUSTRIES INC.
                       ALL FIGURES IN THOUSANDS OF US $

                                                       Three Months Ended

                                                      March 31,     March 31,
                                                          2009          2008
                                                  ------------- -------------
                                                    (unaudited)   (unaudited)
      Balance, beginning of period                $    177,422  $    177,271
      Repurchase and cancellation of shares                (19)            -
                                                  ------------- -------------
      Balance, end of period                           177,403       177,271
                                                  ------------- -------------

      Balance, beginning of period                      16,070        11,623
      Stock-based compensation                             606         1,481
                                                  ------------- -------------
      Balance, end of period                            16,676        13,104
                                                  ------------- -------------

      Balance, beginning of period                     738,113       641,981
      Net income                                        28,029        35,133
      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                     (23)            -
      Dividends on common shares                        (4,199)       (4,179)
      Dividends on deferred share units                     (5)           (3)
                                                  ------------- -------------
      Balance, end of period                           759,819       672,932
                                                  ------------- -------------
      Balance, beginning of period                      83,139       106,871
      Total other comprehensive income                 (27,317)       30,063
                                                  ------------- -------------
      Balance, end of period                            55,822       136,934
                                                  ------------- -------------

    TOTAL SHAREHOLDERS' EQUITY                    $  1,009,720  $  1,000,241
                                                  ------------- -------------
                                                  ------------- -------------

                            DOREL INDUSTRIES INC.
                       ALL FIGURES IN THOUSANDS OF US $

                                                       Three Months Ended

                                                      March 31,     March 31,
                                                          2009          2008
                                                  ------------- -------------
                                                    (unaudited)   (unaudited)


    Net income                                    $     28,029   $    35,133
    Items not involving cash:
      Depreciation and amortization                     10,468        11,086
      Amortization of deferred financing costs              50            59
      Future income taxes                               (2,025)       (3,671)
      Stock based compensation                             606         1,481
      Pension and post-retirement defined
       benefit plans                                       686            31
      Restructuring activities                             (87)         (684)
      Loss on disposal of property, plant and
       equipment                                             6            20
                                                  ------------- -------------
                                                        37,733        43,455
    Net changes in non-cash balances related to
      Accounts receivable                              (66,561)      (69,540)
      Inventories                                       84,074        16,673
      Prepaid expenses                                  (3,065)          763
      Accounts payable, accruals and other
       liabilities                                     (55,489)       15,810
      Income taxes                                       1,229         3,217
                                                  ------------- -------------
                                                       (39,812)      (33,077)
                                                  ------------- -------------

     ACTIVITIES                                         (2,079)       10,378
                                                  ------------- -------------

      Bank indebtedness                                  3,784        (1,010)
      Increase of long-term debt                        54,893       252,175
      Repayments of long-term debt                     (31,065)      (55,156)
      Share repurchase                                     (42)            -
      Dividends on common shares                        (4,199)       (4,179)
                                                  ------------- -------------

    CASH PROVIDED BY FINANCING ACTIVITIES               23,371       191,830
                                                  ------------- -------------

      Acquisition of subsidiary companies               (6,488)     (186,812)
      Additions to property, plant and equipment
       - net                                            (1,341)       (5,281)
      Intangible assets                                 (4,841)       (4,634)
                                                  ------------- -------------
    CASH USED IN INVESTING ACTIVITIES                  (12,670)     (196,727)
                                                  ------------- -------------

      Effect of exchange rate changes on cash
       and cash equivalents                             (3,098)        1,584
                                                  ------------- -------------
    NET INCREASE IN CASH AND CASH EQUIVALENTS            5,524         7,065

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

    CASH AND CASH EQUIVALENTS, END OF PERIOD      $     22,490  $     29,578
                                                  ------------- -------------
                                                  ------------- -------------

                            DOREL INDUSTRIES INC.
                       ALL FIGURES IN THOUSANDS OF US $

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

    Total revenue             $  525,230  $  556,034  $  253,961  $  308,684
    Cost of sales                402,020     418,981     181,251     217,666
    Selling, general and
     administrative               71,996      75,037      38,158      47,140
    Depreciation and
     amortization                  5,655       5,998       3,991       4,405
    Research and development
     costs                         2,475       2,713       1,839       1,966
    Restructuring costs                2         823           2         775
    Earnings from operations      43,082      52,482  $   28,720  $   36,732
    Interest                       4,252       4,608
    Corporate expenses             5,252       5,412
    Income taxes                   5,549       7,329
    Net income                $   28,029  $   35,133
    Earnings per Share

      Basic                   $     0.84  $     1.05
                                    ----        ----
                                    ----        ----
      Diluted                 $     0.84  $     1.05
                                    ----        ----
                                    ----        ----

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

    Total revenue             $  161,428  $  140,459  $  109,841  $  106,891
    Cost of sales                124,400     105,961      96,369      95,354
    Selling, general and
     administrative               25,734      18,586       8,104       9,311
    Depreciation and
     amortization                  1,317       1,102         347         491
    Research and development
     costs                             -           -         636         747
    Restructuring costs                -           -           -          48
    Earnings from operations  $    9,977  $   14,810  $    4,385  $      940
    Interest                  -----------------------------------------------

For further information:

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

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