Dorel posts record third quarter earnings


    
    EXCHANGES
    TSX: DII.B, DII.A

    - Earnings momentum continues on reduced revenues
    - New car seat technology boosts Dorel Juvenile Group USA
    - Home Furnishings segment helps drive earnings
    
</pre>
<p/>
<p><location>MONTREAL</location>, <chron>Nov. 5</chron> /CNW Telbec/ - Dorel Industries Inc. (TSX: DII.B DII.A) today released third quarter and nine month results for the period ended <chron>September 30, 2009</chron>. Net income for the quarter was US$30.2 million or US$0.91 per diluted share compared to US$27.2 million or US$0.82 per diluted share a year ago. In terms of profitability, the third quarter of 2009 is the best ever recorded by Dorel. Revenue was US$518.5, down 6.1% from US$552.2 million a year ago.</p>
<p>Net income for the nine months ended <chron>September 30</chron> was US$83.0 million or US$2.49 per diluted share, compared to last year's US$93.7 million or US$2.81 per diluted share. Revenue for the nine months was US$1.6 billion, down 6.3% from US$1.7 billion a year ago.</p>
<p>"The fact that we have exceeded last year's earnings for the quarter despite a difficult economic period is a tribute to the quality and value of our products and our focus on maximizing margins through cost containment, a more stable cost environment and our disciplined minimum margin requirement program. Dorel's multi-national operations, diverse operating segments and broad product lines have traditionally compensated for earnings variations within the Company's various operating divisions. This is the case in 2009 as strong results within <location>North America</location> in the Juvenile and Home Furnishing segments are offsetting less profitable results at other divisions elsewhere within the Company," commented Dorel President and CEO, <person>Martin Schwartz</person>.</p>
<p/>
<p/>
<pre>
    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Summary of Financial Highlights
    -------------------------------------------------------------------------
                      Third Quarters Ended September 30
    -------------------------------------------------------------------------
         All figures in thousands of US $, except per share amounts
                                              2009         2008      Change %
    -------------------------------------------------------------------------
    Revenues                               518,458      552,242         -6.1%
    Net income                              30,230       27,208         11.1%
      Per share - Basic                       0.91         0.82         11.0%
      Per share - Diluted                     0.91         0.82         11.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of shares
     outstanding -
     diluted weighted average           33,338,597   33,399,355
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Summary of Financial Highlights
    -------------------------------------------------------------------------
                       Nine Months Ended September 30
         All figures in thousands of US $, except per share amounts
                                              2009         2008      Change %
    -------------------------------------------------------------------------
    Revenues                             1,594,811    1,702,000         -6.3%
    Net income                              83,023       93,688        -11.4%
      Per share - Basic                       2.49         2.81        -11.4%
      Per share - Diluted                     2.49         2.81        -11.4%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of shares
     outstanding -
     diluted weighted average           33,389,225   33,399,003
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Juvenile

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                      Third Quarters Ended September 30
                               2009                  2008
    -------------------------------------------------------------------------
                               $   % of rev.         $   % of rev.   Change %
    Revenues             247,860               263,155                  -5.8%
    Gross Profit          72,334       29.2%    81,360       30.9%     -11.1%
    Earnings from
     operations           26,126       10.5%    34,711       13.2%     -24.7%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Nine Months Ended September 30
                               2009                  2008
    -------------------------------------------------------------------------
                               $   % of rev.         $   % of rev.   Change %
    Revenues             746,493               854,042                 -12.6%
    Gross Profit         204,637       27.4%   249,852       29.3%     -18.1%
    Earnings from
     operations           71,571        9.6%   101,014       11.8%     -29.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
</pre>
<p/>
<p>The decline in revenues in the Juvenile segment that has been experienced since the start of the year moderated in the third quarter with a decline of 5.8%. This decline was most pronounced in <location>Europe</location>, due to a combination of existing market conditions abroad as well as the value of the US dollar versus the prior year. Third quarter European sales declined by 10% from the corresponding period last year, but two-thirds was due to the impact of foreign exchange. Excluding this, organic revenue decline in <location>Europe</location> was approximately 5%. For the segment as a whole, the organic revenue decline was approximately 3%. As described in more detail below, included in the 2009 quarterly figures are mark-to-market losses on foreign exchange contracts purchased to hedge a portion of both 2009 and 2010 purchases. The loss within the Juvenile segment in 2009 is US$2.5 million. Conversely, in 2008 a gain of US$3.6 million was recorded on contracts put in place to hedge a portion of 2009 purchases.</p>
<p>The Air Protect(TM) car seat technology, designed to protect children in side impact collisions, was launched in July in the US and in late September in <location>Canada</location>. As such, the quarter includes the initial shipments of the Safety 1st Complete Air car seat which helped the results at Dorel Juvenile Group. It is expected that additional retailers will be carrying the seat commencing January. Continuing the migration of the Air Protect(TM) technology into the new infant carrier, On Board 35 Air, is being rolled out next month as part of a travel system. The Air Protect(TM) technology will continue to evolve and will be available at various price points. "Dorel is focused on providing the best solutions to keep our children safe at affordable prices," commented <person>Mr. Schwartz</person>.</p>
<p/>
<p>Recreational/Leisure</p>
<p/>
<pre>
    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                      Third Quarters Ended September 30
                               2009                  2008
    -------------------------------------------------------------------------
                               $   % of rev.         $   % of rev.   Change %
    -------------------------------------------------------------------------
    Revenues             145,175               163,186                 -11.0%
    Gross Profit          33,771       23.3%    36,991       22.7%      -8.7%
    Earnings from
     operations            4,862        3.3%     6,640        4.1%     -26.8%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Nine Months Ended September 30
                               2009                  2008
    -------------------------------------------------------------------------
                               $   % of rev.         $   % of rev.   Change %
    -------------------------------------------------------------------------
    Revenues             505,696               498,719        1.4%
    Gross Profit         115,051       22.8%   117,113       23.5%      -1.8%
    Earnings from
     operations           30,848        6.1%    38,702        7.8%     -20.3%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
</pre>
<p/>
<p/>
<p>The third quarter revenue decline was due primarily to a reduction in sales at mass merchants from prior year levels. Sales at Cycling Sports Group (CSG) to Independent Bike Dealers (IBD) and specialty sporting goods customers increased over last year's third quarter. However, consumers are purchasing less of CSG's higher-end products and are trading down to lower priced items, which carry lower margins. Excluding the impact of new business acquisitions and foreign exchange variations on the segment's non-US based businesses, Recreational/Leisure's organic revenue decline was approximately 10% for the quarter and 6% year-to-date.</p>
<p>During the quarter and into early October, three business acquisitions were concluded, including a recognized brand name in "Iron Horse", and two successful bicycle distributors in <location>Australia</location> and the <location>United Kingdom</location>. The UK acquisition of Hot Wheels and Circle Bikes included the popular local "Charge" brand which was recently awarded both "Manufacturer of the Year" and "Bike of the Year 2009" by two British cycling magazines. Dorel has retained the owners of Hot Wheels who will manage the newly created Cycling Sports Group UK (CSG UK). This subsidiary will be dedicated to the IBD channel and will drive the future growth of the Charge, Mongoose, GT and Cannondale brands.</p>
<p>Last month additional initiatives were announced to further grow Dorel's Performance Apparel Division.  The Apparel Footwear Group (AFG) will incorporate SUGOI Performance Apparel as well as the apparel lines of Cannondale, GT, Schwinn, Iron Horse and Mongoose - in both custom and its regular offerings.  Plans include an investment in new equipment, facilities and additional employees.  An important focus of AFG will be to build the custom apparel business, developing specific riding and running uniforms for teams and clubs.</p>
<p/>
<p>Home Furnishings</p>
<p/>
<pre>
    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                      Third Quarters Ended September 30
                               2009                  2008
    -------------------------------------------------------------------------
                               $   % of rev.         $   % of rev.   Change %
    -------------------------------------------------------------------------
    Revenues             125,423               125,901                  -0.4%
    Gross Profit          22,635       18.0%    13,509       10.7%      67.6%
    Earnings from
     operations           12,508       10.0%     1,924        1.5%     550.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                       Nine Months Ended September 30
                               2009                  2008
    -------------------------------------------------------------------------
                               $   % of rev.         $   % of rev.   Change %
    -------------------------------------------------------------------------
    Revenues             342,622               349,239                  -1.9%
    Gross Profit          53,377       15.6%    39,393       11.3%      35.5%
    Earnings from
     operations           24,606        7.2%     6,425        1.8%     283.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
</pre>
<p/>
<p/>
<p>Third quarter earnings improvement in Home Furnishings was led by domestically produced furniture and futons. Lower material costs, a favourable currency environment, as well as increased operational efficiencies improved gross margin by 730 basis points to 18.0% for the segment.</p>
<p>Reduced overheads and selling and administration expenses helped to narrow the losses at Cosco Home & Office and the recovery plan for this division remains on track. The import furniture businesses also improved earnings over the prior year and continue to perform to expectation.</p>
<p/>
<p>Other</p>
<p/>
<p>As disclosed previously, 2009 earnings are being negatively affected by the reversal of a US$10.5 million mark-to-market gain that was recorded on foreign exchange contracts in 2008. The third quarter of 2009 includes a loss on this reversal of US$1.8 million, as well as a mark-to-market loss of US$1.2 million on foreign exchange contracts put in place in the year to hedge a portion of 2010 purchases. Of the US$10.5 million gain recorded in 2008, US$3.5 million was in the third quarter of that year. After-tax, the amounts recorded in the third quarter are a loss of US$2.2 million in 2009 and a gain US$2.5 million in 2008.</p>
<p>The tax rate in the third quarter was 11.0% and year-to-date is 14.7%, in line with expectations. The quarter's lower than typical rate is consistent with the prior year which was 11.3%. For the year the Company's tax rate is expected to be at the lower end of its previously published range of 15% to 20%.</p>
<p/>
<p>Cash flow</p>
<p/>
<p>During the first nine months of 2009, cash flow from operating activities more than doubled as compared to 2008 at US$148.2 million compared to US$72.4 million in the prior year. Driven by inventory reductions, the change in non-cash balances related to operations provided a source of funds of US$30.9 million in 2009 compared to a use of US$59.1 million in 2008. Free cash flow, defined as cash flow from operating activities less fixed asset and intangible additions and dividends, is US$107.1 million thus far in 2009 as compared to US$27.8 million in 2008.</p>
<p/>
<p>Quarterly dividend</p>
<p/>
<p>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 <chron>December 3, 2009</chron> to shareholders of record as at the close of business on <chron>November 19, 2009</chron>.</p>
<p/>
<p>Outlook</p>
<p/>
<p>Dorel's nine month performance in 2009 has validated the Company's expectations for the year. Despite the recession, belief was that while not immune to these conditions, Dorel's customer profile and the nature of the great majority of its products would help protect the Company from dramatic sales reductions versus 2008. Underlining this sentiment is the fact that organic sales have declined by just over 5%.</p>
<p>Expectations for strong free cash flow in 2009 have also been realized. This has allowed the Company to continue to invest in future growth through strategic acquisitions and an on-going commitment to new product development. Going forward, recent trends in the value of the U.S. dollar against other currencies mean that earnings will be dampened within Home Furnishings as the Canadian dollar has strengthened. Home Furnishings has two large manufacturing facilities in <location>Canada</location> and their products are sold primarily within the US.  Conversely, the rise in value of the Canadian dollar, as well as the Euro and several other currencies against the U.S. dollar will help earnings within the Juvenile segment.</p>
<p>"We believe we are well-positioned as we head into the fourth quarter and look forward to an encouraging 2010. Within the Recreational/Leisure segment we have received favourable reaction to our 2010 model line-up and order levels have increased. The Juvenile segment will benefit from Air Protect(TM) in <location>North America</location> and from Maxi-Cosi's new FamilyFix in <location>Europe</location> which was first shown at the September <location>Cologne</location>, <location>Germany</location> juvenile trade fair and was well received by customers. The turnaround in Home Furnishings has materialized as we expected, and while currency rates do pose a challenge, our belief in that segment has been validated by its greatly improved performance," concluded <person>Mr. Schwartz</person>.</p>
<p/>
<p>Conference Call</p>
<p/>
<p>Dorel Industries Inc. will hold a conference call to discuss these results today, <chron>November 5, 2009</chron> at <chron>1:00 P.M. Eastern Time</chron>. Interested parties can join the call by dialling 1-877-974-0449. The conference call can also be accessed via live webcast at <a href="http://www.dorel.com">www.dorel.com</a> , <a href="http://www.newswire.ca">www.newswire.ca</a> or <a href="http://www.q1234.com">www.q1234.com</a>. 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 4179066# on your phone. This tape recording will be available on <chron>Thursday, November 5, 2009</chron> as of <chron>3:00 P.M.</chron> until <chron>11:59 P.M.</chron> on <chron>Thursday, November 12, 2009</chron>.</p>
<p/>
<p>Complete financial statements will be available on the Company's website, <a href="http://www.dorel.com">www.dorel.com</a>, and will be available through the SEDAR websites.</p>
<p/>
<p>Profile</p>
<p/>
<p>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, Iron Horse 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.</p>
<p/>
<p>Caution Concerning Forward-Looking Statements</p>
<p/>
<p>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.</p>
<p/>
<p/>
<pre>
    
                            DOREL INDUSTRIES INC.
                         CONSOLIDATED BALANCE SHEETS
                       ALL FIGURES IN THOUSANDS OF US $

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

    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                    $    56,145   $    16,966
      Accounts receivable                              344,904       316,267
      Income taxes receivable                           16,893        19,798
      Inventories                                      413,684       509,467
      Prepaid expenses                                  17,701        16,236
      Future income taxes                               42,691        37,342
                                                   ------------  ------------
                                                       892,018       916,076

    PROPERTY, PLANT AND EQUIPMENT                      153,339       158,895
    INTANGIBLE ASSETS                                  408,188       395,742
    GOODWILL                                           553,531       540,187
    OTHER ASSETS                                        15,534        19,573
                                                   ------------  ------------
                                                   $ 2,022,610   $ 2,030,473
                                                   ------------  ------------
                                                   ------------  ------------

    LIABILITIES
    CURRENT LIABILITIES
      Bank indebtedness                            $     7,278   $     4,398
      Accounts payable and accrued liabilities         336,615       380,915
      Income taxes payable                              29,765        30,164
      Future income taxes                                    -         2,713
      Current portion of long-term debt                379,761         8,879
                                                   ------------  ------------
                                                       753,419       427,069
                                                   ------------  ------------

    LONG-TERM DEBT                                      26,630       450,704
                                                   ------------  ------------
    PENSION & POST-RETIREMENT BENEFIT OBLIGATIONS       20,680        20,072
                                                   ------------  ------------
    FUTURE INCOME TAXES                                113,271       111,874
                                                   ------------  ------------
    OTHER LONG-TERM LIABILITIES                          7,492         6,010
                                                   ------------  ------------

    SHAREHOLDERS' EQUITY
    CAPITAL STOCK                                      175,742       177,422
                                                   ------------  ------------
    CONTRIBUTED SURPLUS                                 19,014        16,070
                                                   ------------  ------------
    RETAINED EARNINGS                                  802,224       738,113
    ACCUMULATED OTHER COMPREHENSIVE INCOME             104,138        83,139
                                                   ------------  ------------
                                                       906,362       821,252
                                                   ------------  ------------
                                                     1,101,118     1,014,744
                                                   ------------  ------------
                                                   $ 2,022,610   $ 2,030,473
                                                   ------------  ------------
                                                   ------------  ------------


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

                         Third Quarters Ended          Nine Months Ended
                      --------------------------- ---------------------------
                      September 30, September 30, September 30, September 30,
                              2009          2008          2009          2008
                      ------------- ------------- ------------- -------------
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)

    Sales             $    514,654  $    547,211  $  1,583,322  $  1,688,986

    Licensing and
     commission
     income                  3,804         5,031        11,489        13,014
                      ------------- ------------- ------------- -------------

    TOTAL REVENUE          518,458       552,242     1,594,811     1,702,000
                      ------------- ------------- ------------- -------------

    EXPENSES
      Cost of sales        389,718       420,382     1,221,746     1,295,642
      Selling,
       general and
       administrative
       expenses             79,776        86,406       234,953       248,439
      Depreciation and
       amortization          7,332         5,973        19,322        19,266
      Research and
       development
       costs                 3,799         3,417         8,847         8,638
      Restructuring
       costs                    14          (175)           86         1,450
      Interest on
       long-term debt        3,451         5,353        11,602        15,390
      Other interest           407           200           913           722
                      ------------- ------------- ------------- -------------
                           484,497       521,556     1,497,469     1,589,547
                      ------------- ------------- ------------- -------------
    Income before
     income taxes           33,961        30,686        97,342       112,453

    Income taxes             3,731         3,478        14,319        18,765
                      ------------- ------------- ------------- -------------

    NET INCOME        $     30,230  $     27,208  $     83,023  $     93,688
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    EARNINGS PER
     SHARE
      Basic           $       0.91  $       0.82  $       2.49  $       2.81
                      ------------  ------------  ------------  -------------
                      ------------  ------------  ------------  -------------
      Diluted         $       0.91  $       0.82  $       2.49  $       2.81
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    SHARES
     OUTSTANDING
      Basic -
       weighted
       average          33,179,322    33,397,627    33,297,385    33,397,337
      Diluted -
       weighted
       average          33,338,597    33,399,355    33,389,225    33,399,003


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

                         Third Quarters Ended          Nine Months Ended
                      --------------------------- ---------------------------
                      September 30, September 30, September 30, September 30,
                              2009          2008          2009          2008
                      ------------- ------------- ------------- -------------
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)

    NET INCOME        $     30,230  $     27,208  $     83,023  $     93,688
                      ------------- ------------- ------------- -------------

    OTHER
     COMPREHENSIVE
     INCOME:
    Cumulative
    ----------
     translation
     -----------
     adjustment:
     -----------
    Net change in
     unrealized
     foreign
     currency gains
     (losses) on
     translation of
     net investments
     in self-sust-
     aining foreign
     operations,
     net of tax
     of nil                 20,220       (41,232)       20,878       (13,011)

    Portion
     included in
     income as a
     result of
     reductions
     in net inv-
     estments
     in self-
     sustaining
     foreign
     operations,
     net of tax
     of nil                      -             -             -          (384)
                      ------------- ------------- ------------- -------------
                            20,220       (41,232)       20,878       (13,395)
                      ------------- ------------- ------------- -------------

    Net changes in
    --------------
     cash flow hedges:
     -----------------
    Net change in
     unrealized gains
     (losses) on
     derivatives
     designated
     as cash flow
     hedges                   (961)            -          (120)            -
    Reclassification
     to income                 240             -           461             -
    Future income
     taxes                     464             -          (220)            -
                      ------------- ------------- ------------- -------------
                              (257)            -           121             -
                      ------------- ------------- ------------- -------------
    TOTAL OTHER
     COMPREHENSIVE
     INCOME                 19,963       (41,232)       20,999       (13,395)
                      ------------- ------------- ------------- -------------
    TOTAL
     COMPREHENSIVE
     INCOME           $     50,193  $    (14,024) $    104,022  $     80,293
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------


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

                                                       Nine Months Ended
                                                  ---------------------------
                                                  September 30,  December 30,
                                                          2009          2008
                                                  -------------  ------------
                                                    (unaudited)     (audited)
    CAPITAL STOCK
      Balance, beginning of period                $    177,422   $   177,271
      Issued under stock option plan                         -           151
      Repurchase and cancellation of shares             (1,680)            -
                                                  -------------  ------------
      Balance, end of period                           175,742       177,422
                                                  -------------  ------------

    CONTRIBUTED SURPLUS
      Balance, beginning of period                      16,070        11,623
      Stock-based compensation                           2,944         3,738
                                                  -------------  ------------
      Balance, end of period                            19,014        15,361
                                                  -------------  ------------

    RETAINED EARNINGS
      Balance, beginning of period                     738,113       641,981
      Net income                                        83,023        93,688
      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                  (4,309)            -
      Dividends on common shares                       (12,485)      (12,531)
      Dividends on deferred share units                    (22)          (12)
                                                  -------------  ------------
      Balance, end of period                           802,224       723,126
                                                  -------------  ------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME
      Balance, beginning of period                      83,139       106,871
      Total other comprehensive income                  20,999       (13,395)
                                                  -------------  ------------
      Balance, end of period                           104,138        93,476
                                                  -------------  ------------

    TOTAL SHAREHOLDERS' EQUITY                    $  1,101,118   $ 1,009,385
                                                  -------------  ------------
                                                  -------------  ------------


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

                         Third Quarters Ended          Nine Months Ended
                      --------------------------- ---------------------------
                      September 30, September 30, September 30, September 30,
                              2009          2008          2009          2008
                      ------------- ------------- ------------- -------------
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    CASH PROVIDED BY
     (USED IN):
    OPERATING
     ACTIVITIES
    Net income        $     30,230  $     27,208  $     83,023  $     93,688
    Items not
     involving cash:
      Depreciation and
       amortization         12,996        11,125        34,835        34,915
      Amortization of
       deferred
       financing costs          69            44           175           150
      Future income
       taxes                 2,364         1,866        (4,227)        2,526
      Stock based
       compensation          1,085         1,108         2,543         3,738
      Pension and
       post-retirement
       defined benefit
       plans                  (902)          297           694         1,117
      Restructuring
       activities             (156)       (2,382)         (269)       (4,259)
      Exchange gain
       from reduction
       of net
       investments
       in foreign
       operations                -             -             -          (384)
      Loss (gain) on
       disposal of
       property, plant
       and equipment            71            (4)          480            20
                      ------------- ------------- ------------- -------------
                            45,757        39,262       117,254       131,511

    Net changes in
     non-cash balances
     related to
     operations:
      Accounts
       receivable           33,127        50,344       (23,760)        4,826
      Inventories           12,351       (53,399)       98,931       (61,871)
      Prepaid expenses       3,030          (570)         (643)         (710)
      Accounts
       payable,
       accruals and
       other
       liabilities         (18,329)      (20,318)      (47,232)        3,297
      Income taxes          (2,747)       (6,789)        3,620        (4,651)
                      ------------- ------------- ------------- -------------
                            27,432       (30,732)       30,916       (59,109)
                      ------------- ------------- ------------- -------------

    CASH PROVIDED BY
     OPERATING
     ACTIVITIES             73,189         8,530       148,170        72,402
                      ------------- ------------- ------------- -------------

    FINANCING
     ACTIVITIES
      Bank
       indebtedness         (3,018)       (5,404)        2,200        (1,473)
      Increase of
       long-term debt            -         4,802             -       262,759
      Repayments of
       long-term debt      (34,979)       (1,000)      (53,242)      (62,556)
      Share repurchase      (2,514)            -        (5,989)            -
      Issuance of
       capital stock             -           151             -           151
      Dividends on
       common shares        (4,125)       (4,173)      (12,485)      (12,531)
                      ------------- ------------- ------------- -------------
    CASH (USED IN)
     PROVIDED BY
     FINANCING
     ACTIVITIES            (44,636)       (5,624)      (69,516)      186,350
                      ------------- ------------- ------------- -------------

    INVESTING
     ACTIVITIES
      Acquisition
       of companies         (7,457)         (460)      (13,941)     (218,542)
      Additions to
       property,
       plant and
       equipment -
       net                  (5,915)       (5,292)      (12,775)      (17,116)
      Intangible
       assets               (5,414)       (4,612)      (15,793)      (14,989)
                      ------------- ------------- ------------- -------------
    CASH USED IN
     INVESTING
     ACTIVITIES            (18,786)      (10,364)      (42,509)     (250,647)
                      ------------- ------------- ------------- -------------

      Effect of
       exchange
       rate changes
       on cash and
       cash
       equivalents           2,665          (921)        3,034          (163)
                      ------------- ------------- ------------- -------------

    NET INCREASE
     (DECREASE)
     IN CASH AND
     CASH
     EQUIVALENTS            12,432        (8,379)       39,179         7,942

    Cash and cash
     equivalents,
     beginning of
     period                 43,713        38,834        16,966        22,513
                      ------------- ------------- ------------- -------------

    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD    $     56,145  $     30,455  $     56,145  $     30,455
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------


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

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

    Total revenue         $   518,458  $   552,242  $   247,860  $   263,155
    Cost of sales             389,718      420,382      175,526      181,795
    Selling, general and
     administrative            74,173       79,393       37,486       38,861
    Depreciation and
     amortization               7,258        5,950        5,570        5,376
    Research and
     development costs          3,799        3,417        3,138        2,550
    Restructuring costs            14         (175)          14         (138)
                          ---------------------------------------------------
    Earnings from
     operations                43,496       43,275  $    26,126  $    34,711
                                                    -------------------------
                                                    -------------------------
    Interest                    3,858        5,553
    Corporate expenses          5,677        7,036
    Income taxes                3,731        3,478
                          -------------------------

    Net income            $    30,230  $    27,208
                          -------------------------
                          -------------------------
    Earnings per Share
    ------------------
      Basic               $      0.91  $      0.82
                          -----------  ------------
                          -----------  ------------
      Diluted             $      0.91  $      0.82
                          -----------  ------------
                          -----------  ------------


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

    Total revenue         $   145,175  $   163,186  $   125,423  $   125,901
    Cost of sales             111,404      126,195      102,788      112,392
    Selling, general and
     administrative            27,585       30,119        9,102       10,413
    Depreciation and
     amortization               1,324          232          364          342
    Research and
     development costs              -            -          661          867
    Restructuring costs             -            -            -          (37)
                          ---------------------------------------------------
    Earnings from
     operations           $     4,862  $     6,640  $    12,508  $     1,924
                          ---------------------------------------------------
                          ---------------------------------------------------


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

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

    Total revenue         $ 1,594,811  $ 1,702,000  $   746,493  $   854,042
    Cost of sales           1,221,746    1,295,642      541,856      604,190
    Selling, general and
     administrative           217,887      230,927      111,761      126,271
    Depreciation and
     amortization              19,220       19,202       14,303       14,897
    Research and
     development costs          8,847        8,638        6,916        6,236
    Restructuring costs            86        1,450           86        1,434
                          ---------------------------------------------------
    Earnings from
     operations               127,025      146,141  $    71,571  $   101,014
                                                    -------------------------
                                                    -------------------------
    Interest                   12,515       16,112
    Corporate expenses         17,168       17,576
    Income taxes               14,319       18,765
                          -------------------------

    Net income            $    83,023  $    93,688
                          -------------------------
                          -------------------------
    Earnings per Share
    ------------------
      Basic               $      2.49  $      2.81
                          -----------  ------------
                          -----------  ------------
      Diluted             $      2.49  $      2.81
                          -----------  ------------
                          -----------  ------------


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

    Total revenue         $   505,696  $   498,719  $   342,622  $   349,239
    Cost of sales             390,645      381,606      289,245      309,846
    Selling, general and
     administrative            80,368       75,542       25,758       29,114
    Depreciation and
     amortization               3,835        2,869        1,082        1,436
    Research and
     development costs              -            -        1,931        2,402
    Restructuring costs             -            -            -           16
                          ---------------------------------------------------
    Earnings from
     operations           $    30,848  $    38,702  $    24,606  $     6,425
                          ---------------------------------------------------
                          ---------------------------------------------------
    

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

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