- Recreational/Leisure segment posts strong quarter cementing recovery
- Lerado acquisition to position Dorel Juvenile for long-term growth
EXCHANGES
TSX: DII.B, DII.A
MONTREAL, Aug. 6, 2014 /PRNewswire/ - Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the second quarter and six months ended June 30, 2014. Total revenue for the quarter was US$655.8 million, up 9.2% from US$600.4 million recorded in the same period last year. Net income was US$15.2 million or US$0.47 per diluted share, an increase of 14.9% from US$13.2 million or US$0.41 per diluted share reported for the same period a year ago. Revenue for the six months increased 9.1% to US$1.3 billion compared to US$1.2 billion last year. Net income reached US$40 million or US$1.24 per diluted share, compared to US$35.5 million or US$1.11 per diluted share in 2013.
"The momentum of the first quarter in the Recreational/Leisure segment carried into the second quarter as revenue grew by strong double digits and operating profit rose significantly," said Dorel President and CEO, Martin Schwartz. "Overall we are pleased with the earnings from operations for our three segments, however the costs related to the Caloi acquisition has resulted in our earnings to be lower than we hoped to see.
"Caloi's first half of the year performance was close to plan with a loss from operations at the segment level of US$0.8 million. Caloi was affected by the slowing economy in Brazil and consumers' focus on the month-long World Cup which shifted attention away from the bicycle business. Caloi is executing well and is growing its market share. We are expecting the bulk of the earnings to come in the fourth quarter as it is both the start of summer and Christmas in Brazil. Despite the softening Brazilian economy, we expect Caloi to grow versus last year and we are confident regarding its future contributions to the segment as we firmly believe this transaction will be a good long-term investment in Dorel's future."
The impact of Caloi decreased Dorel's earnings by US$10.3 million net of tax for the six months ended June 30, 2014 which is mainly comprised of the US$0.8 million loss from operations at the segment level, cash interest costs and US$6.0 million of non-cash charges including accretion interest and unrealized foreign exchange losses on put option liabilities.
"In Juvenile, results exceeded prior year, led by a strong performance at Dorel Juvenile Europe and continued sales growth at Dorel Juvenile Brazil. We are actively working on a plan to integrate the announced acquisition of the Lerado juvenile business which is expected to close before year-end. Lerado is one of the largest juvenile product manufacturers in China and will provide Dorel with our first-ever company-owned factories in Asia. We see this as an essential strategy to support and grow our Juvenile business.
"Home Furnishings' top line was flat with prior year as Internet sales continued their upward trend, offsetting the drop in brick and mortar revenue. As anticipated, operating profit for that segment decreased."
| Summary of Financial Highlights | ||||
| Second Quarters Ended June 30 | ||||
| All figures in thousands of US $, except per share amounts | ||||
| 2014 | 2013 | Change % | ||
| Total revenue | 655,831 | 600,449 | 9.2% | |
| Net income | 15,200 | 13,224 | 14.9% | |
| Per share - Basic | 0.47 | 0.41 | 14.6% | |
| Per share - Diluted | 0.47 | 0.41 | 14.6% | |
| Average number of shares outstanding - Diluted weighted average | 32,488,794 | 32,223,810 | ||
| Summary of Financial Highlights | ||||
| Six Months Ended June 30 | ||||
| All figures in thousands of US $, except per share amounts | ||||
| 2014 | 2013 | Change % | ||
| Total revenue | 1,303,532 | 1,194,617 | 9.1% | |
| Net income | 40,000 | 35,540 | 12.5% | |
| Per share - Basic | 1.25 | 1.12 | 11.6% | |
| Per share - Diluted | 1.24 | 1.11 | 11.7% | |
| Average number of shares outstanding - Diluted weighted average | 32,384,207 | 32,152,285 | ||
Juvenile Segment
| Second Quarters Ended June 30 | |||||
| 2014 | 2013 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 251,322 | 243,412 | 3.2% | ||
| Gross profit | 72,777 | 29.0% | 68,761 | 28.2% | 5.8% |
| Operating profit | 16,163 | 6.4% | 15,811 | 6.5% | 2.2% |
| Six Months Ended June 30 | |||||
| 2014 | 2013 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 520,554 | 498,645 | 4.4% | ||
| Gross profit | 149,191 | 28.7% | 143,267 | 28.7% | 4.1% |
| Operating profit | 35,743 | 6.9% | 33,743 | 6.8% | 5.9% |
Organic revenue was flat in the second quarter and has increased by approximately 1% year-to-date. Latin American organic growth was the exception, with an increase of approximately 10% for the quarter and 16% year-to-date. However, upon conversion to the U.S. dollar, this growth was largely offset by a less favourable exchange rate. The improvement in the segment's operating profit resulted primarily from Dorel Juvenile Europe due to slightly enhanced gross margins, lower operating costs and a stronger rate of conversion to the U.S. dollar. Conversely, operating profits in Latin America, Canada and Australia were impacted negatively due to a weakness in foreign exchange rates. The impact was most acute in Chile where average year-to-date exchange rates have declined by over 15%. For the first half, the operating profit increase has been driven by improved earnings at Dorel Juvenile USA and Dorel Juvenile Europe, partially offset by the currency challenges in the other markets.
Recreational/Leisure Segment
| Second Quarters Ended June 30 | |||||
| 2014 | 2013 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 286,249 | 238,174 | 20.2% | ||
| Gross profit | 67,348 | 23.5% | 54,550 | 22.9% | 23.5% |
| Operating profit | 15,212 | 5.3% | 3,681 | 1.5% | 313.3% |
| Six Months Ended June 30 | |||||
| 2014 | 2013 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 526,597 | 441,688 | 19.2% | ||
| Gross profit | 127,790 | 24.3% | 105,839 | 24.0% | 20.7% |
| Operating profit | 31,523 | 6.0% | 13,222 | 3.0% | 138.4% |
Organic revenue increased by approximately 11% in the quarter and 15% year-to-date as overseas markets in the independent bike dealers (IBD) channel as well as sales to the North American mass merchant distribution channel contributed to the growth. The management team is driving improvements and is focused on cost containment initiatives. The results were further aided by improved weather conditions versus last year and the continuing rebound in most global bike markets. Both the Cannondale Sports Group (CSG) and Pacific Cycle made solid headway. CSG benefitted from global sales growth in most IBD markets, particularly in Europe and Japan, while better weather drove the improvement at Pacific Cycle at mass merchants. Restructuring costs of approximately US$1.7 million for the quarter and US$2.2 million year-to-date were recorded in 2014, compared with US$2.0 million for both the quarter and year-to-date periods of 2013. Remaining costs of approximately US$0.9 million are expected to be recorded in the second half of this year. As discussed above, the results of Caloi did not contribute to the quarter.
Sales of current model-year bicycles and the weakening of the U.S. dollar against its Euro counterpart helped boost the gross margins in the IBD channel in both the quarter and year-to-date. Gross profit in the mass market channel was tempered marginally due mainly to sales mix and was below the prior year's level in both the quarter and year-to-date.
Home Furnishings Segment
| Second Quarters Ended June 30 | |||||
| 2014 | 2013 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 118,260 | 118,863 | (0.5%) | ||
| Gross profit | 15,812 | 13.4% | 17,145 | 14.4% | (7.8%) |
| Operating profit | 5,254 | 4.4% | 7,201 | 6.1% | (27.0%) |
| Six Months Ended June 30 | |||||
| 2014 | 2013 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 256,381 | 254,284 | 0.8% | ||
| Gross profit | 33,904 | 13.2% | 35,225 | 13.9% | (3.8%) |
| Operating profit | 13,324 | 5.2% | 15,149 | 6.0% | (12.0%) |
Sales to the segment's drop ship vendor program and on-line sales increased both for the quarter and year-to-date. These increases were offset for the quarter and partly offset for the year-to-date by declines in sales to brick-and-mortar stores. Dorel Home Products (DHP) and Cosco Home & Office again had a solid quarter while sales of ready-to-assemble (RTA) furniture products at Ameriwood and Altra negated some of these gains.
Other
The second quarter tax rate was 20.2% and year-to-date was 18.1%. This compares to 21.1% for the quarter and 14.3% year-to-date in 2013. The main causes of the variations year-over-year are changes in the jurisdictions in which the Company generated its income year-over-year and the increase in the fair value adjustments related to the put option liabilities which are non-deductible for tax purposes. For the full year the annual tax rate is expected to be between 15% and 20%. The Company has expensed approximately US$1.0 million dollars in costs related to acquisitions in the first half this year.
Quarterly dividend
The Board of Directors of Dorel declared its regular quarterly dividend of US$0.30 per share on the outstanding number of the Company's Class A Multiple Voting Shares, Class B Subordinate Voting Shares, Deferred Share Units and cash-settled Performance Share Units. The dividend is payable on September 3, 2014 to shareholders of record as at the close of business on August 20, 2014.
Outlook
"As expected, the momentum of the first quarter continued in the second quarter in the Recreational/Leisure segment as operating profit rose from prior year. As we look to the second half, excluding the restructuring costs, we are anticipating a slight growth in operating profit for the third quarter and a significant growth in the fourth quarter versus previous year," said Mr. Schwartz.
"In the Juvenile segment, even after excluding the impact of the U.S. product liability settlement case in Q4 2013, we still expect double digit earnings growth in the second half of 2014. This excludes any impact on earnings related to the acquisition of the juvenile products business of the Lerado Group.
"In the Home Furnishings segment, we expect an improvement in this year's second half to make up the earnings shortfall from the second quarter, which was anticipated."
It is important to note that due to the seasonality of both Dorel's Recreational/Leisure and Juvenile divisions in Latin America, approximately 90% of the operating profit of these businesses will be earned in the second half this year, primarily in the fourth quarter whilst the interest costs and the non-cash charges related to the put option liability are expensed throughout the year.
"Senior management is focused on investments which will provide Dorel with growth for the long-term. The Caloi acquisition and the Lerado transaction are two such examples. As well, while aware of a cooling of the Brazilian economy in the short-term we remain bullish on Latin America in general and have set in motion initial steps to develop a distribution base in Mexico," concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, August 6, 2014 at 1:00 P.M. Eastern Time. Interested parties can join the call by dialling 1-888-231-8191. The conference call can also be accessed via live webcast at www.dorel.com or www.newswire.ca. If you are unable to call in at this time, you may access a recording of the meeting by calling 1-855-859-2056 and entering the passcode 76948662 on your phone. This recording will be available on Wednesday, August 6, 2014 as of 4:00 P.M. until 11:59 P.M. on Wednesday, August 13, 2014.
The condensed consolidated interim financial statements as of June 30, 2014 will be available on the Company's website, www.dorel.com, and will be available through the SEDAR websites.
Profile
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle company. 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 global juvenile brands Safety 1st, Quinny, Maxi-Cosi, Bébé Confort and Tiny Love, complemented by regional brands such as Cosco and Infanti. In Recreational/Leisure, brands include Cannondale, Schwinn, GT, Mongoose, Caloi, IronHorse and SUGOI. 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$2.4 billion and employs approximately 6,400 people in facilities located in twenty-five 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.
| DOREL INDUSTRIES INC. | |||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION | |||||||
| ALL FIGURES IN THOUSANDS OF US $ | |||||||
| as at | as at | ||||||
| June 30, 2014 |
December 30, 2013 |
||||||
| (unaudited) | (unaudited) | ||||||
| ASSETS | |||||||
| CURRENT ASSETS | |||||||
| Cash and cash equivalents | $ | 40,858 | $ | 40,074 | |||
| Trade and other receivables | 474,776 | 456,465 | |||||
| Inventories | 593,094 | 555,567 | |||||
| Other financial assets | 780 | 231 | |||||
| Income taxes receivable | 14,296 | 11,626 | |||||
| Prepaid expenses | 32,694 | 26,200 | |||||
| 1,156,498 | 1,090,163 | ||||||
| Assets held for sale | 1,308 | - | |||||
| 1,157,806 | 1,090,163 | ||||||
| NON-CURRENT ASSETS | |||||||
| Property, plant and equipment | 179,613 | 181,299 | |||||
| Intangible assets | 557,117 | 500,381 | |||||
| Goodwill | 632,851 | 637,084 | |||||
| Other financial assets | 1,036 | 620 | |||||
| Deferred tax assets | 20,150 | 24,356 | |||||
| Other assets | 5,562 | 6,060 | |||||
| 1,396,329 | 1,349,800 | ||||||
| $ | 2,554,135 | $ | 2,439,963 | ||||
| LIABILITIES | |||||||
| CURRENT LIABILITIES | |||||||
| Bank indebtedness | $ | 38,740 | $ | 72,546 | |||
| Trade and other payables | 389,116 | 379,311 | |||||
| Other financial liabilities | 3,540 | 3,231 | |||||
| Income taxes payable | 4,147 | 7,075 | |||||
| Long-term debt | 61,727 | 344,374 | |||||
| Provisions | 37,318 | 44,570 | |||||
| 534,588 | 851,107 | ||||||
| NON-CURRENT LIABILITIES | |||||||
| Long-term debt | 417,753 | 13,183 | |||||
| Net pension and post-retirement defined benefit liabilities | 31,172 | 31,701 | |||||
| Deferred tax liabilities | 94,723 | 87,171 | |||||
| Provisions | 2,000 | 1,993 | |||||
| Put option liabilities | 81,646 | 92,570 | |||||
| Other financial liabilities | 2,203 | 2,727 | |||||
| Other long-term liabilities | 14,162 | 12,751 | |||||
| 643,659 | 242,096 | ||||||
| EQUITY | |||||||
| Share capital | 199,358 | 190,458 | |||||
| Contributed surplus | 25,679 | 26,994 | |||||
| Accumulated other comprehensive income | 68,730 | 67,824 | |||||
| Retained earnings | 1,082,121 | 1,061,484 | |||||
| 1,375,888 | 1,346,760 | ||||||
| $ | 2,554,135 | $ | 2,439,963 | ||||
| DOREL INDUSTRIES INC. | ||||||||||||
| CONDENSED CONSOLIDATED INTERIM INCOME STATEMENTS | ||||||||||||
| ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS |
||||||||||||
| Second Quarters Ended | Six Months Ended | |||||||||||
| June 30, 2014 | June 30, 2013 | June 30, 2014 | June 30, 2013 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Sales | $ | 653,415 | $ | 598,046 | $ | 1,296,573 | $ | 1,187,112 | ||||
| Licensing and commission income | 2,416 | 2,403 | 6,959 | 7,505 | ||||||||
| TOTAL REVENUE | 655,831 | 600,449 | 1,303,532 | 1,194,617 | ||||||||
| Cost of sales (1) | 499,894 | 459,993 | 992,647 | 910,286 | ||||||||
| GROSS PROFIT | 155,937 | 140,456 | 310,885 | 284,331 | ||||||||
| Selling expenses | 61,964 | 62,412 | 118,662 | 117,772 | ||||||||
| General and administrative expenses | 56,544 | 46,044 | 106,675 | 98,178 | ||||||||
| Research and development expenses | 6,945 | 7,696 | 15,696 | 14,899 | ||||||||
| Restructuring costs (1) | 1,212 | 1,950 | 1,483 | 1,950 | ||||||||
| OPERATING PROFIT | 29,272 | 22,354 | 68,369 | 51,532 | ||||||||
| Finance expenses | 10,231 | 5,585 | 19,510 | 10,067 | ||||||||
| INCOME BEFORE INCOME TAXES | 19,041 | 16,769 | 48,859 | 41,465 | ||||||||
| Income taxes expense | 3,841 | 3,545 | 8,859 | 5,925 | ||||||||
| NET INCOME | $ | 15,200 | $ | 13,224 | $ | 40,000 | $ | 35,540 | ||||
| EARNINGS PER SHARE | ||||||||||||
| Basic | $ | 0.47 | $ | 0.41 | $ | 1.25 | $ | 1.12 | ||||
| Diluted | $ | 0.47 | $ | 0.41 | $ | 1.24 | $ | 1.11 | ||||
| SHARES OUTSTANDING | ||||||||||||
| Basic - weighted average | 32,297,064 | 31,865,525 | 32,117,648 | 31,765,123 | ||||||||
| Diluted - weighted average | 32,488,794 | 32,223,810 | 32,384,207 | 32,152,285 | ||||||||
| (1) Restructuring costs charged to: | ||||||||||||
| Cost of sales | $ | 491 | $ | - | $ | 671 | $ | - | ||||
| Expenses | 1,212 | 1,950 | 1,483 | 1,950 | ||||||||
| $ | 1,703 | $ | 1,950 | $ | 2,154 | $ | 1,950 | |||||
| DOREL INDUSTRIES INC. | |||||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
| ALL FIGURES IN THOUSANDS OF US $ | |||||||||||
| Second Quarters Ended | Six Months Ended | ||||||||||
| June 30, 2014 | June 30, 2013 | June 30, 2014 | June 30, 2013 | ||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||
| NET INCOME | $ | 15,200 | $ | 13,224 | $ | 40,000 | $ | 35,540 | |||
| OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||
| Items that are or may be reclassified subsequently to net income: | |||||||||||
| Cumulative translation account: | |||||||||||
| Net change in unrealized foreign currency gains (losses) on translation of net investments in foreign operations, net of tax of nil | 441 | (3,711) | 109 | (19,349) | |||||||
| Net changes in cash flow hedges: | |||||||||||
| Net change in unrealized gains (losses) on derivatives designated as cash flow hedges | (1,070) | (294) | (939) | 3,824 | |||||||
| Reclassification to income | 190 | 251 | 480 | 503 | |||||||
| Reclassification to the related non-financial asset | 993 | (628) | 1,477 | (758) | |||||||
| Deferred income taxes | 71 | 41 | (227) | (1,211) | |||||||
| 184 | (630) | 791 | 2,358 | ||||||||
| Items that will not be reclassified to net income: | |||||||||||
| Defined benefit plans: | |||||||||||
| Remeasurements of the net pension and post-retirement defined benefit liabilities | 9 | (4) | 9 | 4 | |||||||
| Deferred income taxes | (3) | 1 | (3) | (1) | |||||||
| 6 | (3) | 6 | 3 | ||||||||
| TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 631 | (4,344) | 906 | (16,988) | |||||||
| TOTAL COMPREHENSIVE INCOME | $ | 15,831 | $ | 8,880 | $ | 40,906 | $ | 18,552 | |||
| DOREL INDUSTRIES INC. | |||||||||||||||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||
| ALL FIGURES IN THOUSANDS OF US $ | |||||||||||||||||||||
| Attributable to equity holders of the Company | |||||||||||||||||||||
| |
|
|
Accumulated other comprehensive income |
|
|||||||||||||||||
| Share Capital |
Contributed Surplus |
Cumulative Translation Account |
Cash Flow Hedges |
Defined Benefit Plans |
Retained Earnings |
Total Equity |
|||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
| Balance as at December 30, 2012 | $ | 180,856 | $ | 27,192 | $ | 66,391 | $ | (1,036) | $ | (7,736) | $ | 1,042,446 | $ | 1,308,113 | |||||||
| Total comprehensive income: | |||||||||||||||||||||
| Net income | - | - | - | - | - | 35,540 | 35,540 | ||||||||||||||
| Other comprehensive income (loss) | - | - | (19,349) | 2,358 | 3 | - | (16,988) | ||||||||||||||
| $ | - | $ | - | $ | (19,349) | $ | 2,358 | $ | 3 | $ | 35,540 | $ | 18,552 | ||||||||
| Issued under stock option plan | 6,464 | - | - | - | - | - | 6,464 | ||||||||||||||
| Reclassification from contributed surplus due to exercise of stock options | 1,377 | (1,377) | - | - | - | - | - | ||||||||||||||
| Reclassification from contributed surplus due to settlement of deferred share units | 227 | (347) | - | - | - | - | (120) | ||||||||||||||
| Share-based payments | - | 1,381 | - | - | - | - | 1,381 | ||||||||||||||
| Dividends on common shares | - | - | - | - | - | (19,052) | (19,052) | ||||||||||||||
| Dividends on deferred share units | - | 93 | - | - | - | (93) | - | ||||||||||||||
| Balance as at June 30, 2013 | $ | 188,924 | $ | 26,942 | $ | 47,042 | $ | 1,322 | $ | (7,733) | $ | 1,058,841 | $ | 1,315,338 | |||||||
| Balance as at December 30, 2013 | $ | 190,458 | $ | 26,994 | $ | 75,378 | $ | (2,154) | $ | (5,400) | $ | 1,061,484 | $ | 1,346,760 | |||||||
| Total comprehensive income: | |||||||||||||||||||||
| Net income | - | - | - | - | - | 40,000 | 40,000 | ||||||||||||||
| Other comprehensive income | - | - | 109 | 791 | 6 | - | 906 | ||||||||||||||
| $ | - | $ | - | $ | 109 | $ | 791 | $ | 6 | $ | 40,000 | $ | 40,906 | ||||||||
| Issued under stock option plan | 6,916 | - | - | - | - | - | 6,916 | ||||||||||||||
| Reclassification from contributed surplus due to exercise of stock options | 1,829 | (1,829) | - | - | - | - | - | ||||||||||||||
| Reclassification from contributed surplus due to settlement of deferred share units | 155 | (233) | - | - | - | - | (78) | ||||||||||||||
| Share-based payments | - | 650 | - | - | - | - | 650 | ||||||||||||||
| Dividends on common shares | - | - | - | - | - | (19,266) | (19,266) | ||||||||||||||
| Dividends on deferred share units | - | 97 | - | - | - | (97) | - | ||||||||||||||
| Balance as at June 30, 2014 | $ | 199,358 | $ | 25,679 | $ | 75,487 | $ | (1,363) | $ | (5,394) | $ | 1,082,121 | $ | 1,375,888 | |||||||
| DOREL INDUSTRIES INC. | ||||||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS | ||||||||||||
| ALL FIGURES IN THOUSANDS OF US $ | ||||||||||||
| Second Quarters Ended | Six Months Ended | |||||||||||
| June 30, 2014 | June 30, 2013 | June 30, 2014 | June 30, 2013 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| CASH PROVIDED BY (USED IN): | ||||||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net income | $ | 15,200 | $ | 13,224 | $ | 40,000 | $ | 35,540 | ||||
| Items not involving cash: | ||||||||||||
| Depreciation and amortization | 14,692 | 13,957 | 29,712 | 27,080 | ||||||||
| Amortization of deferred financing costs | 206 | 98 | 383 | 190 | ||||||||
| Accretion expense on put option liabilities | 1,452 | 578 | 3,797 | 1,172 | ||||||||
| Unrealized losses (gains) due to foreign exchange exposure on put option liabilities | 969 | (2,169) | 2,654 | (1,975) | ||||||||
| Unrealized losses (gains) arising on financial assets and financial liabilities classified as held for trading | 538 | - | 538 | - | ||||||||
| Other finance expenses | 8,573 | 4,909 | 15,330 | 8,705 | ||||||||
| Restructuring costs | 1,703 | 1,950 | 2,154 | 1,950 | ||||||||
| Income taxes expense | 3,841 | 3,545 | 8,859 | 5,925 | ||||||||
| Share-based payments | 192 | 327 | 506 | 1,076 | ||||||||
| Defined benefit pension and post-retirement costs | 833 | 933 | 1,704 | 1,492 | ||||||||
| Loss (gain) on disposal of property, plant and equipment | 43 | (197) | 20 | (218) | ||||||||
| 48,242 | 37,155 | 105,657 | 80,937 | |||||||||
| Net changes in balances related to operations: | ||||||||||||
| Trade and other receivables | 32,227 | 41,435 | (11,329) | (3,979) | ||||||||
| Inventories | (16,705) | 9,717 | (31,616) | (13,312) | ||||||||
| Other financial assets | 6 | (12) | (177) | 24 | ||||||||
| Prepaid expenses | 1,111 | (310) | (6,503) | (9,552) | ||||||||
| Other assets | 1,920 | 21 | 1,072 | (1,293) | ||||||||
| Trade and other payables | (31,678) | (13,668) | (6,667) | 3,450 | ||||||||
| Net pension and post-retirement defined benefit liabilities | (548) | (499) | (2,152) | (1,733) | ||||||||
| Provisions, other financial liabilities and other long-term liabilities | (7,843) | (900) | (6,478) | (2,701) | ||||||||
| (21,510) | 35,784 | (63,850) | (29,096) | |||||||||
| Income taxes paid | (5,935) | (4,247) | (18,544) | (9,609) | ||||||||
| Income taxes received | 1,226 | 1,663 | 6,445 | 9,891 | ||||||||
| Interest paid | (9,700) | (6,695) | (13,390) | (8,213) | ||||||||
| Interest received | 85 | - | 274 | 496 | ||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES | 12,408 | 63,660 | 16,592 | 44,406 | ||||||||
| FINANCING ACTIVITIES | ||||||||||||
| Bank indebtedness | (28,937) | (9,726) | (37,194) | 5,605 | ||||||||
| Increase of long-term debt | 73,296 | - | 147,173 | 19,957 | ||||||||
| Repayments of long-term debt | (24,968) | (15,424) | (26,395) | (13,084) | ||||||||
| Repayments of contingent consideration | - | - | - | (1,995) | ||||||||
| Financing costs | (900) | (213) | (1,291) | (218) | ||||||||
| Issuance of share capital | 301 | 571 | 6,901 | 5,620 | ||||||||
| Dividends on common shares | (9,691) | (9,562) | (19,266) | (19,052) | ||||||||
| CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 9,101 | (34,354) | 69,928 | (3,167) | ||||||||
| INVESTING ACTIVITIES | ||||||||||||
| Acquisition of businesses | (6,432) | - | (54,593) | - | ||||||||
| Additions to property, plant and equipment | (8,054) | (10,885) | (18,084) | (17,530) | ||||||||
| Disposals of property, plant and equipment | 535 | 229 | 568 | 288 | ||||||||
| Additions to intangible assets | (5,370) | (5,535) | (10,076) | (10,877) | ||||||||
| CASH USED IN INVESTING ACTIVITIES | (19,321) | (16,191) | (82,185) | (28,119) | ||||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (2,996) | 1,781 | (3,551) | 986 | ||||||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (808) | 14,896 | 784 | 14,106 | ||||||||
| Cash and cash equivalents, beginning of period | 41,666 | 37,521 | 40,074 | 38,311 | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 40,858 | $ | 52,417 | $ | 40,858 | $ | 52,417 | ||||
| DOREL INDUSTRIES INC. INDUSTRY SEGMENTED INFORMATION SECOND QUARTERS ENDED JUNE 30 ALL FIGURES IN THOUSANDS OF US $ |
||||||||||||||||||
| Total | Juvenile | Recreational / Leisure | Home Furnishings | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||
| Total revenue | $ | 655,831 | $ | 600,449 | $ | 251,322 | $ | 243,412 | $ | 286,249 | $ | 238,174 | $ | 118,260 | $ | 118,863 | ||
| Cost of sales | 499,894 | 459,993 | 178,545 | 174,651 | 218,901 | 183,624 | 102,448 | 101,718 | ||||||||||
| Gross profit | 155,937 | 140,456 | 72,777 | 68,761 | 67,348 | 54,550 | 15,812 | 17,145 | ||||||||||
| Selling expenses | 61,142 | 61,804 | 28,761 | 27,384 | 28,300 | 30,319 | 4,081 | 4,101 | ||||||||||
| General and administrative expenses | 50,009 | 42,313 | 23,682 | 20,486 | 20,831 | 16,900 | 5,496 | 4,927 | ||||||||||
| Research and development expenses | 6,945 | 7,696 | 4,171 | 5,080 | 1,793 | 1,700 | 981 | 916 | ||||||||||
| Restructuring costs | 1,212 | 1,950 | - | - | 1,212 | 1,950 | - | - | ||||||||||
| Operating profit | 36,629 | 26,693 | $ | 16,163 | $ | 15,811 | $ | 15,212 | $ | 3,681 | $ | 5,254 | $ | 7,201 | ||||
| Finance expenses | 10,231 | 5,585 | ||||||||||||||||
| Corporate expenses | 7,357 | 4,339 | ||||||||||||||||
| Income taxes | 3,841 | 3,545 | ||||||||||||||||
| Net income | $ | 15,200 | $ | 13,224 | ||||||||||||||
| Earnings per Share | ||||||||||||||||||
| Basic | $ | 0.47 | $ | 0.41 | ||||||||||||||
| Diluted | $ | 0.47 | $ | 0.41 | ||||||||||||||
| Depreciation and amortization included in operating profit |
$ | 14,646 | $ | 13,913 | $ | 10,097 | $ | 10,163 | $ | 3,522 | $ | 2,708 | $ | 1,027 | $ | 1,042 | ||
| DOREL INDUSTRIES INC. INDUSTRY SEGMENTED INFORMATION SIX MONTHS ENDED JUNE 30 ALL FIGURES IN THOUSANDS OF US $ |
||||||||||||||||||
| Total | Juvenile | Recreational / Leisure | Home Furnishings | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||
| Total revenue | $ | 1,303,532 | $ | 1,194,617 | $ | 520,554 | $ | 498,645 | $ | 526,597 | $ | 441,688 | $ | 256,381 | $ | 254,284 | ||
| Cost of sales | 992,647 | 910,286 | 371,363 | 355,378 | 398,807 | 335,849 | 222,477 | 219,059 | ||||||||||
| Gross Profit | 310,885 | 284,331 | 149,191 | 143,267 | 127,790 | 105,839 | 33,904 | 35,225 | ||||||||||
| Selling expenses | 117,133 | 116,527 | 57,714 | 54,817 | 51,308 | 53,757 | 8,111 | 7,953 | ||||||||||
| General and administrative expenses | 95,983 | 88,841 | 45,214 | 44,845 | 40,191 | 33,615 | 10,578 | 10,381 | ||||||||||
| Research and development expenses | 15,696 | 14,899 | 10,520 | 9,862 | 3,285 | 3,295 | 1,891 | 1,742 | ||||||||||
| Restructuring costs | 1,483 | 1,950 | - | - | 1,483 | 1,950 | - | - | ||||||||||
| Operating profit | 80,590 | 62,114 | $ | 35,743 | $ | 33,743 | $ | 31,523 | $ | 13,222 | $ | 13,324 | $ | 15,149 | ||||
| Finance expenses | 19,510 | 10,067 | ||||||||||||||||
| Corporate expenses | 12,221 | 10,582 | ||||||||||||||||
| Income taxes | 8,859 | 5,925 | ||||||||||||||||
| Net income | $ | 40,000 | $ | 35,540 | ||||||||||||||
| Earnings per Share | ||||||||||||||||||
| Basic | $ | 1.25 | $ | 1.12 | ||||||||||||||
| Diluted | $ | 1.24 | $ | 1.11 | ||||||||||||||
| Depreciation and amortization included in operating profit |
$ | 29,625 | $ | 26,994 | $ | 20,597 | $ | 19,816 | $ | 6,868 | $ | 5,036 | $ | 2,160 | $ | 2,142 | ||
SOURCE Dorel Industries Inc.
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