- Recreational/Leisure ends difficult 2013 with an optimistic view to 2014
- Juvenile dealing with tough retail environments in U.S and Europe but performing well in Latin America
- Home Furnishings continues to benefit from Internet sales channel growth
EXCHANGES
TSX: DII.B, DII.A
MONTREAL, March 4, 2014 /PRNewswire/ - Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the fourth quarter and full year ended December 30, 2013. Revenue for the fourth quarter was US$633.5 million up 1.8% from US$622.6 million a year ago. Net income was US$11.0 million or US$0.34 per diluted share compared to net income of US$29.1 million or US$0.91 per diluted share in 2012. The Company had previously announced a restructuring of its Recreational/Leisure segment, with a total pre-tax charge of US$14 million to US$16 million. Included in this fourth quarter is US$13.5 million pre-tax, of which 65% is non-cash, related to this restructuring with the balance to be incurred in 2014. Excluding the impact of these restructuring charges, adjusted net income for the quarter was US$19.2 million or US$0.60 per diluted share.
Revenue for the full year was US$2.4 billion, down 2.2% from last year's US$2.5 billion. Net income was US$57.7 million or US$1.79 per diluted share, compared to US$108.5 million or US$3.39 per diluted share a year ago. Excluding full year restructuring charges of US$15.4 million pre-tax in the Recreational/Leisure segment, adjusted net income for the year was US$67.1 million or US$2.09 per diluted share.
"2013's performance was disappointing," stated Dorel's President and CEO, Martin Schwartz. "A number of the issues we faced were industry and economy related, while others were the result of less than perfect execution on our part. As announced last month, our Recreational/Leisure segment was negatively affected by top line weakness and a poorer product mix as mass merchant store traffic in general was reduced and the independent bike dealer (IBD) channel was reluctant to increase inventories going into the new year. Matters in our direct control are being addressed and there has been definite progress."
Dorel communicated in January that the Recreational/Leisure segment is restructuring its operations to enhance its competitiveness. "Specifically, we want to significantly reduce development and supply chain lead times with our global partners, improve cost structures and operating margins. This plan will result in higher levels of service for our customers and consumers and will improve profit through 2014 and 2015. We expect to realize annualized cost savings of at least US$6 million once the restructuring is completed in late 2014," added Mr. Schwartz.
"The Juvenile segment faced headwinds last year, particularly in North America and Europe where the marketplace is challenging. Our Latin American expansion continued to be a bright spot, as Dorel Juvenile Chile performed well and Dorel Juvenile Brazil substantially improved over 2012. In Home Furnishings, we are pleased with their continued gains in the Internet sales channel which serves as a good model for the rest of our businesses," concluded Mr. Schwartz.
| Summary of Financial Highlights | ||||
| Fourth Quarters Ended December 30 | ||||
| All figures in thousands of US $, except per share amounts | ||||
| 2013 | 2012 | Change % | ||
| Total revenue | 633,534 | 622,604 | 1.8% | |
| Net income | 11,024 | 29,119 | (62.1%) | |
| Per share - Basic | 0.35 | 0.92 | (62.0%) | |
| Per share - Diluted | 0.34 | 0.91 | (62.6%) | |
| Average number of shares outstanding - | ||||
| Diluted weighted average | 32,245,587 | 31,963,942 | ||
| Summary of Financial Highlights | ||||
| Twelve Months Ended December 30 | ||||
| All figures in thousands of US $, except per share amounts | ||||
| 2013 | 2012 | Change % | ||
| Total revenue | 2,435,449 | 2,490,710 | (2.2%) | |
| Net income | 57,669 | 108,509 | (46.9%) | |
| Per share - Basic | 1.81 | 3.42 | (47.1%) | |
| Per share - Diluted | 1.79 | 3.39 | (47.2%) | |
| Average number of shares outstanding - | ||||
| Diluted weighted average | 32,190,332 | 32,039,861 | ||
Juvenile Segment
| Fourth Quarters Ended December 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 255,254 | 267,359 | (4.5%) | ||
| Gross profit | 73,445 | 28.8% | 74,820 | 28.0% | (1.8%) |
| Operating profit | 18,388 | 7.2% | 18,641 | 7.0% | (1.4%) |
| Twelve Months Ended December 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 992,882 | 1,040,765 | (4.6%) | ||
| Gross profit | 281,623 | 28.4% | 287,300 | 27.6% | (2.0%) |
| Operating profit | 57,158 | 5.8% | 73,070 | 7.0% | (21.8%) |
Fourth quarter
Excluding the impact of foreign exchange, organic revenue decreased by approximately 4%. While sales were lower than the prior year, versus the third quarter of 2013, they increased by almost 7% with improvements in several markets. Most of the segment's markets saw their currency weaken against the U.S. dollar and this had the effect of dampening earnings. The exception was the Euro which strengthened against its U.S. counterpart in the quarter, helping to offset these other declines. Overall the segment recorded earnings similar to the prior year, despite the lower revenues.
Full year
Revenues declined approximately 6% from the prior year excluding the impact of foreign exchange and acquisitions. As it was the case in the fourth quarter, the reduced sales were in North America and Europe, whereas Latin America sales growth was strong in all regions. Retail continues to grow in importance in Chile and Peru with 18 new locations opened through the year bringing the total number of stores there to 88.
In almost all markets the earnings decline was driven by sales shortfalls and in Canada and Australia by a decrease in the value of local currencies. Strong cost management across the segment kept gross profit stable, offsetting the impact of lower volumes and unfavourable exchange.
Subsequent to year end, Dorel acquired Israeli-based Tiny Love, a global, award-winning baby products and developmental toy company whose 2013 sales were approximately US$45 million and consist of a product line that is complementary to Dorel's and is sold in more than 50 countries worldwide.
Recreational/Leisure Segment
| Fourth Quarters Ended December 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 245,465 | 226,640 | 8.3% | ||
| Gross profit | 51,861 | 21.1% | 56,519 | 24.9% | (8.2%) |
| Operating profit (loss) | (5,427) | (2.2%) | 16,456 | 7.3% | (133.0%) |
| Twelve Months Ended December 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 918,744 | 928,422 | (1.0%) | ||
| Gross profit | 211,885 | 23.1% | 233,437 | 25.1% | (9.2%) |
| Operating profit | 21,900 | 2.4% | 71,958 | 7.8% | (69.6%) |
Fourth quarter
Segment revenues were up US$18.8 million or 8.3% for the quarter. The organic sales increase was approximately 1%, excluding the impact of foreign exchange and the acquisition of Caloi. Sales were affected by the global bike market slowdown, a sluggish start to the holiday season in both the IBD and mass merchant channels as well as an unfavourable product mix. Industry discounting continued throughout the quarter and more 2013 model year bicycles with lower gross profit were sold than had been anticipated. As well, supply for firm customer orders for more than US$10 million of CSG 2014 models did not arrive in time for fourth quarter delivery and were shipped during the current first quarter.
The US$13.5 million pre-tax restructuring charges and costs resulted in a decline of the segment's results to an operating loss of US$5.4 million from an operating profit of US$16.5 million in 2012. Excluding the restructuring charges, the segment posted US$8.1 million in operating profit. All organic businesses experienced a profit decline in the fourth quarter. Caloi, acquired in August 2013, contributed a full quarter of profitability.
Full year
The organic sales decrease after removing the impact of foreign exchange and acquisitions was approximately 2% and was in both the IBD and the mass merchant distribution channels. In both cases the decline was driven by a 2013 global decrease in the bicycle market, predominantly caused by the extremely poor weather during the first half of 2013.
For the year the segment recorded a total of US$15.4 million pre-tax in restructuring charges and costs. Operating profit in all of the segment's divisions, with the exception of Caloi, was down as increased price discounting was prevalent through the year. Unfavorable product and customer mix was also a major contributor to the reduced gross profit.
Home Furnishings Segment
| Fourth Quarters Ended December 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 132,815 | 128,605 | 3.3% | ||
| Gross profit | 15,451 | 11.6% | 15,064 | 11.7% | 2.6% |
| Operating profit | 5,004 | 3.8% | 7,295 | 5.7% | (31.4%) |
| Twelve Months Ended December 30 | |||||
| 2013 | 2012 | ||||
| $ | % of rev. | $ | % of rev. | Change % | |
| Total revenue | 523,823 | 521,523 | 0.4% | ||
| Gross profit | 66,204 | 12.6% | 62,552 | 12.0% | 5.8% |
| Operating profit | 25,992 | 5.0% | 25,593 | 4.9% | 1.6% |
Fourth quarter
The fourth quarter increase was driven by higher sales of imported furniture items, mattresses, futons and folding furniture. Both Dorel Home Products and Cosco Home and Office performed exceedingly well. In addition, Home Furnishings continues its expansion into the Internet sales channel which now represents a significant portion of revenue, accounting for just over 20% of sales. The segment's drop-ship vendor channel continued to gain traction, helping to drive the growth of the Internet channel. Gross profit remained stable due mainly to effective cost controls.
Full year
2013 Home Furnishings revenues were US$523.8 million compared to US$521.5 million in the prior year. Sales decreases of metal folding furniture were offset by the sales growth of imported furniture, principally in the futon, mattress, bunk bed and upholstered item categories. The segment posted another record year of sales through the Internet sales channel which offset reductions in sales to brick and mortar stores. Operating profit was up 1.6% for the year.
Other
In 2013, the Company's effective tax rate was 8.0% as compared to 16.3% in 2012. The main causes of the variations are changes in the jurisdictions in which the Company generated its income and the recognition of a tax benefit pertaining to an adjustment of tax balances following a foreign reorganization.
Statement of Financial Position and Cash Flow
For the year, cash flow provided by operating activities was US$144.3 million compared to US$107.2 million recorded in 2012, an increase of US$37.1 million. This was despite lower year-over-year after-tax earnings and was due to improved working capital management.
Outlook
"Now two months into 2014, we are seeing an encouraging start to the year. In Recreational/Leisure, the restructuring and cost-cutting initiatives underway, coupled with an expected rebound in all markets and a full year of Caloi in Brazil, provide for confidence for the year ahead. Weather is always a variable that we cannot control, but if last spring's record rain and cold in both North America and Europe are not repeated, we are definitely well positioned to return to much higher levels of profitability. Earnings for the first quarter should improve by at least 20% to 25% over last year.
"In Juvenile, we expect most markets to improve their earnings in 2014. This along with the contribution of Tiny Love acquired in January should translate into earnings growth of at least 10% for the year. Note that this expectation excludes the negative impact of the costs of the one-time U.S. legal case that we recorded 2013. As we start the year, currency challenges in Canada, Australia and Latin America should result in the first quarter being slightly below last year, but this does not dampen our enthusiasm for the full year.
"In Home Furnishings, we expect moderate growth in sales and earnings as we continue to capitalize on our Omni-channel distribution through both traditional and on-line retailers," concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, March 4, 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 41136240 on your phone. This recording will be available on Tuesday, March 4, 2014 as of 4:00 P.M. until 11:59 P.M. on Tuesday, March 11, 2014.
Complete financial statements will be available on the Company's website, www.dorel.com, and will be available through the SEDAR website.
Profile
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle company. 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. | ||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||||
| ALL FIGURES IN THOUSANDS OF US $ | ||||||
| as at | as at | |||||
| December 30, 2013 |
December 30, 2012 |
|||||
| (unaudited) | (unaudited) | |||||
| Restated | ||||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents | $ | 40,074 | $ | 38,311 | ||
| Trade and other receivables | 456,465 | 443,020 | ||||
| Inventories | 555,567 | 501,652 | ||||
| Other financial assets | 231 | 287 | ||||
| Income taxes receivable | 11,626 | 17,273 | ||||
| Prepaid expenses | 26,200 | 19,813 | ||||
| 1,090,163 | 1,020,356 | |||||
| NON-CURRENT ASSETS | ||||||
| Property, plant and equipment | 181,299 | 157,127 | ||||
| Intangible assets | 500,381 | 423,057 | ||||
| Goodwill | 637,084 | 578,352 | ||||
| Other financial assets | 620 | 796 | ||||
| Deferred tax assets | 24,356 | 22,555 | ||||
| Other assets | 6,060 | 1,625 | ||||
| 1,349,800 | 1,183,512 | |||||
| $ | 2,439,963 | $ | 2,203,868 | |||
| LIABILITIES | ||||||
| CURRENT LIABILITIES | ||||||
| Bank indebtedness | $ | 72,546 | $ | 11,476 | ||
| Trade and other payables | 379,311 | 337,451 | ||||
| Contingent consideration and put option liabilities | - | 2,151 | ||||
| Other financial liabilities | 3,231 | 2,085 | ||||
| Income taxes payable | 7,075 | 2,856 | ||||
| Long-term debt | 344,374 | 13,520 | ||||
| Provisions | 44,570 | 33,769 | ||||
| 851,107 | 403,308 | |||||
| NON-CURRENT LIABILITIES | ||||||
| Long-term debt | 13,183 | 317,970 | ||||
| Net pension and post-retirement defined benefit liabilities | 31,701 | 35,091 | ||||
| Deferred tax liabilities | 87,171 | 87,922 | ||||
| Provisions | 1,993 | 1,969 | ||||
| Contingent consideration and put option liabilities | 92,570 | 40,782 | ||||
| Other financial liabilities | 2,727 | 2,818 | ||||
| Other long-term liabilities | 12,751 | 5,895 | ||||
| 242,096 | 492,447 | |||||
| EQUITY | ||||||
| Share capital | 190,458 | 180,856 | ||||
| Contributed surplus | 26,994 | 27,192 | ||||
| Accumulated other comprehensive income | 67,824 | 57,619 | ||||
| Retained earnings | 1,061,484 | 1,042,446 | ||||
| 1,346,760 | 1,308,113 | |||||
| $ | 2,439,963 | $ | 2,203,868 | |||
| DOREL INDUSTRIES INC. | ||||||||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||||||||
| ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS | ||||||||||||
| Fourth Quarters Ended | Twelve Months Ended | |||||||||||
| December 30, 2013 |
December 30, 2012 |
December 30, 2013 |
December 30, 2012 |
|||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Restated | ||||||||||||
| Sales | $ | 625,856 | $ | 616,996 | $ | 2,417,291 | $ | 2,475,762 | ||||
| Licensing and commission income | 7,678 | 5,608 | 18,158 | 14,948 | ||||||||
| TOTAL REVENUE | 633,534 | 622,604 | 2,435,449 | 2,490,710 | ||||||||
| Cost of sales (1) | 492,777 | 476,201 | 1,875,737 | 1,907,421 | ||||||||
| GROSS PROFIT | 140,757 | 146,403 | 559,712 | 583,289 | ||||||||
| Selling expenses | 59,143 | 55,424 | 231,724 | 220,299 | ||||||||
| General and administrative expenses | 42,289 | 43,629 | 197,152 | 186,670 | ||||||||
| Research and development expenses | 10,625 | 7,861 | 32,905 | 28,724 | ||||||||
| Restructuring costs (1) | 9,407 | - | 11,357 | - | ||||||||
| OPERATING PROFIT | 19,293 | 39,489 | 86,574 | 147,596 | ||||||||
| Finance expenses | 8,330 | 4,511 | 23,921 | 18,017 | ||||||||
| INCOME BEFORE INCOME TAXES | 10,963 | 34,978 | 62,653 | 129,579 | ||||||||
| Income taxes expense | (61) | 5,859 | 4,984 | 21,070 | ||||||||
| NET INCOME | $ | 11,024 | $ | 29,119 | $ | 57,669 | $ | 108,509 | ||||
| EARNINGS PER SHARE | ||||||||||||
| Basic | $ | 0.35 | $ | 0.92 | $ | 1.81 | $ | 3.42 | ||||
| Diluted | $ | 0.34 | $ | 0.91 | $ | 1.79 | $ | 3.39 | ||||
| SHARES OUTSTANDING | ||||||||||||
| Basic - weighted average | 31,905,793 | 31,560,961 | 31,828,510 | 31,690,811 | ||||||||
| Diluted - weighted average | 32,245,587 | 31,963,942 | 32,190,332 | 32,039,861 | ||||||||
| (1) Restructuring costs charged to: | ||||||||||||
| Cost of sales | $ | 4,075 | $ | - | $ | 4,075 | $ | - | ||||
| Expenses | 9,407 | - | 11,357 | - | ||||||||
| $ | 13,482 | $ | - | $ | 15,432 | $ | - | |||||
| DOREL INDUSTRIES INC. | |||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
| ALL FIGURES IN THOUSANDS OF US $ | |||||||||||
| Fourth Quarters Ended | Twelve Months Ended | ||||||||||
| December 30, 2013 |
December 30, 2012 |
December 30, 2013 |
December 30, 2012 |
||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||
| Restated | Restated | ||||||||||
| NET INCOME | $ | 11,024 | $ | 29,119 | $ | 57,669 | $ | 108,509 | |||
| 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 | 3,624 | 13,491 | 8,987 | 13,631 | |||||||
| Net changes in cash flow hedges: | |||||||||||
| Net change in unrealized gains (losses) on derivatives designated as cash flow hedges | (2,023) | (998) | (1,706) | 123 | |||||||
| Reclassification to income | 256 | 242 | 1,005 | 973 | |||||||
| Reclassification to the related non-financial asset | 744 | (2,637) | (314) | (10,654) | |||||||
| Deferred income taxes | 188 | 869 | (103) | 2,440 | |||||||
| (835) | (2,524) | (1,118) | (7,118) | ||||||||
| Items that will not be reclassified to net income: | |||||||||||
| Defined benefit plans: | |||||||||||
| Remeasurements of the net pension and post-retirement benefit liabilities | 3,980 | (2,868) | 3,972 | (2,075) | |||||||
| Deferred income taxes | (1,638) | 1,138 | (1,636) | 783 | |||||||
| 2,342 | (1,730) | 2,336 | (1,292) | ||||||||
| TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 5,131 | 9,237 | 10,205 | 5,221 | |||||||
| TOTAL COMPREHENSIVE INCOME | $ | 16,155 | $ | 38,356 | $ | 67,874 | $ | 113,730 | |||
| DOREL INDUSTRIES INC. | |||||||||||||||
| CONSOLIDATED 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, 2011, as previously reported | $ | 174,782 | $ | 26,445 | $ | 52,760 | $ | 6,082 | $ | - | $ | 969,586 | $ | 1,229,655 | |
| Impact of change in accounting policy | - | - | - | - | (6,444) | 6,520 | 76 | ||||||||
| Balance as at December 30, 2011, as restated | $ | 174,782 | $ | 26,445 | $ | 52,760 | $ | 6,082 | $ | (6,444) | $ | 976,106 | $ | 1,229,731 | |
| Total comprehensive income: | |||||||||||||||
| Net income | - | - | - | - | - | 108,509 | 108,509 | ||||||||
| Other comprehensive income (loss) | - | - | 13,631 | (7,118) | (1,292) | - | 5,221 | ||||||||
| $ | - | $ | - | $ | 13,631 | $ | (7,118) | $ | (1,292) | $ | 108,509 | $ | 113,730 | ||
| Issued under stock option plan | 8,524 | - | - | - | - | - | 8,524 | ||||||||
| Reclassification from contributed surplus due to exercise of stock options | 1,770 | (1,770) | - | - | - | - | - | ||||||||
| Repurchase and cancellation of shares | (4,220) | - | - | - | - | - | (4,220) | ||||||||
| Premium paid on share repurchase | - | - | - | - | - | (13,592) | (13,592) | ||||||||
| Share-based payments | - | 2,389 | - | - | - | - | 2,389 | ||||||||
| Dividends on common shares | - | - | - | - | - | (28,449) | (28,449) | ||||||||
| Dividends on deferred share units | - | 128 | - | - | - | (128) | - | ||||||||
| 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 | - | - | - | - | - | 57,669 | 57,669 | ||||||||
| Other comprehensive income (loss) | - | - | 8,987 | (1,118) | 2,336 | - | 10,205 | ||||||||
| $ | - | $ | - | $ | 8,987 | $ | (1,118) | $ | 2,336 | $ | 57,669 | $ | 67,874 | ||
| Issued under stock option plan | 7,605 | - | - | - | - | - | 7,605 | ||||||||
| Reclassification from contributed surplus due to exercise of stock options | 1,838 | (1,838) | - | - | - | - | - | ||||||||
| Reclassification from contributed surplus due to settlement of deferred share units | 227 | (347) | - | - | - | - | (120) | ||||||||
| Repurchase and cancellation of shares | (68) | - | - | - | - | - | (68) | ||||||||
| Premium paid on share repurchase | - | - | - | - | - | (253) | (253) | ||||||||
| Share-based payments | - | 1,794 | - | - | - | - | 1,794 | ||||||||
| Dividends on common shares | - | - | - | - | - | (38,185) | (38,185) | ||||||||
| Dividends on deferred share units | - | 193 | - | - | - | (193) | - | ||||||||
| Balance as at December 30, 2013 | $ | 190,458 | $ | 26,994 | $ | 75,378 | $ | (2,154) | $ | (5,400) | $ | 1,061,484 | $ | 1,346,760 | |
| DOREL INDUSTRIES INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| ALL FIGURES IN THOUSANDS OF US $ |
||||||||||||
| Fourth Quarters Ended | Twelve Months Ended | |||||||||||
| December 30, 2013 |
December 30, 2012 |
December 30, 2013 |
December 30, 2012 |
|||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Restated | ||||||||||||
| CASH PROVIDED BY (USED IN): | ||||||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net income | $ | 11,024 | $ | 29,119 | $ | 57,669 | $ | 108,509 | ||||
| Items not involving cash: | ||||||||||||
| Depreciation and amortization | 15,407 | 14,011 | 56,269 | 53,332 | ||||||||
| Amortization of deferred financing costs | 107 | 98 | 412 | 418 | ||||||||
| Accretion expense on contingent consideration and put option liabilities | 563 | 1,196 | 2,815 | 3,304 | ||||||||
| Change of assumptions on contingent consideration and put option liabilities | (567) | (2,043) | (567) | (3,473) | ||||||||
| Unrealized (gains) losses due to foreign exchange exposure on contingent consideration and put option liabilities | (6,171) | (140) | (4,689) | 1,466 | ||||||||
| Restructuring activities | 12,822 | - | 13,843 | - | ||||||||
| Other finance expenses | 7,660 | 3,217 | 20,694 | 14,295 | ||||||||
| Income taxes expense | (61) | 5,859 | 4,984 | 21,070 | ||||||||
| Share-based payments | 108 | 567 | 1,489 | 2,275 | ||||||||
| Defined benefit pension and post-retirement costs | 1,020 | (1,741) | 3,239 | 674 | ||||||||
| Loss on disposal of property, plant and equipment | 603 | 305 | 446 | 229 | ||||||||
| 42,515 | 50,448 | 156,604 | 202,099 | |||||||||
| Net changes in balances related to operations: | ||||||||||||
| Trade and other receivables | 11,812 | (3,816) | 15,384 | (37,250) | ||||||||
| Inventories | (16,577) | 29,712 | (18,900) | (47,120) | ||||||||
| Other financial assets | 164 | 31 | 3,060 | (947) | ||||||||
| Prepaid expenses | (1,324) | 4,690 | (5,803) | 2,220 | ||||||||
| Other assets | (485) | - | (3,095) | - | ||||||||
| Trade and other payables | 12,582 | (14,250) | 14,337 | 11,769 | ||||||||
| Net pension and post-retirement defined benefit liabilities | (964) | (304) | (3,025) | (2,776) | ||||||||
| Provisions, other financial liabilities and other long-term liabilities | 3,621 | (2,366) | 8,565 | (2,616) | ||||||||
| 8,829 | 13,697 | 10,523 | (76,720) | |||||||||
| - | ||||||||||||
| Income taxes paid | (5,378) | (6,058) | (17,173) | (19,271) | ||||||||
| Income taxes received | 973 | 1,286 | 12,793 | 16,541 | ||||||||
| Interest paid | (10,229) | (6,257) | (18,936) | (16,660) | ||||||||
| Interest received | 82 | 343 | 469 | 1,228 | ||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES | 36,792 | 53,459 | 144,280 | 107,217 | ||||||||
| FINANCING ACTIVITIES | ||||||||||||
| Bank indebtedness | 2,067 | 711 | 20,442 | (8,670) | ||||||||
| Increase of long-term debt | - | - | 18,195 | 32,883 | ||||||||
| Repayments of long-term debt | (8,717) | (29,998) | (14,243) | (16,767) | ||||||||
| Repayments of contingent consideration and put option liabilities | - | - | (1,995) | (6,972) | ||||||||
| Financing costs | (23) | (28) | (562) | (220) | ||||||||
| Share repurchase | - | - | (321) | (17,812) | ||||||||
| Issuance of share capital | 315 | 3,134 | 6,740 | 7,941 | ||||||||
| Dividends on common shares | (9,572) | (9,463) | (38,185) | (28,449) | ||||||||
| CASH USED IN FINANCING ACTIVITIES | (15,930) | (35,644) | (9,929) | (38,066) | ||||||||
| INVESTING ACTIVITIES | ||||||||||||
| Acquisition of businesses | - | (152) | (71,924) | (14,819) | ||||||||
| Additions to property, plant and equipment | (12,322) | (6,443) | (41,801) | (27,020) | ||||||||
| Disposals of property, plant and equipment | 65 | 16 | 410 | 166 | ||||||||
| Additions to intangible assets | (4,679) | (4,898) | (20,489) | (19,491) | ||||||||
| CASH USED IN INVESTING ACTIVITIES | (16,936) | (11,477) | (133,804) | (61,164) | ||||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (847) | 67 | 1,216 | 560 | ||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 3,079 | 6,405 | 1,763 | 8,547 | ||||||||
| Cash and cash equivalents, beginning of period | 36,995 | 31,906 | 38,311 | 29,764 | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 40,074 | $ | 38,311 | $ | 40,074 | $ | 38,311 | ||||
| DOREL INDUSTRIES INC. | |||||||||||||||||
| INDUSTRY SEGMENTED INFORMATION | |||||||||||||||||
| FOURTH QUARTERS ENDED DECEMBER 30 | |||||||||||||||||
| ALL FIGURES IN THOUSANDS OF US $ | |||||||||||||||||
| Total | Juvenile | Recreational / Leisure | Home Furnishings | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Total revenue | $ | 633,534 | $ | 622,604 | $ | 255,254 | $ | 267,359 | $ | 245,465 | $ | 226,640 | $ | 132,815 | $ | 128,605 | |
| Cost of sales | 492,777 | 476,201 | 181,809 | 192,539 | 193,604 | 170,121 | 117,364 | 113,541 | |||||||||
| Gross profit | 140,757 | 146,403 | 73,445 | 74,820 | 51,861 | 56,519 | 15,451 | 15,064 | |||||||||
| Selling expenses | 58,522 | 54,746 | 28,609 | 28,709 | 25,715 | 21,962 | 4,198 | 4,075 | |||||||||
| General and administrative expenses | 44,238 | 41,404 | 18,369 | 21,171 | 20,565 | 17,354 | 5,304 | 2,879 | |||||||||
| Research and development expenses | 10,625 | 7,861 | 8,079 | 6,299 | 1,601 | 747 | 945 | 815 | |||||||||
| Restructuring costs | 9,407 | - | - | - | 9,407 | - | - | - | |||||||||
| Operating profit (loss) | 17,965 | 42,392 | $ | 18,388 | $ | 18,641 | $ | (5,427) | $ | 16,456 | $ | 5,004 | $ | 7,295 | |||
| Finance expenses | 8,330 | 4,511 | |||||||||||||||
| Corporate expenses | (1,328) | 2,903 | |||||||||||||||
| Income taxes | (61) | 5,859 | |||||||||||||||
| Net income | $ | 11,024 | $ | 29,119 | |||||||||||||
| Earnings per Share | |||||||||||||||||
| Basic | $ | 0.35 | $ | 0.92 | |||||||||||||
| Diluted | $ | 0.34 | $ | 0.91 | |||||||||||||
| Depreciation and amortization included in operating profit | $ | 15,363 | $ | 13,856 | $ | 10,337 | $ | 10,210 | $ | 4,040 | $ | 2,695 | $ | 986 | $ | 951 | |
| DOREL INDUSTRIES INC. | |||||||||||||||||
| INDUSTRY SEGMENTED INFORMATION | |||||||||||||||||
| FOR THE YEARS ENDED DECEMBER 30 | |||||||||||||||||
| ALL FIGURES IN THOUSANDS OF US $ | |||||||||||||||||
| Total | Juvenile | Recreational / Leisure | Home Furnishings | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Total revenue | $ | 2,435,449 | $ | 2,490,710 | $ | 992,882 | $ | 1,040,765 | $ | 918,744 | $ | 928,422 | $ | 523,823 | $ | 521,523 | |
| Cost of sales | 1,875,737 | 1,907,421 | 711,259 | 753,465 | 706,859 | 694,985 | 457,619 | 458,971 | |||||||||
| Gross Profit | 559,712 | 583,289 | 281,623 | 287,300 | 211,885 | 233,437 | 66,204 | 62,552 | |||||||||
| Selling expenses | 229,274 | 217,889 | 110,721 | 106,134 | 102,581 | 94,523 | 15,972 | 17,232 | |||||||||
| General and administrative expenses | 181,126 | 166,055 | 90,784 | 87,087 | 69,752 | 62,327 | 20,590 | 16,641 | |||||||||
| Research and development expenses | 32,905 | 28,724 | 22,960 | 21,009 | 6,295 | 4,629 | 3,650 | 3,086 | |||||||||
| Restructuring costs | 11,357 | - | - | - | 11,357 | - | - | - | |||||||||
| Operating profit | 105,050 | 170,621 | $ | 57,158 | $ | 73,070 | $ | 21,900 | $ | 71,958 | $ | 25,992 | $ | 25,593 | |||
| Finance expenses | 23,921 | 18,017 | |||||||||||||||
| Corporate expenses | 18,476 | 23,025 | |||||||||||||||
| Income taxes | 4,984 | 21,070 | |||||||||||||||
| Net income | $ | 57,669 | $ | 108,509 | |||||||||||||
| Earnings per Share | |||||||||||||||||
| Basic | $ | 1.81 | $ | 3.42 | |||||||||||||
| Diluted | $ | 1.79 | $ | 3.39 | |||||||||||||
| Depreciation and amortization included in operating profit | $ | 56,096 | $ | 53,054 | $ | 40,026 | $ | 39,151 | $ | 11,857 | $ | 9,429 | $ | 4,213 | $ | 4,474 | |
SOURCE Dorel Industries Inc.
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