UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 30, 2007
Commission File Number: 0-29712
DOREL INDUSTRIES INC.
________________________________________________________________________________________
1255 Greene Ave, Suite 300, Westmount, Quebec, Canada H3Z 2A4
________________________________________________________________________________________
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F [ X ] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [ X ]
| |
C O M M U N I Q U É | |
JUVENILE Cosco Safety 1st Maxi-Cosi Bébé Confort Quinny Baby Relax Babidéal Mon Bébé Bertini Mother’s Choice RECREATIONAL / LEISURE Cannondale GT SUGOi Pacific Cycle Schwinn Mongoose InSTEP PlaySafe Pacific Outdoors HOME FURNISHINGS Ameriwood Altra Furniture Dorel Home Products Cosco Home & Office Dorel Asia Cosco Ability Care Essentials Adepta EXCHANGES TSX: DII.B, DII.A CONTACT: MaisonBrison Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034 | DOREL REPORTS STRONG 2007 RESULTS · Adjusted net income of US$100.1 million, the highest in history · Adjusted pre-tax earnings top US$125 million · Juvenile segment revenues approach record US$1 billion, earnings from operations best ever · Free cash flow exceeds US$116 million Montreal, March 11, 2008 — Dorel Industries Inc. (TSX: DII.B DII.A) today announced full results for the fourth quarter and year ended December 30, 2007. On March 4, 2008 the Company pre-released certain fiscal 2007 financial information in advance of a series of investor meetings. On an adjusted basis, fiscal 2007 net income was US$100.1 million, an increase of US$8.1 million from 2006 levels and the highest level ever recorded in Dorel’s history. The Juvenile segment was a major factor in this success, and for the year it recorded revenues of US$963.6 million and just over US$114 million in adjusted earnings from operations, both all time records. The Recreational/Leisure segment also improved with a 10.0% gain in revenues and a 26.8% increase in earnings from operations. Revenue for the fourth quarter increased 2.4% to US$458.9 million from US$447.9 million a year ago. In the fourth quarter, net income grew 3.1% to US$22.3 million, or US$0.67 per diluted share compared to US$21.7 million, or US$0.66 per diluted share in the fourth quarter of 2006. These results include the previously announced restructuring costs at Dorel Europe and Ameriwood Industries. Therefore adjusted net income, excluding these costs, for the fourth quarter was US$24.0 million or US$0.72 per diluted share compared to adjusted net income of US$24.4 million or US$0.74 per diluted share a year ago. Full year revenue was US$1.81 billion versus last year’s US$1.77 billion. 2007 net income was basically flat at US$87.5 million or US$2.63 per diluted share, compared to 2006 net earnings of US$88.9 million or US$2.70 per diluted share. However, excluding the above mentioned restructuring costs in both years, 2007 adjusted net income was US$100.1 million or US$3.01 per diluted share compared to adjusted net income of US$92.0 million or US$2.80 per diluted share last year. Pre-tax earnings for the year were also up considerably over 2006 levels. On an adjusted basis for the fourth quarter pre-tax earnings increased 18.3% to US$31.1 million and for the year the increase was 19.8%, reaching US$125.8 million. |
![[form6keng11mar08002.gif]](form6keng11mar08002.gif)
“The solid 2007 results underline the growing contribution of the Company’s core Juvenile and Recreational/Leisure segments. We are encouraged by this strong showing as we continue to further unlock value within the Company with these two business segments. We are already a world leader in juvenile in our categories and this performance, combined with our recent acquisition of Cannondale and SUGUOi, solidifies our leadership position as a world class bicycle company as well,” said Dorel CEO and President, Martin Schwartz.
Summary of Financial Highlights | |||
Fourth Quarters Ended December 30 | |||
All figures in thousands of US $, except per share amounts | |||
| 2007 | 2006 | Change % |
Revenues | 458,853 | 447,930 | 2.4% |
Adjusted net income* | 23,995 | 24,370 | -1.5% |
Per share - Basic | 0.72 | 0.74 | -2.7% |
Per share - Diluted | 0.72 | 0.74 | -2.7% |
Net income | 22,348 | 21,675 | 3.1% |
Per share - Basic | 0.67 | 0.66 | 1.5% |
Per share - Diluted | 0.67 | 0.66 | 1.5% |
Average number of shares outstanding - diluted weighted average | 33,397,773 | 32,861,757 |
|
*adjusted to exclude after-tax impact of restructuring costs
Summary of Financial Highlights | |||
For the Years Ended December 30 | |||
All figures in thousands of US$, except per share amounts | |||
| 2007 | 2006 | Change % |
Revenues | 1,813,672 | 1,771,168 | 2.4% |
Adjusted net income* | 100,092 | 92,025 | 8.8% |
Per share - Basic | 3.01 | 2.80 | 7.5% |
Per share - Diluted | 3.01 | 2.80 | 7.5% |
Net income | 87,492 | 88,865 | -1.5% |
Per share - Basic | 2.63 | 2.70 | -2.6% |
Per share - Diluted | 2.63 | 2.70 | -2.6% |
Average number of shares outstanding - diluted weighted average | 33,293,248 | 32,860,760 |
|
*adjusted to exclude after-tax impact of restructuring costs
Juvenile Segment
The Juvenile segment had its most successful year ever, as revenues reached almost US$1 billion, finishing the year at US$963.6 million, up 8.4% from 2006. Full year earnings from operations were US$106.2 million, an increase of 15.4% over 2006. Excluding restructuring costs in France and Italy, 2007 earnings from operations rose 19.2% to US$114.4 million compared to US$96.0 million a year ago. Fourth quarter revenue increased 9.9% to US$248.0 million from US$225.7 million last year. Earnings from operations in the quarter were US$25.8 million up from US$19.2 million the year before, a 34.2% increase. Adjusted earnings from operations for the quarter rose 20.6% to US$28.0 million from US$23.2 million in 2006.
The year’s success was driven by Dorel Europe where organic sales growth was just over 10%. In U.S. dollars this increase was over 20% due to the strong Euro and British Pound. The increase was principally due to sales gains in car seats and strollers as the investments made in new product development proved successful. The majority of these increases were in the United Kingdom, Germany as well as several eastern European countries as this relatively new market continues to be penetrated. These gains compensated for a decline in North American revenues.
Gross margins for the Juvenile segment as a whole were 30.6% in 2007 as compared to 29.7% in 2006, due principally to the improvement in Europe. Selling general and administrative costs increased over 2006 levels from US$132.7 million to US$143.0 million. The increase resulted from higher costs in Europe due to greater sales activity and the higher rate of exchange in 2007, as well as the addition of the Australian business in the year. Offsetting these increases was a decline in product liability costs in the United States of US$8.6 million. These costs totalled US$16.6 million in 2007 and US$25.2 million in 2006.
Recreational / Leisure Segment
Revenue for the year in the Recreational / Leisure segment increased by 10.0% to US$374.8 million from US$340.7 million the year before. Earnings from operations jumped 26.8% to US$33.0 million from US$26.0 million a year ago. For the fourth quarter, revenue was US$85.8 million, an 11.6% increase from the previous year’s US$76.9 million. In the fourth quarter, earnings from operations were essentially flat at US$5.8 million as compared to US$5.9 million the year before.
For the year, the improvement was due to success in both the mass merchant and Independent Bicycle Dealers (IBD) channels. The majority of the increase came from several key mass customers as sales rebounded after declines in 2006. Sales were also strong with certain warehouse club customers, a relatively new distribution channel for this segment. These increases, at both existing and new customers, were driven by bicycle sales, although other recreational product lines continue to be explored and added in an attempt to diversify sales of the segment.
Gross margins for the year increased by 70 basis points. However fiscal 2006 included a one-time US$3.5 million inventory write-down, therefore margins were, in fact, consistent with the prior year. Selling, general and administrative expenses rose moderately from US$36.9 million in 2006 to US$38.3 million in 2007. However as a percentage of revenue this represents a decrease of 60 basis points as 2007 sales volume increases outpaced additional spending.
Home Furnishings Segment
Total 2007 revenue was US$475.3 million versus US$541.9 million the prior year, a 12.3% decrease. Earnings from operations in 2007 were US$17.2 million, a 44.8% decrease from US$31.2 million in 2006. Adjusted earnings from operations for the year were down 11.8% to US$28.1 million compared to last year’s US$31.9 million. Revenue for the fourth quarter was US$125.0 million, down 13.9% from last year’s US$145.3 million. Despite the revenue decline, earnings from operations were US$10.4 million as compared to US$8.9 million in 2006. Adjusted earnings from operations for the fourth quarter rose 19.9% to US$10.7 million from US$8.9 million.
During the year the slowdown in the U.S. housing industry negatively impacted this segment. The two divisions experiencing the greatest sales decline were Ameriwood and Dorel Asia, both of which experienced decreases exceeding 10%. Cosco Home & Office and Dorel Home Products were less affected and combined were essentially flat with the prior year. Even though sales were lower, adjusted gross margins for the segment increased by 70 basis points to 15.6% from 14.9% in 2006. Despite the decline in earnings, this segment was a strong contributor to the Company’s free cash flow in 2007.
Restructuring costs
The Company is including adjusted earnings figures in this press release that are considered non-GAAP financial measures, as it believes this results in a more meaningful comparison of its core business performance between the periods presented. Therefore the terms “adjusted gross margin”, “adjusted earnings from operations”, “adjusted pre-tax income, “adjusted net income” and “adjusted net income per diluted share” should be considered as non-GAAP financial measures. Where applicable the segmented results presented exclude restructuring costs and use the term “adjusted” when describing these results.
For the fourth quarter and full year, the combined after-tax impact of the previously announced restructuring initiatives in Juvenile (Dorel Europe) and Home Furnishings (Ameriwood) is US$1.6 million or US$0.05 per diluted share and US$12.6 million or US$0.38 per diluted share respectively. A complete reconciliation of adjusted earnings to GAAP earnings is attached at the end of this press release.
Other
The Company had its strongest cash flow year in history, generating a record US$167.3 million in cash flow provided by operating activities. This was an increase of US$60.6 million or 56.8% from the US$106.7 million posted in 2006. Free cash flow, a non-GAAP financial measure, defined as cash provided by operating activities less dividends paid, additions to property, plant & equipment, deferred development costs and intangibles, plus or minus variations in funds held by ceding insurer, was US$116.2 million in 2007 versus US$83.4 million, an improvement of US$32.8 million. The 2007 free cash flow amount is net of dividends of US$12.5 million, the first year in which Dorel has paid a dividend.
As a result of the Company’s strong free cash flow, debt reduction meant total interest costs declined in 2007 to US$23.5 million from US$29.9 million in 2006. The Company’s average interest rate on its long-term borrowings and revolving facilities in 2007 was approximately 6.4%, as compared to the average of 6.7% in 2006. In 2007 the Company’s effective tax rate was 17.9% as compared to 11.4% in 2006. The reasons for the increase in the rate were twofold. First, there were a greater proportion of earnings in higher tax rate jurisdictions in 2007 versus 2006 and second, unlike in 2006, the Company was unable to apply certain tax losses.
Outlook
On February 4, 2008, Dorel announced the acquisition of the Cannondale Bicycle Corporation and SUGOi Performance Apparel. This resulted in the establishment of a new Recreational/Leisure division, the Cannondale Sports Group, with an exclusive focus on the Independent Bicycle Dealers (IBD) channel.
“Our 2007 success stems from the combined strength of our Juvenile and Recreational/Leisure businesses. The acquisition of Cannondale and SUGOi fortifies our position and stature in the bicycle industry and underlines our commitment to further unlock shareholder value by concentrating on Dorel’s core segments, which provide the greatest potential. The new Cannondale Sports Group will build on Cannondale’s strengths to grow significantly within the IBD channel. Our intention is to build a world-class company and to offer a line of products that will be desired by both dealers and consumers.
“We will continue to strive to optimize the results of each of our segments and we will devote the necessary resources to ensure their growth and development. The current economic situation, particularly in the US, does not allow for the accurate prediction of consumer trends and hence the outlook for the complete year cannot be seen with clarity. Nonetheless, we have not witnessed any slowdown of consumer spending in Dorel’s products during the first two months of 2008,” concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference call to discuss these results today, March 11, 2008 at 1:30 P.M. Eastern Time. Interested parties can join the call by dialling 1-800-733-7560. The conference call can also be accessed via live webcast at www.dorel.com , www.newswire.ca or www.q1234.com. 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 21264785# on your phone. This tape recording will be available on Tuesday, March 11, 2008 as of 5:00 P.M. until 11:59 P.M. on Tuesday, March 18, 2008.
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. 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. In the Juvenile segment, Dorel’s powerfully branded products such as Quinny, Maxi-Cosi, Safety 1st and Bébé Confort have shown the way to safety, originality and fashion. Similarly, its highly popular brands such as Cannondale, Schwinn, GT, Mongoose and SUGOi have made Dorel a principal player with both independent bicycle dealers and mass merchants. Dorel’s Home Furnishings segment markets a wide assortment of furniture products, both domestically produced and imported. The Company exerts relentless innovation and marketing flair across all of its divisions. Dorel is a $2 billion company with forty-six hundred employees, facilities in seventeen countries, and sales worldwide.
US operations include Dorel Juvenile Group USA; the Cannondale Sports Group; Pacific Cycle; Ameriwood Industries which produces ready-to-assemble furniture; Altra Furniture; and Cosco Home & Office. In Canada, Dorel operates Dorel Distribution Canada and Dorel Home Products. Abroad, operations include Dorel Europe and IGC in Australia, a manufacturer and distributor of juvenile products. Dorel Asia sources and imports home furnishings products. Dorel China has eight offices which oversee the sourcing, engineering and logistics of the Company’s Asian supplier chain.
Caution Concerning Forward-Looking Statements
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Dorel Industries Inc. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. The business of the Company and these forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ from expected results. Important factors which could cause such differences may include, without excluding other considerations, increases in raw material costs, particularly for key input factors such as particle board and resins; increases in ocean freight container costs; failure of new products to meet demand expectations; changes to the Company’s effective income tax rate as a result of changes in the anticipated geographic mix of revenues; the impact of price pressures exerted by competitors, and settlements for product liability cases which exceed the Company’s insurance coverage limits. A description of the above mentioned items and certain additional risk factors are discussed in the Company’s Annual MD&A and Annual Information Form, filed with the securities regulatory authorities in Canada and the U.S. The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference. The Company’s business, financial condition, or operating results could be materially adversely affected if any of these risks and uncertainties were to materialize. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
DOREL INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
ALL FIGURES IN THOUSANDS OF US $
| As at |
| As at | |||
| (audited) |
| (audited) | |||
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
| $ 22,513 |
|
| $ 25,925 |
Accounts receivable |
|
| 286,924 |
|
| 294,731 |
Income taxes receivable |
|
| 6,519 |
|
| 8,264 |
Inventories |
|
| 322,332 |
|
| 326,540 |
Prepaid expenses |
|
| 10,538 |
|
| 9,652 |
Future income taxes |
|
| 35,228 |
|
| 29,046 |
|
|
| 684,054 |
|
| 694,158 |
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT |
|
| 140,362 |
|
| 142,002 |
INTANGIBLE ASSETS |
|
| 276,383 |
|
| 261,966 |
GOODWILL |
|
| 525,235 |
|
| 501,356 |
OTHER ASSETS |
|
| 31,870 |
|
| 27,924 |
|
|
| $ 1,657,904 |
|
| $ 1,627,406 |
LIABILITIES |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Bank indebtedness |
|
| $ 5,836 |
|
| $ 3,733 |
Accounts payable and accrued liabilities |
|
| 325,938 |
|
| 326,915 |
Income taxes payable |
|
| 25,532 |
|
| 10,742 |
Balance of sale payable |
|
| - |
|
| 605 |
Future Income Taxes |
|
| 136 |
|
| - |
Current portion of long-term debt |
|
| 62,906 |
|
| 7,832 |
|
|
| 420,348 |
|
| 349,827 |
|
|
|
|
|
|
|
LONG-TERM DEBT |
|
| 192,385 |
|
| 375,135 |
PENSION & POST-RETIREMENT BENEFIT OBLIGATIONS |
|
| 20,942 |
|
| 20,370 |
FUTURE INCOME TAXES |
|
| 79,635 |
|
| 74,833 |
OTHER LONG-TERM LIABILITIES |
|
| 6,848 |
|
| 7,719 |
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
CAPITAL STOCK |
|
| 177,271 |
|
| 162,555 |
CONTRIBUTED SURPLUS |
|
| 11,623 |
|
| 6,061 |
RETAINED EARNINGS |
|
| 641,981 |
|
| 567,020 |
ACCUMULATED OTHER COMPREHENSIVE INCOME |
|
| 106,871 |
|
| 63,886 |
|
|
| 748,852 |
|
| 630,906 |
|
|
| 937,746 |
|
| 799,522 |
|
|
| $ 1,657,904 |
|
| $ 1,627,406 |
|
|
|
|
|
|
|
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF INCOME
ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS
| Fourth Quarters Ended |
| Twelve Months Ended | ||||||
| December 30, 2007 |
| December 30, 2006 |
| December 30, 2007 |
| December 30, 2006 | ||
| (unaudited) |
| (unaudited) |
| (audited) |
| (audited) | ||
|
|
|
|
|
|
|
| ||
Sales | $ 454,831 |
| $ 442,719 |
| $ 1,792,611 |
| $ 1,748,032 | ||
Licensing and commission income | 4,022 |
| 5,211 |
| 21,061 |
| 23,136 | ||
TOTAL REVENUE | 458,853 |
| 447,930 |
| 1,813,672 |
| 1,771,168 | ||
|
|
|
|
|
|
|
| ||
EXPENSES |
|
|
|
|
|
|
| ||
Cost of sales | 348,236 |
| 341,223 |
| 1,375,418 |
| 1,363,421 | ||
Selling, general and administrative expenses | 62,035 |
| 62,614 |
| 244,798 |
| 228,765 | ||
Depreciation and amortization | 10,635 |
| 9,868 |
| 39,844 |
| 36,969 | ||
Research and development costs | 2,581 |
| 1,459 |
| 9,009 |
| 8,169 | ||
Restructuring costs | 1,753 |
| 3,671 |
| 14,509 |
| 3,671 | ||
Interest on long-term debt | 5,106 |
| 6,771 |
| 23,782 |
| 29,594 | ||
Other interest | (79) |
| 71 |
| (316) |
| 305 | ||
| 430,267 |
| 425,677 |
| 1,707,044 |
| 1,670,894 | ||
|
|
|
|
|
|
|
| ||
Income before income taxes | 28,586 |
| 22,253 |
| 106,628 |
| 100,274 | ||
|
|
|
|
|
|
|
| ||
Income taxes | 6,238 |
| 578 |
| 19,136 |
| 11,409 | ||
|
|
|
|
|
|
|
| ||
NET INCOME | $ 22,348 |
| $ 21,675 |
| $ 87,492 |
| $ 88,865 | ||
|
|
|
|
|
|
|
| ||
EARNINGS PER SHARE |
|
|
|
|
|
|
| ||
Basic | $ 0.67 |
| $ 0.66 |
| $ 2.63 |
| $ 2.70 | ||
Diluted | $ 0.67 |
| $ 0.66 |
| $ 2.63 |
| $ 2.70 | ||
|
|
|
|
|
|
|
| ||
SHARES OUTSTANDING |
|
|
|
|
|
|
| ||
Basic – weighted average | 33,397,192 |
| 32,861,107 |
| 33,285,990 |
| 32,860,375 | ||
Diluted – weighted average | 33,397,773 |
| 32,861,757 |
| 33,293,248 |
| 32,860,760 | ||
|
|
|
|
|
|
|
| ||
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ALL FIGURES IN THOUSANDS OF US $
| Fourth Quarters Ended |
| Twelve Months Ended | ||||
| December 30, 2007 |
| December 30, 2006 |
| December 30, 2007 |
| December 30, 2006 |
| (unaudited) |
| (unaudited) |
| (audited) |
| (audited) |
|
|
|
|
|
|
|
|
NET INCOME | $ 22,348 |
| $ 21,675 |
| $ 87,492 |
| $ 88,865 |
OTHER COMPREHENSIVE INCOME: |
|
|
|
|
|
|
|
Net change in unrealized foreign currency gains on translation of net investments in self-sustaining foreign operations, net of tax of nil. | 15,227 |
| 15,502 |
| 42,985 |
| 37,726 |
Portion included in income as a result of reductions in net investments in self- sustaining foreign operations | - |
| (1,985) |
| - |
| (1,985) |
| 15,227 |
| 13,517 |
| 42,985 |
| 35,741 |
COMPREHENSIVE INCOME | $ 37,575 |
| $ 35,192 |
| $ 130,477 |
| $ 124,606 |
|
|
|
|
|
|
|
|
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
ALL FIGURES IN THOUSANDS OF US $
| Twelve Months Ended | ||||
|
| December 30, 2007 |
| December 30, 2006 | |
|
| (audited) |
| (audited) | |
CAPITAL STOCK |
|
|
|
| |
Balance, beginning of period |
| $ 162,555 |
| $ 162,503 | |
Issued under stock option plan |
| 14,716 |
| 52 | |
Balance, end of period |
| 177,271 |
| 162,555 | |
|
|
|
|
| |
CONTRIBUTED SURPLUS |
|
|
|
| |
Balance, beginning of period |
| 6,061 |
| 3,639 | |
Stock-based compensation |
| 5,562 |
| 2,422 | |
Balance, end of period |
| 11,623 |
| 6,061 | |
|
|
|
|
| |
RETAINED EARNINGS |
|
|
|
| |
Balance, beginning of period |
| 567,020 |
| 478,155 | |
Net income |
| 87,492 |
| 88,865 | |
Dividends on common shares |
| (12,524) |
| – | |
Dividends on deferred share units |
| (7) |
| – | |
Balance, end of period |
| 641,981 |
| 567,020 | |
|
|
|
|
| |
ACCUMULATED OTHER COMPREHENSIVE INCOME |
|
|
|
| |
Balance, beginning of period |
| 63,886 |
| 28,145 | |
Other comprehensive income |
| 42,985 |
| 35,741 | |
Balance, end of period |
| 106,871 |
| 63,886 | |
|
|
|
|
| |
TOTAL SHAREHOLDERS’ EQUITY |
| $ 937,746 |
| $ 799,522 | |
|
|
|
|
| |
DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
ALL FIGURES IN THOUSANDS OF US $
| Fourth Quarters Ended |
| Nine Months Ended | ||||
| Dec. 30, 2007 |
| Dec. 30, 2006 |
| Dec. 30, 2007 |
| Dec. 30, 2006 |
| (unaudited) |
| (unaudited) |
| (audited) |
| (audited) |
CASH PROVIDED BY (USED IN): |
|
|
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net income | $ 22,348 |
| $ 21,675 |
| $ 87,492 |
| $ 88,865 |
Items not involving cash: |
|
|
|
|
|
|
|
Depreciation and amortization | 10,635 |
| 9,868 |
| 39,844 |
| 36,969 |
Amortization of deferred financing costs | 68 |
| 38 |
| 217 |
| 512 |
Future income taxes | (2,880) |
| (524) |
| (7,282) |
| 3,531 |
Stock-based compensation | 1,636 |
| 513 |
| 5,562 |
| 2,422 |
Pension and post-retirement defined |
|
|
|
|
|
|
|
Restructuring activities | 1,351 |
| 4,347 |
| 15,436 |
| 3,840 |
Exchange gain from reduction of net investments in foreign operations | – |
| (746) |
| – |
| (1,985) |
Loss on disposal of property, plant |
|
|
|
|
|
|
|
| 33,595 |
| 35,155 |
| 142,858 |
| 136,123 |
Net changes in non-cash balances related |
|
|
|
|
|
|
|
Accounts receivable | 5,252 |
| (16,319) |
| 19,811 |
| 188 |
Inventories | (2,354) |
| (3,610) |
| 13,137 |
| (39,752) |
Prepaid expenses | (1,943) |
| 32 |
| (126) |
| 1,053 |
Accounts payable, accruals and other liabilities | 28,570 |
| 24,626 |
| (23,707) |
| 10,810 |
Income taxes | 9,288 |
| (460) |
| 15,367 |
| (1,701) |
| 38,813 |
| 4,269 |
| 24,482 |
| (29,402) |
CASH PROVIDED BY OPERATING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Bank indebtedness | 1,419 |
| (3,377) |
| 1,577 |
| (1,136) |
Long-term debt | (69,772) |
| (21,397) |
| (136,036) |
| (64,787) |
Dividends on common shares | (4,175) |
| – |
| (12,524) |
| – |
Issuance of capital stock | – |
| 8 |
| 14,698 |
| 42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Acquisition of subsidiary companies | 46 |
| – |
| (2,786) |
| (4,946) |
Additions to property, plant and |
|
|
|
|
|
|
|
Deferred development costs | (4,093) |
| (4,470) |
| (14,470) |
| (10,628) |
Funds held by ceding insurer | – |
| – |
| – |
| 3,647 |
Intangible assets | (551) |
| 558 |
| (1,871) |
| (2,034) |
CASH USED IN INVESTING ACTIVITIES | (13,310) |
| (5,149) |
| (41,396) |
| (28,295) |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents | 1,083 |
| 380 |
| 2,929 |
| 1,035 |
NET (DECREASE) INCREASE IN CASH | (12,347) |
| 9,889 |
| (3,412) |
| 13,580 |
Cash and cash equivalents, beginning | 34,860 |
| 16,036 |
| 25,925 |
| 12,345 |
CASH AND CASH EQUIVALENTS, END | $ 22,513 |
| $ 25,925 |
| $ 22,513 |
| $ 25,925 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
| Dorel Industries Inc. Industry Segmented Information For The Fourth Quarters Ended December 30 All Figures in Thousands of US$ | ||||||||
| Total | Juvenile | Recreational / Leisure | Home Furnishings | |||||
| 2007 (unaudited) | 2006 (unaudited) | 2007 (unaudited) | 2006 (unaudited) | 2007 (unaudited) | 2006 (unaudited) | 2007 (unaudited) | 2006 (unaudited) | |
Total Revenue | $458,853 | $447,930 | $247,983 | $225,700 | $85,836 | $76,943 | $125,034 | $145,287 | |
Cost of sales | 348,236 | 341,223 | 174,809 | 156,699 | 70,267 | 61,799 | 103,160 | 122,725 | |
Selling, general and administrative expenses |
|
|
|
|
|
|
|
| |
Depreciation & amortization |
|
|
|
|
|
|
|
| |
Research and development costs |
|
|
|
|
|
|
|
| |
Restructuring costs |
|
|
|
|
|
|
|
| |
Earnings from Operations |
|
|
|
|
|
|
|
| |
Interest | 5,027 | 6,842 |
|
|
|
|
|
| |
Corporate expenses |
|
|
|
|
|
|
|
| |
Income taxes | 6,238 | 578 |
|
|
|
|
|
| |
Net income | $22,348 | $21,675 |
|
|
|
|
|
| |
Earnings per Share |
|
|
|
|
|
|
|
| |
Basic | $0.67 | $0.66 |
|
|
|
|
|
| |
Diluted | $0.67 | $0.66 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Reconciliation to non-GAAP financial measures
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
Earnings from Operations as above |
|
|
|
|
|
|
|
|
Restructuring costs |
|
|
|
|
|
|
|
|
Restructuring costs in cost of sales |
|
|
|
|
|
|
|
|
Adjusted earnings from Operations |
|
|
|
|
|
|
|
|
Interest | 5,027 | 6,842 |
|
|
|
|
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
Income taxes - as above | 6,238 | 578 |
|
|
|
|
|
|
Income taxes on restructuring costs | 859 | 1,329 |
|
|
|
|
|
|
Adjusted net income | $ 23,995 | $ 24,370 |
|
|
|
|
|
|
Adjusted Earnings per Share |
|
|
|
|
|
|
|
|
Basic | $0.72 | $0.74 |
|
|
|
|
|
|
Diluted | $0.72 | $0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dorel Industries Inc. Industry Segmented Information For The Years Ended December 30 All Figures in Thousands of US$ | ||||||||
| Total | Juvenile | Recreational / Leisure | Home Furnishings | |||||
| 2007 (unaudited) | 2006 (unaudited) | 2007 (unaudited) | 2006 (unaudited) | 2007 (unaudited) | 2006 (unaudited) | 2007 (unaudited) | 2006 (unaudited) | |
Total Revenue | $1,813,672 | $1,771,168 | $963,572 | $888,534 | $374,783 | $340,696 | $475,317 | $541,938 | |
Cost of sales | 1,375,418 | 1,363,421 | 668,248 | 625,032 | 301,835 | 276,718 | 405,335 | 461,671 | |
Selling, general and administrative expenses |
|
|
|
|
|
|
|
| |
Depreciation & amortization |
|
|
|
|
|
|
|
| |
Research and development costs |
|
|
|
|
|
|
|
| |
Restructuring costs |
|
|
|
|
|
|
|
| |
Earnings from Operations |
|
|
|
|
|
|
|
| |
Interest | 23,466 | 29,899 |
|
|
|
|
|
| |
Corporate expenses |
|
|
|
|
|
|
|
| |
Income taxes | 19,136 | 11,409 |
|
|
|
|
|
| |
Net income | $87,492 | $88,865 |
|
|
|
|
|
| |
Earnings per Share |
|
|
|
|
|
|
|
| |
Basic | $2.63 | $2.70 |
|
|
|
|
|
| |
Diluted | $2.63 | $2.70 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Reconciliation to non-GAAP financial measures
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
Earnings from Operations as above |
|
|
|
|
|
|
|
|
Restructuring costs |
|
|
|
|
|
|
|
|
Restructuring costs in cost of sales |
|
|
|
|
|
|
|
|
Adjusted earnings from Operations |
|
|
|
|
|
|
|
|
Interest | 23,466 | 29,899 |
|
|
|
|
|
|
Corporate expenses |
|
|
|
|
|
|
|
|
Income taxes - as above | 19,136 | 11,409 |
|
|
|
|
|
|
Income taxes on restructuring costs | 6,584 | 1,580 |
|
|
|
|
|
|
Adjusted net income | $ 100,092 | $ 92,025 |
|
|
|
|
|
|
Adjusted Earnings per Share |
|
|
|
|
|
|
|
|
Basic | $3.01 | $2.80 |
|
|
|
|
|
|
Diluted | $3.01 | $2.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DOREL INDUSTRIES INC.
By: /s/ Martin Schwartz_____________
Martin Schwartz
Title: President and Chief Executive Officer
By: /s/ Jeffrey Schwartz_____________
Jeffrey Schwartz
Title: Executive Vice-President,
Chief Financial Officer
March 11, 2008