MONTREAL – Dorel Industries says its fiscal year got off to strong start as an early European spring drove a recovery in its bicycle business.
The Montreal-based maker of bicycles, car seats and ready-to-make furniture said it earned US$24.8 million or 77 cents per diluted share in the first quarter. That compared to US$22.3 million or 70 cents per share a year earlier.
The company, which reports in U.S. dollars, said revenues increased nine per cent to $647.7 million from $594.2 million in the prior year.
Dorel was expected to earn 69 cents per share on $632 million of revenues, according to analysts polled by Thomson Reuters.
“All three Dorel business segments improved during the first quarter, with the most dramatic gains in our recreational/leisure segment,” stated president and CEO Martin Schwartz.
Sales rebounded at both Cannondale Sports Group and Pacific Cycle while the global bicycle market strengthened.
The segment’s operating profit increased 71 per cent to $16.3 million on a recovery of demand and favourable exchange rates. Revenues grew 18.1 per cent to $240.3 million.
Profits in the juvenile segment, which makes car seats and strollers, increased 9.2 per cent to $19.6 million on $269.2 million of revenues. Dorel (TSX:DII.B) said a strong performance of juvenile products in the U.S. more than offset the negative impact of a lower Canadian dollar.
Home furnishings earned $8.1 million on $138.1 million of revenues.
Excluding the contribution from an acquisition, organic revenue grew three per cent.
After the quarter ended, Dorel acquired the popular Infanti brand in Brazil, which the company said will better reach the fast-growing middle-class consumer. Dorel already owns the brand of products including car seats, strollers, cribs and accessories in Chile, Peru, Bolivia, Argentina, Colombia and most Central American and Caribbean countries.
Schwartz said he expects the bike segment’s recovery will continue in Europe and North America in higher price bicycles and those sold by mass retailers.
“In the second half we are also going to see the full benefit of our Caloi acquisition, so we remain confident about our return to much higher levels of profitability,” he added.
The company manufactures a number of children’s products under the Safety 1st, Quinny, Cosco, Maxi-Cosi and Bebe Confort brands, while its bikes and related products include brands such as Cannondale, Schwinn, GT, Mongoose, IronHorse and Sugoi. It has annual sales of US$2.6 billion and employs 6,300 people in 24 countries.
On the Toronto Stock Exchange, Dorel shares closed up $1.48 or 3.75 per cent to C$40.93.
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