Dorel profits down 21% as sales fall 7.2%

But furniture segment operating profits more than double

Larry Thomas -- Furniture Today, August 12, 2009

MONTREAL — Hurt by losses on foreign currency exchange contracts, Canadian furniture resource Dorel Inds. said its second-quarter profits fell 21%.

The company, a major supplier of juvenile products and ready-to-assemble furniture, said sales for the quarter ended June 30 declined 7.2%.

"Overall, our divisions are performing well, notwithstanding the challenging economy," said Martin Schwartz, president and CEO. "For the second consecutive quarter, we have surpassed our internal earnings forecasts due to the implementation of stringent cost containment measures, a focus on working capital management and a more stable cost environment."

Dorel, which reports its sales and earnings in U.S. dollars, said sales for the quarter totaled $551.1 million. That's down from $593.7 million in last year's second quarter.

Net income totaled $24.8 million or 74 cents per share. That compares with net income of $31.3 million or 94 cents per share in the same quarter last year.

Excluding the losses on currency exchange contracts, net income in the most recent quarter was $37.4 million or $1.01 per share.

The company said sales in its home furnishings segment, which includes the Ameriwood, Ridgewood and Charleswood brands, fell 7.8% to $107.4 million. Operating profits, however, more than doubled to $7.7 million.

In the juvenile products segment, sales fell 13.3% to $244.7 million and operating profits tumbled 43.4% to $16.7 million.

For the six months ended June 30, companywide sales fell 6.4% to $1.08 billion.

Six-month net income was $52.8 million or $1.58 per share. That's down 20.6% from the first half of last year, when profits were $66.5 million or $1.99 per share.