Dorel 3Q revenues up 3.1%
By Michael Knell -- Furniture Today, November 12, 2006
Montreal — Consumer goods and ready-to-assemble furniture giant Dorel Inds. said total third-quarter revenues rose 3.1% to $436.3 million, with net earnings of $25.1 million, or 76 cents per share, essentially flat with adjusted earnings of $25.6 million, or 78 cents per share, in 2005's third quarter.
The adjusted 2005 figure doesn't include restructuring costs associated with the closing of an Ameriwood RTA furniture plant.
For the nine months, revenues remained basically flat at $1.3 billion, as net earnings dropped to $67.2 million, or $2.04 per share, compared with adjusted earnings of $74.6 million, or $2.27 per share, in the previous year's nine months.
Dorel reports in U.S. dollars.
"The negative trend in sales was reversed in home furnishings during the quarter," said President and CEO Martin Schwartz in a conference call with securities analysts.
Third-quarter revenues in that segment were essentially flat year-over-year at $142.8 million, but earnings from operations rose 62.5% to $13 million. For the nine months, home furnishings revenues were off 5.7% to $396.7 million, while earnings from operations were down 8% to $23 million.
Schwartz said gross margins in the segment were 17.5% in the third quarter, an improvement over 13% in 2005's comparable quarter, driven principally by improvements at Ameriwood's RTA division.
"Sales of ready-to-assemble furniture declined by $4.2 million from the third quarter of 2005, or 7.6%, due principally to lower sales to the mass-merchant channel," he said. "Versus the second quarter of 2006, RTA sales increased by 11.9%. Ameriwood's futon sales rebounded during the third quarter, with a strong back-to-college showing.
"While Ameriwood has been importing a portion of products and furniture components for some time, the new focused global sourcing initiative is expected to yield positive results in 2007," Schwartz said.
"Concurrently, efforts are under way to ensure the lowest cost position in domestic production, and price increases with Ameriwood's customers have been successfully implemented," he said.
Third-quarter revenues in the juvenile segment were up 3.7% to $217 million, while revenues in the recreational/leisure segment increased 7.9% to $76.4 million.
| Dorel Inds. | |||
|---|---|---|---|
| Owns Ameriwood, Charleswood, Cosco and Ridgewood | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 9/30 | 2006 | 2005 | Change |
| (a) The 2005 quarter and nine months includes $6.4 million in pretax restructuring costs in connection with the closure of an Ameriwood plant. |
|||
| Revenues | $436,300,000 | $423,329,000 | 3.1% |
| Operating income | 49,742,000 | 48,370,000 | 2.8% |
| Net income (a) | 25,073,000 | 19,826,000 | 26.5% |
| Earnings per share | 0.76 | 0.60 | 26.7% |
| 9 months ended 9/30 | 2006 | 2005 | Change |
| Revenues | $1,323,238,000 | $1,330,607,000 | (0.6%) |
| Operating income | 134,889,000 | 146,955,000 | (8.2%) |
| Net income (a) | 67,190,000 | 68,776,000 | (2.3%) |
| Earnings per share | 2.04 | 2.09 | (2.4%) |
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Dorel: Home still key segment
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Dorel Inds. reports 4Q revenue up 4.1%
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