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Dorel posts record profits

By Michael J. Knell -- Furniture Today, November 16, 2009

MONTREAL — Consumer goods giant Dorel Inds. earned record profits of $30.2 million or 91 cents per share in the third quarter, although revenue fell 6.1% to $552.2 million.

Net income for the nine months ended Sept. 30 was $83 million or $2.49 per share, down 11.4% from the same period a year earlier. Revenue for the nine months of $1.6 billion was down 6.3%.

“The fact that we have exceeded last year’s earnings for the quarter despite a difficult economic period is a tribute to the quality and value of our products and our focus on maximizing margins through cost containment, a more stable cost environment and our disciplined minimum margin requirement program,” said President and CEO Martin Schwartz.

He added that “strong results within North America in the juvenile and home furnishing segments are offsetting less profitable results at other divisions.”

Although a Canadian company, Dorel reports in U.S. dollars.

Dorel said third-quarter sales for its home furnishings segment were $125.4 million, off slightly from a year earlier. But operating earnings in the segment were $12.5 million, more than five times greater than in the comparable period last year.

For the first nine months, home furnishings revenues of $342.6 million were down 1.9% year-over-year, but earnings from operations more than tripled to $24.6 million.

Schwartz attributed the segment’s earnings improvement to “lower material costs, a favorable currency environment, as well as increased operational efficiencies.”

Dorel said its overall 2009 earnings were hurt by the reversal of a $10.5 million gain on its 2008 foreign currency exchange contracts, of which $1.8 million was charged against the third quarter.

The company also said that recent trends in the value of the U.S. dollar against other currencies mean that earnings will be dampened within home furnishings. The segment has two manufacturing facilities in Canada whose products are sold primarily in the United States.

“The turnaround in home furnishings has materialized as we expected, and while currency rates do pose a challenge, our belief in that segment has been validated by its greatly improved performance,” said Schwartz.

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	2009	2008	Change
(a) Includes restructuring costs of $14,000 in the 2009 quarter, $86,000 in the 2008 quarter and $1.5 million in the 2008 nine months, and restructuring benefit of $175,000 in the 2009 nine months.
Revenues	$518,458,000	$552,242,000	(6.1%)
Operating income	48,964,000	45,454,000	7.7%
Net income (a)	30,230,000	27,208,000	11.1%
Earnings per share	0.91	0.82	11.0%
9 months ended 9/30	2009	2008	Change
Revenues	$1,594,811,000	$1,702,000,000	(6.3%)
Operating income	138,112,000	157,919,000	(12.5%)
Net income (a)	83,023,000	93,688,000	(11.4%)
Earnings per share	2.49	2.81	(11.4%)

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Dorel reports record profits for third quarter

Nov 6, 2009

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