Dorel Inds. reports 4Q revenue up 4.1%
Net earning drop 3.9%
By Furniture Today Staff -- Furniture Today, March 12, 2007
MONTREAL — Dorel Inds., parent of furniture sources Ameriwood, Carina, SystemBuild, Altra and Ridgewood, said its fourth-quarter revenue rose 4.1% while net earnings declined 3.9%.
The company, which reports in U.S. dollars, said it earned $21.7 million or 66 cents per share in the period, on revenue of $447.9 million.
The latest quarter included $4 million in pretax restructuring costs for production changes at Dorel Europe. The 2005 quarter also included restructuring costs from an Ameriwood plant closure. Excluding the restructuring charges in both periods, the company said net income rose 6.5% to $24.4 million or 74 cents per share.
Full-year revenue was $1.77 billion, virtually flat with 2005’s $1.76 billion, while net income declined 2.6% to $88.9 million or $2.70 per share. Excluding restructuring costs in both years, adjusted net income was $92 million or $2.80, down 5.6%.
The Dorel Europe costs in the quarter involved operational changes in the company’s juvenile products segment.
In the company’s Home Furnishings Segment, fourth-quarter revenue of $145.3 million was down 2.4% from the same period a year earlier, while adjusted earnings from operations rose 9% to $8.9.
Total 2006 revenue dropped 4.8% to $541.9, while adjusted earnings from operations were down 3.9% to $31.9. million.
The fourth quarter of 2006 includes a charge of $4.5 million for U.S. antidumping duties, pertaining to metal furniture imported from China into the United States that was subject to duties from December 2001 through May 2003. The company originally recorded and estimated this liability to be $2.5 million, but in December it learned the U.S. Department of Commerce had assessed the product at a higher rate, and needed an additional $4.5 million.
In response, Dorel said it is suing its law firm for “failure to timely file a request for an administrative review by the DOC of the duties imposed.”
Adjusted gross margins for the segment improved to 14.9% in 2006 versus 13.4% in 2005, mainly because of ready-to-assemble furniture manufacturing improvements, the company said.
Dorel’s board, meanwhile, approved payment of the company’s first quarterly stock dividend, amounting to 12.5 cents per share on Class A Multiple Voting Shares, Class B Subordinate Voting Shares and Deferred Share Units of the company. It will be payable on April 23 to shareholders of record on March 23.
“Ready-to-assemble furniture operations continue to be a focus as we redefine operations at Ameriwood,” said Martin Schwartz, Dorel CEO. “In 2007, Ameriwood will explore sales opportunities that are best suited to their domestic manufacturing capabilities.
“We expect to benefit from board prices that have stabilized in the last several months. Concurrently, Ameriwood will step up efforts to further reduce operational costs. We expect high single-digit revenue growth in this segment with a continuing turnaround in earnings,” he said.
In addition to home furnishings and juvenile, Dorel has products in recreation and leisure and office products segments.
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