Dorel Industries (DII.B , M or T) good earnings report Message Board

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Gold/Mining/Energy : Dorel Industries (DII.B , M or T) good earnings report

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To: John Stopforth who wrote ()	10/7/1997 4:15:00 PM
From: Jay Arkay	of 96

Dorel was featured today in a full-page article in the Financial Post (October 7, page 33), generally in very positive terms. Short snippets from the piece follow: Dorel Industries Inc. has transformed what was a heavy debt burden in the early 1990s into an increasingly healthy financial statement. The company has enjoyed 12 consecutive quarters of growth. In 1994 the company had net income of $8 million and long-term debt of about $78 million. Two years later, net income was $15.5 million and long term debt was at $55 million. They are already below 1:1 on debt-equity ratio and by the end of next year they will see substantial further improvement, said one analyst. "The balance sheet is no longer an excuse not to buy the stock." Analysts see a strong future. Dorel has turned around the companies it acquired during a cross-border shopping spree from 1988 to 1994. It is developing its product line and continues to grow internationally. They may be based in Canada, but Dorel is an international manufacturer. About 82% of the company's revenue comes from the U.S., 10% from Europe, and only 8% from Canada. RBC Dominion Securities' analyst Jon Reider said that expects Dorel's ready-to-assemble division to continue to perform strongly because of improved plant operating efficiencies and new product lines. Reider estimates Dorel's earnings will be $1.90 a share in 1997 and $2.30 in 1998. An analyst with C.M. Oliver & Co. forecasts $1.85 and $2.13 for these two years. CIBC Wood Gundy analyst forecasts $1.85 in 1997, $2.15 in 1998, and $2.50 in 1999. The report goes on to detail the successful formula that Dorel has used to acquire new branches and remake them and their product lines to expand sales, cut costs, and grow profits. One analyst states that shareholders should not expect Dorel to start paying dividends even as the company continues to expand and prosper. "Companies that pay dividends just don't know what to do with their money. Dorel still has plenty of things they can do." The article also contains a detailed technical analysis of Dorel share prices. It finds the company is "in the midst of a strong wave three bull run." It does caution, though, about possible increasing resistance and consolidation toward the 40-week moving average. Dorel shares (DII.B) continued to gain today, closing up 65 cents at $33.55 on TSE and up 95 cents at $33.95 on MSE.

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