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Canadian Corporate News --- Hot Off The Wire
News Release for DOREL INDUSTRIES INC.
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NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: DOREL INDUSTRIES INC.
ME, TSE SYMBOL: DII.A
ME, TSE SYMBOL: DII.B
NASDAQ SYMBOL: DIIBF
AUGUST 11, 1998
Dorel Announces More Record Profits - Stock to Split Two
For One
MONTREAL, QUEBEC--Dorel Industries Inc. (NASDAQ: DIIBF) today
announced results for the three months ended June 30, 1998,
marking the 16th consecutive quarter of improved sales and
earnings. Company President and Chief Executive Officer, Martin
Schwartz also revealed that the Board of Directors has approved a
two for one stock split, effective September 2, 1998.
Net earnings for the second quarter increased 40 percent to $8.6
million from $6.2 million last year. On a fully diluted basis,
earnings per share were up 26.5 percent to $0.63 from $0.49 a year
ago. Sales for the period rose 41.4 percent to $174.3 million
from $123.3 million.
Net earnings for the first half of the year jumped 43.3 percent to
$16 million from $11.2 million last year. Earnings per share rose
31 percent to $1.17 per share, fully diluted, from $0.89 per
share, fully diluted for the six months a year ago. Sales climbed
to $334.9 million, up 35 percent, from $248.1 million last year.
Less than 1 percent of Company sales are from Asia.
Mr. Schwartz stated Dorel's ready-to-assemble segment continues to
benefit from strong demand from their RTA customers. He added,
however, that with sales up significantly, margins have been
affected by reduced efficiencies. "In order to ensure deliveries
to our clients despite this surge in orders, we incurred
additional overtime and other related costs. We have since
upgraded equipment and added new machinery to our existing RTA
facilities. We expect margins to improve through the balance of
the year".
"We are pleased with the progress to date since the acquisition
this past spring of U.S. RTA manufacturer, Ameriwood," said Mr.
Schwartz. Some 50 positions have been eliminated while expenses
and raw material costs have thus far been reduced by over US$500
thousand per month. Ameriwood's corporate office in Grand Rapids
has been closed and will result in annual savings of $2.9 million.
Capacity utilization has increased by 40 percent.
Several million dollars in capacity is being switched from
Charleswood to Ameriwood. This will relieve overtime and increase
efficiencies at Charleswood which have been hampered this year and
has the added benefit of substantially increasing productivity at
Ameriwood.
The juvenile segment was strong with improved numbers across the
board. Cosco, Maxi-Miliaan, Infantino and Dorel (U.K.) all
contributed to the solid performance. The introduction of new
products continued to fuel sales. A new Cosco high chair,
Options, has been well received as has the High Back booster seat
introduced this past spring. Coupled with the Grand Explorer and
Adventurer, these units are capturing an increasing share of the
car seat market. Sales of the Maxi Cosi Priori, Maxi's first full
size children's car seat, have been better than expected and have
greatly contributed to Maxi's profits.
During the summer, Home Furnishings division, Dorel Home Products,
consolidated all of its manufacturing and distribution operations
in a single, 408,000 sq. ft. Montreal facility. The transition
went smoothly with production schedules generally unaffected. A
second paint line has been installed, which effectively doubles
capacity and allows for the elimination of any out-sourcing.
The added paint line and a system of cell manufacturing in the
metal department have increased efficiencies. Rather than working
7 days a week, 24 hours per day, there are now two shifts, five
days per week. The workforce has been reduced, with half the cuts
a result of the effectiveness of the cells. The benefits of these
changes are expected to have a positive effect during the third
quarter.
Dorel will split each of its Class A Multiple Voting Shares and
Class B Subordinate Voting Shares on the basis of two new shares
for each existing share. Dorel has established September 2, 1998
as the record date for the stock split. The Class A Multiple
Voting Shares and Class B Subordinate Voting Shares will begin
trading on a post-split basis two days prior to the record date.
Mr. Schwartz stated the announced share split will provide added
liquidity and an opportunity for additional retail investors to
buy into Dorel. "We look forward to a strong second half as
demand for our various products continues to grow," concluded Mr.
Schwartz.
This communique contains forward-looking statements that involve
risks and uncertainties. Actual results may be materially
different from those contained in such forward-looking statements.
Additional information concerning factors that could cause actual
results to materially differ from those in the forward-looking
statements is contained in the Company's filings with the U.S.
Securities and Exchange Commission.
Dorel is a rapidly growing, consumer products manufacturer
specializing in three product areas: ready-to-assemble (RTA)
furniture, juvenile products and home furnishings. Dorel's
product offerings include a wide variety of RTA furniture for home
and office use; juvenile products such as infant car seats,
strollers, high chairs, toddler beds and cribs; and home
furnishings such as metal folding chairs, tables, bunk beds,
futons and step stools.
Dorel employs more than 3,400 people in nine countries. Major
North American facilities are located in Montreal, Quebec;
Cornwall, Ontario; Columbus, Indiana; Wright City, Missouri;
Tiffin, Ohio; Dowagiac, Michigan; Cartersville, Georgia; and San
Diego, California. The Company's major subsidiary in the United
States is Cosco, Inc. European operations are carried out through
Maxi- Miliaan B.V. in the Netherlands and Dorel (U.K.) Ltd. in the
United Kingdom.
N.B. All figures are quoted in Canadian dollars.
/T/
DOREL INDUSTRIES INC.
FINANCIAL HIGHLIGHTS
6 MONTHS JUNE 30, 1998 JUNE 30, 1997
_______________________________________________________________
SALES $334,914,120 $248,059,183
NET EARNINGS $16,023,001 $11,184,498
E.P.S BASIC $1.20 $0.92
E.P.S. FULLY DILUTED $1.17 $0.89
AVG. NO. SHARES - BASIC 13,400,402 12,156,827
AVG. NO. SHARES -
FULLY DILUTED 13,758,642 12,559,796
QUARTER
_______________________________________________________________
SALES $174,281,696 $123,282,616
NET EARNINGS $8,632,843 $6,167,878
E.P.S BASIC $0.64 $0.51
E.P.S. FULLY DILUTED $0.63 $0.49
AVG. NO. SHARES - BASIC 13,531,411 12,162,854
AVG. NO. SHARES -
FULLY DILUTED 13,882,488 12,559,796
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
DOREL Industries Inc.
Jeffrey Schwartz
(514) 323-5701
or
Maison Brison
Rick Leckner
(514) 731-0000
INDUSTRY: HPR
SUBJECT: ERN
-0-
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