Dorel Continues Five Year Growth Streak Revenues and Net Earnings Increase to
New Records
MONTREAL, Feb. 17 /CNW/ - Dorel (TSE : DII.A, DII.B ; NASDAQ : DIIBF) is
well on its way to becoming a billion dollar corporation this year. A strong
fourth quarter pushed revenue well above the $900 million mark for the fiscal
year ended December 30, 1999. Record earnings were also achieved, further
underlining the company's solid five year performance. Dorel has now posted
22 consecutive quarters of growth.
Revenues and earnings for the fourth quarter and year ended December 30,
1999 were as follows.
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Summary of Financial Highlights
-----------------------------------------------------------
Year ended December 30,
-----------------------------------------------------------
1999 1998 Change
Revenue
929,082,942 766,606,558 21.2%
Net income 55,676,067 26,985,078 106.3%
Net income per share
Basic 1.99 0.99 101.0%
Fully diluted 1.91 0.97 96.9%
Net income before
restructuring 37,597,104 48.1%
EPS before restructuring
Basic 1.37 45.3%
Fully diluted 1.35 41.5%
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Fourth Quarter
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1999 1998 Change
Revenue 249,159,274 220,726,529 12.9%
Net income 17,080,063 11,863,630 44.0%
Net income per share
Basic 0.61 0.43 41.9%
Fully diluted 0.58 0.42 38.1%
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``Much was accomplished through 1999 which positions Dorel to continue
this solid progress. While each of our three segments experienced top and
bottom line growth, a number of efficiency issues were identified and resolved
which will make our operations even stronger. We are confident that our
emphasis on new product development will continue to capture added market
share,' stated Dorel President and Chief Executive Officer, Martin Schwartz.
RTA
Sales for the year in ready-to-assemble rose 17.2% to $345.7 million,
while earnings from operations jumped 47.7% to $59.6 million, making it the
leading contributor to profits. While sales dropped 2.8% during the fourth
quarter to $92.7 million, earnings from operations were up 44.7% to $20.5
million.
A recent expansion and realignment at the Canadian and U.S. facilities
have positioned Dorel's RTA units to benefit further from continuing rapid
growth with its customers. The combined changes should allow RTA capacities
going forward to increase by some 50%, thus providing the capacity for up to a
quarter of a billion dollars in additional sales.
Subsequent to year end the RTA sector underwent a major organizational
change. All RTA facilities are being consolidated as one operational entity
under Ameriwood Industries. RTA headquarters will be in Wright City, Missouri.
The Ridgewood and Charleswood names will be retained as major brands to be
marketed under the Ameriwood umbrella.
``Dorel has some of the finest brands and is among the most efficient
operations in the RTA industry. We are convinced that these combined
operations will create important synergies which will help us achieve our
goals of becoming the leading supplier of RTA furniture in North America,'
commented Mr. Schwartz.
JUVENILE
New product introductions, new licensing arrangements and strong branding
propelled the Juvenile sector to increased profitability in 1999. Sales for
the year rose 36.3% to $399.7 million, while earnings from operations were up
14.4% to $30.3 million. During the fourth quarter sales increased 33.6% to
$93.9 million and earnings from operations rose 25.6% to $7.3 million.
Cosco's licensing agreement with Eddie Bauer proved highly successful and
additional significant revenues are anticipated this year. This positive
experience led Cosco to seek out other joint ventures. In January it was
announced that three additional licensing agreements had been secured, one
with the National Association For Stock Car Racing (NASCAR) and the others
with two of the top U.S. racing car drivers.
New products launched and others to be introduced by Dorel's European
unit, Maxi-Miliaan, auger well for the current fiscal year. Maxi intends to
unveil four new stroller ``travel systems' by mid-year. Both Maxi and Cosco
are also collaborating with major mass merchants, such as Wal-Mart, who are
expanding internationally.
HOME FURNISHINGS
Sales for the year were up 2.9% to $183.7 million, while earnings from
operations soared 135.7% to $11 million. During the fourth quarter sales
increased 13.6% to $62.5 million and earnings from operations jumped 123% to
$3.4 million.
Cosco continued to be a major component of the segment's success. Their
highly popular lines of work platforms and step stools have been augmented
with new models. This has helped broaden the recognition and reputation of
Cosco. With the Sealy brand, Dorel Home Products intends to become the
overwhelmingly dominant futon manufacturer, a market which is estimated at
between $500 and $700 million at the retail level, and which is still growing.
OUTLOOK
Brands and licenses such as Ameriwood, Ridgewood, Cosco, Eddy Bauer,
NASCAR and Sealy as well as Maxi in Europe have positioned Dorel firmly with
consumers. Solid relationships with the major mass merchants make the
Company's products easy to find wherever they choose to shop.
``It is this combination, coupled with our focus on the introduction of
innovative, new products that will permit us to maintain our strong internal
growth. As well, we are actively seeking an acquisition which would benefit
from our valuable distribution channels. While our objective is to complete
such a purchase this year, we will only do so if the fit is right,' concluded
Mr. Schwartz.
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 3,300 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; Fort Smith, Arkansas and San Diego, California. The
Company's major divisions in the United States include Cosco, Ameriwood and
Infantino. In Canada, Dorel operates Ridgewood and Dorel Home Products.
European operations are carried out through Maxi-Miliaan B.V. in the
Netherlands and Dorel (U.K.) Ltd. in the United Kingdom.
This communiqu‚ 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 INDUSTRIES INC.
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 30, 1999
1999 1998
$ $
ASSETS
CURRENT ASSETS
Cash and cash equivalents 8,779,318 9,851,288
Accounts receivable 151,260,493 120,298,982
Inventories 147,282,021 143,161,832
Prepaid expenses 15,273,107 11,652,230
Deferred income taxes 10,655,741 10,097,437
----------------------------------
333,250,680 295,061,769
CAPITAL ASSETS 136,878,142 126,464,855
EQUIPMENT UNDER CAPITAL LEASE - 13,294,093
DEFERRED CHARGES 5,239,246 5,357,211
INTANGIBLE ASSETS 20,458,477 24,208,133
----------------------------------
495,826,545 464,386,061
----------------------------------
----------------------------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness 1,603,857 12,906,046
Accounts payable and accrued
liabilities 76,149,470 69,744,936
Salaries payable 14,594,528 11,933,481
Income taxes payable 4,208,946 5,247,547
Current portion of long-term debt and
obligation under capital lease 7,727,074 14,279,021
----------------------------------
104,283,875 114,111,031
----------------------------------
LONG-TERM DEBT 106,978,066 111,216,018
----------------------------------
OBLIGATION UNDER CAPITAL LEASE - 734,839
----------------------------------
DEFERRED INCOME TAXES 18,497,075 14,741,832
----------------------------------
SHAREHOLDERS' EQUITY
CAPITAL STOCK 90,321,519 88,025,658
RETAINED EARNINGS 172,250,053 116,785,779
CUMULATIVE TRANSLATION ADJUSTMENT 3,495,957 18,770,904
----------------------------------
266,067,529 223,582,341
----------------------------------
495,826,545 464,386,061
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DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE FOURTH QUARTERS AND TWELVE MONTHS ENDED DECEMBER 30,
1999 AND 1998
Fourth quarter ended Twelve months ended
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Dec. 30, Dec. 30, Dec. 30, Dec. 30,
1999 1998 1999 1998
$ $ $ $
SALES 249,159,274 220,726,529 929,082,942 766,606,558
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EXPENSES
Cost of sales 186,042,862 167,541,387 697,811,566 584,007,406
Operating 29,712,663 28,752,150 114,774,048 96,749,857
Amortization 5,628,610 5,239,973 24,395,408 20,130,611
Research and
development costs 528,969 345,616 2,424,839 1,998,461
Restructuring costs - 133,889 - 14,528,673
Interest on long-term
debt 2,486,700 2,768,073 9,445,020 8,551,628
Other interest 117,413 96,330 271,070 651,324
-----------------------------------------------------
224,517,217 204,877,418 849,121,951 726,617,960
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INCOME BEFORE
INCOME TAXES 24,642,057 15,849,111 79,960,991 39,988,598
Income taxes 7,561,994 3,985,481 24,284,924 13,003,520
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NET INCOME 17,080,063 11,863,630 55,676,067 26,985,078
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EARNINGS PER SHARE
Basic 0.61 0.43 1.99 0.99
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Fully Diluted 0.58 0.42 1.91 0.97
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DOREL INDUSTRIES INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FOURTH QUARTERS AND TWELVE MONTHS ENDED DECEMBER 30,
1999 AND 1998
Fourth quarter ended Twelve months ended
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Dec. 30, Dec. 30, Dec. 30, Dec. 30,
1999 1998 1999 1998
$ $ $ $
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net income 17,080,063 11,863,630 55,676,067 26,985,078
Adjustments for:
Amortization 5,628,611 5,239,973 24,395,408 20,130,611
Deferred income
taxes 452,657 152,446 513,503 126,045
Loss (gain) on disposal
of capital assets (225,751) 318,734 (225,751) 235,865
------------------------------------------------------
22,935,580 17,574,783 80,359,227 47,477,599
Changes in non-cash working capital:
Decrease (increase) in
accounts receivabl (19,918,902) 19,748,389 (38,309,680) (6,707,361)
Decrease (increase)
in inventories 18,096,957 12,906,665 (12,540,436) (3,357,665)
Decrease (increase)
in prepaid expenses 992,574 (2,933,204) (4,544,342) (1,452,053)
Increase (decrease) in accounts
payable and accrued
liabilities 5,891,261 (6,129,693) 12,779,991 5,043,118
Increase (decrease) in
income taxes payable (1,769,794) 2,097,733 3,690,503 5,391,269
Increase in salaries
payable 2,156,814 706,820 1,757,564 1,280,824
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5,448,910 26,396,709 (37,166,400) 198,132
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CASH PROVIDED BY OPERATING
ACTIVITIES 28,384,490 43,971,492 43,192,827 47,675,731
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FINANCING ACTIVITIES
Decrease in long-term debt
and obligation under
capital lease (19,038,021) (39,833,228) (6,038,404) (22,013,214)
Issuance of capital
stock - 1,994,308 2,337,544 22,375,420
Share issue expenses - (1,848,982) - (1,848,982)
Repurchase of capital
stock (253,600) - (253,600) -
Increase (decrease) in
bank indebtedness 49,307 (1,534,062) (11,272,734) 2,993,043
------------------------------------------------------
CASH PROVIDED BY (USED IN)
FINANCING
ACTIVITIES (19,242,314) (41,221,964) (15,227,194) 1,506,267
------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of subsidiary
company - (12,658,054) - (74,930,840)
Cash on hand - 1,620 - 125,168
------------------------------------------------------
- (12,656,434) - (74,805,672)
Financed by long-term debt - 8,186,921 - 53,427,438
------------------------------------------------------
- (4,469,513) - (21,378,234)
Additions to capital
assets - net (5,545,488) (3,240,587) (26,690,656) (28,003,527)
Deferred charges (1,263,264) (1,380,695) (2,250,868) (4,102,336)
Intangible assets (316,114) 75,831 (595,870) 480,998
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CASH USED IN INVESTING
ACTIVITIES (7,124,866) (9,014,964) (29,537,394) (53,003,099)
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OTHER
Effect of exchange rate
changes on cash (39,351) 680,880 499,791 (3,633,410)
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NET INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS 1,977,959 (5,584,556) (1,071,970) (7,454,511)
Cash and cash equivalents,
beginning of period 6,801,359 15,435,845 9,851,288 17,305,800
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CASH AND CASH EQUIVALENTS
END OF PERIOD 8,779,318 9,851,289 8,779,318 9,851,289
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