Dorel Down in 4th Quarter, Still Registers a Record Year
Despite a slow-down in the fourth quarter, Dorel Industries continued to grow in 2010, recording an 8.1% increase in revenues (US$2.3 billion) over 2009 (US$2.1 billion). Dorel CEO and President, Martin Schwartz (photo) stated that
MONTREAL, Canada – Despite a slow-down in the fourth quarter, Dorel Industries continued to grow in 2010, recording an 8.1% increase in revenues (US$2.3 billion) over 2009 (US$2.1 billion). The fourth quarter saw a 1.1% revenue drop to US$539.5 million from US$545.3 million a year ago, but Dorel CEO and President, Martin Schwartz (photo) was still pleased with his company’s performance for the year.
“In an environment of reduced consumer discretionary spending and rising input costs, Dorel was able to deliver revenue growth of over 8% and improved earnings over the prior year,” said Schwartz. “If there was ever a test of the acceptance of Dorel’s brands and products, the past two years have provided it.”
Dorel’s recreational/leisure segment, home to the company’s cycling brands, was the standout performer for the company in 2010. Revenues increased by US$30.2 million (17.2%) in the fourth quarter, while overall revenues for the year totaled US$775 million, up 13.7% over 2009’s total of US$681.4 million. By comparison, the company’s juvenile division (cribs, child safety seats, strollers, and baby products) saw a 5% drop in the fourth quarter and only 3.5% growth for the year. The home furnishings division had the worst showing during the final three months of 2010, with a 19.6% drop, although it did show revenue growth for the year overall, increasing 9.5%, to US$507.8 million, up from the 2009 total of US$463.7 million.
Not only did revenues increase for the cycling division, earnings in the segment increased by 31.3% for the year, a result the company is attributing in no small part to an intensive marketing campaign for its Schwinn brand. Sales to both mass market customers and IDBs grew by 20% and the company reports the growth was spread across the majority of brands it markets to the IBDs, rather than being limited to its flagship Cannondale marque. The only dark spot on the segment’s balance sheet was found in the results for the Apparel Footwear Group (AFG) which saw quarter-over-quarter earnings decreasing by over US$2 million.
"Our bicycle business did well in 2010 and we foresee continued growth through 2011, noted Schwartz. “The Recreational / Leisure Segment has had a good start to the year and are on track to improve their year-over-year performance. While a small part of the Recreational/Leisure Segment, we are focused on correcting issues at the Apparel Footwear Group.”
2011 sales and earnings from all three segments are expected to exceed 2010 levels. Dorel is a Canadian-based company with 4700 employees, facilities in nineteen countries, and sales worldwide.