Aggressive Bike Marketing and R&D Spurs Dorel’s Results
Dorel Industries reported another profitable third quarter, with revenues up 9.8% to US$ 569.5 million for the quarter. Overall, the company’s revenues to September 30, 2010 have risen by 11.2% to US$ 1.8 billion, compared to
MONTREAL, Canada – Dorel Industries reported another profitable third quarter, with revenues up 9.8% to US$ 569.5 million for the quarter. Overall, the company’s revenues to September 30, 2010 have risen by 11.2% to US$ 1.8 billion, compared to US$ 1.6 billion for 2009. Net income for the quarter remained essentially the same as last year, at US$ 30.1 million (US$ 30.2 million in 2009) for earnings of US$ 0.91 per diluted share.
“Dorel has posted solid third quarter results. Our top line improved markedly while earnings were in line with the prior year. This was achieved notwithstanding the combination of much high container freight rates and increased raw material costs which impacted margins, particularly at our US juvenile business and home furnishings divisions,” commented Martin Schwartz, Dorel President and CEO.
“Dorel’s bicycle business is reflecting the investments that we are making in our brands and in R&D with increased sales and earnings. At the same time despite a difficult economy abroad, there was solid progress in our juvenile business in Europe and a continuing strong showing in Brazil.”
The company’s recreational/leisure segment outperformed the overall figures, registering an 18.8% third-quarter increase in revenue, to US$ 172.5 million, compared to US$ 145.2 million in 2009. After removing the impact of new business acquisitions and foreign exchange variations, the segment’s organic revenue increase was roughly 13% for the quarter and sits at 8% for the year-to-date. According to the company’s press release, the sales increases, in both mass merchant and independent bike dealer (IBD) channels are due to increased promotional activity and successful new model introductions.
New launches and a concentrated advertising campaign particularly benefited the Schwinn brand, while Cannondale’s research and development efforts are also helping, with the introduction of the E-series electric bikes, the Super X cyclo-cross bike, and the CAAD 10 road bike. Dorel’s Cycling Sports Group, which concentrates on the IBD channel, saw positive results from its sponsorship efforts, as the Cannondale-equipped Liquigas Sports cycling team won two of the three major UCI Grand tours. That commitment is expanding in 2011, with Cannondale becoming a co-sponsor and the team being renamed to Liquigas-Cannondale. Sugoi will also become a sponsor, supplying the team with newly-designed uniforms.
“Our bicycle segment continues to improve, for both our mass merchant and IBD businesses,” said Schwartz. “Investments in brand building and product innovation are proving to be successful with consumers in North America and Europe. The strategies put in place in Recreational/Leisure are working, the team is focused on great execution, and we’ll continue to see progress.”