Bike business supports Dorel results in Q1 2012

first_img Related Cannondale owner Dorel Industries Inc has released its Q1 2012 results. Total company revenue rose 2.2% to US$621.1 million. Noting that the first quarter of 2011 was last year’s strongest, Dorel President and CEO Martin Schwartz said that momentum thus far in 2012 is encouraging after a generally tough 2011.Also, as noted by the company for its full year 2011 results, Dorel’s first quarter has again been supported by the activities of its bike business, which sits within Dorel’s Recreational/Leisure division.“Last year was characterized by a good start, difficult second and third quarters and a reversal of that negative trend in the final quarter,” said Dorel President and CEO Martin Schwartz.“I am pleased that we are continuing to move in the right direction. Recreational/Leisure continued to drive results, posting its best quarter ever on the back of a strong 2011. Powered by brand building, continuing innovation and growing distribution across the globe, sales grew in both the IBD and mass merchant channels. There has also been operational improvement at our Apparel Footwear Group (AFG).”Dorel’s Recreational/Leisure division includes the following brandsCannondaleGTSUGOISchwinnMongooseIron HorseInSTEPDorel’s Recreational/Leisure business segment delivered a 10.2% year on year gain in revenue to reach US$220.9 million for Q1 2012. Gross profit rose 14.6% to US$58.4 million; and operating profit surged 20.3% to US$21.4 million.As the company noted in its quarterly sales release…The revenue growth of 2011 continued into the first quarter of 2012 with sales increasing in the IBD channel in the US, Europe and Japan. The Cannondale, GT and Mongoose brands are doing especially well in Europe. CSG Canada also contributed to the sales growth with strong spring shipments to certain key customers.While more modest, sales were also up to the segment’s mass merchant customers as favourable weather conditions helped drive consumer demand. Operating profit for the quarter was the highest ever in the segment’s history, dating back to 2004. The AFG apparel division was a positive contributor to earnings and its turnaround is on track.Within Recreational/Leisure unit, Dorel’s AFG apparel division (including the SUGOI brand) struggled in 2011. Last year, the division was hit by a write-down of excess inventory from prior model years and costs of US$1.8 million related to the strategic decision to outsource the ‘custom manufacturing’ business to a third party.www.dorel.comlast_img read more