Dorel to Shareholders: Progress Being Made

June 21, 2006  by in UnCategorized   

By Home Furnishings Business in Home Office on June 2006 Ready-to-assemble major Dorel Inds. told shareholders attending Wednesday’s annual meeting that the company is making progress in all product segments.

In the company’s first quarter of 2006, revenues were off 4.4 percent, compared to the prior-year period, to $451 million; while earnings fell 11.1 percent to $24.2 million.

Right now the Dorel is concentrating on productivity and the introduction of higher-margin products to in order to meet cost and competitive challenges.

“RTA in particular has needed and received considerable attention,” said President and Chief Executive Officer Martin Schwartz. “We have been disappointed with our returns in this segment for some time and are working aggressively to turn things around.”

The Ameriwood division, he said, has an integrated plan in place to launch new products, build on strong brands and seek out new customers.

“We have a much wider customer base, plus an enhanced new product development capability which has resulted in a flow of numerous exciting, new products and allows for faster speed-to-market,” he said. “The combination of domestically and offshore production is working well.”

Availability and the cost of particle board have pressured margins, however, and price increases are being implemented and will take effect through the year.

Dorel’s other home furnishings businesses performed well in 2005 and are off to a good start this year. Dorel Asia, which designs and sources furniture, has posted a four year combined annual growth rate of 79 percent in revenue and 66 percent in earnings from operations.

Cosco Home & Office repositioned its furniture business in 2005. Long known for its folding furniture, the division is re-establishing itself as a source of decorative furniture. This focus is expected to provide greater revenue and margin growth. Futons continue to be a strong performer. New models have been developed with value added features.

Dorel Juvenile Group USA has several new product launches planned this year, including higher price points and create higher margins to complement starting price goods.

Dorel Europe will introduce line extensions to its popular Quinny and Loola juvenile travel systems.

Dorel Distribution Canada experienced its first full year with an expanded mandate encompassing most of Dorel’s product segments.

The company also is taking steps to build market share in its bicycle division.