Dorel Industries Inc. (TSX: DII.B, DII.A), today announced results
for the second quarter and six months ended June 30, 2024.
Second quarter revenue was US$348.1 million,
compared to US$345.2 million, up 0.8% from the same period a year
ago. Reported net loss was US$59.5 million or US$1.83 per diluted
share, compared to US$16.7 million or US$0.51 per diluted share
last year. Adjusted net loss1 was US$13.6 million or US$0.42
per diluted share compared to US$16.7 million or US$0.51 per
diluted share last year.
Revenue for the six months was US$699.1 million,
compared to US$678.4 million, up 3.1% from the prior year. Reported
net loss was US$77.0 million or US$2.37 per diluted share,
compared to US$48.2 million or US$1.48 per diluted share a year
ago. Adjusted net loss1 for the six months was US$30.5 million or
US$0.94 per diluted share, compared to US$48.2 million or
US$1.48 per diluted share last year.
“Dorel Juvenile has continued its trajectory of
growth and improvement. Our profit turnaround is on-going,
particularly driven by strong results in North America where our
market share has grown for several consecutive quarters. This is
also true in our other major market of Europe, where our innovative
new product launches are leading the way with our retail partners
and consumers. This positive outcome is a testament to our
commitment to excellence and innovation. Our Home segment continues
to operate in a difficult environment with the ongoing high
inflation and interest rates affecting our consumers and the demand
for new furniture. As a result, reduced earnings and cash flow
projections forced us to record a non-cash impairment loss on
goodwill of US$45.3 million in the quarter. Excluding this, our
adjusted operating loss1 was similar to prior year second quarter.
On a positive note, the Cosco product line of folding indoor
furniture, step stools and utility products is growing
year-over-year and sales to our brick-and-mortar retailers
increased overall. We have also significantly reduced our operating
expenses and it remains a focus. We’re excited about our new
product listings and we remain committed to improving our
operations, focusing on new product development and expanding our
market presence,” stated Dorel President & CEO, Martin
Schwartz.
_____________________________________1 This is a non-GAAP
financial ratio or measure with no standardized meaning prescribed
by IFRS and therefore is unlikely to be comparable to similar
measures presented by other issuers. Refer to the section
“Definition and reconciliation of non-GAAP financial ratios and
measures” in this press release.
|
|
|
|
|
Summary of Financial Information (unaudited) |
|
Second Quarters Ended June 30, |
|
All figures in thousands of US $, except per share amounts |
|
|
2024 |
2023 |
Change |
|
|
$ |
$ |
% |
|
Revenue |
348,077 |
|
345,211 |
|
0.8% |
|
|
|
|
|
|
|
Net loss |
(59,481 |
) |
(16,724 |
) |
255.7% |
|
|
Per share - Basic |
(1.83 |
) |
(0.51 |
) |
258.8% |
|
|
Per share - Diluted |
(1.83 |
) |
(0.51 |
) |
258.8% |
|
|
|
|
|
|
|
Adjusted net loss (1) |
(13,582 |
) |
(16,724 |
) |
(18.8)% |
|
|
Per share - Diluted (1) |
(0.42 |
) |
(0.51 |
) |
(17.6)% |
|
|
Number of shares outstanding – |
|
|
|
|
Basic weighted average |
32,558,321 |
|
32,537,617 |
|
|
Diluted weighted average |
32,558,321 |
|
32,537,617 |
|
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is
unlikely to be comparable to similar measures presented by
other issuers. Refer to the section “Definition and
reconciliation of non-GAAP financial ratios and measures” in
this press release. |
|
|
|
|
|
|
|
Summary of Financial Information (unaudited) |
|
Six Months Ended June 30, |
|
All figures in thousands of US $, except per share amounts |
|
|
2024 |
2023 |
Change |
|
|
$ |
$ |
% |
|
Revenue |
699,149 |
|
678,408 |
|
3.1% |
|
|
|
|
|
|
|
Net loss |
(77,050 |
) |
(48,233 |
) |
59.7% |
|
|
Per share - Basic |
(2.37 |
) |
(1.48 |
) |
60.1% |
|
|
Per share - Diluted |
(2.37 |
) |
(1.48 |
) |
60.1% |
|
|
|
|
|
|
|
Adjusted net loss (1) |
(30,452 |
) |
(48,233 |
) |
(36.9)% |
|
|
Per share - Diluted (1) |
(0.94 |
) |
(1.48 |
) |
(36.5)% |
|
|
Number of shares outstanding – |
|
|
|
|
Basic weighted average |
32,557,102 |
|
32,537,617 |
|
|
Diluted weighted average |
32,557,102 |
|
32,537,617 |
|
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is
unlikely to be comparable to similar measures presented by
other issuers. Refer to the section “Definition and
reconciliation of non-GAAP financial ratios and measures” in this
press release. |
|
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|
|
|
|
|
Dorel Juvenile |
|
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|
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|
|
|
|
|
|
|
|
|
All figures
in thousands of US $ |
|
|
|
|
|
|
Second Quarters Ended June 30 (unaudited) |
|
|
2024 |
2023 |
Change |
|
|
$ |
% of rev. |
|
$ |
% of rev. |
|
% |
|
Revenue |
216,434 |
|
211,761 |
|
|
2.2% |
|
|
|
|
|
|
|
|
|
Gross profit |
61,667 |
28.5% |
|
54,936 |
|
25.9% |
|
12.3% |
|
|
Operating profit |
6,271 |
|
849 |
|
|
n.m. |
|
|
|
|
|
|
|
|
|
Adjusted operating profit (1) |
6,868 |
|
849 |
|
|
n.m. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n.m. = not meaningful |
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is
unlikely to be comparable to similar measures presented by other
issuers. Refer to the section “Definition and reconciliation of
non-GAAP financial ratios and measures” in this press release. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All figures
in thousands of US $ |
|
|
|
|
|
|
Six Months Ended June 30 (unaudited) |
|
|
2024 |
2023 |
Change |
|
|
$ |
% of rev. |
|
$ |
% of rev. |
|
% |
|
Revenue |
429,124 |
|
411,786 |
|
|
4.2% |
|
|
|
|
|
|
|
|
|
Gross profit |
118,124 |
27.5% |
|
99,729 |
|
24.2% |
|
18.4% |
|
|
Operating profit (loss) |
6,820 |
|
(8,074 |
) |
|
n.m. |
|
|
|
|
|
|
|
|
|
Adjusted operating profit (loss) (1) |
7,997 |
|
(8,074 |
) |
|
n.m. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n.m. = not meaningful |
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is
unlikely to be comparable to similar measures presented by other
issuers. Refer to the section “Definition and reconciliation of
non-GAAP financial ratios and measures” in this press release. |
|
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|
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|
|
|
|
|
|
Second quarter revenue was US$216.4 million, an
increase of US$4.7 million, or 2.2% versus last year. Organic
revenue1 increased by 3.7%, after removing the impact of varying
foreign exchange rates year-over-year. The growth in the
second quarter mainly came from North America and the majority
of export markets. Year-to-date revenue was
US$429.1 million, an increase of US$17.3 million, or 4.2% from
US$411.8 million in 2023. Year-to-date, the sales
increase versus prior year are being driven by continued success on
Maxi-Cosi and a strong performance by Safety 1st. Car seats
continue to drive revenues at approximately half of sales, but
importantly sales of travel systems and strollers are increasing.
This is an identified strategic priority in most markets where
Dorel is underrepresented within these categories.
Reported operating profit for the quarter was
US$6.3 million compared to US$0.8 million last year. Adjusted
operating profit1 for the quarter was US$6.9 million which was an
increase of US$6.0 million versus last year’s results. This
increase was driven by revenue increases in North America and
improving gross margins in the majority of markets. While Europe
was not a contributor to improved earnings, new product launches in
the quarter were very successful, but less favourable currency and
some supply chain challenges limited their impact with substantial
shipping occurring expected in the second half. For the six months,
reported operating profit was US$6.8 million and adjusted operating
profit1 was US$8.0 million compared to an adjusted operating loss1
of US$8.1 million last year, an improvement of US$16.1
million.
|
|
|
|
|
|
|
Dorel Home |
|
|
|
|
|
|
|
|
|
|
|
|
|
All figures
in thousands of US $ |
|
|
|
|
|
|
Second Quarters Ended June 30 (unaudited) |
|
|
2024 |
2023 |
Change |
|
|
$ |
% of rev. |
|
$ |
% of rev. |
|
% |
|
Revenue |
131,643 |
|
|
133,450 |
|
|
(1.4)% |
|
|
|
|
|
|
|
|
|
Gross profit |
4,514 |
|
3.4% |
|
5,299 |
|
4.0% |
|
(14.8)% |
|
|
Operating loss |
(53,647 |
) |
|
(9,988 |
) |
|
437.1% |
|
|
|
|
|
|
|
|
|
Adjusted operating loss (1) |
(8,345 |
) |
|
(9,988 |
) |
|
(16.4)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is
unlikely to be comparable to similar measures presented by other
issuers. Refer to the section “Definition and reconciliation of
non-GAAP financial ratios and measures” in this press release. |
|
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|
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|
|
|
|
|
|
|
|
|
|
All figures
in thousands of US $ |
|
|
|
|
|
|
Six Months Ended June 30 (unaudited) |
|
|
2024 |
2023 |
Change |
|
|
$ |
% of rev. |
|
$ |
% of rev. |
|
% |
|
Revenue |
270,025 |
|
|
266,622 |
|
|
1.3% |
|
|
|
|
|
|
|
|
|
Gross profit |
16,294 |
|
6.0% |
|
7,219 |
|
2.7% |
|
125.7% |
|
|
Operating loss |
(57,203 |
) |
|
(23,869 |
) |
|
139.7% |
|
|
|
|
|
|
|
|
|
Adjusted operating loss (1) |
(11,716 |
) |
|
(23,869 |
) |
|
(50.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is
unlikely to be comparable to similar measures presented by other
issuers. Refer to the section “Definition and reconciliation of
non-GAAP financial ratios and measures” in this press release. |
|
|
|
Second quarter revenue was US$131.6 million, a
decrease of US$1.8 million, or 1.4%, from US$133.4 million last
year. Dorel Home continues to operate in a challenging economic
environment, and this is reflected in sales being flat
year-over-year. E-commerce sales continued to trend downwards,
compensated by improved brick-and-mortar performance. Contrary to
the segment overall, Cosco Home & Office sales and earnings
continue to grow. Six-month revenue was US$270.0 million, an
increase of US$3.4 million, or 1.3%, from US$266.6 million last
year.
Second quarter operating loss was US$53.6
million, which includes an impairment loss on goodwill of US$45.3
million. This impairment loss on goodwill is due to reduced
earnings and cash flow projections, and a higher assumed risk
adjusted discount rate, in light of the general economic and
financial conditions globally. Excluding the impairment loss on
goodwill, adjusted operating loss1 was US$8.3 million, an
improvement from an operating loss of US$10.0 million last year.
This was due to lower operating costs which were reduced by 15.9%
or US$2.4 million versus prior year. The company’s gross margin was
impacted by increased promotional pricing and lower volume
efficiency and production levels at its ready-to-assemble (RTA)
plants. Inventories were down US$32.1 million from the second
quarter of 2023 by reducing new purchases and depleting inventory
on-hand through the increase in promotional pricing in the quarter.
For the six months, the operating loss was US$57.2 million and
adjusted operating loss1 was US$11.7 million. This compares to
US$23.9 million in 2023. This improvement was due not only to lower
operating costs but an increase in revenue and gross margins.
To match its operations to the reality of
current demand, the Home segment continued its path to streamline
operations and on July 8th, 2024, it was announced the closure of
the RTA manufacturing facility, located in Tiffin, Ohio. This
location will be repurposed into a distribution center and
production of all RTA furniture will be assumed at facilities in
Cornwall, Ontario in late third quarter of 2024. Equipment and
customer orders will be transferred to Cornwall with the goal of
having one highly efficient and profitable facility for domestic
RTA furniture production.
Outlook
“The Dorel Juvenile segment is on track and we
still expect our second half results to improve versus the first
half. The new product launches thus far this year will drive higher
revenues in the back half of the year, with the fourth quarter
expected to be the strongest. While there is the risk of a slowing
economy and we are facing higher supply chain costs, we believe we
have the levers to offset these challenges and are confident that
our strategic initiatives and focus on operational efficiency will
continue to drive growth and deliver value for our stakeholders,”
commented Dorel President & CEO, Martin Schwartz.
“Despite not seeing an industry improvement, we
are cautiously optimistic that we will deliver increased sales for
Dorel Home in the second half. This is based on our new product
pipeline and the success we are seeing at brick and mortar. With
our focus on cost reduction, we anticipate improving gross margins
and a much improved second half versus both first half results and
last year’s comparative quarter. We continue to monitor the
macro-environment and will make additional operational improvements
and remain committed to delivering quality products and value to
our customers,” concluded Mr. Schwartz.
Conference Call
Dorel Industries Inc. will hold a conference
call to discuss these results on Friday, August 9, 2024 at 1:00 PM
Eastern Time. Interested parties can join the call by dialing
1-844-763-8274. The conference call can also be accessed via live
webcast at http://www.dorel.com. If you are unable to call in at
this time, you may access a recording of the meeting by calling
1-855-669-9658 and entering the passcode 0756 on your phone. This
recording will be available on Friday, August 9, 2024 as of
4:30 PM until 11:59 PM on Friday, August 16, 2024.
Condensed consolidated interim financial
statements as at June 30, 2024 will be available on the Company's
website, www.dorel.com, and will
be available through the SEDAR website.
Profile
Dorel Industries Inc. (TSX:
DII.B, DII.A) is a global organization, operating two distinct
businesses in juvenile products and home products. Dorel’s strength
lies in the diversity, innovation and quality of its products as
well as the superiority of its brands. Dorel Juvenile’s
powerfully branded products include global brands Maxi-Cosi, Safety
1st and Tiny Love, complemented by regional brands such as
BebeConfort, Cosco, Mother’s Choice and Infanti. Dorel Home, with
its comprehensive e-commerce platform, markets a wide assortment of
domestically produced and imported furniture. Dorel has annual
sales of US$1.4 billion and employs approximately
3,900 people in facilities located in twenty-two countries
worldwide.
Caution Regarding Forward-Looking
Statements
Certain statements included in this press
release may constitute “forward-looking statements” within the
meaning of applicable Canadian securities legislation. Except as
may be required by Canadian securities laws, the Company does not
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Forward-looking statements, by their very nature, are
subject to numerous risks and uncertainties, including statements
regarding the impact of the macro-economic environment, including
inflationary pressures, changes in consumer spending, exchange rate
fluctuations and increases in interest rates on the Company’s
business, financial position and operations, and are based on
several assumptions which give rise to the possibility that actual
results could differ materially from the Company’s expectations
expressed in or implied by such forward-looking statements and that
the objectives, plans, strategic priorities and business outlook
may not be achieved. As a result, the Company cannot guarantee that
any forward-looking statement will materialize, or if any of them
do, what benefits the Company will derive from them.
Forward-looking statements are provided in this press release for
the purpose of giving information about management’s current
expectations and plans and allowing investors and others to get a
better understanding of the Company’s operating environment.
However, readers are cautioned that it may not be appropriate to
use such forward-looking statements for any other purpose.
Forward-looking statements made in this press
release are based on a number of assumptions that the Company
believed were reasonable on the day it made the forward-looking
statements. Factors that could cause actual results to differ
materially from the Company’s expectations expressed in or implied
by the forward-looking statements include:
- general economic and financial
conditions, including those resulting from the current high
inflationary environment;
- changes in applicable laws or
regulations;
- changes in product costs and supply
channels, including disruption of the Company’s supply chain
resulting from the macro-economic environment;
- foreign currency fluctuations,
including high levels of volatility in foreign currencies with
respect to the US dollar reflecting uncertainties related to the
macro-economic environment;
- customer and credit risk, including
the concentration of revenues with a small number of
customers;
- costs associated with product
liability;
- changes in income tax legislation
or the interpretation or application of those rules;
- the continued ability to develop
products and support brand names;
- changes in the regulatory
environment;
- outbreak of public health crises,
such as the COVID-19 pandemic, that could adversely affect global
economies and financial markets, resulting in an economic downturn
which could be for a prolonged period of time and have a material
adverse effect on the demand for the Company’s products and on its
business, financial condition and results of operations;
- the effect of international
conflicts on the Company’s sales, including the ongoing
Russia-Ukraine war and the Israeli-Hamas war;
- continued access to capital
resources, including compliance by the Company with all of the
covenants under its ABL facility and term loan facility, and the
related costs of borrowing, all of which may be adversely impacted
by the macro-economic environment;
- failures related to information
technology systems;
- changes in assumptions in the
valuation of goodwill and other intangible assets and any future
decline in market capitalization;
- there being no certainty that the
Company will declare any dividend in the future;
- increased exposure to cybersecurity
risks as a result of remote work by the Company’s employees;
- the Company’s ability to protect
its current and future technologies and products and to defend its
intellectual property rights;
- potential damage to the Company’s
reputation; and
- the effect of climate change on the
Company.
These and other risk factors that could cause
actual results to differ materially from expectations expressed in
or implied by the forward-looking statements are discussed in the
Company’s annual MD&A and Annual Information Form filed with
the applicable Canadian securities regulatory authorities. The risk
factors set out in the previously mentioned documents are expressly
incorporated by reference herein in their entirety.
The Company cautions readers that the risks
described above are not the only ones that could impact it.
Additional risks and uncertainties not currently known to the
Company or that the Company currently deems to be immaterial may
also have a material adverse effect on the Company’s business,
financial condition, or results of operations. Given these risks
and uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.
All figures in the tables below are in thousands of US $, except
per share amounts.
Consolidated Results |
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June
30, |
|
Variation |
|
June 30, |
|
June
30, |
|
Variation |
|
|
|
2024 |
|
2023 |
|
$ |
|
% |
|
|
2024 |
|
2023 |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
348,077 |
|
345,211 |
|
2,866 |
|
0.8% |
|
|
699,149 |
|
678,408 |
|
20,741 |
|
3.1% |
|
Cost of sales |
281,896 |
|
284,976 |
|
(3,080 |
) |
(1.1)% |
|
|
564,731 |
|
571,460 |
|
(6,729 |
) |
(1.2)% |
|
Gross profit |
66,181 |
|
60,235 |
|
5,946 |
|
9.9% |
|
|
134,418 |
|
106,948 |
|
27,470 |
|
25.7% |
|
Selling expenses |
33,940 |
|
32,177 |
|
1,763 |
|
5.5% |
|
|
65,102 |
|
63,616 |
|
1,486 |
|
2.3% |
|
General and administrative expenses |
29,932 |
|
34,933 |
|
(5,001 |
) |
(14.3)% |
|
|
67,682 |
|
71,627 |
|
(3,945 |
) |
(5.5)% |
|
Research and development expenses |
5,626 |
|
6,236 |
|
(610 |
) |
(9.8)% |
|
|
11,717 |
|
12,444 |
|
(727 |
) |
(5.8)% |
|
Impairment loss (reversal) on trade accounts receivable |
99 |
|
(81 |
) |
180 |
|
n.m. |
|
|
220 |
|
333 |
|
(113 |
) |
(33.9)% |
|
Restructuring costs |
597 |
|
- |
|
597 |
|
100.0% |
|
|
1,362 |
|
- |
|
1,362 |
|
100.0% |
|
Impairment loss on goodwill |
45,302 |
|
- |
|
45,302 |
|
100.0% |
|
|
45,302 |
|
- |
|
45,302 |
|
100.0% |
|
Operating loss |
(49,315 |
) |
(13,030 |
) |
36,285 |
|
278.5% |
|
|
(56,967 |
) |
(41,072 |
) |
15,895 |
|
38.7% |
|
Adjusted operating loss (1) |
(3,416 |
) |
(13,030 |
) |
(9,614 |
) |
(73.8)% |
|
|
(10,303 |
) |
(41,072 |
) |
(30,769 |
) |
(74.9)% |
|
Finance expenses |
9,560 |
|
6,059 |
|
3,501 |
|
57.8% |
|
|
18,642 |
|
12,299 |
|
6,343 |
|
51.6% |
|
Loss before income taxes |
(58,875 |
) |
(19,089 |
) |
39,786 |
|
208.4% |
|
|
(75,609 |
) |
(53,371 |
) |
22,238 |
|
41.7% |
|
Income taxes expense (recovery) |
606 |
|
(2,365 |
) |
2,971 |
|
n.m. |
|
|
1,441 |
|
(5,138 |
) |
(6,579 |
) |
n.m. |
|
Net loss |
(59,481 |
) |
(16,724 |
) |
42,757 |
|
255.7% |
|
|
(77,050 |
) |
(48,233 |
) |
28,817 |
|
59.7% |
|
Adjusted net loss (1) |
(13,582 |
) |
(16,724 |
) |
(3,142 |
) |
(18.8)% |
|
|
(30,452 |
) |
(48,233 |
) |
(17,781 |
) |
(36.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share |
(1.83 |
) |
(0.51 |
) |
1.32 |
|
258.8% |
|
|
(2.37 |
) |
(1.48 |
) |
0.89 |
|
60.1% |
|
Diluted loss per share |
(1.83 |
) |
(0.51 |
) |
1.32 |
|
258.8% |
|
|
(2.37 |
) |
(1.48 |
) |
0.89 |
|
60.1% |
|
Adjusted diluted loss per share (1) |
(0.42 |
) |
(0.51 |
) |
(0.09 |
) |
(17.6)% |
|
|
(0.94 |
) |
(1.48 |
) |
(0.54 |
) |
(36.5)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares - Basic |
32,558,321 |
|
32,537,617 |
|
n/a |
|
n/a |
|
|
32,557,102 |
|
32,537,617 |
|
n/a |
|
n/a |
|
Weighted average number of shares - Diluted |
32,558,321 |
|
32,537,617 |
|
n/a |
|
n/a |
|
|
32,557,102 |
|
32,537,617 |
|
n/a |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin (2) |
19.0% |
|
17.4% |
|
n/a |
|
160 bp |
|
|
19.2% |
|
15.8 |
% |
n/a |
|
340 bp |
|
Selling expenses as a percentage of revenue (3) |
9.8% |
|
9.3% |
|
n/a |
|
50 bp |
|
|
9.3% |
|
9.4 |
% |
n/a |
|
(10) bp |
|
General and administrative expenses as a percentage of revenue
(4) |
8.6% |
|
10.1% |
|
n/a |
|
(150) bp |
|
|
9.7% |
|
10.6 |
% |
n/a |
|
(90) bp |
|
|
|
|
|
|
|
|
|
|
|
|
|
n.m. = not
meaningful |
n/a = not
applicable |
bp = basis
point |
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is unlikely
to be comparable to similar measures presented by other
issuers. Refer to the section “Definition and reconciliation
of non-GAAP financial ratios and measures” in this press
release. |
(2) Gross margin is defined as gross profit divided by
revenue. |
(3) Selling expenses as a percentage of revenue is defined as
selling expenses divided by
revenue. |
(4) General and administrative expenses as a percentage of revenue
is defined as general and administrative expenses divided by
revenue. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dorel Juvenile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended |
|
Six Months Ended |
|
June 30, |
|
June
30, |
|
Variation |
|
June 30, |
|
June
30, |
|
Variation |
|
2024 |
|
2023 |
|
$ |
|
% |
|
|
2024 |
|
2023 |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
216,434 |
|
211,761 |
|
4,673 |
|
2.2% |
|
|
429,124 |
|
411,786 |
|
17,338 |
|
4.2% |
|
Cost of sales |
154,767 |
|
156,825 |
|
(2,058 |
) |
(1.3)% |
|
|
311,000 |
|
312,057 |
|
(1,057 |
) |
(0.3)% |
|
Gross profit |
61,667 |
|
54,936 |
|
6,731 |
|
12.3% |
|
|
118,124 |
|
99,729 |
|
18,395 |
|
18.4% |
|
Selling expenses |
28,666 |
|
25,758 |
|
2,908 |
|
11.3% |
|
|
54,037 |
|
50,889 |
|
3,148 |
|
6.2% |
|
General and administrative expenses |
21,659 |
|
23,429 |
|
(1,770 |
) |
(7.6)% |
|
|
46,810 |
|
46,735 |
|
75 |
|
0.2% |
|
Research and development expenses |
4,403 |
|
4,938 |
|
(535 |
) |
(10.8)% |
|
|
9,132 |
|
9,821 |
|
(689 |
) |
(7.0)% |
|
Impairment loss (reversal) on trade accounts receivable |
71 |
|
(38 |
) |
109 |
|
n.m. |
|
|
148 |
|
358 |
|
(210 |
) |
(58.7)% |
|
Restructuring costs |
597 |
|
- |
|
597 |
|
100.0% |
|
|
1,177 |
|
- |
|
1,177 |
|
100.0% |
|
Operating profit (loss) |
6,271 |
|
849 |
|
5,422 |
|
n.m. |
|
|
6,820 |
|
(8,074 |
) |
14,894 |
|
n.m. |
|
Adjusted operating profit (loss) (1) |
6,868 |
|
849 |
|
6,019 |
|
n.m. |
|
|
7,997 |
|
(8,074 |
) |
16,071 |
|
n.m. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin (2) |
28.5% |
|
25.9% |
|
n/a |
|
260 bp |
|
|
27.5% |
|
24.2 |
% |
n/a |
|
330 bp |
|
Selling expenses as a percentage of revenue (3) |
13.2% |
|
12.2% |
|
n/a |
|
100 bp |
|
|
12.6% |
|
12.4 |
% |
n/a |
|
20 bp |
|
General and administrative expenses as a percentage of revenue
(4) |
10.0% |
|
11.1% |
|
n/a |
|
(110)
bp |
|
|
10.9% |
|
11.3 |
% |
n/a |
|
(40)
bp |
|
|
|
|
|
|
|
|
|
|
|
n.m. = not
meaningful |
n/a = not
applicable |
bp = basis
point |
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is unlikely
to be comparable to similar measures presented by other issuers.
Refer to the section “Definition and reconciliation of non-GAAP
financial ratios and measures” in this press release. |
(2) Gross margin is defined as gross profit divided by
revenue. |
(3) Selling expenses as a percentage of revenue is defined as
selling expenses divided by
revenue. |
(4) General and administrative expenses as a percentage of revenue
is defined as general and administrative expenses divided by
revenue. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dorel Home |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June
30, |
|
Variation |
|
June 30, |
|
June
30, |
|
Variation |
|
|
|
2024 |
|
2023 |
|
$ |
|
% |
|
|
2024 |
|
2023 |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
131,643 |
|
133,450 |
|
(1,807 |
) |
(1.4)% |
|
|
270,025 |
|
266,622 |
|
3,403 |
|
1.3% |
|
Cost of
sales |
|
|
127,129 |
|
128,151 |
|
(1,022 |
) |
(0.8)% |
|
|
253,731 |
|
259,403 |
|
(5,672 |
) |
(2.2)% |
|
Gross profit |
4,514 |
|
5,299 |
|
(785 |
) |
(14.8)% |
|
|
16,294 |
|
7,219 |
|
9,075 |
|
125.7% |
|
Selling expenses |
5,274 |
|
6,419 |
|
(1,145 |
) |
(17.8)% |
|
|
11,065 |
|
12,727 |
|
(1,662 |
) |
(13.1)% |
|
General and administrative expenses |
6,334 |
|
7,613 |
|
(1,279 |
) |
(16.8)% |
|
|
14,288 |
|
15,763 |
|
(1,475 |
) |
(9.4)% |
|
Research and development expenses |
1,223 |
|
1,298 |
|
(75 |
) |
(5.8)% |
|
|
2,585 |
|
2,623 |
|
(38 |
) |
(1.4)% |
|
Impairment loss (reversal) on trade accounts receivable |
28 |
|
(43 |
) |
71 |
|
n.m. |
|
|
72 |
|
(25 |
) |
97 |
|
n.m. |
|
Restructuring costs |
- |
|
- |
|
- |
|
n/a |
|
|
185 |
|
- |
|
185 |
|
100.0% |
|
Impairment loss on goodwill |
45,302 |
|
- |
|
45,302 |
|
100.0% |
|
|
45,302 |
|
- |
|
45,302 |
|
100.0% |
|
Operating loss |
(53,647 |
) |
(9,988 |
) |
43,659 |
|
437.1% |
|
|
(57,203 |
) |
(23,869 |
) |
33,334 |
|
139.7% |
|
Adjusted operating loss (1) |
(8,345 |
) |
(9,988 |
) |
(1,643 |
) |
(16.4)% |
|
|
(11,716 |
) |
(23,869 |
) |
(12,153 |
) |
(50.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin (2) |
|
3.4% |
|
4.0% |
|
n/a |
|
(60) bp |
|
6.0% |
|
2.7% |
|
n/a |
|
330 bp |
|
Selling expenses as a percentage of revenue (3) |
4.0% |
|
4.8% |
|
n/a |
|
(80) bp |
|
4.1% |
|
4.8% |
|
n/a |
|
(70)
bp |
|
General and administrative expenses as a percentage of revenue
(4) |
4.8% |
|
5.7% |
|
n/a |
|
(90) bp |
|
5.3% |
|
5.9% |
|
n/a |
|
(60)
bp |
|
|
|
|
|
|
|
|
|
|
|
|
|
n.m. = not
meaningful |
n/a = not
applicable |
bp = basis
point |
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is unlikely
to be comparable to similar measures presented by other issuers.
Refer to the section “Definition and reconciliation of non-GAAP
financial ratios and measures” in this press release. |
(2) Gross margin is defined as gross profit divided by
revenue. |
(3) Selling expenses as a percentage of revenue is defined as
selling expenses divided by
revenue. |
(4) General and administrative expenses as a percentage of revenue
is defined as general and administrative expenses divided by
revenue. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Definition and Reconciliation of Non-GAAP Financial
Ratios and Measures
Dorel presents in this press release certain
non-GAAP financial ratios and measures, as described below. These
non-GAAP financial ratios and measures do not have a standardized
meaning prescribed by IFRS and therefore are unlikely to be
comparable to similar measures presented by other issuers. These
non-GAAP financial ratios and measures should not be considered in
isolation or as a substitute for a measure prepared in accordance
with IFRS. Contained within this press release are reconciliations
of the non-GAAP financial ratios and measures to the most directly
comparable financial measures calculated in accordance with
IFRS.
Dorel believes that the non-GAAP financial
ratios and measures used in this press release provide investors
with additional information to analyze its results and to measure
its financial performance by excluding the variation caused by
certain items that Dorel believes do not reflect its core business
performance and provides better comparability between the periods
presented. Excluding these items does not imply they are
necessarily non-recurring. The non-GAAP financial measures are also
used by management to assess Dorel’s financial performance and to
make operating and strategic decisions.
Adjustments to non-GAAP financial ratios
and measuresAs noted above, certain of our non-GAAP
financial measures and ratios exclude the variation caused by
certain adjustments that affect the comparability of Dorel’s
financial results and could potentially distort the analysis of
trends in its business performance. Adjustments which impact more
than one non-GAAP financial ratio and measure are explained
below.
Restructuring costsRestructuring costs are
comprised of costs directly related to significant exit activities,
including the sale of manufacturing facilities, closure of
businesses, reorganization, optimization, transformation, and
consolidation to improve the competitive position of the Company in
the marketplace and to reduce costs and bring efficiencies, and
acquisition-related costs in connection with business acquisitions.
Restructuring costs are included as an adjustment of adjusted gross
profit, adjusted gross margin, adjusted operating profit (loss),
adjusted net income (loss) and adjusted diluted earnings (loss) per
share. Restructuring costs were respectively US$0.6 million and
US$1.4 million for the second quarter and six months ended
June 30, 2024 (none in 2023). Refer to the section “Impairment
loss on goodwill and restructuring costs” in the MD&A for more
details.
Impairment loss on goodwillImpairment loss on
goodwill is included as an adjustment of adjusted operating profit
(loss), adjusted net income (loss) and adjusted diluted earnings
(loss) per share. Impairment loss on goodwill was respectively
US$45.3 million and US$45.3 million for the second quarter and
six months ended June 30, 2024 (none in 2023). Refer to the section
“Impairment loss on goodwill and restructuring costs” in the
MD&A for more details.
Adjusted gross profit and adjusted gross
marginAdjusted gross profit is calculated as gross profit
excluding the impact of restructuring costs. Adjusted gross margin
is a non-GAAP ratio and is calculated as adjusted gross profit
divided by revenue. Dorel uses adjusted gross profit and adjusted
gross margin to measure its performance from one period to the
next, without the variation caused by the impacts of the items
described above. Dorel also uses adjusted gross profit and adjusted
gross margin on a segment basis to measure its performance at the
segment level. Dorel excludes this item because it affects the
comparability of its financial results and could potentially
distort the analysis of trends in its business performance. Certain
investors and analysts use the adjusted gross profit and adjusted
gross margin to measure the business performance of the Company as
a whole and at the segment level from one period to the next,
without the variation caused by the impact of the restructuring
costs. Excluding this item does not imply it is necessarily
non-recurring. These ratios and measures do not have any
standardized meanings prescribed by IFRS and are therefore unlikely
to be comparable to a similar measure presented by other
companies.
There are no adjusted gross profit and adjusted
gross margin for the second quarters and six months ended June 30,
2024 and 2023.
Adjusted operating profit
(loss)Adjusted operating profit (loss) is calculated as
operating profit (loss) excluding the impact of restructuring
costs. Adjusted operating profit (loss) also excludes impairment
loss on goodwill. Management uses adjusted operating profit (loss)
to measure its performance from one period to the next, without the
variation caused by the impacts of the items described above. Dorel
also uses adjusted operating profit (loss) on a segment basis to
measure its performance at the segment level. Dorel excludes these
items because they affect the comparability of its financial
results and could potentially distort the analysis of trends in its
business performance. Certain investors and analysts use the
adjusted operating profit (loss) to measure the business
performance of the Company as a whole and at the segment level from
one period to the next, without the variation caused by the impact
of the restructuring costs and impairment loss on goodwill.
Excluding these items does not imply they are necessarily
non-recurring. This measure does not have any standardized meaning
prescribed by IFRS and is therefore unlikely to be comparable to a
similar measure presented by other companies.
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
June 30, |
|
June 30, |
|
|
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
Operating loss |
(49,315 |
) |
(13,030 |
) |
|
(56,967 |
) |
(41,072 |
) |
Adjustment for: |
|
|
|
|
|
|
Total restructuring costs |
597 |
|
- |
|
|
1,362 |
|
- |
|
|
Impairment loss on goodwill |
45,302 |
|
- |
|
|
45,302 |
|
- |
|
Adjusted operating loss |
(3,416 |
) |
(13,030 |
) |
|
(10,303 |
) |
(41,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June
30, |
|
|
June 30, |
|
June
30, |
|
Dorel Juvenile |
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
Operating profit (loss) |
6,271 |
|
849 |
|
|
6,820 |
|
(8,074 |
) |
Adjustment for: |
|
|
|
|
|
|
Restructuring costs |
597 |
|
- |
|
|
1,177 |
|
- |
|
Adjusted operating profit (loss) |
6,868 |
|
849 |
|
|
7,997 |
|
(8,074 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June
30, |
|
|
June 30, |
|
June
30, |
|
Dorel Home |
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
Operating loss |
(53,647 |
) |
(9,988 |
) |
|
(57,203 |
) |
(23,869 |
) |
Adjustment for: |
|
|
|
|
|
|
Restructuring costs |
- |
|
- |
|
|
185 |
|
- |
|
|
Impairment loss on goodwill |
45,302 |
|
- |
|
|
45,302 |
|
- |
|
Adjusted operating loss |
(8,345 |
) |
(9,988 |
) |
|
(11,716 |
) |
(23,869 |
) |
|
|
|
|
|
|
|
|
Adjusted net income (loss) and adjusted
diluted earnings (loss) per shareAdjusted net income
(loss) is calculated as net income (loss) excluding the impact of
restructuring costs and impairment loss on goodwill, as well as
income taxes expense (recovery) relating to the adjustments above.
Adjusted diluted earnings (loss) per share is a non-GAAP ratio and
is calculated as adjusted net income (loss) divided by the weighted
average number of diluted shares. Management uses adjusted net
income (loss) and adjusted diluted earnings (loss) per share to
measure its performance from one period to the next, without the
variation caused by the impacts of the items described above. Dorel
excludes these items because they affect the comparability of its
financial results and could potentially distort the analysis of
trends in its business performance. Certain investors and analysts
use the adjusted net income (loss) and adjusted diluted earnings
(loss) per share to measure the business performance of the Company
from one period to the next. Excluding these items does not imply
they are necessarily non-recurring. These measures do not have any
standardized meanings prescribed by IFRS and are therefore unlikely
to be comparable to a similar measure presented by other
companies.
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
June 30, |
|
June 30, |
|
|
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
Net loss |
(59,481 |
) |
(16,724 |
) |
|
(77,050 |
) |
(48,233 |
) |
Adjustment
for: |
|
|
|
|
|
|
Total
restructuring costs |
597 |
|
- |
|
|
1,362 |
|
- |
|
|
Impairment loss on
goodwill |
45,302 |
|
- |
|
|
45,302 |
|
- |
|
|
Income taxes
recovery relating to the above-noted adjustments |
- |
|
- |
|
|
(66 |
) |
- |
|
Adjusted net loss |
(13,582 |
) |
(16,724 |
) |
|
(30,452 |
) |
(48,233 |
) |
Basic loss per
share |
(1.83 |
) |
(0.51 |
) |
|
(2.37 |
) |
(1.48 |
) |
Diluted loss per
share |
(1.83 |
) |
(0.51 |
) |
|
(2.37 |
) |
(1.48 |
) |
Adjusted diluted loss per share (1) |
(0.42 |
) |
(0.51 |
) |
|
(0.94 |
) |
(1.48 |
) |
(1) This is a non-GAAP financial ratio and it is calculated as
adjusted net income (loss) divided by weighted average
number of diluted shares. |
|
|
|
|
|
|
|
|
Organic revenue growth (decline) and adjusted organic
revenue growth (decline)
Organic revenue growth (decline) is calculated
as revenue growth (decline) compared to the previous period,
excluding the impact of varying foreign exchange rates. Adjusted
organic revenue growth (decline) is calculated as revenue growth
(decline) compared to the previous period, excluding the impact of
varying foreign exchange rates and the impact of the acquired
businesses for the first year of operation and the sale of
divisions. Management uses organic revenue growth (decline) and
adjusted organic revenue growth (decline) to measure its
performance from one period to the next, without the variation
caused by the impacts of the items described above. Dorel excludes
these items because they affect the comparability of its financial
results and could potentially distort the analysis of trends in its
business performance. Certain investors and analysts use organic
revenue growth (decline) and adjusted organic revenue growth
(decline) to measure the business performance of the Company as a
whole and at the segment level from one period to the next.
Excluding these items does not imply they are necessarily
non-recurring. These measures do not have any standardized meanings
prescribed by IFRS and are therefore unlikely to be comparable to a
similar measure presented by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarters Ended June 30, |
|
|
Consolidated |
|
Dorel Juvenile |
|
Dorel Home |
|
|
2024 |
2023 |
|
2024 |
2023 |
|
2024 |
2023 |
|
$ |
|
% |
$ |
|
% |
|
|
$ |
|
% |
$ |
|
% |
|
|
$ |
|
% |
|
$ |
|
% |
|
Revenue of the period |
348,077 |
|
|
345,211 |
|
|
|
216,434 |
|
|
211,761 |
|
|
|
131,643 |
|
|
133,450 |
|
|
Revenue of the comparative period |
(345,211 |
) |
|
(427,835 |
) |
|
|
(211,761 |
) |
|
(218,004 |
) |
|
|
(133,450 |
) |
|
(209,831 |
) |
|
Revenue growth (decline) |
2,866 |
|
0.8 |
(82,624 |
) |
(19.3 |
) |
|
4,673 |
|
2.2 |
(6,243 |
) |
(2.9 |
) |
|
(1,807 |
) |
(1.4 |
) |
(76,381 |
) |
(36.4 |
) |
Impact of varying foreign exchange rates |
3,149 |
|
0.9 |
(1,328 |
) |
(0.3 |
) |
|
3,075 |
|
1.5 |
(1,425 |
) |
(0.6 |
) |
|
74 |
|
0.1 |
|
97 |
|
- |
|
Organic revenue growth (decline) (1) |
6,015 |
|
1.7 |
(83,952 |
) |
(19.6 |
) |
|
7,748 |
|
3.7 |
(7,668 |
) |
(3.5 |
) |
|
(1,733 |
) |
(1.3 |
) |
(76,284 |
) |
(36.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is unlikely
to be comparable to similar measures presented by other issuers.
Refer to the section “Definition and reconciliation of non-GAAP
financial ratios and measures” in this press release. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
Consolidated |
|
Dorel Juvenile |
|
Dorel Home |
|
|
2024 |
2023 |
|
2024 |
2023 |
|
2024 |
2023 |
|
$ |
|
% |
$ |
|
% |
|
|
$ |
|
% |
$ |
|
% |
|
|
$ |
|
% |
|
$ |
|
% |
|
Revenue of the period |
699,149 |
|
|
678,408 |
|
|
|
429,124 |
|
|
411,786 |
|
|
|
270,025 |
|
|
266,622 |
|
|
Revenue of the comparative period |
(678,408 |
) |
|
(855,870 |
) |
|
|
(411,786 |
) |
|
(434,573 |
) |
|
|
(266,622 |
) |
|
(421,297 |
) |
|
Revenue growth (decline) |
20,741 |
|
3.1 |
(177,462 |
) |
(20.7 |
) |
|
17,338 |
|
4.2 |
(22,787 |
) |
(5.2 |
) |
|
3,403 |
|
1.3 |
|
(154,675 |
) |
(36.7 |
) |
Impact of varying foreign exchange rates |
2,750 |
|
0.4 |
3,614 |
|
0.4 |
|
|
2,808 |
|
0.7 |
2,879 |
|
0.6 |
|
|
(58 |
) |
- |
|
735 |
|
0.2 |
|
Organic revenue growth (decline) (1) |
23,491 |
|
3.5 |
(173,848 |
) |
(20.3 |
) |
|
20,146 |
|
4.9 |
(19,908 |
) |
(4.6 |
) |
|
3,345 |
|
1.3 |
|
(153,940 |
) |
(36.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This is a non-GAAP financial ratio or measure with no
standardized meaning prescribed by IFRS and therefore is unlikely
to be comparable to similar measures presented by other issuers.
Refer to the section “Definition and reconciliation of non-GAAP
financial ratios and measures” in this press release. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|