Business news : Dorel's Bicycle Segment Sees 12 Percent Q4 Growth

Revenue at Dorel Industries Recreational/Leisure segment, which owns the Cannondale, Schwinn and other bike brands, increased 12.0 percent to $225.6 million in the fourth quarter ended. Dec. 30, 2012 and broke $900 million in the full fiscal year. Gross margin increased 200 basis points to 24.9 percent while operating margins grew 160 basis points to 7.3 percent or revnue, or $16.5 million. "Driven by double digit growth in sales of Dorel's premium Cannondale brand, the Recreational/Leisure segment's full-year revenue surpassed US$900 million," said Dorel President and CEO, Martin Schwartz. "Fourth quarter revenue increased markedly due to the ability to ship more product and strong sales of electric ride-on toys. We have proven we can do a good job in the bike business and the growth trend we have established during the last couple of years clearly underlines this."

Fourth quarter revenues increased approximately 12 percent, with all of the growth being organic. The Independent Bicycle Dealer (IBD) channel drove the increase with strong pre-season sales of model year 2013 bicycles. Improved mix and cost containment were the principal reasons for the increase in operating profit of 41.8 percent. The continuing turnaround at SUGOI resulted in a modestly profitable quarter, a sharp reversal from the loss during the fourth quarter a year ago.

For the full year, revenues rose 7.7 percent to $928.4 million compared to $861.8 million a year ago. After removing the impact of foreign exchange, organic sales increased approximately 10 percent, marking the second consecutive year of 10 percent organic growth. The gain was in both the IBD and the mass merchant distribution channels, driven by new products and strong marketing of the segment's brands. The operating profit increase of 18.6 percent was driven by a focus on increased sales and gross margin expansion. To support this growth, the segment continues to invest in marketing and infrastructure to support the objectives of building this segment into the premier bicycle company in the market.

The growth in the IBD channel was in the majority of its markets. In the mass channel, bicycle sales were complemented by strong growth in the electric ride-on category.

Outlook

"Specifically in Recreational / Leisure we believe the success of our new product development and marketing in 2012 will continue into 2013," Schwartz continued.

 

Dorel Industries Recreational/Leisure Segment
Fourth Quarters Ended December 30
	2012		2011
	$	% of rev.	$	% of rev.	Change %
Total revenue	226,640		202,410		12.0%
Gross profit	56,519	24.9%	46,410	22.9%	21.8%
Operating profit	16,456	7.3%	11,604	5.7%	41.8%
For the years Ended December 30
	2012		2011
	$	% of rev.	$	% of rev.	Change %
Total revenue	928,422		861,754		7.7%
Gross profit	233,437	25.1%	205,052	23.8%	13.8%
Operating profit	71,958	7.8%	60,657	7.0%	18.6%

( Source Dorel Industries through SportsOneSource )