Dorel Industries reported that third-quarter revenue at its Dorel Sports segment was US$303.6 million, a slight decrease of US$2.0 million, or 0.6 percent from last year.

Excluding the impact of foreign exchange rates, year-over-year organic revenue declined 1.2 percent. Consumer demand for all bikes remained high; however, supply chain disruptions and a shortage of components impacted sales through the quarter.

Dorel Sports is now listed as a discontinued operation following Dorel’s announcement on October 11 that it had entered into a definitive agreement to sell the business to Pon Holdings B.V., a Dutch mobility group, for US$810 million in cash. Dorel Sports brands include Cannondale, Schwinn, GT, Mongoose, Caloi, and IronHorse.

Dorel said that prior to the reclassification as assets held for sale as at September 30, 2021, the company concluded that the transaction to sell the Sports segment was an indication that previously recognized impairment losses in the Sports segment may no longer exist or may have decreased. The company calculated the assets’ recoverable amount and therefore recorded a reversal of previously recognized impairment losses on intangibles of US$72.9 million.

Operating profit at the Dorel Sports segment for the quarter was US$43.1 million compared to US$24.2 million last year. Excluding the reversal of prior year impairment losses on intangibles in the amount of US$72.9 million, the adjusted operating loss was US$29.8 million compared to an adjusted operating profit of US$27.8 million.

Year-to-date revenue at the Dorel Sports segment was US$891.3 million, up US$111.9 million or 14.4 percent from a year ago.

Nine-month operating profit at the Dorel Sports segment was US$96.6 million, compared to US$50.4 million a year ago. Adjusted operating profit1, excluding the reversal of prior year impairment losses on intangibles, was US$23.7 million versus US$54.4 million the prior year. When also excluding the transaction costs related to the sale of the Sports segment in the amount of US$51.0 million, the adjusted operating profit1 for the quarter was US$21.1 million compared to US$27.8 million last year and for the nine months, adjusted operating profit1 was US$74.7 million versus US$54.4 million the prior year.

Photo courtesy Dorel Sports