Dorel Sports third quarter revenue remained flat at $266.5 million, but was up approximately 9 percent after removing the impact of foreign exchange year-over-year, according to Canadian parent company Dorel Industries Inc.
The main drivers of the increased revenue were in the independent bike dealer (IBD) channel due to increased demand of new model year 2016 higher margin bicycles. Caloi sales grew in Brazil as consumers were attracted to Caloi's strong brand equity in the lower price-point category. Sales of battery powered ride-ons in the U.S. mass market channel continued to increase.
Nine month revenue decreased 5.9 percent to $746.5 million. Organic revenue increased approximately 2 percent, after removing the impact of varying foreign exchange rates year-over-year.
Third quarter adjusted operating profit of $10.8 million was down $9.3 million, or 46.3 percent. All major divisions saw their currencies weaken significantly against the US dollar which had a net negative impact on the segment's operating profit of approximately $10 million. Year-to-date adjusted operating profit was $32.8 million, a decline of 40.8 percent compared to last year. The net negative impact of foreign exchange for the first nine months was approximately $24 million.
Cannondale won a 2015 Eurobike Gold Award for Best Road Race Bike for the new Slate Force CX1. The Eurobike Award is selected by an independent jury of industry experts and is one of the most prestigious design awards in the cycling industry. Cannondale also received the American “Interbike Road Bike of the Year” award for the SuperSix EVO Carbon Force Racing Edition.
Outlook
“Despite challenges through much of 2015, Dorel Sports will turn the corner in the fourth quarter with increases over last year in both sales and earnings,” said Dorel President & CEO, Martin Schwartz. “Considerable changes have been made in the segment, new pricing has been implemented on 2016 model year bicycles and Dorel Sports has launched its largest ever number of new bicycle platforms. These new investments will pay off with the start of a new positive trend going forward. Foreign exchange remains unpredictable, however the segment is in a stronger position to face this issue.”
All figures in thousands of US $
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Third Quarters Ended September 30
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2015 2014
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$ % of rev. $ % of rev. Change %
Total revenue 266,499 266,503 (0.0%)
Adjusted gross profit 53,466 20.1% 62,556 23.5% (14.5%)
Adjusted operating
profit 10,825 4.1% 20,174 7.6% (46.3%)
Gross profit 50,954 19.1% 62,052 23.3% (17.9%)
Operating profit (loss) (20,169) (7.6%) 14,769 5.5% (236.6%)
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All figures in thousands of US $
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Nine Months Ended September 30
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2015 2014
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$ % of rev. $ % of rev. Change %
Total revenue 746,515 793,100 (5.9%)
Adjusted gross profit 163,553 21.9% 191,017 24.1% (14.4%)
Adjusted operating
profit 32,842 4.4% 55,477 7.0% (40.8%)
Gross profit 161,041 21.6% 189,842 23.9% (15.2%)
Operating profit 2,472 0.3% 46,292 5.8% (94.7%)
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