Dorel Industries Q2 Cycling Revenues Up 15.9 Percent

 

Excluding the impact of foreign exchange variations on the segment’s non-US based businesses, organic revenue increased approximately 12 percent for the quarter and 11 percent year-to-date. For the quarter, the IBD channel experienced sales gains in all of its divisions which are located in the U.S., Europe, Japan and Australia, with Europe posting a particularly strong sales increase of over 50 percent. There has also been strong revenue growth within the segment’s international IBD distributors in Europe and Latin America.

Consumers remain attracted to Dorel’s premium bicycle brands. The demand for Cannondale is very strong and GT, Schwinn and Mongoose continue to make important gains in key North American and European IBD markets. Growth is coming both from existing dealers and from new distribution for all brands through a combination of additional dealers and cross-selling at existing dealers.

Gross profit reached $60.5 million, up 17.6 percent from the second quarter of 2010. Gross margin rose 30 basis points to 24.3 percent of sales. Operating profits for the segment reached $21.3 million, up 25 percent from a year earlier. Operating margins edge up 60 basis points to 8.5 percent of sales.

The sales success of the segment’s premium bicycles can be attributed to successful new product introductions and increased promotional spending which is improving brand awareness. Product development also remains a key focus. This is evident in the exciting innovations in the 2012 Cannondale line up, which is now ready to be shipped. The 2012 Schwinn and GT lines also feature significant changes with updated frame specifications and components.

After a slow start due to a wet spring and retailers closely controlling inventories, second quarter Pacific Cycle sales to the mass merchant distribution channel improved slightly over last year. POS levels have increased since the weather finally broke in early June. Bolstered by an aggressive advertising and marketing campaign which has increased Schwinn’s brand awareness, Pacific Cycle is increasing its market share in the adult category. Schwinn is outperforming the competition and has made made gains over last year’s second quarter.

“Dorel’s Recreational / Leisure segment maintained its strong performance through the second quarter with a year-over-year revenue increase of 16 percent and an operating profit gain of 25 percent, said Dorel President and CEO, Martin Schwartz. With its strong focus on innovation, Cannondale has become a much desired brand and is selling very well. In addition, the marketing investments made in Schwinn have brought the desired results.”

Recreational/Leisure Segment

Second Quarters Ended June 30
		2011				2010
		$		% of rev.		$		% of rev.		Change %
Total revenue		249,094				214,888				15.9%
Gross profit		60,592		24.3%		51,519		24.0%		17.6%
Operating profit		21,274		8.5%		17,009		7.9%		25.1%
Six Months Ended June 30
		2011				2010
		$		% of rev.		$		% of rev.		Change %
Total revenue		449,521				396,565				13.4%
Gross profit		111,587		24.8%		97,642		24.6%		14.3%
Operating profit		39,045		8.7%		32,080		8.1%		21.7%