Dorel revenues for the fourth quarter rose to $462 million, up 42.7% from $323.7 million a year ago. Net income for the fourth quarter jumped 69.6% to $34.7 million from $20.5 million. Income per share for the final quarter was $1.05 fully diluted, compared to 63 cents per share in the fourth the previous year.
For fiscal 2004, Dorel posted revenues of $1.7 billion, up 44.8% from the $1.2 billion last year. Net income for the full year amounted to $100.1 million or US$3.04 per share fully diluted, compared to 2003 net income of $74.2 million or $2.29 per share.
Dorel's continued progress, through a strategic program of selective acquisitions and organic growth, rewarded shareholders with a record performance in 2004. These achievements were realized despite high petroleum costs and increased raw material prices for major commodities such as steel, plastic resin, and particle board, particularly during the first half of the year which lowered gross margins, primarily in the Home Furnishings segment. The situation improved through the balance of the year as the necessary adjustments were made to improve profitability. However the continuing rise in the cost of resin kept overall company gross margins from improving significantly over the first half.
“Despite these raw material price increases throughout the year, overall earnings from operations were 10.7% of sales in the second half of the year versus 8.0% in the first half. Our known consumer brands helped propel sales, predominantly Schwinn's reborn Sting-Ray bicycle, which generated unprecedented sales for a single Dorel product,” commented Martin Schwartz, Dorel President and CEO.
Fourth quarter revenues and earnings in the Recreational/Leisure segment, primarily the Pacific Cycle business, were their highest of the year with revenues of $123.9 million and earnings of $15.7 million. For the year, which includes eleven months of activity,
revenues were $385.9 million and earnings reached $49.4 million, or 12.8% as a percentage of revenues. Upon acquisition it was expected that this new
segment would account for revenues of US$350 million to $375 million with earnings from operations of 12% to 13% of revenues.
Success was driven by the Schwinn Sting-Ray bicycle, which proved to be one of the most successful bicycle launches ever. Over 500,000 bicycles were
sold to several large retailers. The exposure generated by the Sting-Ray also re-invigorated the Schwinn brand name.