Dorel Industries executives told their shareholders Thursday that improving consumer confidence and new products from Cannondale will help it maintain the momentum it reported in the first quarter, when sales at its Recreation/Leisure segment revenues grew 12.5% to $181.7 million.

 

“There is every indication that this momentum will continue over the next few months,” said Martin Schwartz, President and CEO for Dorel Industries, which also make infant baby seats, small appliances and furniture. “The Cannondale product is the best it's been in years and the results are clear. A record number of new dealers have been added since January, many in key US markets such as Los Angles, Northern California and Colorado. Another growth path is our new Apparel Footwear Group (AFG), which combines the branded apparel of SUGOI, Cannondale, GT, Schwinn, IronHorse and Mongoose, in both custom and its regular offerings. We've barely scratched the surface in the expanding custom market and expect to triple this business within 5 years.”

 

Dorel's CFO Jeffrey Schwartz said consumer confidence has risen in many of Dorel's markets including in most of Europe.

 

“While margins could be affected by rising commodity and freight costs, the momentum we have established so far this year positions us to benefit from further new product introductions and our brand equity,” stated Schwartz.

He also noted that Dorel management is very confident it will close a deal next month to refinance its revolving debt. Earlier this year Dorel refinanced its long-term debt by issuing US$200 million of Senior Guaranteed Notes at fixed rates. Earlier this month Dorel's Board decided to increase the quarterly dividend by 20% to US$0.60 per share per annum.


Martin Schwartz said Dorel continues to scout acquisition opportunities. 

 

“We continue to keep our eyes open for companies in our sectors that are the proper fit,” he said. “While there is nothing imminent, Dorel has the balance sheet and the capability to digest another key transaction. The management structure we put in place two years ago was designed with this in mind. We must ensure that we capitalize on further opportunities, deliver long-term sustainable growth and above all, maximize shareholder value.”