Dorel Industries Inc. recorded a 5.3% increase in second quarter net
revenues to $459.0 million from $435.9 million for the same period last
year. Net income was $10.8 million or 32 cents per diluted share, down
39.7% from $17.9 million or 55 cents per diluted share in 2006.
However, Pacific Cycles recreational leisure business was quite strong
with revenue up 16.7% from $102 million to $120 million. Sales to
the independent bicycle dealer network continued “at a good pace” and
were described as “substantially over Q2 last year.” The segment has
broadened its product line in 2007; however, the majority of the
revenue growth is still due to improved bicycle sales to both new and
existing customers. In the segment's non-bike sector, sales of motor
scooters are progressing with 350 dealers on the way to the forecasted
500 and sales of skateboards are “above expectations.”
Gross margins for the division this year were 20.6% versus 15.6% last
year, because of the $3.5 million charge against inventory reserve on
the Stingray last year. The improvement on gross margin was mostly due
to the mix of product sold. Earnings from operations more than doubled
to $13.9 million versus $5.9 million. This jump represents a 580 basis
point increase in operating margins to 11.6% of sales versus 5.8% last
year.
