Dorel recently issued a statement regarding their upbeat outlook for the 2007 fiscal year. In the Recreational/Leisure division, after two years of limited growth at Pacific Cycle, 2007 is shaping up as a much better year, according to management.
There are efforts on several fronts with new non-bike product categories. These include backyard items such as swing sets as well as products for fish and game enthusiasts, among others. Pacific Cycle now generates a growing proportion of its revenue from non-bicycle sales as it continues to develop into a true recreational company, as opposed to strictly a bicycle business. Even so, Pacific Cycle sells more bikes than any other US bicycle company with the strong Schwinn, Mongoose and GT brands. Pacific tops the industry at 30 plus per cent of the units sold.
Expectations remain that organic revenue growth will be modest in 2007, but that earnings improvements will outpace revenue increases. Despite organic revenue growth in the Juvenile segment that is expected to be in the low single digits, a strong first quarter performance at Dorel Europe and the stronger Euro will positively impact both revenues and earnings for this segment. The Recreational/Leisure segment is forecasting high single digit growth with better margins and increased earnings. The Home Furnishings segment revenue growth is expected to be in the low single digits, with moderate earnings improvements.
“We are encouraged with the prospects for this year. We have set in motion several initiatives in each of our divisions to capture increased market share and see considerable growth potential. Product development has been a keen focus and the benefits of these efforts will be felt as early as the third quarter. Acquisitions have helped build Dorel's global presence by purchasing businesses that offer opportunity and round out the Company's offerings. While we will concentrate on organic growth we will also look actively and carefully at new opportunities,” concluded Mr. Schwartz.