Dorel posts 2Q sales uptick of 10.3%
By Furniture Today Staff -- Furniture Today, August 18, 2003
Montreal — Dorel Inds. said second-quarter sales rose 10.3% to $264.7 million as earnings increased 9.2% to $16.3 million.
The Canadian home furnishings and juvenile products giant, which has extensive operations in the United States and Europe, reports results in U.S. dollars.
For the first six months, sales increased 9.4% to $541.6 million and earnings gained 16% to $35.5 million.
In the home furnishings segment, which includes ready-to-assemble furniture and futons, the picture was less bright. Sales in the sector fell 11.3% to $96.8 million in the second quarter, traditionally the year's slowest period. Earnings from operations were down 13% to $13.8 million. For the six months, sales dipped 3.9% to $207.8 million, while earnings from operations slipped 2% to $29.4 million.
"The market in ready-to-assemble furniture has not grown during the first six months of the year," said Martin Schwartz, president and chief executive officer. "Our performance is clearly a reflection of this situation."
He said last year's second quarter benefited from "make-up" orders from Kmart, which remains in Chapter 11 reorganization. "That was a special situation and it was not expected to be repeated," Schwartz said.
"It is now evident that the balance of this year will remain difficult for the retail sector," he continued. "Notwithstanding this, Dorel's earnings per share are expected to grow at between 15% and 20%. While this is less than originally forecast, we are confident the company will post yet another record year of sales and earnings.
"Inventory levels at most retailers are definitely lower than they were at this time last year. In the case of Dorel, we do not expect that retailers will further reduce their positions in the second half of 2003."
Dorel now is projecting 2003 home furnishings sales of between $460 million and $490 million, instead of the previous guidance of $500 to $550 million, although earnings from operations are expected to remain unchanged at between 13% and 14% of sales.
"While we continue to gain market share in Europe, retailers across North America are remaining prudent in their buying patterns as consumers continue to be selective in their purchases," Schwartz said.
| Dorel Inds. | |||
|---|---|---|---|
| Owns Ameriwood, Charleswood, Cosco and Ridgewood | |||
| Quarter ended 6/30 | 2003 | 2002 | Change |
| Based on average shares outstanding of 32.4 million in the 2003 quarter, 30.3 million in the 2002 quarter, 32.3 million in the 2003 six months and 29.5 million in the 2002 six months. | |||
| Sales | $264,740,000 | $239,992,000 | 10.3% |
| Operating income | 36,364,000 | 30,897,000 | 17.7% |
| Net income | 16,261,000 | 14,896,000 | 9.2% |
| Earnings per share (a) | 0.50 | 0.49 | 2.0% |
| 6 months ended 6/30 | 2003 | 2002 | Change |
| Sales | $541,626,000 | $494,974,000 | 9.4% |
| Operating income | 76,044,000 | 63,912,000 | 19.0% |
| Net income | 35,510,000 | 30,624,000 | 16.0% |
| Earnings per share (a) | 1.10 | 1.04 | 5.8%(a) |
