Sting-Ray helps Dorel to record 52% increase in Q2 revenues

Dorel Industries Inc., owner of Pacific Cycle which itself owns Schwinn, the Sting-Ray supplier, today released results for the second quarter ended June 30, 2004. Net earnings increased 11.3 percent to $18.1m compared with $16.3m in the second quarter a year ago. Revenues for the period were in line with expectations at $403.5m compared to 2003 second quarter revenues of $264.7m. Six month earnings were $37.7m. Sting-Ray delivery problems have now been "rectified", said a statement from Dorel.
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Dorel president and CEO, Martin Schwartz, said:

"We anticipate a stronger second half with new juvenile product introductions, particularly in Europe, and ramped up production of the extremely successful Sting Ray bicycle. We believe the Sting Ray will be a very popular Christmas gift item this year. Overall, we are confident of a stronger second half with margins improving throughout the balance of the year."

Dorel is an importer of furniture and child carrying products as well as bicycles.

Revenues for the second quarter, the first full quarter to include Pacific Cycle results, were $102.2m. Pacific Cycle was acquired in February 2004. Earnings from operations were $12.6m. For the five months of 2004, revenues were $156.1m while earnings from operations were $19.1m.

Sales of the Sting-Ray bicycleare "above expectations," said a statement from Dorel.

"While a lack of supply hindered sales in the first half of the year, this has been rectified and a strong second half is expected. As a result, the initial guidance of earnings from operations is being increased slightly to between 12% and 13% of sales from the prior 11.5% to 12.5%. Sales of between $335m and $375m are still anticipated for the 11 months of 2004."

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Summary of Financial Highlights

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Second quarter ended June 30

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All figures in thousands of US $

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2004 2003 Change%

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Revenue 403,527 264,741 52.4%

Net income 18,103 16,261 11.3%

Per share - Basic 0.55 0.51 7.8%

Per share - Diluted 0.55 0.50 10.0%

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Average number of shares

outstanding -

diluted weighted average 32,955,200 32,422,777

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Summary of Financial Highlights

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Six months ended June 30

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All figures in thousands of US $

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2004 2003 Change%

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Revenue 795,373 541,626 46.8%

Net income 37,706 35,510 6.2%

Per share - Basic 1.15 1.12 2.7%

Per share - Diluted 1.15 1.10 4.5%

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Average number of shares

outstanding -

diluted weighted average 32,921,590 32,317,008

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