Dorel Sports’ revenue increased to $909 million for 2019, up 2.9% from $883 million last year.
The results also show that fourth-quarter revenue increased to $233.2 million, up 0.2% from $232.7 million last year.
Pacific Cycle Group (PCG) and Caloi posted growth in the quarter while the Cycling Sports Group’s (CSG) revenue declined. PCG rose on the back of strong POS at key retailers and robust e-commerce sales, Dorel said, and there has been tariff relief on children’s bicycles and this mitigated the year’s earlier impact at PCG.
Caloi benefitted through the quarter from price increases on its models and improved mix on higher Cannondale sales. CSG organic revenue growth was in most geographies with increased sales of Cannondale e-bikes and model year 2020 product launches.
Fourth-quarter operating profit was $9.8 million compared with an operating loss of $232.1 million last year. Adjusted operating profit increased to $13.6 million, up $8.4 million or 164.5% from last year, excluding impairment losses on goodwill, intangible assets and property, plant and equipment, restructuring and other costs.
For the year, the operating profit was $30.3 million compared to an operating loss of $229.1 million in 2018. Excluding impairment losses on goodwill, intangible assets and property, plant and equipment, restructuring and other costs, adjusted operating profit increased by $13.9 million, or 70.0%, to $33.8 million.
Dorel Sports has said it is strengthening its European CSG operations, which will be centralised in the Netherlands. The existing assembly plant in Oldenzaal is being transformed into a “state-of-the-art facility” to more than double its current production capacity of Cannondale bicycles and e-bikes, and allow for an increase in focus on premium quality products. All production and supply related departments are being merged into the new facility.
In addition, CSG’s European headquarters is being relocated to Woudenberg in a new, scenic campus, where an “excellent working environment” is being created in a setting that will bring CSG’s brands to life. The offices in Oldenzaal and Basel, Switzerland have been closed. The reorganisation is expected to be fully completed by year-end, Dorel said, and will result in estimated restructuring costs of between $8 million to $10 million, of which $3.8 million was recorded in the fourth quarter.
Dorel Sports’ president Peter Woods said: “This is a major step in implementing CSG Europe’s strategic plan. We have had excellent results in Europe in 2019 and the exciting changes we are announcing will enable us to better serve our customers, boost our brand presence, and further develop our culture.”