Dorel financials weather stormy 2013

Revenue is largely static for the Cannondale owner, despite initial poor weather, downsizing and acquisitions
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Dorel Group, owner of Cannondale, Schwinn, GT, Mongoose, Caloi, Iron Horse and Sugoi, saw a one per cent drop in revenue in the recreational / leisure sector.

In the recreational / leisure sector (including its bicycle division), revenue hit $918,744,000 ($928,422,000 in 2012) representing a one per cent drop. In Q4 sector revenue hit $245,465,000 up 8.3 per cent on 2012 ($226,640,000).

It's been a busy year for Dorel, having expanded into the Latin American market with the acquisition of Caloi. Less positive developments included 50 jobs being shed worldwide.

Gross profit in 2013 was 23.0 per cent as compared to 23.4 per cent in the prior year. Excluding the restructuring charges, adjusted gross profit was 23.1 per cent. In addition to restructuring costs, Dorel again grumbled at "increased discounting pricing activity in the Recreational/Leisure segment".

"The investment in new product development and brand support over the past several years has allowed its products to remain desirable to consumers and has helped prevent competing merely on price.

"As in recent years since the financial crisis of 2008, 2013 was a year in which consumers remained prudent in their level of discretionary spending in North America and particularly in many regions of Europe, which are facing economic adversity."

Specifically on the cycle market, Dorel said: "The organic sales decrease after removing the impact of foreign exchange and acquisitions was approximately two per cent. The decrease was in both the IBD and the mass merchant distribution channels. In both cases, the decline was driven by the ongoing global decrease in the bicycle market predominantly caused by the extremely poor weather during the first half of 2013.

"Moreover, sales to the mass merchant market were lower during the fourth quarter compared to last year as retailers experienced fewer consumer visits during the holiday period, and sales to the IBD channel were affected as dealers were reluctant to increase inventory going into the new year."

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