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Dorel should thrive in down times, CEO Schwartz tells shareholders PDF Print E-mail
Written by HGO Staff   
MONTREAL (27 May 2009) - Economic down turns should spell opportunity for all three of Dorel Industries Inc.'s business, president and chief executive officer Martin Schwartz told shareholders at today's annual general meeting here, outlining the factors which will drive the company to perform well during the current global recession.

The consumer goods giant posted its best year in 2008 with revenues of US$2.2 billion and net income of $113 million. First quarter 2009 revenues were US$525 million and net income of US$28 million, which was lower than last year's first quarter.

"Given the context of the economic situation, we are more than satisfied with the start of the year," Schwartz told his shareholders.

Dorel's product assortment is usually in strong demand during recessionary times. For example, the value-priced ready-to-assemble furniture produced by its home furnishings segment becomes more attractive to consumers for less expenses items.

"Our price points fit the times. Retailers have shifted gears and are offering consumers products in what we term ‘opening to mid price points', as shoppers of every description are gravitating to the big box outlets," Schwartz said.

"Dorel excels in these categories with the majority of our sales in these price points. We are also picking up new listings from competitors. In times of uncertainty, retailers seek strong, stable suppliers with a history of delivering, and who will be around for the long term. Dorel fits that bill perfectly. Our financial strength also provides a high level of comfort," he continued.

Shareholders were provided with an overview of all three Dorel segments. Results at Dorel Juvenile Group in the United States have been strong in 2009. Their earnings exceeded plan in the first quarter and order levels in the second quarter have been strong. The division will be making a major announcement early in the near future which will unveil a completely revolutionary advancement in one of Dorel's most important juvenile categories.

Scwartz also said the first quarter was the home furnishings segment's best since the fourth quarter of 2007, driven largely by increased demand for Ameriwood's RTA furniture lines at mass merchants and DIY centres across North America.

Much of the means used to right Ameriwood will now be centered on Cosco Home & Office where both operations and product listing are being focused.

"While the division still expects to lose money in 2009 due to the cost of resolving previous years' issues, plans are well on track for a return to profitability next year," Schwartz said.

In the juvenile segment, Dorel plans to introduce a number new products in North America this year while the recreational segment is focusing on making Cannondale a market-leading bicycle brand.

"In home furnishings, indications point to a good year, led by Ameriwood which is now a solid money maker," Schwartz said.

"Even after considering all of the issues in 2009, our full year outlook remains unchanged. We are committed to reducing expenses, anticipate cash flow of at least US$150 million and expect input costs will remain stable through the year," he continued, adding, "As previously stated, we do not anticipate 2009 will be as profitable as 2008 but nor do we expect it to be anywhere nearly as negative as current market conditions suggest."

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