Dorel's Q3 bike sales boom, furniture sales up during COVID summer

·2 min read

MONTREAL — Dorel Industries Inc. says it couldn't keep up with demand for bicycles and some home furniture during the summer as the quarter's revenue still rose 9.9 per cent from last year.

The Montreal-based company, which reports in U.S. currency, said revenue for the three months ended Sept. 30 was US$753.4 million, up from US$685.7 million a year earlier.

Net income was $26.2 million or 80 cents per share, compared with a year-earlier loss of $4.3 million or 13 cents per share.

Adjusted net income was $28.7 million or 87 cents per share, up from $2.4 million or seven cents per share in last year's third quarter.

The results come as Dorel's independent directors consider the controlling family's proposal to take the company private by buying out other shareholders at C$14.50 per share.

Following the third-quarter earnings report early Friday, Dorel's subordinate B shares traded on the Toronto Stock Exchange at C$15.81, up 12 cents from Thursday.

Dorel chief executive Martin Schwartz, a member of the controlling family, said its sports and home divisions drove the third-quarter growth.

"In sports, the second-quarter trend of increased demand for bicycles continued and outpaced product availability. In spite of this, the segment was still able to achieve the highest earnings in its history," Schwartz said.

The sports division revenue was up US$55.3 million or 22.1 per cent compared with last year. Adjusted operating profit, which excludes restructuring costs, set a record of US$27.8 million, about five times higher that a year earlier after rising US22.2 million.

The home division sales were also limited by a lack of supply in some of its product categories but still rose by US$29.7 million or 14 per cent. Sales at its Juvenile segment, which sells car seats, strollers and other products for young children, fell US$17.3 million

Dorel's board has agreed to negotiate exclusively with the Schwartz family and their partner Cerberus Capital Management until Tuesday.

Dorel's largest non-family shareholder, a Montreal-based investment firm with a 13.1 per cent holding, said this week that it wouldn't support the proposed going-private offer because the controlling family's desire to remain shareholders is evidence of Dorel's long-term potential.

This report by The Canadian Press was first published Nov. 6, 2020.

Companies in this story: (TSX:DII.A, TSX:DII.B)

The Canadian Press