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Press release from CNW Group

Dorel announces third quarter results

Thursday, November 03, 2011

Dorel announces third quarter results08:34 EDT Thursday, November 03, 2011EXCHANGESTSX:DII.B, DII.AStrong cash flow quarter Recreational/Leisure continues to perform well, Juvenile downDorel to acquire majority interest in a South American juvenile products business (see separate release issued this morning)MONTREAL, Nov. 3, 2011 /CNW Telbec/ - Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the third quarter ended September 30, 2011.  Revenue for the period increased by US$6.3 million, or 1.1%, to US$575.8 million from US$569.5 million a year ago. Net income was US$23.1 million or US$0.71 per diluted share compared to US$30.6 million or US$0.92 per diluted share in 2010.Total nine month revenue was up US$29.2 million, or 1.6%, to US$1.80 billion from US$1.77 billion in prior year. Net income was US$77.2 million or US$2.36 per diluted share compared to US$101.8 million or US$3.06 per diluted share for the year-to-date period in 2010. Upon transition to IFRS, previously issued earnings per diluted share of US$0.91 and US$3.09 for the third quarter and nine months respectively have been restated to US$0.92 and US$3.06."We are disappointed with the results of our Juvenile segment, particularly in the U.S. Performance was at an unacceptable level due to the perfect storm of rapidly increasing input costs and decreased consumer demand for juvenile products.  Consumers maintained a tight rein on spending and this meant we were unable to pass the majority of higher costs on to our customers.  In Recreational/Leisure we maintained our momentum as the Cannondale brand becomes increasingly synonymous with product innovation.  Sales to mass merchants were also up year-over-year. Home Furnishings sales were down almost 7% as POS levels were affected by the weak economy.  Nonetheless the segment continues to be a good generator of cash.  For the Company as a whole, year-to-date cash flow generation is up over US$30 million from last year due to improved working capital management, principally inventory reductions," commented Dorel President and CEO Martin Schwartz. Summary of Financial HighlightsThird Quarters Ended September 30All figures in thousands of US $, except per share amounts  2011 2010 Change %Total revenue 575,828 569,455 1.1%Net income 23,074 30,649 -24.7% Per share - Basic 0.71 0.93 -23.7% Per share - Diluted 0.71 0.92 -22.8%Average number of shares outstanding - diluted weighted average 32,613,976 33,159,981                Summary of Financial HighlightsNine Months Ended September 30All figures in thousands of US $, except per share amounts  2011 2010 Change %Total revenue 1,802,621 1,773,463 1.6%Net income 77,231 101,780 -24.1% Per share - Basic 2.37 3.09 -23.3% Per share - Diluted 2.36 3.06 -22.9%Average number of shares outstanding - diluted weighted average 32,779,635 33,260,965  Juvenile Segment Third Quarters Ended September 30  2011 2010    $ % of rev. $ % of rev. Change %Total revenue 227,080   248,421   -8.6%Gross profit 50,089 22.1% 65,622 26.4% -23.7%Operating profit 4,934 2.2% 22,443 9.0% -78.0%                      Nine Months Ended September 30  2011 2010    $ % of rev. $ % of rev. Change %Total revenue 740,665   794,005   -6.7%Gross profit 183,445 24.8% 218,210 27.5% -15.9%Operating profit 43,461 5.9% 81,544 10.3% -46.7%Third quarter revenue and operating profits declined in the majority of the Juvenile segment's divisions.  The organic revenue decrease was approximately 13%, with the most significant decline at Dorel Juvenile Group (DJG) in the U.S. where cautious consumers have created a difficult retail environment.  In Europe, sales in local currency were down just over 10%, however upon conversion to the U.S. dollar, decreased by less than 3%. Sales declines were most pronounced in Southern Europe.  Despite car seat sales being slightly down, feedback from European retailers is that Dorel Europe is still out-pacing the market.Margins have eroded, particularly in the U.S. where higher input costs, mainly resin, significantly reduced earnings and the ability to pass on these higher costs to customers has been limited. This was compounded by a less favourable product mix.  Also, the stronger U.S. dollar at the end of the quarter reduced operating profit at several divisions.  However, resin costs have begun to decline which will provide some relief as the Company moves into the fourth quarter and next year.  A further bright spot at DJG is the progress being made with its international brands, Quinny and Maxi-Cosi. With an added focus and new leadership in this area, the brands are being increasingly accepted in the U.S. market with more placements in more stores.Recreational/Leisure Segment Third Quarters Ended September 30  2011 2010    $ % of rev. $ % of rev. Change %Total revenue 209,823   172,530   21.6%Gross profit 47,055 22.4%  39,420 22.8% 19.4%Operating profit 10,008 4.8% 9,111 5.3% 9.8%                      Nine Months Ended September 30  2011 2010    $ % of rev. $ % of rev. Change %Total revenue 659,344   569,095   15.9%Gross profit 158,642 24.1% 137,062 24.1% 15.7%Operating profit 49,053 7.4% 41,191 7.2% 19.1%Revenue in the third quarter increased 21.6%, as strong sales to the independent bicycle dealer (IBD) channel continued, driven by new product innovation and brand support.  This was evidenced at September's two major bike shows in Europe and the U.S. where new products were enthusiastically received. In the mass merchant channel, sales for the quarter improved over last year.  The segment's organic revenue increase was approximately 18% for the quarter and is 13% year-to-date. As in Juvenile, the stronger U.S. dollar at the end of September also affected operating profit, reducing the gross margin percentage by approximately 1% in the quarter.The segment's earnings in the quarter were hampered by a loss at its apparel division, with earnings declining by approximately US$2.5 million from last year.  The decrease was due mainly to a write-down of excess inventory from prior model years and one-time costs of $US0.8 million related to a strategic decision to outsource the "custom manufacturing" part of this business.  Principally for employee severance, it is anticipated that in the fourth quarter additional one-time costs of US$1.5 million will be incurred as part of this initiative. Though less than 5% of the segment's total revenues, improving profits at the apparel division remain a focus as management believes the SUGOI brand and its product offerings offer substantial opportunity. Preliminary orders for spring 2012 are higher than they were a year ago at this time.Excluding the decline in earnings at this division, the operating profit in the segment would have increased by over 35% for the quarter as opposed to the 9.8% recorded.Home Furnishings Segment           Third Quarters Ended September30  2011 2010    $ % of rev. $ % of rev. Change %Total revenue       138,925     148,504   -6.5%Gross profit         15,709 11.3%     17,345 11.7% -9.4%Operating profit           6,748 4.9%       7,052 4.7% -4.3%                      Nine Months Ended September 30  2011 2010    $ % of rev. $ % of rev. Change %Total revenue 402,612   410,363   -1.9%Gross profit 48,498 12.0% 57,238 13.9% -15.3%Operating profit 20,765 5.2% 29,024 7.1% -28.5%Home Furnishings' year-over-year third quarter revenue decreased 6.5% and is down 1.9% year-to-date.  While the difficult U.S. economy continued to affect POS levels at retail, the segment's various divisions have maintained their market share.  In the quarter and year-to-date, a principal driver of the sales decline was the decision to exit unprofitable product SKUs sold by the Cosco Home & Office division as it became strategically advantageous to no longer sell these items. Sales of ready-to-assemble furniture are also down from prior year, but increases in other furniture lines, mainly upholstered furniture and futons, offset some of these decreases.Cost increases in commodities, labour and rising costs in Asia also affected margins. In addition, the continued strength of the Canadian dollar increased costs for two of the segment's plants that are based in Canada but ship primarily to the U.S.  Notably, the earnings decline in the quarter versus the prior year was the lowest decline thus far in 2011 and this improved earnings trend is expected to continue into the fourth quarter.Cash FlowDuring the first nine months of the year, cash flow provided by operating activities was US$105.8 million compared to US$72.5 million recorded in 2010, an increase of US$33.3 million. This was despite lower year-over-year after-tax earnings of US$24.5 million and was due to improved working capital management, principally inventory reductions. As has been stated in the past, the Company estimates the appropriate level of inventory to support the business to be from US$450 million to US$470 million. As a result of management's focus on right sizing inventory levels, the balance as at September 30, 2011 was US$446.4 million. This reduction has generated year-to-date cash flow of US$63 million.OtherA third quarter income tax recovery of US$8.7 million was recorded. This was mainly due to a US$6.2 million tax benefit in the Netherlands where the Juvenile segment's new product R&D program qualified for the Dutch government's "Innovation Box" program. This lower rate of tax in the Netherlands is anticipated to remain in effect going forward. For mainly this reason, the Company's 2011 year-to-date tax rate is 6.4%, as compared to 16.2% in 2010. Excluding the US$6.2 million recovery in the Netherlands, the current year-to-date tax rate would be 13.9%, more in line with the prior year. However due principally to the impact of the "Innovation Box" tax recovery, the rate for the year is now expected to be in the range of 8% to 12%.Increase to Normal Course Issuer BidThe Company announces that it has amended its normal course issuer bid in order to increase the maximum number of Class B Subordinate Voting Shares that may be repurchased for cancellation during the twelve month period ending April 3, 2012 from 700,000 Class B Subordinate Voting Shares to 1,420,660, representing 5% of Dorel's issued and outstanding Class B Subordinate Voting Shares as at March 29, 2011 (see press release dated March 31, 2011).  No other terms of the normal course issuer bid have changed.The purchases by Dorel will be effected through the facilities of the Toronto Stock Exchange and will be made at the market price of the Class B Subordinate Voting Shares at the time of the purchase.  To date, Dorel has purchased a total of 575,400 Class B Subordinate Voting Shares at a weighted average price of $23.52 under the current normal course issuer bid.  As at November 2, 2011, there were 27,847,677 Dorel Class B Subordinate Voting Shares issued and outstanding.In addition, Dorel has amended the automatic share purchase agreement with CIBC World Markets Inc. in connection with the normal course issuer bid in order to take into account the revised terms of the bid.  Under the agreement, CIBC may acquire, at its discretion, Class B Subordinate Voting Shares at any time on Dorel's behalf, subject to certain parameters as to price and number of shares.The amended normal course issuer bid has been approved by the Toronto Stock Exchange.Quarterly dividendThe Board of Directors of Dorel declared its regular quarterly dividend of US$0.15 per share on the outstanding number of the Company's Class A Multiple Voting Shares, Class B Subordinate Voting Shares and Deferred Share Units. The dividend is payable on December 1, 2011 to shareholders of record as at the close of business on November 17, 2011.Outlook"The third quarter was very challenging for Dorel with the Juvenile segment having one of its poorest quarters ever.  As we move into the last quarter of 2011, we expect that the Juvenile segment will reverse its downward earnings trend in the fourth quarter, while posting similar revenues to last year's fourth quarter.  Aided mainly by lower costs, earnings will move towards fourth quarter 2010 figures, though gross margins will be lower than last year.  Dorel's senior management is focused on addressing issues within the segment and we are expecting to see improvement through 2012." commented Mr. Schwartz."I am delighted with the juvenile acquisition announced this morning. The transaction is intended to extend our reach in a market we believe has great growth potential and provides Dorel with another important brand in Chile, Bolivia, Peru and Argentina, further solidifying our position as a global leader in the juvenile products industry. It will be immediately accretive to earnings and responds to our corporate objective of growing Juvenile through geographic expansion."Our Recreational/Leisure segment continues to perform well and we see no change in this positive trend through year-end. Driven by exciting new innovative products consumers have embraced our various brands. Cannondale has had an excellent year and we see this growth continuing.  Pre-holiday sales to mass merchants have been good, helped by a major retailer's decision to reinstate its lay-away plan.  In Home Furnishings, we expect the fourth quarter to be improved over last year's comparable period. Overall, we believe that the worst is over for Dorel and going forward we expect to return to a better level of performance," concluded Mr. Schwartz.Conference CallDorel Industries Inc. will hold a conference call to discuss these results today, November 3, 2011 at 1:00 P.M. Eastern Time. Interested parties can join the call by dialling 1-800-731-5319. The conference call can also be accessed via live webcast at or If you are unable to call in at this time, you may access a tape recording of the meeting by calling 1-877-289-8525 and entering the passcode 4479973# on your phone. This tape recording will be available on Thursday, November 3, 2011 as of 4:00 P.M. until 11:59 P.M. on Thursday, November 10, 2011.Complete financial statements will be available on the Company's website,, and will be available through the SEDAR websites.ProfileDorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle company. Established in 1962, Dorel creates style and excitement in equal measure to safety, quality and value. The Company's lifestyle leadership position is pronounced in both its Juvenile and Bicycle categories with an array of trend-setting products.  Dorel's powerfully branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale, Schwinn, GT, Mongoose, IronHorse and SUGOI in Recreational/Leisure.  Dorel's Home Furnishings segment markets a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel is a US$2.3 billion company with 4700 employees, facilities in nineteen countries, and sales worldwide.Caution Regarding Forward Looking StatementsCertain statements included in this press release may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation.  Except as may be required by Canadian securities laws, Dorel does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Dorel's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Dorel cannot guarantee that any forward-looking statement will materialize. Forward-looking statements are provided in this press release for the purpose of giving information about Management's current expectations and plans and allowing investors and others to get a better understanding of Dorel's operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.Forward-looking statements made in this press release are based on a number of assumptions that Dorel believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from the Company's expectations expressed in or implied by the forward-looking statements include:  general economic conditions; changes in product costs and supply channel; foreign currency fluctuations; customer and credit risk including the concentration of revenues with few customers; costs associated with product liability; changes in income tax legislation or the interpretation or application of those rules; the continued ability to develop products and support brand names; changes in the regulatory environment; continued access to capital resources and the related costs of borrowing; changes in assumptions in the valuation of goodwill and other intangible assets and subject to dividends being declared by the Board of Directors, there can be no certainty that Dorel's Dividend Policy will be maintained. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in Dorel's annual MD&A and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference.Dorel cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to Dorel or that Dorel currently deems to be immaterial may also have a material adverse effect on our business, financial condition or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.Except as otherwise indicated, forward-looking statements do not reflect the potential impact of any non-recurring or other unusual items or of any dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date hereof. The financial impact of these transactions and non-recurring and other unusual items can be complex and depends on the facts particular to each of them. Dorel therefore cannot describe the expected impact in a meaningful way or in the same way Dorel presents known risks affecting the business. DOREL INDUSTRIES INC.CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONALL FIGURES IN THOUSANDS OF US $         as at as at  September 30,2011 December 30,2010         (unaudited) (unaudited)       ASSETS      CURRENT ASSETS       Cash and cash equivalents $25,778 $15,748 Trade and other receivables  382,801  356,507 Inventories  446,364  510,068 Other financial assets  8,144  2,554 Income taxes receivable  19,312  14,096 Prepaid expenses  21,341  17,823   903,740  916,796       NON-CURRENT ASSETS       Property, plant and equipment  158,120  158,752 Intangible assets  392,502  396,354 Goodwill  554,660  554,528 Deferred tax assets  64,779  65,690 Other assets  1,834  2,215   1,171,895  1,177,539  $2,075,635 $2,094,335       LIABILITIES      CURRENT LIABILITIES       Bank indebtedness $22,338 $30,515 Trade and other payables  294,502  323,588 Other financial liabilities  2,295  4,203 Income taxes payable  4,547  13,154 Long-term debt  17,142  10,667 Provisions  40,546  43,232   381,370  425,359       NON-CURRENT LIABILITIES       Long-term debt  291,968  319,281 Pension and post-retirement benefit obligations  32,027  32,056 Deferred tax liabilities  107,177  109,789 Provisions  1,847  1,780 Other financial liabilites  28,394  31,253 Other long-term liabilities  3,995  2,966   465,408  497,125       EQUITY      SHARE CAPITAL  176,094  178,816CONTRIBUTED SURPLUS  25,900  23,776ACCUMULATED OTHER COMPREHENSIVE INCOME  69,135  64,626RETAINED EARNINGS  957,728  904,633   1,228,857  1,171,851  $2,075,635 $2,094,335 DOREL INDUSTRIES INC.CONSOLIDATED INCOME STATEMENTSALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS               Third Quarters Ended Nine Months Ended  September  30,2011 September 30,2010 September  30,2011 September 30, 2010  (unaudited) (unaudited) (unaudited) (unaudited)             Sales $574,092 $567,329 $1,794,219 $1,765,199Licensing and commission income  1,736  2,126  8,402  8,264TOTAL REVENUE  575,828  569,455  1,802,621  1,773,463             Cost of sales  462,975  447,068  1,412,036  1,360,953GROSS PROFIT  112,853  122,387  390,585  412,510                          Selling expenses  48,241  42,899  140,703  128,822General and administrative expenses   38,521  38,874  128,781  127,821Research and development expenses  7,048  6,931  22,378  21,423OPERATING PROFIT  19,043  33,683  98,723  134,444             Finance expenses  4,659  5,201  16,246  13,046INCOME BEFORE INCOME TAXES  14,384  28,482  82,477  121,398             Income taxes expense  (8,690)  (2,167)  5,246  19,618NET INCOME $23,074 $30,649 $77,231 $101,780             EARNINGS PER SHARE             Basic  $0.71  $0.93  $2.37  $3.09 Diluted  $0.71  $0.92  $2.36  $3.06             SHARES OUTSTANDING             Basic - weighted average  32,506,383  32,833,643  32,596,280  32,906,296 Diluted - weighted average  32,613,976  33,159,981  32,779,635  33,260,965                          DOREL INDUSTRIES INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEALL FIGURES IN THOUSANDS OF US $               ThirdQuarters Ended Nine Months Ended  September  30,2011 September 30,2010 September  30,2011 September 30,2010  (unaudited) (unaudited) (unaudited) (unaudited)             NET INCOME $23,074 $30,649 $77,231 $101,780             OTHER COMPREHENSIVE INCOME (LOSS):            Cumulative translation account:            Net change in unrealized foreign currency gains (losses) on translation ofnet investments in foreign operations, net of tax of nil  (39,256)  43,595  (557)  (23,678)                          Net changes in cash flow hedges:            Net change in unrealized gains (losses) on derivatives designated ascash flow hedges  15,734  (6,628)  11,846  (7,973)Reclassification to income  (3,857)  (400)  (6,265)  (467)Reclassification to the related non financial asset  (2,045)  215  1,310  (399)Deferred income taxes  (2,646)  2,102  (1,735)  3,429   7,186  (4,711)  5,156  (5,410)             Defined benefit plans:            Actuarial gains (losses) on defined benefit plans  116  (979)  (6)  (2,726)Deferred income taxes  (30)  346  (84)  981   86  (633)  (90)  (1,745)             TOTAL OTHER COMPREHENSIVE INCOME (LOSS)  (31,984)  38,251  4,509  (30,833)             TOTAL COMPREHENSIVE INCOME (LOSS) $(8,910) $68,900 $81,740 $70,947 DOREL INDUSTRIES INC.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYALL FIGURES IN THOUSANDS OF US $              Attributable to equity holders of the Company ShareCapitalContributedSurplusCumulativeTranslationAccount*Cash FlowHedges*DefinedBenefitPlans*RetainedEarningsTotalEquity (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)               Balance as at December 31, 2009$174,816$20,311$96,840$895$- $809,976$1,102,838               Total comprehensive income (loss) - - (23,678) (5,410) (1,745) 101,780 70,947Issued under stock option plan 4,707 - - - - - 4,707Reclassification from contributed surplus due to exercise of stock options 1,147 (1,147) - - - - -Repurchase and cancellation of shares (2,406) - - - - -  (2,406)Premium paid on share repurchase - - - - - (10,829) (10,829)Share-based payments - 3,709 - - - - 3,709Dividends on common shares - - - - - (13,977) (13,977)Dividends on deferred share units - 39 - - - (39) -               Balance as at September 30, 2010$178,264$22,912$73,162$(4,515)$(1,745)$886,911$1,154,989                              Balance as at December 31, 2010$178,816$23,776$67,970$(1,032)$(2,312)$904,633$1,171,851               Total comprehensive income (loss) - - (557) 5,156 (90) 77,231 81,740Issued under stock option plan 429 - - - - - 429Reclassification from contributed surplus due to exercise of stock options 89 (89) - - - - -Repurchase and cancellation of shares (3,240) - - - - - (3,240)Premium paid on share repurchase - - - - - (9,406) (9,406)Share-based payments - 2,160 - - - - 2,160Dividends on common shares - - - - - (14,677) (14,677)Dividends on deferred share units - 53 - - - (53) -               Balance as at September 30, 2011$176,094$25,900$67,413$4,124$(2,402)$957,728$1,228,857               *Accumulated other comprehensive income              DOREL INDUSTRIES INC.            CONSOLIDATED STATEMENTS OF CASH FLOWS            ALL FIGURES IN THOUSANDS OF US $                           Third Quarters Ended Nine Months Ended      September  30,2011 September 30,2010 September  30,2011 September 30,2010  (unaudited) (unaudited) (unaudited) (unaudited)             CASH PROVIDED BY (USED IN):                         OPERATING ACTIVITIES            Net income $23,074 $30,649 $77,231 $101,780Items not involving cash:             Depreciation and amortization  14,093  13,050  41,705  38,233 Amortization of deferred financing costs  (270)  112  376  191 Accretion expense on contingent consideration and put option liabilities  523  784  1,610  1,725 Change of assumptions on contingent consideration and put option liabilities  (113)  -  (1,086)  - Unrealized (gains) losses due to foreign exchange exposure on contingent considerationand put option liabilities  (546)  (162)  (1,067)  319 Other finance expenses  4,136  4,417  14,636  11,321 Income taxes expense  (8,690)  (2,167)  5,246  19,618 Share-based payments  546  1,224  1,941  3,372 Pension and post-retirement defined benefit plans  824  721  2,516  2,353 Loss (gain) on disposal of property, plant and equipment  33  891  (26)  893   33,610  49,519  143,082  179,805Net changes in non-cash balances related to operations:             Trade and other receivables  36,061  48,890  (27,027)  (11,497) Inventories  45,692  (71,500)  63,014  (129,256) Prepaid expenses  (2,610)  (133)  (4,146)  (2,564) Trade and other payables  (39,764)  (27,700)  (30,950)  70,810 Pension and post-retirement benefit obligations  (411)  (866)  (2,510)  (2,289) Provisions, other financial liabilities and other long-term liabilities  (74)  (1,117)  (691)  (823)   38,894  (52,426)  (2,310)  (75,619) Income taxes paid  (4,489)  (3,983)  (23,692)  (27,620) Income taxes received  579  146  1,069  3,838 Interest paid  (2,191)  (2,411)  (12,301)  (7,924)             CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES  66,403  (9,155)  105,848  72,480             FINANCING ACTIVITIES             Bank indebtedness  (6,500)  7,581  (8,282)  8,236 Increase of long-term debt  -  28,679  -  228,679 Repayments of long-term debt  (29,244)  (10,000)  (21,123)  (230,122) Repayments on contingent consideration and put option liabilities  (2,431)  -  (2,431)  - Share repurchase  (10,089)  (6,541)  (12,646)  (13,235) Issuance of share capital  27  1,053  429  4,707 Dividends on common shares  (4,897)  (4,912)  (14,677)  (13,977)CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES  (53,134)  15,860  (58,730)  (15,712)             INVESTING ACTIVITIES             Acquisition of businesses  -  (220)  -  (220) Additions to property, plant and equipment  (8,061)  (6,811)  (23,012)  (22,906) Additions to intangible assets  (4,996)  (5,002)  (14,821)  (14,299)CASH USED IN INVESTING ACTIVITIES  (13,057)  (12,033)  (37,833)  (37,425)              Effect of exchange rate changes on cash and cash equivalents  988  6,131  745  (4,400)             NET INCREASE IN CASH AND CASH EQUIVALENTS  1,200  803  10,030  14,943             Cash and cash equivalents, beginning of period  24,578  33,987  15,748  19,847             CASH AND CASH EQUIVALENTS, END OF PERIOD $25,778 $34,790 $25,778 $34,790 DOREL INDUSTRIES INC.INDUSTRY SEGMENTED INFORMATIONTHIRD QUARTERS ENDED SEPTEMBER30ALL FIGURES IN THOUSANDS OF US $                    TotalJuvenileRecreational / LeisureHome Furnishings  20112010201120102011201020112010  (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)Total revenue $575,828$569,455$227,080$248,421$209,823$172,530$138,925$148,504Cost of sales  462,975 447,068 176,991 182,799 162,768 133,110 123,216 131,159Gross profit  112,853 122,387 50,089 65,622 47,055 39,420 15,709 17,345Selling expenses  47,742 41,762 19,394 19,292 23,967 18,186 4,381 4,284General and administrative expenses  36,373 35,088 20,188 18,353 12,203 11,435 3,982 5,300Research and development expenses  7,048 6,931 5,573 5,534 877 688 598 709Operating profit  21,690 38,606$4,934$22,443$10,008$9,111$6,748$7,052Finance expenses  4,659 5,201            Corporate expenses  2,647 4,923            Income taxes  (8,690) (2,167)                              Net income $23,074$30,649                              Earnings per Share                   Basic  $0.71 $0.93              Diluted  $0.71 $0.92                              Depreciation and amortization included in operating profit $14,049$13,004$10,300$8,903$2,318$2,749$1 ,431$1,352  DOREL INDUSTRIESINC.INDUSTRY SEGMENTED INFORMATIONNINE MONTHS ENDED SEPTEMBER 30ALL FIGURES IN THOUSANDS OF US $                    TotalJuvenile  Recreational / LeisureHome Furnishings  20112010201120102011201020112010  (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)Total revenue $1,802,621$1,773,463$740,665$794,005$659,344$569,095$402,612$410,363Cost of sales  1,412,036 1,360,953 557,220 575,795 500,702 432,033 354,114 353,125Gross profit  390,585 412,510 183,445 218,210 158,642 137,062 48,498 57,238Selling expenses  139,133 126,651 60,649 58,806 65,643 55,633 12,841 12,212General and administrative expenses  115,795 112,677 61,460 60,734 41,369 38,113 12,966 13,830Research and development expenses  22,378 21,423 17,875 17,126 2,577 2,125 1,926 2,172Operating profit  113,279 151,759$43,461$81,544$49,053$41,191$20,765$29,024Finance expenses  16,246 13,046            Corporate expenses  14,556 17,315            Income taxes  5,246 19,618                              Net income $77,231$101,780                              Earnings per Share                   Basic  $2.37 $3.09              Diluted  $2.36 $3.06                              Depreciation and amortization included in operating profit $41,571$38,115$30,455$26,898$6,874$7,143$4,242$4,074For further information: MaisonBrison Communications Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034