The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Dorel reports solid second quarter 2012

Thursday, August 09, 2012

Dorel reports solid second quarter 201209:21 EDT Thursday, August 09, 2012Company increases quarterly dividend by 100%Net income increases 32% despite negative currency trendJuvenile business improving EXCHANGESTSX: DII.B, DII.AMONTREAL, Aug. 9, 2012 /CNW Telbec/ - Dorel Industries Inc. (TSX: DII.B, DII.A) today announced results for the second quarter and six months ended June 30, 2012. Total revenue for the period was US$633.7 million, up 2.4% from US$619.0 million for the same quarter last year. Net income increased by 32.0% to US$30.3 million or US$0.95 per diluted share compared with US$23.0 million or US$0.70 per diluted share for the corresponding quarter of 2011.Year-to-date revenue rose 2.3% to US$1.25 billion from to US$1.23 billion last year with net income for the six months increasing by 9.9% to US$59.5 million or US$1.85 per diluted share. This compares to net income of US$54.2 million or US$1.65 per diluted share for the first half of 2011.The Board of Directors of Dorel has declared an increase in the Company's quarterly dividend to US$0.30 from US$0.15 on the Class A Multiple Voting Shares, Class B Subordinate Voting Shares and Deferred Share Units (DSU) of the Company. The first increased dividend amount of US$0.30 per share and DSU will be payable on September 6th, 2012 to shareholders of record at the close of business on August 23rd, 2012. The dividend policy was originally instituted in March 2007. Shareholders will now receive a total of US$1.20 per share per annum."Dorel has a proven track record of earnings and cash flow. We are optimistic about our long-term future earnings and are confident in our ability to sustain an increased dividend, thereby enhancing total return to our shareholders," stated Dorel President and CEO Martin Schwartz."Dorel performed well in our various business segments, despite a stubborn and unstable economy in the majority of our geographic markets.  We have maintained the positive momentum established in the final quarter of 2011 through a combination of strong marketing and judicious cost containment."Operating profit in the Juvenile segment grew 15% over the same quarter a year ago, despite a strengthening U.S. dollar which reduced earnings by approximately US$3.5 million in the quarter compared to the prior year.  Dorel Juvenile Group (DJG) USA improved as the tactical plan put in place last year has started to bring the needed results. Europe as a whole is very challenging, yet Dorel Europe maintained its profitability with solid results in Northern Europe and the positive contribution of the newly acquired Dorel Polska, based in Poland.  Another positive is Dorel Chile which saw growth in both its wholesale and retail businesses."Recreational/Leisure's top line grew once again, though it was tempered by adverse foreign exchange rates.  Profits in the quarter were flat as the negative impact of currency reduced earnings by approximately US$2.5 million.  Intense branding of the Cannondale line continues to drive results.  The Liquigas Cannondale Pro-Cycling Team has performed well this year with various victories.  In the recently completed Tour de France, Peter Sagan won the prestigious green jersey as well as three stages in the overall tour and Vincenzo Nibali placed third overall.  We are pleased with the sponsorship of the team and intend to maintain Dorel's commitment to the promotion of our brands.  As well, we continue to invest in R&D, driving expansion and distribution across the globe. Operating profit for the quarter grew in Home Furnishings and Internet sales were up considerably," commented Mr. Schwartz. Summary of Financial HighlightsSecond Quarters Ended June 30All figures in thousands of US $, except per share amounts 20122011Change%Total revenue         633,711         619,0102.4%Net income           30,345           22,99332.0% Per share - basic              0.95              0.7035.7% Per share - diluted              0.95              0.7035.7%Average number of shares outstanding -diluted weighted average32,046,44332,828,089     Summary of Financial HighlightsSix Months ended June 30All figures in thousands of US $, except per share amounts 20122011Change%Total revenue      1,254,811      1,226,7932.3%Net income           59,508           54,1579.9% Per share - basic              1.87              1.6612.7% Per share - diluted              1.85              1.6512.1%Average number of shares outstanding -diluted weighted average32,080,03332,862,173 Juvenile Segment  Second Quarters Ended June 30 20122011  $% of rev.$% of rev.Change%Total revenue      254,781     243,965 4.4%Gross profit        69,39127.2%      61,73625.3%12.4%Operating profit        17,1186.7%      14,8556.1%15.2%      Six Months ended June 30 20122011  $% of rev.$% of rev.Change%Total revenue      524,280     513,585 2.1%Gross profit      143,75827.4%    133,35626.0%7.8%Operating profit        37,7837.2%      38,5277.5%(1.9%) After adjusting for the impact of varying exchange rates and new businesses acquired, the second quarter organic revenue increase was approximately 1%, reversing a trend of declining organic sales growth.  Year-to-date, organic revenues declined by approximately 2%.For the quarter, the largest factor in the earnings improvement was in operating profit at Dorel Juvenile Group (DJG) USA where sales increased by approximately 5% and gross margins benefitted from more stable costs. Dorel Chile also contributed to the profit increase.  The recent weakening of most currencies against the US dollar had a negative impact on earnings for the quarter of approximately US$3.5 million versus last year.  As such, the earnings increase would have been almost 40% if currencies were consistent year-over-year. At Dorel Europe, the Southern markets continue to endure difficult economic conditions, yet the division as a whole delivered improved earnings when expressed in Euros.Recreational/Leisure Segment Second Quarters Ended June 30 20122011  $% of rev.$% of rev.Change%Total revenue      251,911   249,094 1.1%Gross profit        63,18325.1%    60,59224.3%4.3%Operating profit        21,6068.6%    21,2748.5%1.6%      Six Months ended June 30 20122011  $% of rev.$% of rev.Change%Total revenue      472,829   449,521 5.2%Gross profit      121,62325.7%  111,58724.8%9.0%Operating profit        42,9869.1%    39,0458.7%10.1% Organic sales growth, excluding the impact of foreign exchange variations on the segment's non-US based businesses was approximately 7% year-to-date. The increases are in the IBD channel in most of the segment's markets and are being driven by improved sales in several bike categories.  The decline in the value of the Euro versus the US dollar negatively impacted revenues by approximately 2% and as a result the reported revenue increase in the quarter was only 1.1%.  Sales in June were also lower as certain mass market customers reduced orders in an attempt to reduce their in-stock inventory levels.Earnings were negatively impacted by the decline in the value of the Euro and certain other currencies against the US dollar. Specifically, compared to the prior year, Cycling Sports Group's (CSG) gross margin dollars were reduced by approximately US$2.5 million in the quarter. Approximately 50% of CSG's revenues are from markets outside of the United States and as such are affected by foreign currency more than the segment's mass market business which is mostly comprise of US-based customers. Progress continued to be made in returning to profitability at the segment's apparel division, which markets the SUGOI brand.Home Furnishings Segment Second Quarters Ended June 30 20122011  $% of rev.$% of rev.Change %Total revenue      127,019 125,951 0.8%Gross profit        16,57413.0%   15,60312.4%6.2%Operating profit          6,6945.3%      6,2675.0%6.8%      Six Months ended June 30 20122011  $% of rev.$% of rev.Change %Total revenue      257,702   263,687 (2.3%)Gross profit        32,30412.5%    32,78912.4%(1.5%)Operating profit        12,4854.8%    14,0175.3%(10.9%)For the quarter, Home Furnishings revenues increased slightly versus the prior year as sales to the Internet sales channel offset declines in the segment's other major channels of distribution. Operating profit for the quarter increased versus both the prior year and this year's first quarter, as profitability was aided by a more stable cost environment.  Partially offsetting this was a less profitable sales mix at several of the segment's divisions.Statements of Financial Position and Cash flowsThe key financial position components of working capital, accounts receivable, inventory and accounts payable, all increased significantly compared to December 30, 2011 levels. However, this is in line with business requirements. Second quarter inventory increased to US$499.5 million, its highest level since last year's comparable period, to service shipments in the second half this year. Inventory is expected to return to levels similar to last year end by December 30, 2012. The higher inventory amount also explains the increase in accounts payable from US$323.6 million to US$391.7 million as certain purchases within the quarter remain to be paid.For the first half of the year, cash flow provided by operating activities was US$52.5 million compared to US$39.4 million in 2011. Despite the changes to working capital, the net impact on cash flow was similar to the prior year.  Year-to-date investing activities totalled US$29.4 million versus US$24.8 million in 2011. As part of its Normal Course Issuer Bid, the Company disbursed US$16.9 million in the first six months, compared to US$2.6 million in the prior year. The Company also disbursed US$9.6 million year-to-date for dividends. These were the main factors in the first half US$3.6 million increase in debt, net of cash.Outlook"Pre-tax earnings for the second half this year are expected to be higher than last year, driven by advances in the Juvenile segment.  Specifically, significant progress in North America and a greater contribution from Latin America will ensure that we improve upon the disappointing third quarter in 2011. Recreational / Leisure remains on track to exceed last year's record earnings, whereas we expect Home Furnishings' operating profit to be slightly below last year's levels.  There was a significant tax recovery in last year's third quarter which will not re-occur this year. Our expectations for the 2012 tax rate remain in the range of 15% to 20%," commented Mr. Schwartz."While we expect input costs to remain relatively stable in the foreseeable future, exchange rates can be volatile and are difficult to predict. Our pre-tax income improvement expected for the balance of the year assumes exchange rates similar to those of today, but a further decline in currencies, especially the Euro, could negatively impact future earnings," concluded Mr. Schwartz.Conference CallDorel Industries Inc. will hold a conference call to discuss these results today, August 9, 2012 at 2:00 P.M. Eastern Time. Interested parties can join the call by dialling 1-888-231-8191. 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 recording of the meeting by calling 1-855-859-2056 and entering the passcode 98095948# on your phone. This recording will be available on Thursday, August 9, 2012 as of 4:00 P.M. until 11:59 P.M. on Thursday, August 16, 2012.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. Now in its 50th year, 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 has annual sales of US$2.4 billion and employs 5,000 people in facilities located in twenty-two countries 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.CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITIONALL FIGURES IN THOUSANDS OF US $     as atJune 30,2012 as atDecember 30,2011     (unaudited) (unaudited)      ASSETS     CURRENT ASSETS      Cash and cash equivalents$45,094 $29,764 Trade and other receivables 451,728  403,664 Inventories 499,482  442,409 Other financial assets 6,008  9,867 Income taxes receivable 13,292  17,811 Prepaid expenses 25,357  21,858  1,040,961  925,373      NON-CURRENT ASSETS      Property, plant and equipment 156,212  158,363 Intangible assets 407,578  411,171 Goodwill 567,395  568,849 Other financial assets 756  -  Deferred tax assets 34,215  31,096 Other assets 1,747  1,717  1,167,903  1,171,196 $2,208,864 $2,096,569      LIABILITIES     CURRENT LIABILITIES      Bank indebtedness$20,636 $20,130 Trade and other payables 391,735  323,552 Other financial liabilities 12,245  13,065 Income taxes payable 4,441  2,315 Long-term debt 17,033  17,279 Provisions 35,922  37,096  482,012  413,437      NON-CURRENT LIABILITIES      Long-term debt 316,785  298,160 Pension and post-retirement benefit obligations 34,719  35,258 Deferred tax liabilities 82,011  79,702 Provisions 1,867  1,876 Other financial liabilites 33,701  33,141 Other long-term liabilities 5,430  5,340  474,513  453,477      EQUITY     SHARE CAPITAL 172,039  174,782CONTRIBUTED SURPLUS 27,606  26,445ACCUMULATED OTHER COMPREHENSIVE INCOME 46,134  58,842RETAINED EARNINGS 1,006,560  969,586  1,252,339  1,229,655 $2,208,864 $2,096,569  DOREL INDUSTRIES INC.CONDENSED CONSOLIDATED INTERIM INCOME STATEMENTSALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS             Second Quarters Ended   Six Months Ended June  30, 2012 June 30, 2011 June  30, 2012 June 30, 2011 (unaudited) (unaudited) (unaudited) (unaudited)            Sales$630,898 $615,710 $1,248,049 $1,220,127Licensing and commission income 2,813  3,300  6,762  6,666TOTAL REVENUE 633,711  619,010  1,254,811  1,226,793            Cost of sales 484,563  481,079  957,126  949,061GROSS PROFIT 149,148  137,931  297,685  277,732                        Selling expenses 57,493  48,019  109,298  92,462General and administrative expenses  44,108  44,482  94,738  90,260Research and development expenses 6,583  7,740  13,570  15,330OPERATING PROFIT 40,964  37,690  80,079  79,680            Finance expenses 4,631  5,709  9,611  11,587INCOME BEFORE INCOME TAXES 36,333  31,981  70,468  68,093            Income taxes expense 5,988  8,988  10,960  13,936NET INCOME$30,345 $22,993 $59,508 $54,157            EARNINGS PER SHARE            Basic$0.95 $0.70 $1.87 $1.66 Diluted$0.95 $0.70 $1.85 $1.65            SHARES OUTSTANDING            Basic - weighted average 31,859,015  32,624,000  31,906,375  32,641,723 Diluted - weighted average 32,046,443  32,828,089  32,080,033  32,862,173DOREL INDUSTRIES INC.CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOMEALL FIGURES IN THOUSANDS OF US $             Second Quarters Ended Six Months Ended June  30, 2012 June 30, 2011 June  30, 2012 June 30, 2011 (unaudited) (unaudited) (unaudited) (unaudited)            NET INCOME$30,345 $22,993 $59,508 $54,157            OTHER COMPREHENSIVE INCOME (LOSS):           Cumulative translation account:           Net change in unrealized foreign currency gains (losses) on translation of net investments inforeign operations, net of tax of nil (24,727)  12,297  (9,961)  38,699                        Net changes in cash flow hedges:           Net change in unrealized gains (losses) on derivatives designated as cash flow hedges 2,635  (3,132)  904  (7,993)Reclassification to income 252  248  495  1,271Reclassification to the related non-financial asset (2,602)  3,119  (5,066)  3,781Deferred income taxes (151)  167  920  911  134  402  (2,747)  (2,030)            Defined benefit plans:           Acturial gains (losses) on defined benefit plans 18  (36)  8  (122)Deferred income taxes (6)  (76)  (3)  (54)  12  (112)  5  (176)            TOTAL OTHER COMPREHENSIVE INCOME (LOSS) (24,581)  12,587  (12,703)  36,493            TOTAL COMPREHENSIVE INCOME$5,764 $35,580 $46,805 $90,650DOREL INDUSTRIES INC.CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITYALL FIGURES IN THOUSANDS OF US $                 Attributable to equity holders of the Company     Accumulated other comprehensive income Retained earnings  ShareCapitalContributedSurplusCumulativeTranslationAccountCash FlowHedges DefinedBenefitPlansOtherRetainedEarningsTotalEquity (unaudited)(unaudited)(unaudited)(unaudited) (unaudited)(unaudited)(unaudited)                Balance as at December 30, 2010$178,816$23,776$67,970$(1,032) $(2,312)$904,633$1,171,851                Net income - - - -  - 54,157 54,157Total other comprehensive income (loss) - - 38,699 (2,030)  (176) - 36,493Issued under stock option plan 402 - - -  - - 402Reclassification from contributed surplus due to exercise of stock options 82 (82) - -  - - -Repurchase and cancellation of shares (531) - - -  - - (531)Premium paid on share repurchase - - - -  - (2,026) (2,026)Share-based payments - 1,614 - -  - -  1,614Dividends on common shares - - - -  - (9,780) (9,780)Dividends on deferred share units - 34 - -  - (34) -                Balance as at June 30, 2011$178,769$25,342$106,669$(3,062)  $ (2,488)$946,950$1,252,180                                Balance as at December 30, 2011$174,782$26,445$52,760$6,082  $ (7,236)$976,822$1,229,655                Net income - - - -  - 59,508 59,508Total other comprehensive income (loss) - - (9,961) (2,747)  5 - (12,703)Issued under stock option plan 1,055 - -  -  - - 1,055Reclassification from contributed surplus due to exercise of stock options 223 (223) - -  - - -Repurchase and cancellation of shares (4,021) - - -  - - (4,021)Premium paid on share repurchase - - - -  - (12,928) (12,928)Share-based payments - 1,342 - -  - -  1,342Dividends on common shares - -  - -  - (9,569) (9,569)Dividends on deferred share units - 42 - -  - (42) -                Balance as at June 30, 2012$172,039$27,606$42,799$3,335 $(7,231)$1,013,791$1,252,339DOREL INDUSTRIES INC.CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWSALL FIGURES IN THOUSANDS OF US $            Second Quarters Ended Six Months Ended June  30, 2012 June 30, 2011 June  30, 2012 June 30, 2011 (unaudited) (unaudited) (unaudited) (unaudited)            CASH PROVIDED BY (USED IN):                       OPERATING ACTIVITIES           Net income$30,345 $22,993 $59,508 $54,157Items not involving cash:            Depreciation and amortization 12,965  14,428  25,994  27,612 Amortization of deferred financing costs 90  277  231  646 Accretion expense on contingent consideration and put option liabilities 544  556  1,459  1,087 Change of assumptions on contingent consideration and put option liabilities (973)  (973)  (973)  (973) Unrealized (gains)/losses due to foreign exchange exposure on contingent consideration and put option liabilities (680)  193  357  (521) Other finance expenses 3,997  4,876  7,921  9,854 Income taxes expense 5,988  8,988  10,960  13,936 Share-based payments 642  584  1,228  1,395 Pension and post-retirement defined benefit plans 722  834  1,456  1,692 Gain on disposal of property, plant and equipment (44)  (41)  (80)  (59)  53,596  52,715  108,061  108,826Net change in balances related to operations:            Trade and other receivables 23,164  40,569  (50,517)  (63,088) Inventories (66,384)  (6,726)  (57,284)  17,322 Other financial assets (212)  -  (832)  - Prepaid expenses 529  848  (4,077)  (1,536) Trade and other payables 52,655  (3,765)  71,596  9,460 Pension and post-retirement benefit obligations (554)  (787)  (1,755)  (2,099) Provisions, other financial liabilities and other long-term liabilities 1,091  (1,829)  (646)  (617)  10,289  28,310  (43,515)  (40,558)             Income taxes paid (6,766)  (13,563)  (9,848)  (19,203) Income taxes received 4,736  386  5,569  490 Interest paid (6,694)  (6,933)  (8,344)  (10,110) Interest received 260  -  572  -            CASH PROVIDED BY OPERATING ACTIVITIES 55,421  60,915  52,495  39,445            FINANCING ACTIVITIES            Bank indebtedness (7,358)  (14,623)  1,113  (1,782) Increase of long-term debt 721  -  18,731  8,121 Repayments of long-term debt -  (26,017)  -  - Repayments of contingent consideration and put option liabilities -  -  (168)  - Financing costs (185)  (1)  (192)  (13) Share repurchase (15,889)  (1,588)  (16,949)  (2,557) Issuance of share capital 245  220  934  402 Dividends on common shares (4,779)  (4,866)  (9,569)  (9,780) CASH USED IN FINANCING ACTIVITIES (27,245)  (46,875)  (6,100)  (5,609)            INVESTING ACTIVITIES            Acquisition of businesses (1,501)  -  (4,397)  -  Additions to property, plant and equipment (8,138)  (8,414)  (14,701)  (15,061) Disposals of property, plant and equipment 85  73  135  110 Additions to intangible assets (4,116)  (5,209)  (10,434)  (9,812)CASH USED IN INVESTING ACTIVITIES (13,670)  (13,550)  (29,397)  (24,763)             Effect of exchange rate changes on cash and cash equivalents (1,811)  (605)  (1,668)  (243)            NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 12,695  (115)  15,330  8,830            Cash and cash equivalents, beginning of period 32,399  24,693  29,764  15,748            CASH AND CASH EQUIVALENTS, END OF PERIOD$45,094 $24,578 $45,094 $24,578 DOREL INDUSTRIES INC.INDUSTRY SEGMENTED INFORMATIONSECOND QUARTERS ENDED JUNE 30ALL FIGURES IN THOUSANDS OF US $                     TotalJuvenile  Recreational / LeisureHome Furnishings   20122011201220112012201120122011   (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)Total revenue  $633,711$619,010$254,781$243,965$251,911$249,094$127,019$125,951Cost of sales   484,563 481,079 185,390 182,229 188,728 188,502 110,445 110,348Gross profit   149,148 137,931 69,391 61,736 63,183 60,592 16,574 15,603Selling expenses   56,954 47,512 25,929 20,528 26,462 22,709 4,563 4,275General and administrative expenses 40,193 40,283 21,551 20,133 14,073 15,803 4,569 4,347Research and development expenses   6,583 7,740 4,793 6,220 1,042 806 748 714Operating profit   45,418 42,396$17,118$14,855$21,606$21,274$6,694$6,267Finance expenses   4,631 5,709            Corporate expenses   4,454 4,706            Income taxes   5,988 8,988                                 Net income  $30,345$22,993                               Earnings per Share                   Basic  $0.95$0.70             Diluted  $0.95$0.70                               Depreciation and amortization included in operating profit$12,969$14,372$9,539$10,533$2,243$2,364$1,187$1,475                                  DOREL INDUSTRIES INC.INDUSTRY SEGMENTED INFORMATIONSIX MONTHS ENDED JUNE 30ALL FIGURES IN THOUSANDS OF US $                      TotalJuvenile  Recreational / LeisureHome Furnishings   20122011201220112012201120122011   (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)Total revenue  $1,254,811$1,226,793$524,280$513,585$472,829$449,521$257,702$263,687Cost of sales   957,126 949,061 380,522 380,229 351,206 337,934 225,398 230,898Gross Profit   297,685 277,732 143,758 133,356 121,623 111,587 32,304 32,789Selling expenses   108,105 91,391 51,276 41,255 47,992 41,676 8,837 8,460General and administrative expenses   82,756 79,422 44,985 41,272 28,326 29,166 9,445 8,984Research and development expenses   13,570 15,330 9,714 12,302 2,319 1,700 1,537 1,328Operating profit   93,254 91,589$37,783$38,527$42,986$39,045$12,485$14,017Finance expenses   9,611 11,587            Corporate expenses   13,175 11,909            Income taxes   10,960 13,936                               Net income  $59,508$54,157                               Earnings per Share                   Basic  $1.87$1.66             Diluted  $1.85$1.65                               Depreciation and amortization included in operating profit  $25,913$27,522$19,234$20,155$4,297$4,556$2,382$2,811  SOURCE: DOREL INDUSTRIES INC.For further information: MaisonBrison Communications Rick Leckner (514) 731-0000 Dorel Industries Inc. Jeffrey Schwartz (514) 934-3034