MONTRÉAL (BRAIN) — Dorel Sports recorded a 14% sales increase in its fourth fiscal quarter and a 15% increase for its full fiscal year, which ended Dec. 30. Dorel Sports is the division of Dorel Industries that holds its bike brands, including Cannondale, Schwinn, GT and others.
While Dorel Sports sales were up for the seventh consecutive quarter, gross profits and operating profits in the final quarter were down significantly from the year prior. Dorel said increased shipping costs and other factors contributed to the loss. A shift to introducing models years on the calendar year also shifted some sales from the fourth quarter to the following quarter, the company said. For the full year, operating profits in the Sports division were up 72%, however.
"Demand (for Dorel Sports products) continues to be very strong in all markets, and despite the industry-wide reality of component availability limiting production and higher costs, the year is starting very strongly," said Martin Schwartz, Dorel's president and CEO. "For the quarter, expectations are for revenue to increase significantly versus prior year first quarter and for adjusted operating profit to be much better than both prior year and the fourth quarter of 2020."
Dorel Industries has had a drama-filled winter, as Schwartz led a failed bid, backed by Cerberus Capital, to take the company public. Schwartz said he viewed shareholders' opposition to the move as confidence in Dorel's potential as a public company. "As a management team, we are committed to rewarding our shareholders for their confidence in Dorel," he said in an earnings statement.
Dorel Industries' Q4 revenue was $704 million, up 7.8% from the same quarter in 2019. Company-wide net loss for the quarter was $22.9 million, compared to a $639,000 loss in the 2019 quarter. Net loss per share was 70 cents.
In Dorel's other divisions, revenues in its Home business were up 10.7% for the fourth quarter and 11% for the full year. Profits were also up for the Home division for the year and the quarter. In the Juvenile division, sales were down 2% in the quarter and 11% for the full year.
Dorel's Class A and Class B shares are traded on Toronto's stock exchange.
