MONTRÉAL (BRAIN) — Dorel Industries reported sales of $304 million in its Dorel Sports division in its third fiscal quarter this year, a 0.6% decline over sales in the same period last year.
Pon Holdings has agreed to buy Dorel Sports for $810 million; the sale is expected to be completed in the first quarter of 2022. Dorel Sports includes Cannondale, GT Bicycles, Schwinn, Mongoose, Caloi and other bike brands.
"Consumer demand for all bicycles remained high, however supply chain disruptions and a shortage of components impacted sales through the quarter," the company said.
For the Sports division, organic revenue (excluding the impact of exchange rates) was down 1.2% in the quarter. Operating profit was $43.1 million, compared to $24.2 million last year. Over the first three quarters of the year, sales were up 14.4% over last year.
Dorel Sports "continues to see strong demand and is navigating the same issues as our other segments. The sale process continues to be on track for closure in the first quarter of 2022. I want to take this opportunity to thank the Sports segment employees for their contributions to Dorel and for their on-going support of the sale process," said Dorel's president and CEO, Martin Schwartz.
Dorel is now recording Dorel Sports under a "discontinued operations" category.
In its two continuing divisions, Dorel Home and Dorel Juvenile, sales totaled $1.3 billion in the first three quarters, up 3.5% from last year. Those operations recorded a net loss of $82.2 million or a loss of $2.18 per share for the nine months.
During the third quarter the Luxembourg Administrative Court levied a final judgment in a tax dispute of of 54.6 million euros including interest. Dorel must pay the Luxembourg tax authorities a remaining cash balance of $45.4 million, which was included in the Q3 results. The litigation was related to a transfer of assets during a reorganization in 2015.
