Dorel Inds. CEO says sale of sports division will “unlock shareholder value”

MONTREAL, Quebec – Dorel Industries said its third quarter ended Sept. 30 was highlighted by its previously announced decision to sell Dorel Sports for $810 million in cash, the closing of which is expected to occur before the end of the first quarter of 2022.

In a statement, company President and CEO Martin Schwartz said the sale of the division to Pon Holdings aims to unlock shareholder value at a time when demand for bicycles is strong, adding that the focus now is to “replicate the success we achieved in our sport business at Dorel Home and Dorel Juvenile.”

He said this focus is already taking place in the Dorel Home division, which announced last month plans to invest $10 million in new equipment in three North American factories along with a planned $19 million purchase of Denmark based ecommerce business Notio Living. It is expected to complete this purchase by the end of this year.

“Dorel remains fully committed to taking a disciplined approach to value creation as it sees significant upside in its Dorel Home business,” Schwartz added, noting that the “announcements will accelerate our strategy for growth,”

That said, the company said that a previous judgment by the Luxembourg Administrative Court had a negative impact on earnings for the third quarter.

The reported net loss from continuing operations was $68 million, or $2.09 per diluted share, compared to reported net income of $9.3 million, or $.28 per diluted share last year.

This included a $61.7 million, or $1.90 per diluted share impact from the court decision this quarter, which represents a remaining cash balance of $45.4 million the company owes to the Luxembourg tax authorities.

This judgment results from the taxation on the transfer of certain assets relating to an internal corporate reorganization in 2015. The company said it expects no further reassessments by the Luxembourg authorities related to the matter.

Third quarter revenue from continuing operations of Dorel Home and Dorel Juvenile and excluding the Dorel Sports business was $437.2 million, down 2.4% from the $447.8 million reported last year.

The company reported that nine-month revenues from continuing operations totaled $1.32 billion, up 3.5% from the $1.28 billion reported last year. It reported a year-to-date net loss of $82.2 million, or $2.53 per diluted share, compared to $51.4 million, or $1.58 per diluted share in 2020.  

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at and at 336-508-4616.

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