by Consolidated sales increases for the quarter and the 1st half were largely driven by the Dorel Juvenile segment
MONTREAL — Dorel Industries reported an increase in revenues for its second quarter and first half ended June 30.
The increase was led largely by its Dorel Juvenile segment, which saw revenues increase 2.2% during the quarter and 4.2% during the first half, compared to a 1.4% decrease in the Dorel Home segment during the quarter and a 1.3% gain during the first half.
Consolidated revenues rose .8% for the quarter to $348.1 million, from $345.2 million the same period last year. Revenues rose 3.1% during the first half to $699.1 million, from $678.4 million.
For the quarter, the company reported an adjusted net loss of $13.6 million, or 42 cents per share, down from $16.7 million, or 51 cents per share, last year. For the first half, its adjusted net loss was $30.5 million, or 94 cents per share, down from $48.2 million, or $1.48 per share, last year.
Dorel Juvenile reported revenues of $216.4 million during the quarter, up 2.2% from $211.8 million last year. During the first half, the segment reported $429.1 million in revenues, up 4.2% from $411.8 million last year. The segment also reported second-quarter adjusted operating profit of $6.9 million, compared with $849,000 last year, and for the first half reported adjusted operating profit of $8 million, compared with an operating loss of $8.1 million the same period last year.
Dorel Home reported second-quarter revenues of $131.6 million, down 1.4% from $133.5 million last year. For the first half, it reported revenues of $270 million, up 1.3% from $266.6 million last year.
During the quarter, the segment also reported an adjusted operating loss of $8.3 million, compared with an operating loss of $10 million the same period last year. For the full first half, it reported an adjusted operating loss of $11.7 million, compared with a loss of $23.9 million last year.
The company said that Dorel Home continues to operate in a challenging environment which was reflected in sales being flat year over year. It also noted that e-commerce sales continued to decline while sales to brick-and-mortar customers improved.
It added that to “match its operations to the reality of current demand, the Home segment continued its path to streamline operations,” which resulted in its July 8 announcement to close its Tiffin, Ohio, RTA manufacturing facility. It noted that the facility will be repurposed into a distribution center and production of all RTA furniture will be shifted to facilities in Cornwall, Ontario, late in the third quarter of 2024.
“Equipment and customer orders will be transferred to Cornwall with the goal of having one highly efficient and profitable facility for domestic RTA furniture production,” the company said.
In a prepared statement, company President and CEO Martin Schwartz commented on the results of each segment of the business.
“Dorel Juvenile has continued its trajectory of growth and improvement,” he said. “Our profit turnaround is ongoing, particularly driven by strong results in North America where our market share has grown for several consecutive quarters. This is also true in our other major market of Europe, where our innovative new product launches are leading the way with our retail partners and consumers. This positive outcome is a testament to our commitment to excellence and innovation.”
“Our Home segment continues to operate in a difficult environment with the ongoing high inflation and interest rates affecting our consumers and the demand for new furniture,” he added. “As a result, reduced earnings and cash flow projections forced us to record a non-cash impairment loss on goodwill of US$45.3 million in the quarter. Excluding this, our adjusted operating loss was similar to prior-year second quarter. On a positive note, the Cosco product line of folding indoor furniture, step stools and utility products is growing year over year and sales to our brick-and-mortar retailers increased overall. We have also significantly reduced our operating expenses and it remains a focus. We’re excited about our new product listings, and we remain committed to improving our operations, focusing on new product development and expanding our market presence.”
