by Company’s performance continues to be dragged down by residential furnishings sector
MONTREAL — Dorel Industries reported a 1.5% decline in net revenues and an increase in its net loss for its third quarter ended Sept. 30.
Third-quarter revenues totaled $354.2 million, compared with $359.7 million, down 1.5% from the same period last year. Its net loss for the period was $21.9 million, or 67 cents per share, compared with $10.4 million, or 32 cents per share, the same period last year. Its adjusted net loss was $20.2 million, or 67 cents per share, compared with $10.4 million, or 32 cents per share, last year.
Its revenue for the nine-month period rose 1.5% to $1.05 billion, from $1.04 billion the same period last year, and its net loss was $98.9 million or $3.04 per share compared with $58.6 million or $1.80 per share last year. Its adjusted net loss for the nine-month period was $50.7 million, or $1.56 per share compared with $58.6 million, or $1.80 per share.
Once again, its results were dragged down by the performance of its furniture segment, which continues to be impacted by challenges at retail. It reported third-quarter revenues of $132.1 million, down 14% from $153.7 million the same period last year. It had gross profits of $2.8 million, down 74.4% from $11 million the same period last year and its operating loss rose to $13.2 million, compared with an operating loss of $3.6 million last year.
For the nine-month period, its revenues fell 4.3% to $402.1 million, compared with $420.3 million last year. Its gross profits rose 5% to $19.1 million from $18.2 million last year and its operating loss totaled $70.4 million, compared with $27.4 million last year.
The company said the decline in revenue was primarily because of lower sales in several categories including fireplaces, futons, dressers, indoor tables and utility storage. This was offset by strong sales in indoor seating, TV stands and step stools. It noted on a sequential basis, brick-and-mortar sales rose slightly from the second quarter and its Cosco Home & Office segment “continued to deliver increased sales and profitability, both significant positives for the segment.”
It said that its gross margin for the quarter fell by 500 basis points compared to last year, primarily because of increased promotional pricing and lower volume efficiency related to decreased production levels at the company’s RTA plants. It also said margins were impacted by costs related to the closure of its Tiffin, Ohio, RTA plant begun in the third quarter.
It noted that inventories are down $32.3 million from last year as the company reduced purchases and depleted inventory through increased promotional pricing. In addition, it noted that operating expenses rose because of an impairment charge related to a customer filing bankruptcy. This caused a $9.6 million increase in its operating loss from last year.
By comparison, Dorel Juvenile reported a 7.8% increase in revenue for the third quarter, to $222.1 million, compared with $206 million last year. Its gross profit for the quarter totaled $62.8 million, up 14.1% from $55 million last year. Its operating profit rose to 125.7% to $7.2 million, compared with $3.2 million last year.
For the nine months, its revenue totaled $651.2 million, up 5.4% from $617.7 million last year. Its gross profit totaled $180.9 million, up 16.9% from $154.7 million last year and its operating profit totaled $14 million, compared to an operating loss of $4.9 million last year.
