First Quarter Conference Call May 9, 2013 - Dorel Industries

FINAL TRANSCRIPT
May 9, 2013 – 01:00 p.m. E.T.
Dorel Industries First Quarter Results
Moving over to Recreation and Leisure, as you read in the release, our revenues were off
last year by 7.9 per cent. The organic revenue decrease was around 8 per cent. Weather was by far
the biggest factor, but to a certain extent, there was timing of deliveries between quarters, which
also had an impact.
In 2011 Q4, we had a relatively weak quarter and our goods that could have or should
have been shipped in 2011 Q4 were shipped the first quarter of Q1 2012. So because of that, we
had a very difficult comp, so that, you know, that was part of the reason. But the majority of the
reason, without a doubt, was the weather.
Gross profits decreased 130 basis points from 25 points… to 25.2 per cent from 26.5 per
cent. The decrease in gross profits compared to last year is related to a less profitable product mix
driven by sales heavily weighted towards lower‐end bicycles due to the late start of the season.
In addition to that, some of the opportunity buys that we were able to sell during the last
part of the quarter were lower‐margin products as the higher‐margin main in‐line products were
already stocked and in stores waiting to be checked out.
So the additional revenue that we used, or that we tried to push through the channel was
at a lower margin.
Over at Home Furnishings, Home Furnishings increased 3.6 per cent from 130.7 million to
135.4 million this year. It was made up of various different channels. It was pretty well mixed. You
know, a lot of it also, as Martin mentioned, came from the Internet sales channel.
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