MONTRÉAL — Dorel Industries Inc., #26 on the FDMC 300 list, has announced results for the fourth quarter and the year. 

Fourth quarter revenue was $326.8 million, down 6.8%, from $350.7 million a year ago. Reported net loss for the quarter was $73.0 million or $2.24 per diluted share compared to $3.8 million or $0.12 per diluted share a year ago. The reported net loss for the quarter includes total restructuring costs of $14.1 million, and write-downs of deferred tax assets of $36.5 million. Adjusted net loss was $59.2 million or $1.82 per diluted share compared to an adjusted net income of $0.2 million or $0.01 per diluted share for the fourth quarter a year ago.

Revenue for the full year was $1.38 billion, down 0.6%, from $1.39 billion the previous year. Reported net loss was $172.0 million or $5.28 per diluted share compared to $62.4 million or $1.92 per diluted share a year ago. The reported net loss for the full year includes total restructuring costs of $17.4 million, an impairment loss on goodwill of $45.3 million, and write-downs of deferred tax assets of $36.5 million. Adjusted net loss for the year was $109.8 million or $3.37 per diluted share, compared to $58.4 million or $1.79 per diluted share in 2023.

"The strengthening U.S. dollar against almost all other major currencies negatively impacted revenue growth and earnings. In fact, currency was the most significant drag on earnings and accounted for $7.5 million of the miss to the prior year," stated Dorel President & CEO, Martin Schwartz. "Currency rates have been volatile since the end of the third quarter. We are talking to our suppliers and customers about how to best manage this.

As we have seen in the past, the ability to recoup the cost of negative currency rates vary by market, but there is also a delay between the change in rates and our ability to offset it. As I said, currencies have been volatile. And, as of today, some are right back where they were several months ago. The euro, our most impactful currency rate is back where we planned for as is the Brazilian real and the Chilean peso. We have also done some hedging to lock in those rates. So as of now, we are less concerned about currency than we were. But of course, it's always a risk."

The company plans to prioritize e-commerce, focusing on both its e-tail sites and collaborations with third-party wholesale customers to enhance Omni-channel capabilities. Leadership believes that, combined with a well-balanced brick-and-mortar retail presence, this strategy will help restore profitability to the business within the year. But beyond restructuring and reducing costs, Schwartz laid out pillars to success that the company has identified and are building upon:

• The company’s strong track record with traditional and Omni-channel retailers, along with real-time customer service and reliable stock levels, continues to secure new programs with major retailers.
• A reduced, high-quality product line at competitive prices will help regain distribution, offering furniture store quality at mass and warehouse chain pricing.
• The Cornwall, Ontario factory, an industry leader for over 30 years, will play a key role in making the company the most efficient domestic manufacturer of wooden RTA furniture.
• Prioritizing successful brands like Novogratz will allow for better marketing allocation, boosting sales, revenue, and profitability.
• With Europe currently accounting for less than 10% of revenues, the company sees growth potential, particularly through the Notio acquisition.
• With Troy Franks returning as Dorel Home’s CEO and a strong support team in place, leadership is set to drive future success.

Schwarts continues, "At Dorel Home, we are making progress in overcoming the challenges caused by the current market environment for furniture companies. The restructuring efforts taken are already delivering results. Our ability to move domestic production to one RTA factory has improved our efficiency and lowered production costs. We have reduced our workforce and our success on lowering inventories means we will be exiting one of our warehouses at the end of the first quarter with the balance of our footprint reduction scheduled for near the end of this year."

"Dorel received $30 million gross, of which about just over $8 million was allocated to reduce debt and the balance went in to help fund the operations," says Jeffrey Schwartz, executive vice president and chief financial officer and secretary. "It actually had a pretty nice impact, and we were able to get some concessions from many suppliers because we were able to catch up on some of our payments. The transaction is part of our initiative to finance the growth of our Juvenile segment and the turnaround of the Home segment. We are actively working on a number of additional opportunities to further enhance our financial position. I can't disclose the nature or timing of these because until they're done, they're not done. But I want to make sure that everybody knows that this is of the utmost importance. And we feel we're making pretty good progress actually. Some of them we hope to get done in the short to mid-term."

The company will continue to innovate and introduce new products, prioritizing higher-margin items and successful licensed brands to grow alongside its Omni-channel retail customers and expand its market presence in Europe. With a leaner, more talented, and agile organization, leadership is confident in its ability to capitalize on market opportunities and anticipates a return to profitability by the end of the year.

To learn more, visit dorel.com.