Dorel to Focus on Core Strategic Businesses of Bikes, Parts and Accessories and Electric Ride-Ons
MONTRÉAL, June 27, 2018 (GLOBE NEWSWIRE) — Dorel Industries Inc. (TSX:DII.B) (TSX:DII.A) today announced that its Dorel Sports segment has sold the SUGOI and Sombrio brands to Louis Garneau Sports Inc., divesting its performance apparel line of business to focus on its core strategic businesses of bikes, parts and accessories and electric ride-ons.
“Despite the strong brands and products in SUGOI and Sombrio, apparel is not a strategic priority and has been a drain on Dorel’s financials. It is in the best interests of our shareholders for us to focus on our core businesses. SUGOI and Sombrio are a perfect fit for Louis Garneau Sports Inc. They specialize in cycling apparel and I am confident both brands will reinforce their excellent product offerings to retailers worldwide,” stated Dorel President & CEO, Martin Schwartz.
As a result of the sale of the performance apparel line of business, Dorel expects to record an estimated amount of US$11 million of restructuring and other costs during the second quarter ending June 30, 2018, mainly related to non-cash charges associated with the write-down of trademarks and non-cash inventory markdowns. This amount may be subject to change once Dorel finalizes its analysis of the transaction. Dorel will provide additional details and updates in its 2018 second quarter consolidated financial statements, which is expected to be issued on August 3, 2018.
Dorel acquired SUGOI Performance Apparel in February of 2008 with the purchase of Cannondale Bicycle Corp. from Pegasus Capital Advisors. Dorel later purchased Sombrio in January of 2014.
Dorel Industries Inc. (TSX:DII.B) (TSX:DII.A) is a global organization, operating three distinct businesses in juvenile products, bicycles and home products. Dorel’s strength lies in the diversity, innovation and quality of its products as well as the superiority of its brands. Dorel Juvenile’s powerfully branded products include global brands Maxi-Cosi, Quinny and Tiny Love, complemented by regional brands such as Safety 1st, Bébé Confort, Cosco and Infanti. Dorel Sports brands include Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture. Dorel has annual sales of US$2.6 billion and employs approximately 10,000 people in facilities located in twenty-five countries worldwide.
Caution Regarding Forward-Looking Statements
Certain statements included in this press release may constitute “forward-looking statements” within the meaning of applicable Canadian securities legislation. Except as may be required by Canadian securities laws, Dorel does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Dorel’s expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Dorel cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits Dorel will derive from them. Forward-looking statements are provided in this press release for the purpose of giving information about Management’s current expectations and plans and allowing investors and others to get a better understanding of Dorel’s operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.
Forward-looking statements made in this press release are based on a number of assumptions that Dorel believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from Dorel’s expectations expressed in or implied by the forward-looking statements include: general economic conditions; changes in product costs and supply channels; foreign currency fluctuations; customer and credit risk, including the risk resulting from the liquidation and reorganization of Toys“R”Us and the concentration of revenues with small number of customers; costs associated with product liability; changes in income tax legislation or the interpretation or application of those rules; the continued ability to develop products and support brand names; changes in the regulatory environment; continued access to capital resources and the related costs of borrowing; changes in assumptions in the valuation of goodwill and other intangible assets; and there being no certainty that Dorel’s current dividend policy will be maintained. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in Dorel’s annual Management Discussion and Analysis and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors outlined in the previously-mentioned documents are specifically incorporated herein by reference.
Dorel cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to Dorel or that Dorel currently deems to be immaterial may also have a material adverse effect on Dorel’s business, financial condition or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Dorel Industries Inc.