Dorel Reports Fourth Quarter and 2024 Year-End Results

Dorel Juvenile revenue increases on market share gains

Dorel Home accelerates restructuring program to realign its business

Dorel Industries Inc. announced results for the fourth quarter and the year ended December 30, 2024.

Fourth quarter revenue was US$326.8 million, down 6.8%, from US$350.7 million a year ago. Reported net loss for the quarter was US$73.0 million or US$2.24 per diluted share compared to US$3.8?million or US$0.12 per diluted share a year ago. The reported net loss for the quarter includes total restructuring costs of US$14.1 million, and write-downs of deferred tax assets of US$36.5 million. Adjusted net loss¹ was US$59.2 million or US$1.82 per diluted share compared to an adjusted net income¹ of US$0.2 million or US$0.01 per diluted share for the fourth quarter a year ago.?? 
 
The adjusted operating loss¹ for the fourth quarter of 2024 was US$8.9 million, an increase from US$2.9 million in the previous year. A significant component of the shortfall in earnings was a US$7.5 million variation in earnings in the Juvenile segment caused by the stronger U.S. dollar in the last quarter of 2024. The Home segment adjusted operating loss¹ was slightly higher with both of these declines partially compensated by lower corporate costs.

Revenue for the full year was US$1.38 billion, down 0.6%, from US$1.39 billion the previous year. Reported net loss was US$172.0 million or US$5.28 per diluted share compared to US$62.4 million or US$1.92 per diluted share a year ago. The reported net loss for the full year includes total restructuring costs of US$17.4 million, an impairment loss on goodwill of US$45.3 million, and write-downs of deferred tax assets of US$36.5 million. Adjusted net loss¹ for the year was US$109.8 million or US$3.37 per diluted share, compared to US$58.4 million or US$1.79 per diluted share in 2023. 

The adjusted operating loss¹ for 2024 was US$28.4 million, reflecting an improvement of US$19.3 million from the previous year. This enhancement is attributed to a stronger performance in the Juvenile segment and reduced corporate expenses, while the adjusted operating losses¹ from the Home segment remained consistent with the prior year.

“Dorel Juvenile has maintained its trajectory of year-over-year revenue growth this quarter, achieving a 2.2% organic revenue¹ increase. Notably, Europe achieved a revenue increase of approximately 18% in local currency. However, the strengthening U.S. dollar against almost all other major currencies negatively impacted revenue growth and earnings. Despite this challenge in the quarter, we continued to invest in marketing and sales initiatives to build momentum for 2025. Dorel Home revenues remain significantly lower than in previous years, and as previously announced on January 30, 2025, we are proactively adjusting our operational footprint to achieve profitability. Looking ahead, Dorel Home will focus on leveraging core competencies, strengthening retailer relationships, and driving growth with innovative, high-margin products,” stated Dorel President & CEO, Martin Schwartz.

Dorel Juvenile

Dorel Juvenile’s fourth-quarter revenue rose 0.4% to US$212.8 million compared to last year. Adjusted for foreign exchange rate variations, organic revenue¹ grew by 2.2%, led by strong sales in Europe, Brazil, Australia, and export markets. Europe saw double digit revenue growth stemming from car seats and strollers due to new product launches like the 360 Pro Family car seats and Oxford and Fame strollers. Full-year revenue increased by 4.1%, reaching US$864.1 million from US$829.8 million the previous year. The full-year organic revenue¹ increase was better than reported results at 5.3%.

The appreciation of the U.S. dollar affected earnings, resulting in lower-than-expected quarterly results. Compared to the previous year, the total impact in the quarter was an increase of approximately US$7.5 million in cost of sales. This led to reduced gross margins, with the adjusted gross margin¹ being 470 basis points lower than the fourth quarter of the previous year. Sales in North America were softer after a very strong third quarter which pulled earnings forward, resulting in lower earnings in the quarter compared to prior year. This and continued challenges in Chile accounted for most of the remaining decrease in earnings versus the prior year.

Fourth quarter operating profit was US$1.6 million, compared to US$11.3 million in the same period last year. Excluding restructuring costs, adjusted operating profit¹ was US$2.4 million, compared to US$12.9 million in the fourth quarter of the previous year. The decline in adjusted operating profit¹ is primarily due to the negative foreign exchange rate impact. Full-year operating profit was US$15.6 million compared to US$6.4 million in 2023. Adjusted operating profit¹ for the year was US$18.3 million, compared to US$8.0 million last year.

Dorel Home

Revenue for the fourth quarter was US$114.0 million, a decrease of US$24.6 million, or 17.8%, from US$138.6 million last year. Most product categories experienced declines, although sales of indoor seating, TV stands, and step stools increased. Brick-and-mortar sales continue to be a focus area and, while slightly down compared to the previous year, this channel is expected to drive growth moving forward. For the full year, revenue was US$516.2 million, a decrease of US$42.8 million, or 7.7%, with e-commerce sales accounting for the majority of the decline.

Adjusted gross margin¹ for the fourth quarter decreased by 310 basis points compared to the previous year, primarily due to increased promotional pricing and lower volume efficiency and production levels at the Company’s ready-to-assemble (RTA) plant. The changes implemented to reduce the manufacturing RTA footprint in 2024 did not impact margins positively in the quarter but are anticipated to do so in the future. Inventories decreased by US$79.7 million from the end of 2023 as the Company reduced new purchases and drew down existing inventory in line with the realignment efforts of the business. Lower operating expenses, which decreased by US$2.8 million, or 17.2%, to US$13.5 million partially offset the reduction in gross profit dollars.

Fourth quarter operating loss was US$25.0 million compared to US$12.8 million last year.?After excluding significant restructuring costs in the quarter, adjusted operating loss¹ for the quarter was US$11.7 million versus US$9.8 million a year ago. For the full year, the operating loss was US$95.3 million, compared to US$40.2 million a year ago. Adjusted operating loss¹ for the full year was US$35.4 million, compared to US$37.3 million in 2023.?

As previously announced in January 2025, Dorel Home undertook significant restructuring efforts, including a workforce reduction primarily impacting selling and administrative functions and the announcement of the closure of the Montreal production facility. These actions resulted in combined restructuring charges of approximately US$13.3 million in the quarter. The Company also made considerable progress in consolidating operations into a single facility following the closure of the Tiffin, Ohio RTA manufacturing facility. Equipment transfers and facility upgrades at Cornwall, Ontario have been mostly completed, and management improvements have been implemented.

Financing Update

It was announced on February 21, 2025 that the Company had entered into a sale-leaseback transaction for its factory and warehousing facility in Columbus, Indiana. The gross proceeds from the sale were US$30.0 million, of which approximately US$8.0 million was allocated to reduce existing debt, with the balance designated for funding the Company’s ongoing operations. This transaction is part of the Company’s initiative to finance the growth of its Juvenile segment and the turnaround of its Home segment, as announced on January 30, 2025. The Company is actively working on additional opportunities to further enhance its financial position.

Outlook

“As we move into 2025, Dorel Juvenile is poised for continued growth and success. Despite the challenges posed by foreign exchange fluctuations, we remain committed to our business plan centred around innovative new products, brand building, digital excellence and outstanding customer relationships. This will continue to drive market share gains and expansion efforts and enhance our competitive position. With a focus on improving profitability in underperforming regions, we have made management changes in Chile and we expect better performance going forward. We are confident in the Juvenile segment’s ability to achieve sustainable growth and create lasting value for our stakeholders,” commented Dorel President & CEO, Martin Schwartz.

“Dorel Home is making progress in overcoming the challenges posed 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 warehouse leases at the end of the first quarter, with the balance of our footprint reduction scheduled for near end of year. Additionally, we will continue to innovate and introduce new products, prioritizing higher margin items and successful licensed brands to grow with our omni channel retail customers and expand our market presence in Europe. With a leaner, talented and more agile organization, we are confident in our ability to capitalize on market opportunities and expect to return to profitability by end of year,” commented Mr. Schwartz.

“As a Company with a substantial footprint in the United States, we are not immune from the potential business impact of import tariffs within the various jurisdictions in which we operate. Due to the unknowns today, it is difficult to assess the potential impact on our supply chain, product costing, retail price points and ultimately on our consumer. Our overall exposure to this risk is less acute in the Juvenile segment than in the Home segment given our domestic manufacturing facility in Columbus, Indiana and our global footprint. We also have strong supplier relationships in both segments with our overseas suppliers and we believe we are well positioned relative to our competitors to successfully navigate the challenges tariffs could pose,” concluded Mr. Schwartz.

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About Dorel Industries Inc.

Dorel Industries Inc. (TSX: DII.B, DII.A) is a global organization, operating two distinct businesses in juvenile products 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, Safety 1st and Tiny Love, complemented by regional brands such as BebeConfort, Cosco, Mother’s Choice and Infanti. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture. Dorel has annual sales of US$1.4 billion and employs approximately 3,900 people in facilities located in twenty-two countries worldwide.

Contact:

Jeffrey Schwartz – Media Contact – (514) 934-3034

Source: Dorel Industries Inc.