Cannondale and Schwinn owner Dorel Industries Inc has unveiled strong results for the second quarter ended 30 June 2010. Total revenue for the period was up 10.3% to US$607.7 million, up from US$551.1 million for the same quarter a year ago.
Net income was US$35.1 million or US$1.05 per diluted share compared with US$24.8 million or US$0.74 per diluted share for the corresponding quarter of 2009.
Year-to-date revenue was US$1.2 billion, up 11.9% from US$1.08 billion last year. Organic revenue growth in both the quarter and year-to-date was approximately 9.5%.
“We are proud of this quarter’s results. Despite negative factors such as foreign exchange, high input costs and increasing ocean freight rates, our divisions performed well and succeeded in building business slowly but steadily," said Dorel, President and Chief Executive Officer Martin Schwartz.
"We maintained our pace of innovation and accelerated marketing support. Solid top-line results, in conjunction with our cost and productivity efforts, enabled us to deliver meaningful profit improvement year over year.
“We are seeing the benefits of the on-going investments in our bicycle business through improved product development, solidifying our structure and promoting our brands. Our brands are gaining wider acceptance and our bicycles are more in demand.”
In the second quarter Dorel’s Recreational/Leisure group saw revenue increase by US$15.8 million, or 7.9%, to US$214.9 million. Year-to-date revenues were up 10.0% or US$36.0 million to US$396.6 million.
The organic revenue increase was approximately 5% for both the quarter and year-to-date when the impact of new business acquisitions during 2009 and foreign exchange rate variations are excluded.
Cycling Sports Group (CSG) sales were up considerably over last year with ‘exceptional demand’ for the division’s elite racing bicycles such as the Cannondale SuperSix. As in the first quarter, demand for new model year products remains strong across all brands resulting in expansion of the dealer base and increases in multi-brand dealers.
Schwinn experienced a strong increase in POS year-over-year, due to the multi-million dollar advertising campaign launched in mid April, excellent retailer support and good early spring weather. While increasing selling, general and administration costs, the ad campaign has been effective in enhancing the Schwinn brand. Sales to the segment’s mass merchant customers were hindered by a lack of supply due to the global shortage of ocean containers, a situation which is said to be improving.
