MONTREAL, Quebec (BRAIN)—Dorel Industries reports that bicycle sales drove a 10 percent increase in sales by its recreational/leisure segment. Dorel owns Pacific Cycle, makers of Mongoose, GT and Schwinn bicycles.
These earnings don't reflect the company's recent purchase of Cannondale.
Dorel chief executive officer and president Martin Schwartz said that while he could not provide earnings guidance for 2008, the company had "not witnessed any slowdown of consumer spending in Dorel's products during the first two months of 2008."
For the fourth quarter, revenue at the recreational/liesure segment rose 11.6 percent to $85.8 million from the previous year's $76.9 million. Earnings from operations were essentially flat at $5.8 million as compared to $5.9 million the year before. For the full year, segment sales increased by 10.0 percent to $374.8 million from $340.7 million the year before. Earnings from operations jumped 26.8 percent to $33.0 million from $26 million a year ago.
For the year, the improvement was due to success in both the mass merchant and Independent Bicycle Dealer (IBD) channels. The majority of the increase came from several key mass customers as sales rebounded after declines in 2006.