With e-commerce sales growing, Dorel Industries reorganized its home division in the fourth quarter, an operation that helped drive the company’s results over the course of the 2016 fiscal year.
In the fourth quarter, Dorel restructured its internal organization and the composition of its reportable segments, with children’s furniture design, sourcing, manufacturing, distribution and retail shifted from Dorel Juvenile to Dorel Home. Costs associated with restructuring were taken against the Juvenile and Sports division.
In the fourth quarter, Dorel Industries recorded a net loss of $5.57 million, or 17 cents per diluted share, versus net income of $6.6 million, or 20 cents per diluted share, in the period a year earlier. Net income adjusted for one-time costs was $7.7 million, or 24 cents per diluted share, versus $14.1 million, or 43 cents per diluted share, in the year-earlier period. Total revenue was $648.7 million versus $668.9 million in the quarter the year before.
For the full fiscal year, Dorel posted a net loss of $11.6 million, or 36 cents per diluted share, versus net income of $25.7 million, or 79 cents per diluted share, in the period a year earlier. Adjusted net income, excluding one-time costs, was $58.3 million, or $1.79 per diluted share, versus $58 million, or $1.78 per diluted share, in the year-earlier period. Total revenue was $2.6 billion versus $2.68 billion in the year before.
Dorel Home revenue was $177 million in the fourth quarter as compared with $173.8 million and operating profit was $13.8 million as compared with $11.1 million in the quarter a year previous. Revenue was $735.2 million for the fiscal year as compared with $685.8 million and operating profit was $64.2 million versus $42.5 million in the previous year.
Revenue in last year’s final quarter was the highest quarterly total Dorel Home has ever posted, the company emphasized. The home division experienced growth in virtually every product segment, Dorel added, and posted another record quarter and full year of sales to digital retailers, with 51% of sales executed online for the quarter and 45% for the full year, up from 44% and 37% for those periods the year before.
Dorel Home operating profit gains rose primarily due to higher e-commerce sales at improved margins, the company indicated, partly offset by higher information technology and administrative costs to support the division’s digital growth.
“Our management teams successfully navigated through challenging conditions in several markets in 2016. I am pleased with the results achieved across our business units. There was notable progress in inventory control and cash flow management. As such, we are considerably less leveraged than a year ago. It was another breakout year for Dorel Home and the segment has evolved from a traditional furniture company to one that understands today’s marketplace with a best-in-class technological distribution platform for home products,” stated Martin Schwartz, Dorel president and CEO.