Dorel Industries has warned investors that earnings will be weaker than expected for its recreational leisure segment for the second quarter due to bad weather across the U.S., Canada and Europe, which led to lower than anticipated sales volumes, particularly in the specialized bike dealer channel. The segment comprises the Cannondale, Schwinn, GT, Mongoose, IronHorse and Sugoi brands. The company said that the situation is now being further compounded by widespread discounting by competitors in the industry. As a result of the soft first half, full-year earnings in bicycles will not exceed 2012 levels, as had been previously predicted. Dorel has adopted cost-cutting measures across the recreational leisure segment, including reduction of some 50 positions worldwide, representing roughly 5 percent of the segment's staff. In connection with this measure, the company will record a one-time charge of approximately US$2 million for severance payments in the second quarter. With cost reductions underway, the company said it is optimistic that bicycle earnings will increase by a double digit in the second half over last year. Dorel will announce its second-quarter results on Aug. 9, 2013.

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