Dorel Industries reported strong results for its 2012 fourth quarter and the full year, mostly driven by the cycling sector. Revenues at the group's Recreational/Leisure segment, comprising Cannondale, Schwinn and other bike brands, increased by 12 percent to $226.6 million in the fourth quarter ended Dec. 30, and surpassed $900 million in the full fiscal year. The segment's gross margin for the quarter increased by 2 percentage points from the same quarter in 2011 to 24.9 percent of revenues.
Dorel's total revenues for the fourth quarter went up by 10.9 percent to $622.6 million from a year ago. The company's net income increased by 6.4 percent to $29.1 million. Revenues for the full year reached $2.5 billion, up by 5.3 percent from last year. The net income for the full year was $108.6 million, up by 3.8 percent.
The 12 percent growth in the Recreational/Leisure category for the fourth quarter was organic, not due to price inflation, and was across the board, including the independent bicycle dealer (IBD) and mass market channels, although the IBD channel drove the increase, with strong pre-season sales of model year 2013 bicycles. Improved mix and cost containment were the main reasons for the increase in the segment's operating profit in the quarter, which rose by 41.8 percent to €16,456,000.
For the full year 2012, the revenues of the Recreational/Leisure business were $928.4 million, up by 7.7 percent compared with the previous year. After removing the impact of foreign exchange conversion, organic sales increased by approximately 10 percent for the second consecutive year. The segment's operating profit for the full year grew by 18.6 percent to $71,958,000, driven by a focus on increased sales and gross margin expansion.
In the full year, gains were recorded in both the IBD and the mass merchant distribution channels, boosted by new products and strong marketing of the segment's brands. The growth in the IBD channel took place in the majority of the markets. In the mass market, bicycle sales were complemented by strong growth in the electric ride-on category.
New product development and marketing actions taken in 2012 should favorably impact Dorel's Recreational/Leisure segment in 2013.