"The higher sales and earnings in the fourth quarter were driven by the RTA furniture group"

Dorel Industries announced fourth quarter and year-end results for its fiscal year ended December 30, 2003. Sales for the fourth quarter grew 34.3% to US$323.7 million from US$241 million a year ago. Net income for the quarter was US$20.8 million, a 41.9% increase over US$14.6 million for the fourth quarter of 2002.

Home Furnishings
Home Furnishings' sales gained 6.5% in 2003, reaching US$493.7 million compared to US$463.6 million a year ago. Earnings from operations were up 3.6% to US$66.8 million from US$64.5 million last year. For the fourth quarter, revenues increased 14.2% to US$152.7 million from US$133.7 million, while earnings from operations rose 12.9% to US$20.3 million from US$18 million.

The higher sales and earnings in the fourth quarter were driven by the RTA furniture group, which benefited from Carina's contribution. In addition, both the existing RTA furniture business and futon sales increased over last year. Cosco Home & Office and Dorel Asia continue to supplement the RTA furniture business and provide for a broader product offering than other pure RTA furniture manufacturers.

For the year, the segment met earnings expectations despite some sales disappointments. Cosco Home & Office and Dorel Asia continue to grow, but the RTA furniture business remains flat. When compared to others in the RTA furniture industry, this is a standout performance. Though margins were eroded somewhat by pricing pressure, certain cost increases and the strengthening Canadian dollar, the effects were offset by the addition of Carina and its sales channels and the strong performance of the futon business, which allowed the Ameriwood group as a whole to match last year's earnings levels.

As previously announced, in 2004 the Home Furnishings segment should record sales of between US$540 million and US$590 million, with earnings from operations of between 11% and 12% of sales.

Outlook
"We are maintaining a cautious, conservative outlook for 2004. Our recent acquisition of Pacific Cycle has further positioned us as a global consumer products company, now with strong brands in all of our segments. We have made several important changes over the past year in our on-going drive for continuous improvement and profitable growth. We have also added significantly to Dorel's operations and expect 2004 sales will climb from US$1.2 billion to between US$1.6 and US$1.8 billion. 2004 will be a year of integration where all energies will be focused on identifying and implementing efficiencies.

"Despite Dorel's increased borrowings to finance acquisitions, we expect that cash flow will generate up to US$100 million and thus we will be able to significantly reduce our debt in the year ahead," concluded Mr. Schwartz.