Our ready-to-assemble-furniture business faces a number of challenges, most significantly manufacturing inefficiencies, which are being addressed
Dorel President and CEO, Martin Schwartz

Dorel Industries (DIIB) stated that though it expects higher pre- tax earnings over 2004, certain issues within the Home Furnishings segments will impact earnings in the second half of the year. Second quarter results, to be announced in early August, will be ahead of last year, but for the year after-tax earnings will be within the same range as the prior year. For the year ended December 30, 2004 Dorel earned US$100.1 million or US$3.04 per share.

Home Furnishings
In December, 2004 Gregory A. Carlson was named President of Ameriwood Industries, Dorel's ready-to-assemble (RTA) division. A new Vice President of Operations was also appointed. "We are pleased with the work Greg and his team are doing but the reality is that the issues identified need longer to correct. Raw material matters are now under control and we expect improvement, but not before 2006," stated Dorel President and CEO, Martin Schwartz.

"Our ready-to-assemble-furniture business faces a number of challenges, most significantly manufacturing inefficiencies, which are being addressed. With a new, invigorated senior management team in place, we are confident that the plan which has been formulated will bring about the required improvements necessary to achieve the desired results," explained Mr. Schwartz.

The segment's other business units, Dorel Asia and Cosco Home & Office are both performing above expectations, driven by new product categories and additional customers at these two divisions. These improvements will help to offset the difficulties being experienced by the RTA operations.