I want to recognize the tremendous efforts of the Wright City workforce. However...
Martin Schwartz, Dorel President and CEO

Dorel Industries (DIIB) today announced a significant consolidation at Ameriwood Industries, the Company's ready-to-assemble (RTA) furniture division. Production will cease at its Wright City, Missouri facilities by no later than December 31st, 2005, as part of the overall plan to improve the earnings of the Company's Home Furnishings segment. Ameriwood has adopted an expanded marketing strategy, realigning marketing into four distinct groups, each focused on developing products unique to their categories. This strategy will include expanding into new designs and materials and aggressively growing the customer base. This product development process will encompass common defined processes and methodologies to allow for exceptional speed to market, from conception to delivery.

"Ameriwood has undergone significant changes in the past 18 months with the support of its workers and their representatives, and I want to recognize the tremendous efforts of the Wright City workforce," said Dorel President and CEO, Martin Schwartz. "However, although we remain confident that there will be sustained demand for domestically manufactured RTA furniture, we have concluded that our manufacturing footprint exceeded anticipated market needs. A combination of North American production with imported components will ensure the long-term viability of our domestic operations. This is in line with a strategic shift away from exclusive domestic production. Ameriwood's new tri-continental supply chain now includes North America as well as sourcing initiatives from South America and Asia.

"The closure of the Wright City plant will result in a pre-tax restructuring charge of approximately US$11 million, the majority of which will be recorded in 2005. Of this amount, approximately US$8 million will be a non-cash charge representing the write-down of building, equipment and other assets. Annual pre-tax savings are expected to exceed US$5 million, commencing in 2006.

The plant closure will affect approximately 300 employees. The Company will immediately begin consultations with employee representatives. Production will be shifted to Dorel's remaining RTA factories located in Dowagiac, Michigan; Tiffin, Ohio and Cornwall, Ontario.

"While this is a difficult and painful decision, the measures taken at Ameriwood will have a positive impact on the Company by reducing our costs going forward and by considerably improving our operating efficiency. Combined with the new management team's focus on marketing and intensive product development, this augurs well for Ameriwood in 2006 and beyond. We firmly believe that we will be a thriving enterprise in a consolidating industry," said Mr. Schwartz.

Dorel Industries 2004 sales were US$1.7 billion.