Dorel Industries (DIIB) investor relations material

Executive summary

• First quarter 2026 revenue was $267.8 million, down 16.4% year-over-year, mainly due to a sharp decline in the Home segment, partially offset by strong international growth in the Juvenile segment.

• Net loss for the quarter was $24.9 million ($0.72 per diluted share), a slight improvement from $25.3 million ($0.77 per diluted share) in Q1 2025.

• Adjusted net loss, excluding restructuring costs, was $22.3 million ($0.65 per diluted share), compared to $23.6 million ($0.72 per diluted share) last year.

• Ongoing restructuring in both segments continued to impact results, with cost reductions improving profitability.

• Juvenile segment's international growth and improved profitability offset U.S. softness and Home segment headwinds.

Financial highlights

• Total revenue declined by $52 million or 16.4% year-over-year to $267.8 million, driven by a sharp drop in Home segment sales.

• Gross margin improved to 21.6% (up 280 bps), with adjusted gross margin at 21.8%; Juvenile gross margin was 26.0% (down 130 bps), Home gross margin was 0.1% (down 110 bps).

• Operating loss narrowed to $6.2 million from $14.1 million; adjusted operating loss was $3.6 million, down from $12.5 million.

• Finance expenses nearly doubled to $18.2 million, mainly due to higher interest on preferred shares and long-term debt.

• Cash flow used in operating activities improved to $8.6 million from $19.4 million last year.

Outlook and guidance

• Management expects improved U.S. Juvenile sales and earnings, with continued international strength, supporting a strong second half and projecting full-year 2026 adjusted earnings to exceed 2025.

• Home segment profitability targeted by year-end, contingent on eliminating legacy costs and focusing on profitable categories.

• Material uncertainty exists regarding the ability to meet quarterly financial covenants over the next twelve months, casting doubt on going concern status.

• Strategic initiatives include asset monetization, further cost controls, and managing working capital.