Dorel Posts Lower Sales on Sting-Ray Softness

Dorel Industries Inc. reported revenue for the third quarter ended September 30, 2005 of $423.3 million, down slightly from $433.8 million a year ago with strong revenue growth in the juvenile segment partially offset the lower sales of Sting-Ray bicycles. Adjusted net earnings for the quarter, excluding restructuring costs incurred on the previously announced Ameriwood ready-to-assemble furniture plant shutdown, were $25.6 million or 78 cents per diluted share. Unadjusted net earnings were $19.8 million or 60 cents per diluted share compared to $28 million or 85 cents per diluted share earned in the same quarter last year.

Nine month revenue increased by 7.3% to $1.3 billion from last year's revenue of $1.2 billion for the corresponding period. Adjusted earnings for the nine months grew 14.1% to $74.6 million or $2.27 per share compared to $65.4 million or $1.99 per share a year ago. On an unadjusted basis, year- to-date earnings were up 5.2% to $68.8 million or $2.09 per diluted share compared with $65.4 million or $1.99 per diluted share a year ago.

Recreational/Leisure Segment

Third quarter Recreational/Leisure revenue decreased 33.7% to $70.8 million compared to last year's $106.8 million. Earnings from operations dropped 57.4% to $6.3 million from $14.7 million. For the nine months, revenue was unchanged from last year at $264.5 million. Nine month earnings from operations were down 16% to $28.4 million from $33.8 million last year. Included in the 2005 year-to-date revenue is $12.3 million from an extra month's sales. Sales increases occurred in several product categories and brands. However, Sting-Ray sales in the first nine months of 2004 far exceeded those in 2005, more than offsetting any increases.

Mr. Schwartz said that progress is being made in a number of areas in addition to the RTA furniture division. “Operating costs are running lower than last year principally due to reduced product liability costs as well as other cost containment measures. We are pleased with the third quarter $23 million reduction in overall inventories. Work will continue to bring inventory levels down,” stated Mr. Schwartz.

“It will still take the balance of this year to correct the RTA furniture issues; as well, last year's unprecedented fourth quarter sales of Sting-Ray bicycles will not be repeated this year. Despite our strong nine month performance, full year 2005 after-tax adjusted earnings will likely be lower than those recorded in 2004, although fiscal 2005 adjusted pre-tax earnings should be above last year. Continued success in Europe is expected to contribute to the Juvenile Segment's overall progress as will new listings in North America and several new product introductions,” concluded Mr. Schwartz.

                            DOREL INDUSTRIES INC.
                      CONSOLIDATED STATEMENT OF INCOME
         ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS

                             Third quarter ended           Nine months ended
                    -----------------------------  --------------------------
                      September 30, September 30, September 30, September 30,
                              2005          2004          2005          2004
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)

    Sales              $   418,835   $   428,422   $ 1,314,640   $ 1,226,460

    Licensing and
    commission income        4,494         5,417        15,967        13,543
                       ------------  ------------  ------------  ------------
    TOTAL REVENUE          423,329       433,839     1,330,607     1,240,003
                       ------------  ------------  ------------  ------------

    EXPENSES
      Cost of sales        327,335       331,479     1,028,236       951,632
      Operating             47,624        51,751       155,416       159,593
      Depreciation and
       amortization         10,308         8,568        29,758        26,844
      Research and
       development costs     1,560         1,015         6,212         4,691
      Restructuring costs    6,432             -         6,432             -
      Interest on
       long-term debt        7,426         7,472        22,172        21,217
      Other interest           478         2,473         1,072         2,987
                       ------------  ------------  ------------  ------------
                           401,163       402,758     1,249,298     1,166,964
                       ------------  ------------  ------------  ------------

    Income before income
     taxes                  22,166        31,081        81,309        73,039

      Income taxes           2,340         3,035        12,533         7,685
                       ------------  ------------  ------------  ------------

    NET INCOME         $    19,826   $    28,046   $    68,776   $    65,354
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

    EARNINGS PER SHARE
      Basic            $      0.60   $      0.86   $      2.09   $      2.00
                              ----          ----          ----          ----
                              ----          ----          ----          ----
      Diluted          $      0.60   $      0.85   $      2.09   $      1.99