UNITED STATES









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 6-K



REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934



August 9, 2005



Commission File Number: 0-29712



DOREL INDUSTRIES INC.

________________________________________________________________________________________________





1255 Greene Ave, Suite 300, Westmount, Quebec, Canada H3Z 2A4

_________________________________________________________________________________________________





Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.


Form 20-F

[    ]

Form 40-F

[ X ]


Indicate by check mark whether the registrant by furnishing the information in this Form is also thereby furnishing

the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes

[    ]

No

[ X ]








[f9aug05002.gif]

 


C  O  M  M  U  N  I  Q  U  É


JUVENILE

Cosco

Safety 1st

Maxi Cosi

Quinny

Baby Relax

Babidéal

MonBébé

Bébé Confort


HOME FURNISHINGS

Ameriwood

Ridgewood

Charleswood

Dorel Home Products

Cosco Home & Office

Dorel Asia

Carina Furniture


RECREATIONAL / LEISURE

Pacific Cycle

Schwinn

GT

Mongoose

In Step


EXCHANGES


CANADA

TSX:

DII.A, DII.B


U.S.A.

NASDAQ:

DIIBF


CONTACT:

Maison Brison

Rick Leckner

(514) 731-0000


Dorel Industries Inc.

Jeffrey Schwartz

(514) 934-3034


DOREL’S SECOND QUARTER EARNINGS CLIMB 21.4 %



Montreal, August 9, 2005 — Dorel Industries Inc. (TSX: DII.MV DII.SV; NASDAQ: DIIB) today released results for the second quarter ended June 30, 2005. Net earnings rose 21.4 % to US$21.7 million or US$0.66 per diluted share compared to US$17.9 million or US$0.54 per share earned in the second quarter a year ago. Pre-tax earnings for the quarter increased by 32.3% to US$25.3 million, up from US$19.1 million in the prior year.  Revenue for the period increased 6.4% to US$435 million compared to 2004 second quarter revenues of US$408.9 million.  Six month earnings climbed 31.2% to US$49 million or US$1.49 per diluted share compared with US$37.3 million or US$1.13 per share a year ago. Year-to-date pre-tax earnings have increased by 41%, increasing from US$42.0 million in 2004 to US$59.1 million in the current year. Year-to-date revenue was US$906.6 million, up 12.5% from last year’s first half revenue of US$805.8 million.  


All three segments contributed to both the second quarter and year-to-date revenue improvement. Organic revenue growth was 5.1% in the quarter and 9.6% year-to-date, excluding both the impact of currency variations and the additional month of revenue in 2005 versus 2004 in  the Recreational/Leisure segment.  Gross margins remained in line with the prior year for both the quarter and year-to-date.



                                 Summary of Financial Highlights

                                    Second quarter ended June 30,

              All figures in thousands of US $, except per share amounts


                                                  2005                       2004              Change %

Revenue                                  434,983                  408,880                 6.4%

Net Income                               21,745                    17,908                21.4%

  Per share – Basic                        0.66                        0.55                20.0%

  Per share – Diluted                      0.66                        0.54                22.2%

  Average number of

  shares outstanding

  diluted weighted average   32,940,164           32,955,200













Summary of Financial Highlights

Six months ended June 30

All figures in thousands of US $, except per share amounts

 

2005

2004

Change %

Revenue

906,560 

805,844

12.5% 

Net income

48,950

37,308

31.2%

Per share - Basic

1.49

1.14

30.7%

Per share - Diluted

1.49

1.13

31.9%

Average number of shares outstanding -

   

diluted weighted average

32,951,503

32,921,590

 


Juvenile Segment


Second quarter Juvenile revenue was up 5.1% to US$192.8 million compared to US$183.6 million during the same period a year ago. Earnings from operations increased 74.3% to US$19.8 million from US$11.4 million last year. For the first half, revenue rose 10.6% to US$436.3 million from US$394.6 million last year, while earnings from operations increased 61.6% to US$47.3 million, from US$29.3 million.


Excluding the impact of currency changes, overall, year-to-date organic revenue growth in the Juvenile Segment was 8%. Year-to-date, revenues in Europe have increased by 11.3%, while North American year-to-date revenues are up 1.3%.  In the second quarter, the revenue increase was driven by European operations where the first quarter’s success of new travel systems continued, contributing to particularly strong gains in Germany, Italy, the United Kingdom, Portugal and Spain. In North America, revenues declined from last year’s second quarter. This was due to a combination of particularly strong shipments in this year’s first quarter and some customers delaying orders into the third quarter of 2005 in anticipation of new product introductions.


European gross margins improved over the prior year due mainly to an enhanced operational performance in Holland and the stronger Euro. In contrast, North American gross margins were negatively impacted by higher raw material prices, a less profitable product mix and competitive pricing pressures.  Operating expenses declined by US$5.7 million in the quarter and US10.5 million year-to-date, due mainly to lower product liability costs.


Home Furnishings Segment


Home Furnishings revenue increased 7.9% to US$131.9 million during the second quarter compared to US$122.3 million a year ago. Earnings from operations were flat at US$6.2 million versus US$6.3 million last year. For the six months, revenue grew 9.3% to US$277.3 million from US$253.8 million last year. Earnings from operations for the first half were up 12.2% to US$17 million from US$15.1 million last year.


Successful new product placements in several categories by Dorel Asia and good retail acceptance of newly designed futons helped to increase combined sales of furniture by Ameriwood and Dorel Asia by 8% in the quarter and 7.9% year-to-date.  Cosco Home & Office sales of folding furniture and other imported home furnishings also increased both in the quarter and year-to-date by 7.7% and 14.9% respectively.


Raw material pricing pressure has eased from last year, reflected both in stabilized board prices, the principal commodity in ready-to-assemble (RTA) furniture products, and declining steel prices, a significant component in futons and folding furniture.  However,  manufacturing inefficiencies at the segment’s RTA plants continue to be the main reason for lower than expected earnings.  The new Ameriwood management team is implementing several business optimization initiatives, including a core focus on low cost, efficient production of RTA furniture as well as process and organizational changes to achieve substantial productivity enhancements.


Dorel President and CEO, Martin Schwartz stated the initiatives are far ranging. “We are taking at look at things from the ground up. Everything is being addressed, including sales and operations planning, inventory management, procurement, customer service and speed-to-market via an already implemented and greatly enhanced new product development capability.  A new design system is now in place with designers and product development teams able to bring product ideas to market in less time.  The highly visible and successful launch of California Closets branded RTA products during the second quarter is a result of these new capabilities.  Ameriwood’s production efficiencies for the balance of fiscal year 2005 will continue to be challenged as it recalibrates its operations.  The aggressive change initiatives are anticipated to reposition the Company for RTA furniture product growth in 2006.”


Recreational/Leisure Segment


Second quarter Recreational/Leisure revenue increased 7% to US$110.2 million compared to last year’s US$103 million. Earnings from operations rose 6.3% to US$13.4 million from US$12.6 million. For the six months, revenue was up 22.5% to US$193 million from US$157.5 million in 2004. Of this increase, sales in January 2005 were US$12.3 million. As the Pacific Cycle acquisition became effective in February 2004, this additional month of revenue in 2005 results in organic year-to-date sales growth of 14.7%. First half earnings from operations increased 15.9% to US$22.1 million from US$19.1 million last year. Sales increases occurred across several product categories and brands.


Outlook


The Juvenile Segment is expected to experience a good second half with new listings in North America and several new product introductions.  In addition, operating costs continue to run at levels lower than last year principally due to reduced product liability costs, as well as other cost containment measures.  Continued success in Europe is expected to contribute to the segment’s overall progress.


As previously announced and detailed above, Dorel’s ready-to-assemble (RTA) furniture division is facing challenges.   Plans are being implemented in response to lower sales volumes and factory inefficiencies .  Partly offsetting the RTA results ar e better than expected performances at Dorel Asia and Cosco Home & Office, where new product categories and additional customers are driving sales increases.  As also previously disclosed, despite increased year-to-date sales within the majority of its product categories, revenues in the Recreational/Leisure segment are expected to be lower in the second half of 2005 versus 2004.  Retail sales of the Sting-Ray model bicycle continue to be above average as compared to other bicycle categories and remain a key part of the Schwinn portfolio. However, second half sales of the Sting-Ray will be lower than the unprecedented record levels achieved in the second half of 2004, resulting in lower second half earnings than in the prior year.


“We are pleased with the first half performance and the year-over-year earnings increase of 31.2%. As announced in July, while we anticipate higher pre-tax earnings over 2004, challenges at our Ameriwood division and lower second half sales at Pacific Cycle will affect earnings in the second half this year. As a result, we currently see fiscal 2005 after-tax earnings to be within the same range as 2004,” concluded Mr. Schwartz.


CONFERENCE CALL

Dorel Industries Inc. will hold a conference call to discuss these results today at 10:00 A.M. Eastern Time. Interested parties can join the call by dialling (514) 807-8791 (Montreal or overseas) or (866) 250-4892 (elsewhere in North America). The conference call can also be accessed via live webcast at www.newswire.ca or www.q1234.com. If you are unable to call in at this time, you may access a tape recording of the meeting by calling 1-877-289-8525 and entering the passcode 21132765# on your phone. This tape recording will be available on Tuesday, August 9th, 2005 as of 12:00 P.M. until 11:59 P.M. on Tuesday, August 16th, 2005.


Complete financial statements will be available on the Company's website, www.dorel.com, and will be available through the SEDAR and EDGAR websites.


Profile

Dorel Industries (TSX: DII.SV, DII.MV; NASDAQ: DIIB) is a global consumer products company engaged in the designing, manufacturing and marketing of a diverse portfolio of powerful consumer brands, sold through its Juvenile, Home Furnishings, and Recreational/Leisure segments. Headquartered in Montreal, Dorel employs approximately 5,000 people in fourteen countries. Dorel also has offices in Shanghai and Shenzhen, China which oversee the sourcing, engineering and logistics of all Asian operations.
2004 sales were US$1.7 billion.


US operations include Dorel Juvenile Group USA, which markets the Cosco and Safety 1st brands as well Eddie Bauer and Disney Baby licensed products; Ameriwood Industries, which markets ready-to-assemble products under the Ameriwood, Carina, SystemBuild, Altra Furniture and Ridgewood/Charleswood brands as well as California Closets and Trading Spaces licenses; Cosco Home & Office, which markets home/office products under the Cosco and Cosco Ability Essentials brands and Samsonite license; and Pacific Cycle, which markets the Schwinn, Mongoose, GT, InSTEP and Roadmaster brands. In Canada, Dorel operates Dorel Distribution Canada, Ridgewood Industries and Dorel Home Products. Dorel Europe markets juvenile products throughout Europe, under the Bébé Confort, Maxi-Cosi, Quinny, Safety 1st, Babidéal, Mon Bébé and Baby Relax brands. Dorel Asia sources and imports home furnishings products.


Caution Concerning Forward-Looking Statements

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Dorel Industries Inc. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. The business of the Company and these forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ from expected results. Important factors which could cause such differences may include, without excluding other considerations, increases in raw material costs, particularly for key input factors such as particle board and resins; increases in ocean freight container costs; failure of new products to meet demand expectations; changes to the Company’s effective income tax rate as a result of changes in the anticipated geographic mix of revenues; the impact of price pressures exerted by competitors, and settlements for product liability cases which exceed the Company’s insurance coverage limits. A description of the above mentioned items and certain additional risk factors are discussed in the Company’s Annual MD&A and Annual Information Form, filed with the securities regulatory authorities in Canada and the U.S. The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference. The Company’s business, financial condition, or operating results could be materially adversely affected if any of these risks and uncertainties were to materialize.  Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.








DOREL INDUSTRIES INC.

CONSOLIDATED BALANCE SHEET

AS AT June 30, 2005

ALL FIGURES IN THOUSANDS OF US $



 

as at

June 30, 2005

(unaudited)

as at

December 30, 2004

(audited)

ASSETS

  

CURRENT ASSETS

  

Cash and cash equivalents

$                  15,888 

$                11,288 

Accounts receivable

262,744 

286,529 

Inventories

323,974 

292,991 

Prepaid expenses

9,842 

12,756 

Funds held by ceding insurer

8,009 

7,920 

Future income taxes

24,059 

24,027 

 

644,516 

635,511 

   
   

CAPITAL ASSETS

158,448 

163,707 

GOODWILL

484,959 

512,546 

DEFERRED CHARGES

18,700 

20,983 

INTANGIBLE ASSETS

256,767 

262,968 

FUTURE INCOME TAXES

8,675 

10,401 

OTHER ASSETS

10,187 

10,786 

 

$            1,582,252 

$            1,616,902 

   

LIABILITIES

  

CURRENT LIABILITIES

  

Bank indebtedness

$                  3,809

$                  1,915 

Accounts payable and accrued liabilities

333,576

354,738 

Income taxes payable

2,459

5,629 

Balance of sale payable

5,611

7,773 

Future income taxes

1,324

1,379 

Current portion of long-term debt

7,666

7,686 

 

354,445

379,120 

   
   

LONG-TERM DEBT

495,767

505,816 

PENSION & POST-RETIREMENT BENEFIT OBLIGATIONS

19,568

20,006 

BALANCE OF SALE PAYABLE

-

5,278 

FUTURE INCOME TAXES

70,436

75,719 

OTHER LONG-TERM LIABILITIES

4,795

2,684 

   

SHAREHOLDERS’ EQUITY

  

CAPITAL STOCK

162,321

160,876 

CONTRIBUTED SURPLUS

2,502

1,081 

RETAINED EARNINGS

435,783

386,833 

CUMULATIVE TRANSLATION ADJUSTMENT

36,635

79,489 

 

637,241

628,279 

 

$            1,582,252

$          1,616,902 









DOREL INDUSTRIES INC.

CONSOLIDATED STATEMENT OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2005 (unaudited)

ALL FIGURES IN THOUSANDS OF US $, EXCEPT PER SHARE AMOUNTS


 

Second quarter ended

Six months ended

 

June 30, 2005 (unaudited)

June 30, 2004 (unaudited)

June 30, 2005 (unaudited)

June 30, 2004 (unaudited)

     

Sales 

 $        429,789 

 $       404,163 

 $        895,087 

 $         797,718 

     

Licensing and commission income 

                5,194 

              4,717 

               11,473 

                8,126 

     

TOTAL REVENUE 

            434,983 

          408,880 

            906,560 

            805,844 

     

EXPENSES 

    

Cost of sales 

            337,775 

          318,070 

            700,183 

            619,833 

Operating 

              52,043 

            53,313 

            107,792 

            107,842 

Depreciation and amortization 

                9,777 

              8,890 

              19,450 

              18,276 

Research and development costs 

                2,462 

              1,978 

                4,652 

                3,676 

Interest on long-term debt 

                7,228 

              7,191 

              14,746 

              13,745 

Other interest 

                    437 

                 345 

                    594 

                   514 

 

            409,722 

          389,787 

            847,417 

            763,886 

     

Income before income taxes 

              25,261 

            19,093 

              59,143 

              41,958 

     

Income taxes 

                3,516 

              1,185 

              10,193 

                4,650 

NET INCOME 

 $           21,745 

$          17,908 

 $           48,950 

$            37,308 

     

EARNINGS PER SHARE: 

    

Basic 

$0.66 

$0.55 

$1.49 

$1.14 

Diluted 

$0.66 

$0.54 

$1.49 

$1.13 

     

SHARES OUTSTANDING: 

    

Basic – weighted average 

      32,825,827 

     32,712,577 

      32,814,402 

       32,679,375 

Diluted – weighted average 

      32,940,164 

     32,955,200 

      32,951,503 

       32,921,590 








DOREL INDUSTRIES INC.

CONSOLIDATED STATEMENT OF RETAINED EARNINGS

FOR THE SIX MONTHS ENDED JUNE 30, 2005 (unaudited)

ALL FIGURES IN THOUSANDS OF US $


 

Six months ended

 

June 30, 2005 (unaudited)

June 30, 2004 (unaudited)

   

BALANCE, BEGINNING OF PERIOD AS REPORTED 

$                386,833 

$                287,583 

   

Restatement 

- 

(826)

   

BALANCE, BEGINNING OF PERIOD AS RESTATED 

386,833 

286,757 

   

Net income 

48,950 

37,308 

   

BALANCE, END OF PERIOD 

$               435,783 

$                324,065 







DOREL INDUSTRIES INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2005 (unaudited)

ALL FIGURES IN THOUSANDS OF US $


 

Second quarter ended

Six months ended

 

June 30, 2005 (unaudited)

June 30, 2004 (unaudited)

June 30, 2005 (unaudited)

June 30, 2004 (unaudited)

     

CASH PROVIDED BY (USED IN):

    

OPERATING ACTIVITIES

    

Net income

 $         21,745 

 $         17,908 

 $           48,950 

 $           37,308 

Adjustments for:

    

Depreciation and amortization

              9,777 

              8,890 

              19,450 

              18,276 

Future income taxes

               (222)

               (308)

                1,452 

               (1,690)

Funds held by ceding insurer

                 (34)

            (2,884)

                    (89)

               (2,917)

Stock based compensation

                 720 

                      - 

                1,421 

                       - 

Gain on disposal of capital assets

                 162 

                 329 

                    167 

                    329 

 

            32,148 

            23,935 

              71,351 

              51,306 

     

Changes in non-cash working capital:

    

Accounts receivable

            20,277 

            42,252 

              13,960 

              22,614 

Inventories

          (24,354)

          (17,874)

            (38,130)

            (10,557)

Prepaid expenses and other assets

              2,544 

            (1,219)

                3,141 

                1,742 

Accounts payable and accrued liabilities

          (19,771)

            (7,784)

               (9,804)

              28,121 

Income taxes payable

               (199)

                 545 

               (3,029)

                    801 

 

          (21,503)

            15,920 

            (33,862)

              42,721 

     

CASH PROVIDED BY OPERATING ACTIVITIES

            10,645 

            39,855 

              37,489 

              94,027 

     

FINANCING ACTIVITIES

    

Bank indebtedness

              2,372 

                 180 

                2,223 

                1,260 

Long-term debt

            (1,271)

          (15,119)

               (9,975)

            237,746 

Issuance of capital stock

              1,290 

              1,528 

                1,417 

                3,052 

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

              2,391 

          (13,411)

               (6,335)

            242,058 

     

INVESTING ACTIVITIES

    

Acquisition of subsidiary companies

            (2,495)

               (808)

               (7,440)

          (295,790)

Additions to capital assets – net

            (5,030)

            (8,701)

            (11,729)

            (16,690)

Deferred charges

            (2,407)

            (1,824)

               (4,703)

               (6,877)

Intangible assets

                 (52)

            (2,302)

               (2,859)

               (2,601)

CASH USED IN INVESTING ACTIVITIES

            (9,984)

          (13,635)

            (26,731)

          (321,958)

     

Effect of exchange rate change on cash

                 384 

               (246)

                    177 

                  (928)

     

NET INCREASE IN CASH

              3,436 

            12,563 

                4,600 

              13,198 

     

Cash and cash equivalents, beginning of period

            12,452 

            14,512 

              11,288 

              13,877 

     

CASH AND CASH EQUIVALENTS, END OF PERIOD

 $         15,888 

 $         27,075 

 $           15,888 

 $           27,075 







DOREL INDUSTRIES INC.

SEGMENTED INFORMATION

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2005

ALL FIGURES IN THOUSANDS OF US $


Industry Segments

FOR THE SIX-MONTH PERIOD ENDED JUNE 30


 

Total

Juvenile

Home Furnishings

Recreational/Leisure

   

For the six months period ending June 30,

 

2005

2004

2005

2004

2005

2004

2005

2004

         

Total Revenues

 $   906,560 

 $ 805,844 

$     436,311 

 $  394,565 

 $  277,292 

 $   253,752 

 $  192,957 

 $  157,527 

Cost of sales

700,184 

619,834 

311,773 

    279,098 

237,630 

217,159 

150,780 

123,576 

Operating expenses

96,667 

101,258 

        59,202 

      69,709 

17,743 

16,923 

19,722 

14,626 

Research and development costs

           4,652 

       3,676 

          3,407 

        2,794 

       1,245 

           882 

               - 

              - 

Amortization

18,579 

17,534 

14,583 

       13,666 

3,679 

3,640 

317 

228 

Earnings from Operations

86,478 

63,542 

$       47,346 

$    29,298 

 $   16,995 

 $    15,148 

 $   22,138 

 $   19,097 

Interest

15,340 

14,259 

      

Corporate expenses

11,996 

7,325 

      

Income taxes

10,193 

4,650 

      
         

Net income

$       48,950 

 $   37,308 

      


Industry Segments

FOR THE QUARTER ENDED JUNE 30


 

Total

Juvenile

Home Furnishings

Recreational/Leisure

   

For the six months period ending June 30,

 

2005

2004

2005

2004

2005

2004

2005

2004

         

Total Revenues

 

 

 

 

 

 

 

 

Cost of sales

337,775 

318,069 

      136,940 

     131,112 

114,433 

106,016 

86,402 

80,941 

Operating expenses

45,945 

50,069 

        26,986 

       32,723 

8,678 

7,903 

10,280 

9,443 

Research and development costs

          2,462 

       1,978 

          1,795 

         1,536 

           667 

            443 

               - 

                - 

Amortization

9,375 

8,548 

          7,319 

         6,818 

1,911 

1,680 

145 

50 

Earnings from Operations

39,426 

30,216 

 $     19,808 

 $    11,362 

 $     6,221 

 $      6,250 

 $   13,397 

 $   12,603 

Interest

7,665 

7,536 

      

Corporate expenses

6,500 

3,586 

      

Income taxes

3,516 

1,185 

      
         

Net income

 $     21,745 

 $   17,908 

      


Geographic Segments - Origin


 

Six months ended June 30,

Second quarter ended June 30,

 

2005

2004

2005

2004

     

Canada

 $     96,875 

 $     89,154 

 $     45,182 

 $     35,088 

United States

556,896 

520,977 

265,293 

276,352 

Europe

190,369 

163,311 

91,497 

75,889 

Other foreign countries

62,420 

32,402 

33,011 

21,551 

Total

 $   906,560 

 $   805,844 

 $   434,983 

 $   408,880 













Signatures


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




DOREL INDUSTRIES INC.



By: /s/ Martin Schwartz_____________

Martin Schwartz

Title: President and Chief Executive Officer



By: /s/ Jeffrey Schwartz_____________

Jeffrey Schwartz

Title: Executive Vice-President,

 Chief Financial Officer





August 9, 2005