DOREL ISSUES EARNINGS WARNING, ANNOUNCES PLANS TO CLOSE PLANT

Dorel Industries issued a second earnings warning in two months and said it would shut a plant in Wright City, Mo., laying off 300 people. The closure is part of a move to counter continuing difficulties in Dorel’s ready-to-assemble (RTA) furniture division. The shutdown will cost Dorel US$11-million in pre-tax restructuring charges and result in annual savings of US$5-million. Furthermore, the company warned after-tax earnings excluding the charges “will likely be lower than 2004” due to an expected drop in furniture sales “at selected mass merchant accounts.” “We have concluded that our manufacturing footprint exceeded anticipated market needs,” chief executive Martin Schwartz said in a release. Dorel stock fell 12% in July after it warned profit “would be in the same range” as last year’s US$100-million profit, or US$3.04 per share.