Martin Schwartz - President and Chief Executive Officer Jeffrey Schwartz - Executive Vice President, Chief Financial Officer and Secretary

Derek Lessard - TD Securities Sabahat Khan - RBC Capital Markets Derek Dley - Canacord Genuity Anthony Zicha - Scotiabank Dave King - Roth Capital Stephen MacLeod - BMO Capital Mark Petrie - CIBC

Thank you. Good afternoon everyone and on behalf of Jeffrey Schwartz and Frank Rana, welcome to our fourth quarter and year-end 2014 conference call.

We will be pleased to take your questions following our initial comments. And as always, all numbers mentioned are in U.S.

dollars. As you can see from the release we issued this morning, Q4 was highly complex with a number of significant financial components factored into our results.

Overall, 2014 was more satisfying than last year with significant improvement in Dorel Sports, major initiatives at Dorel Juvenile and a stronger finish to the year at Dorel Juvenile USA and a consistent performance in Dorel’s Home Furnishing. The economic environment in the past several years has been a challenge for all consumer product companies.

Here at Dorel, each of our three segments has addressed this reality and has initiated both short and long-term plans to remain profitable, given this environment. Dorel Juvenile has expanded into new markets, notably Latin America, which includes retail outlets.

To capture additional market share, while focusing on specific profitable brands, the segment has broadened its product lines in North America and Europe. A huge step was our acquisition of the Juvenile business of the Lerado Group.

While we officially closed the transaction in Q4, we have been very actively involved in this project since we announced it last June. We have named a seasoned veteran from Asia as CEO of the new operations who is familiar with Juvenile product manufacturing and we have bulked up his management team.

With just over four months as owners, we have already identified and are working on the areas that need improvement throughout the operations of the factories. As a reminder, we purchased three factories in China and an R&D center in Taiwan.

Even while making these changes, we have also transferred products from other third-party suppliers to our new facility. Shipment of Dorel products to our Juvenile division have already been slowing for a few months as well the new R&D center is contributing to new product development.

There is still a lot of work to be done but we are optimistic that things will be running efficiently by the end of this year. And as I’ve said before, this is a game changer.

The purchase prompted us to completely reassess Juvenile’s global operations and how the segment will grow going forward. The result is the realignment and strategic shift to a more vertically integrated business model.

This has changed our assumptions on future earnings and cash flow growth and we now expect growth in earnings to come from the new Asian-based facilities as opposed to mature markets in North America and Australia. Also as part of this overall analysis, we have decided that henceforth, the European market focus will be on the Maxi-Cosi, Quinny and Safety 1st brands as opposed to the brands acquired as part of our 2003 Ampa France purchase.

The impairment losses on goodwill and trademarks related to this will be addressed by Jeffrey. While much is being done to ramp up China, I am pleased to say Juvenile is coming back in many of our markets.

Sales at Dorel Juvenile USA finished strongly with the shipment of new products including the successful launch of the new Scenera NEXT car seat. This translated into an improved bottom-line and for the year, the division exceeded budget.

Another positive was Dorel Asia Juvenile which has had rejuvenated growth in the sales of wood cribs and dresses particularly in the higher margin items. Dorel Juvenile Europe’s full year results exceeded the prior year’s performance on a similar level of sales.

New product launches at the Cologne Show are performing as anticipated with positive trade reaction. Chile and Brazil both had a good year with operations running well.

As with the case in Europe, these markets are being affected by currency. Dorel Sports recovered from a disappointing 2013.

The revitalized management team has delivered solid earnings as it refocuses on its strong brands and successful new product introductions. Investments in new product development and brand support over the past several years have attracted increasing consumer attention and have helped prevent competing merely on price.

During 2014, many changes have been made at Dorel Sports. New senior positions have been added and other positions have been changed and strengthened with new managers.

We are seeing positive results across the board, both in our IBD and mass merchant channels. Overseas IBD markets, particularly in Europe and Asia continue to contribute to the organic sales increase.

Pacific Cycle has been particularly strong in 2014 with sales to mass merchants increasing in bicycles and electric ride-ons as new programs have been adopted by some of our biggest customers. Caloi sales were up and in local currency, operating profits increased by double-digits over last year’s quarter driven by Cannondale and GT business which we launched in Brazil during the year.

Cannondale recently introduced the world’s most complete triathlon bike. The all new 2015 Slice Triathlon in Kona Hawaii, home of the world’s most fabulous and famous triathlons.

The Ironman World Championship. Global media impressions for the bike and launch – the bike and launch reached over 9 million within 24 hours of the launch.

The 2015 Cannondale Garmin Pro Cycling team has great things ahead of it with the full racing season about to begin. We are fortunate to have strong young team that is expected to take us to new heights with excellent partners that will support them all the way.

Being a young team, it has great potential and a variety of strong riders that could have breakout years including Andrew Talansky, Canada’s own Ryder Hesjedal and Dan Martin. This team doesn’t have to rely on only big star which was the case with our old team.

In Home Furnishings, all divisions showed increases over last year’s fourth quarter and for the full year, most posted significantly improved operating results. Dorel Home Products has the strongest growth while Cosco Home & Office also did well.

The import division of Ameriwood Altra recorded gains in the quarter, particularly through the internet channel and changes have been made to strengthen Ameriwood’s management team where more emphasis will be placed on new product developments. The segment posted another record year of sales through the internet sales channel which offsets full year reductions in sales of brick and mortar.

E-commerce now represents a sizable percentage of overall sales. While Home Furnishing was the first to embrace e-commerce, all three of our segments have identified online retail sales trends and have set in motion programs to capitalize on the growing potential of the internet channel.

We still expect foreign currency to be a negative factor through 2015 in non-US markets, primarily in the Juvenile and Sports segments. As an international consumer products company, the increase in value of the US dollar impacts both the cost of the sales for Dorel International divisions that purchase in US dollars and sell in local currencies, as well as Dorel’s reported earnings translated into US dollars.

And as you know, we report in US dollars, saw earnings from various geographies are translated into that currency. Each division is developing a strategy to deal with the currency issue.

The strong US dollar should help Home Furnishings as we have two facilities in Canada that produce products principally for the US markets. Jeffrey will now provide you with the financial perspectives.

Thank you, Martin. Apologies to everyone for what is certainly the noisiest quarter Dorel has ever put out, because the line has stopped here and I am going to go through it, it might take a little longer than normal, but I think we got to understand certainly the items used to come up with the adjusted, I’ll do that first and then actually talk about performance of the divisions after that.

The first thing I want to talk about is the impairment, the goodwill impairment charge recorded in the fourth quarter in Juvenile. What’s happened here is, because of a new facility in China, we looked at two of our markets, North America and Australia and believe that, going forward, our cash flows will be a little bit different in those particular markets, because we believe we will be shipping over time, not tomorrow morning, but over the longer-term, we will end up shipping to our customers directly and billing directly at the factory.

That of course changes the cash flows and projected earnings of the specific divisions in North America and Australia and by reducing those projected cash flows and moving them over to the Chinese cash flows, we took a write-down of $82.7 million there, again, non-cash. Over in Europe, little bit different story.

We looked at the brands that we valued when we purchased them back in 2003 and realized that we have not – we were not using the brands the way we were back then. Today, Maxi-Cosi, Quinny and Safety 1st and to a lesser extent Baby Comforter are really the main brands that we view.

We don’t use some of the other brands anymore and as a result, we are writing off the value or most of the value of the brands that we no longer use. That’s not to say we are not doing the business, business has obviously increased since 2003 significantly.

We are just doing it in brands that were not valued at the time of the 2003 transaction. So that’s the non-cash reason for that.

The cost of actually transitioning to our Lerado manufacturing facility way from other suppliers was $10.8 million in the quarter and for the year. What that is, is just the cost out – the cash and non-cash components of that, basically the caution of taking an item that was made at one factory where that could have been tools and dies that we owned and making a similar item in another – in our factory and bringing it to the customer means – there is charges by the customer to replace the SKU.

There could be markdown money that could be incentives involved. So, we did that for primarily the US but a little bit of the European market as well.

So that was the $10.8 million. In addition, there was acquisition-related cost, the actual cost of the acquisition, $3.1 million in the quarter, $4.4 million for the year.

On the Dorel Sports side, we completed the restructuring during the year and we incurred $1.8 million in the fourth quarter, $4.9 million in the year. In addition to that, $600,000 in the fourth quarter, $6.5 million was something we talked about before, but the write-down in our investment and other costs related to the former Cannondale pro cycling team which as Martin mentioned has been switched over to the Cannondale Garmin team.

And we believe going forward in the long run, that will give us a better exposure for less cost and less risk. In the fourth quarter, we also changed our accounting policy to reclassify the forward purchase agreements, unrealized gains and losses due to foreign exchange exposure and the remeasurement due to the change in assumptions from general and administrative expenses to finance expenses as was determined that these items were more representative of finance expenses and that will result in a more reliable and relevant presentation.

The total amount representing the remeasurements of the forward purchase agreement liabilities recognized in 2014 was a non-cash gain of $30.8 million in the fourth quarter and $25.7 million for the year. As part of the remeasurement, the forward purchase agreement liabilities with regard to certain past acquisitions have been reduced based on lower estimated future earnings expected in the year that’s a residual interest in these companies will be resolved.

So, in sort of – to explain that more practical terms, as I like to do, this is mostly referring to our South American acquisitions in which, in many cases we own just the majority stake we have in minority partner. What we’ve done is, we’ve looked at the times when these partnerships would be seized to be and become payable to us and given the huge change in currency in the last year, and the slow down in some of these economies, the short-term future earnings have been reduced and that’s reduced our liability.

So that’s really the effect there. So, based on all these numbers, this is what I would call the adjusted basis and the numbers going forward will lead – will try and talk more about the actual business themselves.

As far as exchange rate, Martin mentioned that the appreciation in US dollars versus the company’s other operating currencies, particularly in the second half of 2014, has had a net negative impact on the Juvenile and Sports segment of about $13 million in 2014 compared to 2013. $9 million for the Q for – when compared to last year.

As a global consumer product company, the increased value of the dollar impacts both the cost of sales of our non-US division that purchase in US dollars and sell in local currencies as well of course as the translation into US dollars as well. So if we go and start looking at some of the adjusted numbers now, adjusted revenue for the fourth quarter $701 million versus $633 million a year ago, an increase of 10%.

But more importantly, if we take away the exchanges and acquisitions, the organic revenue for the quarter was about 8%. So we are pretty happy with that.

Overall, our adjusted full year revenue increased by 10% from $2.4 billion to $2.7 billion, but again if we look at the organic increases, the organic number for the year was 5%. Adjusted net income for the fourth quarter was $11 million, an increase from $12.1 million a year ago.

Adjusted earnings per share in the quarter were $0.34 compared to $0.38 a year ago and for the year, $84 million or $2.59 per fully diluted share versus $70.6 million or $2.19 last year. Adjusted gross profit, 21.3% in the fourth quarter versus 22.9% a year ago.

Again, most of that is foreign exchange and most of that again in the Juvenile and Sports area. The gross profit for the year was $22.9 million in 2014 versus $23.1 million in 2013.

Finance expenses for the Group after eliminating the impact of the remeasurements of the forward purchase agreement liabilities, adjusted finance expenses for the quarter were $10.3 million compared to $7.8 million last year and for the full year, $33.8 million versus $21.1 million. The interest on the long-term debt increased due to higher borrowings because of the acquisitions of Tiny Love and Caloi and the issuance of the debenture related to the acquisition of Lerado as well as the issuance of Caloi debentures in April of 2014.

On the taxes, fourth quarter tax rate was 30.8 and an expense of – was a recovery of 30.8 and expense of 26.7 in 2014 and 2013 quarters respectively. So, others see an adjustment because of the write-offs we took.

So for the full year, tax rate was 13.4% versus 15.8%. If we look at the segments now, the Juvenile segment, adjusted Juvenile segment revenues were – for the fourth quarter were $13.5 million – increase – I am sorry, the increase was 13.5% compared to the same time last year.

Excluding the impact of foreign exchange and any organic, we actually had an increase of 5% led by the United States, Brazil and Australia. For the full year, adjusted revenues, by the way, adjusted revenues and actual revenues; the difference for the year is $600,000.

So it’s not a big deal number. But anyway, for the full year, the increase is $78 million or 7.9% and the organic percentage for the year was 3%.

And for the year, the main drivers were Latin America and North America, while the European numbers were fairly stable. Currency fluctuations, which again were a major impact for the quarter.

We had a negative impact for the segment of about $5 million during the fourth quarter and about $10 million for the year. Probably the biggest area of all of that was our Chilean business, which had a very large late year impact and was not hedged as well as some of the other areas for various reasons.

If we look at the quarter, we are showing an adjusted profit of $8.8 million versus an adjusted profit of $16.5 million last year, so breaking that down; we have $5 million in currency adjustments. We have another approximately $1.6 million in start-up losses for both Lerado and our Mexican business which occurred in the quarter.

And the rest of it is some – particularly some smaller areas, Canada for instance had a bit of a poor quarter and we did some inventory clean-ups there and there is a little bit here and there. We did have some positive numbers, positive increases in the United States, which we’re proud of and probably talk a little bit more about that after.

If we move over to this fourth segment, revenues increased $14.6 million for the quarter, 6%. Organically, again, without the foreign exchange, 10% increase.

So we really saw some nice increases there. Full year revenues increased 14.6% to $1.53 million compared to $918 million a year ago.

Organic increases for the year were 8%. The increases were both in the IBD and mass merchant distribution channel.

As we talked during the year, we’ve had a nice rebound in many areas. The overseas markets in the IBD channels, particularly, Europe and Asia continues to contribute to organic sales increases.

Of note, shipments of our battery-operated ride ons really did also help us on the mass side of the business. If you look at gross profits in the area, they decreased 21% to 21.9% from 22.8%.

Again the decline, unfavorable foreign exchange variations. In fact, the negative impact for the quarter was about $4 million on foreign exchange.

Full year adjusted gross profits were stable at $23.5 million and for the full year, the foreign exchange impact was about $3 million. Adjusted operating profit for the quarter increased by $3.7 million or 45.2% to $12 million from $8.3 million and then for the year, adjusted operating profits for the year were $67.5 million, up from $39 million in 2013.

On the Home Furnishing side, Dorel Home Furnishing revenue increased by 14.2%. Organically, the numbers is 15% for the fourth quarter.

An increase in the fourth quarter of 2014 was driven by sales through the internet channel and the drop ship vendor channels as well as brick and mortar. For the year, our sales increased to $554 million, an increase of 5.7%.

Organically, the number is 6%, there is not a whole lot of difference were not as impacted by foreign exchange as we are in the other divisions. As Martin pointed out, Dorel Home Furnishings now – its expansion into the internet sales channel which we’ve been talking about for a long time, it now represents 30% of revenue compared to about 20% a year ago.

For operating profit for the quarter increased to $5.2 million versus $5 million for the quarter and $24 million versus about $26 million the year before. And with that, I will pass it back to Martin.

Okay, thank you, Jeffery. We believe Dorel’s expansion of its Juvenile and Sports segments into global markets is the right vision for long-term growth.

As a result, just over half of our net income is now from outside North America. The rapid rise in the US dollar has significantly reduced margins in these markets; a situation we expect will affect us for at least the first half of this year.

We are working to adjust to these new exchange rates, but rates keep fluctuating. Until we see some stability in the currency market, our visibility on earnings will remain difficult.

On the positive side, we are experiencing sales and profitability growth in the United States in all segments due to the renewed strength with our mass market customers and the ongoing success in the internet sales channel. \ Dorel Juvenile is making progress integrating its new manufacturing facilities and it will remain a priority for the year.

As stated, Dorel’s manufacturing in China will not be accretive to earnings in the first year. In Dorel Sports, we believe that the second half of 2015, we’ll see growth in the independent bicycle dealer channel.

This is the based on the planned July introduction of our innovative new bicycle model here as well as stabilization of margins in our markets outside of the US. In addition, we anticipate – another solid year in our mass market bike business.

In Dorel Home Furnishings, we are optimistic as we start the year. Demand is increasing and the weak Canadian dollar will benefit the segment’s Canadian operations and its export sales.

I’ll now ask the operator to open the lines for your questions. But please limit your questions to two on the first round.

Operator, please.

Hi, guys. Just, maybe if we can concentrate on the Lerado acquisition just for a second, just wondering if the jump in depreciation, what’s tied to this and I guess, what can we expect in terms of overall depreciation going forward?

Well, the two – I guess, the two areas that the increase in – with also the Tiny Love as well. Remember, Tiny Love, at the beginning of the year, that wasn’t in the 2013 statement.

Okay.

We are still having closed the balance sheet on the acquisition yet. So, we – obviously, there will be an increase in depreciation.

But, we talk about on the Juvenile side, overall, because there is also Caloi, which we now have a full year of as well, so that’s added in, but, on Lerado, we don’t have a final go forward number yet as we are still finalizing our negotiations with the seller as we mentioned in the past. We still have certain negotiations to do.

Is it fair to assume, I guess, the depreciation that we saw this quarter and kind of – is pushed out?

We only had two months of Lerado. So, there will probably be a little bit more.

Okay and I guess, just to clarify the comments about the realignment in the Juvenile. Does this mean, this doesn’t mean that you are not expecting profit growth from North America right?

Not at all, no, this is really an accounting impairment issue.

Okay.

And that’s basically looks at future cash flows and when we had a look at future cash flows, we said, well, there is a chance some of that future growth is going to build at somewhere else. So when you reduce the cash flow in one area, you then have to – you have an impairment issue.

Okay, and just one question – last question before I re-queue. On the bike biz, you said you’ll see growth in the IBD channels in the second half.

I am just wondering what that means for the first half and why you won’t be expecting any growth given the new 2015 models.

Well, for two reasons. One, I believe, our 2015 model year is significantly better than our 2015 model year.

So that’s a big part of it. We had some major introductions while 2015 gave us more refreshes than major introductions.

So, I am expecting a better year. We also – from an earnings standpoint, we have a little bit more visibility in that, the entire industry reprices its products for its new model year, which would give us a chance, not so much in the US, where we are not necessarily expecting much change, but, in Europe and everywhere else, where that’s been hit by foreign exchange, it gives us sort of a chance to reset pricing.

And that will give us more stability in the second half of the year. So a combination of new and better stuff in the marketplace, better new introductions as well as better pricing sort of more stabilized pricing.

Okay and you are still expecting growth in the first half though?

A little bit, yes, not as strong. I mean, again, on the earnings side, because of foreign exchange probably not, on the top-line, I think we will see.

Okay, thank you.

Thanks. Just quickly on the Lerado acquisition.

Can you talk about how much of your production you’ve moved away from third-parties to the Lerado facilities and what kind of plan is for the rest of the production, if all of it will be moved over the next while or which is not still there?

Well, right now we’ve moved majority of the US products to our own facility. The European products, certainly over time, but eventually, it will be a lot of – again the majority of it will come out of our factories, but, this would probably take, maybe another year so to do.

Okay and just on to your strategy going forward in Europe with the two brands, are you planning and just deemphasizing the other brands over time or whether we still continue to have them to just that are not expected to generate as much profit. What your thoughts there?

Yes, on the three brands, that we are talking, MonBebe, Babideal and Baby Relax, we are going to keep them or we are going to use them strategically. This again becomes more of an accounting – it’s not a change sort of a direction, it’s more an accounting adjustment that going forward, we have no plans to resurrect these brands and make them our main brand and therefore, it’s prudent to reduce their value on our balance sheet.

It’s not a – unfortunately, it’s a sort of net sum game, like if we transfer sales from one brand to another, we have to write-down the brand that’s losing, but we don’t get the write-up the other brand. So, the brands that we are using or not – like we don’t get to increase those values.

So, it doesn’t mean a lot strategically. I don’t think people should look too much into it.

It’s just, it is what it is. It just reflects where the business is and where it’s going.

Thank you.

Yes, hi guys. I was just wondering if you’ve implemented any price increases to-date in either Juvenile or Iraq to reflect the changes in currency.

Absolutely, the question is, is it enough, I mean just an anecdotal story. I mean, and sometimes we decide here to do than others.

Latin America, it’s much easier, they are used to match the moves in currency. And again, we discussed not more than a month ago, that when the Real in Brazil was about 2.70 I think it was that we probably are going to see it hit 3 very soon and we should increase prices to reflect the 3 to 1 conversion.

And I think that’s being implemented or had been implemented a couple weeks later and we sit here today and it’s 3.21 this morning. So it has – sharp pass that.

So we have to go back and re-look at it again and in some cases, like I mentioned in Europe, on the bike side, be much more second half. In some markets, we’ve already gone to – probably in Australia, Canada, we’ve gone to market already.

We have to seize that enough. It’s very tricky, every market is different.

Fortunately, we don’t have to do it in US which is often the hardest market to do it in. So, again, the answer is yes, is it full, is it enough, is it fast enough, no to all those.

But yes, we are going to market and yes, we are raising the prices.

Okay, great. That’s helpful.

And can you just comment on the Cannondale and GT launch in Brazil? How that’s going so far?

How consumers there responding to the new brands?

Yes, it’s currency aside, it’s going really well. We’ve really executed well on our plans as far as bringing products into the factory and then out.

As far as expanding dealers, on the Cannondale side, that’s going very well. We are doing everything we planned on doing as far as getting better distribution.

And we need sort of the country to settle down a little bit both their economy and their currency, because that’s been some choppy. But, we are very, very happy with the acquisition.

And, I still believe in the long-term success of this. It’s just we were hoping when we bought it, when the currency was at 2.2 or something, 2.1, that we see a rapid, rapid growth and that’s – we grew last year very nicely.

But, we are going to have tamper that growth as the economy and the currencies there sort of have the heavy headwinds.

Okay, that’s understood. And then just a couple of housekeeping questions.

What tax rate should we be using next year and what’s your CapEx plan for next year?

Tax rate, I am going to again with our 15% to 20%. At this point, again, without noise, I mean, this year, there is tons and tons of noise again, but 15% to 20% seems to be the right number that when we do our forecast.

And for the CapEx, probably, hopefully around $60 million.

Okay, that’s great. Thanks.

Little bit more than before, because of Lerado.

Right. Okay great.

Yes, Martin, could you answer this question please? With reference to your strategic shift towards manufacturing in Asia, what makes you so sure you are going to succeed in that by focusing on Asia rather than North America?

And the second part of the question is, European focus is more on the Quinny, on the Maxi-Cosi and on the Safety 1st, which is, I’d say more of a higher end product. But what about the lower end price points like, how does that change?

I’ll take that Anthony. First of all, your second question first, these are not strategic plans that are changed, this is what we’ve been doing for a while.

Safety 1st is the lower-end brand. We do still use MonBebe and Baby Relax, we still use them.

But, the fact is, this is where, in the past they used to use them from the absolute opening price points right up, so underneath the high price points. We’ve now taken that whole middle-market which isn’t large in Europe and we are using Safety 1st there.

So, it just kind of minimizes the space that the – those three brands can operate in. But, we still plan on using them and again, that’s not really a strategic shift, that’s what we’ve been doing.

We are now reflecting – I think the value of the brands into the strategy that we’ve been doing for the last few years. And on your first part, it didn’t sound right what you said.

We are not shifting our business to Asia. What we are talking about is, just how we are going to build the business in the future.

We believe in some cases, we are going to billing directly from our Asian factory to a customer instead of drew – say, Canadian or US customer. Our Canadian or US operations and that changes the way you look at impairment.

So, it’s again more accounting than business strategy here.

But just to get some clarity, so, now you are going to be billing direct, so, what’s the impact on the margin or is there any?

Well, again – this is going to be new business going forward. So it’s not necessarily, I don’t know what the impact is going to be because it depends on the items.

In some cases, where the item might be too low, to do a double-margin. If you don’t mean, where we can make a margin at the factory and then import it, put it in inventory and sell it directly to the customer, perhaps we’ll just say, you know what, we are going to ship it directly from the factory to our customers’ warehouse and avoid branding and other costs that might be a way that we think going forward.

So I am not sure that net-net impact on margins.

Okay, and the last question to that, with reference to your transition cost, we’ve seen a hit in this quarter and then to Q4. What about going forward?

Can we expect some other costs?

Yes, I mean, I think, we are going to see some – a little bit more this year from – as we transition the European products over. I don’t think it will be anywhere near that side.

But I would expect something to be – something during this year.

Okay, thank you.

Thanks, good afternoon guys. I guess, I’ve gotten just sort of a follow-up some of the others just to make sure I understand it correctly.

So in terms of the $83 million goodwill write-down, that’s one of an accounting issue, it sounds like you are saying Jeffrey, so it’s – just to understand it sounds like it’s was due to lower cash flow is it, but it’s lower cash flow is attributable to the original customers that you were using when those businesses were acquired and so now it’s going to be going more direct. So as a result, you could still recoup those cash flows, but you are not going to – you still have to take the charge.

Am I understanding that correctly?

Yes, it’s different than it is, so what we have to do is, you can’t take your goodwill all of Dorel, put it in a big pile and then say, everything – nothing has changed here, so therefore we don’t have the impairment. They look at individual entities.

So, what we are thinking is, we had this projection of growth over the next – whatever, five, ten years in certain markets and now when we say, now we have a factory here, and we probably will do business differently, again, we haven’t necessarily changed it yet, but we do believe that if we are going to do things differently, going forward, that’s going to increase cash flows in one entity decrease it in another entity and therefore you’ve got to take your write-down on the negative entity. The same thing with the brands, and to me it’s a complete non-business issue.

The fact that we no longer use one brand and use a different brand. But, it affects the brand we don’t use anymore and therefore we have to take a write-down on that brand and we don’t get to take a write-up on the brands that we use more of.

So, it’s somewhat similar on the goodwill as well.

Okay, so then the expectation then is theoretically all else equal, you expect cash flows, there is no impact to the overall cash flows to the company?

Correct.

From what you said today.

The whole – I mean, the whole discussion is based around an accounting impairment, why do we have a write-off, well there will be ever write-off because we’ve changed the way we view the future of cash flows. Not globally, but on a segmented basis.

Okay, that helps. And sorry to beat the dead horse on that one.

And then, in terms of currency, can you just walk us just obviously, a little over half of the overall business is international at this point. It sounds like also, similar on a net income basis.

Can you just walk us through those exposures across the three different businesses, if you can in terms of what’s international and how much of that translates through in the bottom-line? I think Home Furnishing is obvious the least exposed, but?

Yes, in fact, it’s positively exposed of any things, because it’s got a few facilities in Canada where our costs have dropped. We are actually expecting – Home Furnishing should have a nice year in 2015.

It’s got really good demand from the mass market as we pointed out. Because that’s virtually where all the demand comes from and so the lower cost.

So I think, things are looking good over there. On the bike side, again, we are exposed in Europe, we are exposed in Japan, Brazil, little bit Chile now.

We’ve opened up our own operation there. The other area that we are exposed is, we sell through a lot of third-party distributors around the world, places like Russia, South Africa, Ukraine, all these places where the currencies have weakened.

So the buying power of consumers in those areas will probably be lighter. So we are also looking at a negative impact, because our distributors and those customers won’t be able to buy as much as they have in the past.

Okay, so and those are US dollar exposures then? So just we kind of…

Yes, everybody buys everything in US dollars. So, I mean, overall, our purchases, they are probably going to come down like the cost of goods will probably inches way down, but certainly won’t make up for these currency problems that we have around the world.

So, it’s a major impact the positives on the bike side is on the IBD area. We get to reset pricing somewhere in the middle of the year which is sort of very formal.

And on the mass side, which also is very profitable on the bike side, that’s primarily a US business. So they don’t have these issues.

We don’t have to deal with the currency areas. The other thing that you just pointed out and it’s true is translation is a big deal, because if we are going to make €10 million in profit, last year that €10 million was about, say, €12.5 million to €13 million of profit.

And if we get the parity that €10 million is going to be €10 million as profit that we translate and that’s a drop, whatever, $2.5 million to $3 million, just in translation. So, it’s going to be a tough year temporarily.

I think, fundamentally, we are making a lot of progress. We are doing some good things.

Market share-wise and product-wise and it will all adjust at some point the markets do. So we are not concerned about any fundamental long-term issues here.

But it’s going to be a little painful getting through this period like I am sure it is for a lot of consumer product – multi-national consumer product companies. We are all kind of in the same boat.

Absolutely, thanks for the color and good luck.

Okay, thanks.

Thank you. Good afternoon.

I was just wondering if you could provide a little bit of color on your outlook for the Juvenile business and we talk a little bit about Home Furnishings and Dorel Sports, particularly in the first and second half of the year. Just wondering if you can give some color on the Juvenile business?

Well, with the Juvenile business, again, I mean, it’s going to be impacted by currency. But, if we take a look at the various different markets, starting in North America, the US business is picking up.

We had a good fourth quarter. We had some strong introductions of a couple of new products in the – that we have introduced this year.

Demand I think is positive. We are seeing good results from the number of our key customers.

So I think demand is good and I think there is some good product introductions, not a lot of noise regarding currency and all of that. So North America looks pretty good.

South America, we continue to do well strategically. Market share-wise, Brazil.

Brazil had a pretty good year last year considering all the noise and left. We are expecting Brazil to continue to move forward.

We now have another brand in panty in Brazil which is a very popular mid-priced brand. We do have a little bit of manufacturing.

We do some car seats which is going to help us in Brazil versus our competitors that import everything. Chile, we continue, we’ve slowed down the opening of stores now, because of the economy there slowed a little bit.

We are focusing on being more efficient in our business, but sales continue to be strong. Brands continue to be strong.

Again, strategically, very positive about South American area. Europe, again currency is going to be a big deal this year, because that’s moved significantly in 2015 versus last year.

We do have some new product coming through. We are transitioning some of our products over in the orient.

So, we are expecting a – currency aside a solid year, not a huge dynamic year. We still question the strength of the European economy.

So we are watching that very carefully as we raise – we have to raise some prices there. We do fortunately we do almost all of our car seats are domestically made in Europe, which will reduce the amount of cost inflation on the car seat side.

Some of the other products are coming from China. So, all Chinese goods are priced in US dollars, so, everybody who brings in a stroller from China, which is part they know is virtually 95% to 100% of all strollers.

All of those prices will going up in Europe. So, it will be a bit of a choppy year, I think in Europe.

But, and then, the other smaller markets, they are – it’s all currency based right now. Demand, we are trying to come out with some items that maybe will be priced, how those sort of the lower content of features, which will allow them be more competitively priced in some of these markets that have gone under huge pressure on currency.

Right. Okay, that’s great color.

Thank you

And then, I guess, the last part of Juvenile, which is really getting Lerado to the point where it’s efficient making money and having a strong impact on the future of the business. So, we are making progress there.

We’ve changed a lot of those staffing, it’s now people we want, we are seeing efficiencies go up. We are seeing quality getting better, just seeing a lot of things, but having said that there is still so much more to do.

There is better purchasing, better layout of the factories, better efficiencies in how we do things. So we make progress which is a lot more to do.

Right. And at least, to my question which is sort of what’s next on the Lerado integration and how long do you foresee it taking from where we are today?

Well, I think we are sticking with the rest of this year. I mean there is, like I said, we are seeing progress.

The two things that we have statistics on are – sort of productivity and quality and we’ve seen progress already this year in those areas. But, like I said, there is so many, so many items.

It’s a business that’s not just transforming the business over to us. But it’s transforming the business itself from a multi-customer focused sort of marketing factory to a dedicated factory, to less customers and to become more efficient.

That’s a big drop, so.

And I – in other call if, I guess, Martin you answered this previously, but, what percentage of the volume that’s going to Lerado now is your own versus other third-party companies, brand owners?

I think it’s about – probably right now, it’s about 50-50.

Okay. Okay, that’s great.

Thank you very much.

Hi good afternoon. I just want to ask you with the balance sheet, obviously the capital budget as you mentioned is stepping up and just want to talk, or if you could talk a little bit about leverage ratio and how you look at that going forward?

I mean, all future cash flow for 2015 is going to be used to pay down debt from that point of view. WE are looking at the balance sheet, we are – like I said, trying to get a handle on our forecast for this year with the currency adjustment.

So, that’s making it a little bit difficult, plus, certainly not looking at any more M&A for that. So we are not looking at any major shift up in leverage.

We are going to work now on the inventory levels. I mean, they are not super high.

There is no real negative issues there. But, hopefully, we can get better at doing what we are doing and bring some cash in from there and looking at sort of – including all of the assets that came with the Lerado transactions, all the real estate and determining what it is we need and if we don’t need certain building or certain – we can put those on the market and help reduce the debt that way.

So, we are very focused on bringing the debt down this year through cash flow and through other methods.

Okay, thanks.

Yes, just one last question. I just want to get an idea of how the spring selling season is going in, in bikes?

Fairly well, I mean, again, it’s a bit choppy around the world because of price increases. But it’s going well.

I know the mass side I think is up over the last year. So we are expecting a good strong start from the mass side.

And the other – the IBD, I mean, it’s – I haven’t heard a whole lot, it’s still winter. So, it’s doing okay, but, it’s a little early, I mean, you really got to wait till April to really get when spring starts to really see how the year is going to be.

But I don’t see anything negative today, but I haven’t heard anything super positive either.

And there is no like. Crazy weather in Europe like there was last year?

Last year, we had a great year in Europe, with two years ago.

Yes.

But in US, where we have two years in a row kind of light late spring. So it wasn’t so bad last year, but – so no, so far, I am sitting here in Montreal now looking at the winter outside.

So to imagine bikes, but it’s not just cold everywhere. So, again, no I haven’t heard anything big in either direction.

Okay, thanks guys.

Okay. Well we are confident that our businesses are all moving in the right direction.

The unknown and the uncontrollable situation is currency. But we are working aggressively to adjust through this.

Please note that our Q1 results will be released on May the 7th and our AGM is scheduled for May 28th here in Montreal. We look forward to seeing you there.

Thank you all for joining us today and have a good afternoon.