Martin Schwartz - President & CEO Jeffrey Schwartz - EVP, CFO & Secretary

Nick Meyers - Roth Capital Partner Sabahat Khan - RBC Capital Markets Eric Beder - Wunderlich Securities Stephen MacLeod - BMO Capital Markets Derek Dley - Canaccord Genuity Derek Lessard - TD Securities

Hey, good afternoon, everyone. On behalf of Jeffrey Schwartz and Frank Rana, thank you for joining Dorel's first quarter conference call.

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

dollars. 2016 is off to a solid start.

I am pleased to say that things are under control with regards to currencies. Dorel juvenile pricing is now generally in line with today's FX rates and Dorel Sports has mitigated the FX impact with pricing in the business and CSG Europe.

There was another record quarter for home furnishings again underlying that this business has matured and is clearly a growth company. Sales through the internet and drop shift vendor channels grew very strongly far exceeding the decline in brick and mortar sales.

Sales to internet retailers were up across the board with the biggest revenue increases coming from home furnishings largest customers. Highlights to the quarter included another strong showing by Dorel home products, mostly due to increased online sales contributed nicely to profit and also continued growth of internet and Ameriwood and specifically its import division Ultra.

Results can be attributed to a number of factors including better mix, operating leverage with a sound logistic infrastructure as well as technology and automation. The natural correction would be is this sustainable?

I would say we remain bullish and anticipate a continuation of strong sales of our pace of earnings growth should grow somewhat as we need to keep an eye on commodity cost. Both have bottomed out and some are moving back upwards.

Turning to the Juvenile, sales are up in most markets and price increases have been mostly implemented to somewhat neutralize the negative FX impact. We have also been focusing on improvements in focus and personnel to reduce the cost at other divisions and looking to improve efficiencies to enhance drive and long term performance.

Progress continues in China, quality has improved, the supplier base has been reviewed and reduce and cost savings have been identified. These savings will begin to be increasingly recognized as lower input costs are expected to translate into better earnings.

Despite conditions in Latin America the Juvenile, is very well positioned to grow. Our expenses portfolio of brands and various price points, strong local management and domestic manufacturing capabilities are allowing us to gain market share from the competition in Chile, Peru and even in Brazil.

Unlike most of our competitors we have the flexibility to react swiftly to market conditions in these regions. Our management is at the top of their game and have focused on cost control and are reacting quickly to the changing situation.

We are gaining relevance with Latin American consumers who have a strong retail store presence and a push through digital which is allowing us to engage consumers at multiple touch points. This was an initiative of Dorel Juvenile USA which set out to bolster its market position and the convertible currency category.

They have truly succeeded as Grow & Go has quickly become the top selling convertible car seat at major U.S. retailers and is expected to be introduced globally by the end of the year.

Year-over-year Dorel Sports had a weaker quarter due to timing and discounting in the Cycling Sports Group division. Pacific Cycle Corp compensated for some of this.

Part of the decrease in CSGs attributed to timing of sales which were shipped last December rather than in Q1. Results were also affected by discounting in the states, caused by pricing actions initiated by competitors to move inventory to dealer level and Jeffrey will elaborate more during his comments.

CSG Ivy League business was tougher than expected in Q1 and we will take the necessary measures to deal with this, having said that some perspectives is needed. IBD is important for Dorel.

It carries great brand equity with Cannondale and attracts a lot of attention. But it is only one component of our total bicycle business that contributes the smaller part of Dorel's sports profits.

Pacific Cycle on the other hand which has started the year on a very sound footing and is expected to continue this trend delivers much more to this segment operating profits. Taking company wise our IBD bicycle business is one of the smallest pieces of the corporate pie and is one of the multiple brands we have across our business platforms.

Our other businesses including Juvenile and Home furnishings are doing well and we expect to have a decent year of overall end bike. Innovation remains key with Cannondale, the SI and the quick model and the reaction to both is positive.

Recognition has been in abundance for Cannondale with awards & accolades. It was most gratifying to have Cycling Plus magazine and Bike Raider Online name the Caloi bike of the year 2016.

Pacific Cycle sales for the mass channel were quite strong. PCG has also increased its e-commerce business.

The early onset of spring resulted in solid sales of Schwin & Mongoose as well as parts & accessories. The strengthening of the Schwin brand in retail is particularly noteworthy.

Sales of our kid's tracks line of electric ride-on are also solid with new models coming out regularly. Soon to be launched is the Disney's custom design ride on toy with highly anticipated Finding Dory movie which will be in theaters in mid-June.

Additional new products are being developed and there will be an expansion in the 24 volt category. In Brazil, in spite of the tough economy and political turmoil, Caloi remains a strong local brand that we have been successful in maintaining the necessary price increases.

Recently there has been some renewed strength in the Brazilian Royale. The overall focus in Brazil has been to concentrate on working capital, inventory, and cash management, all of which are strong.

In Chile, the mass recreation channel is a bit of a struggle but the five retail bike stores we opened are operating well year-over-year. June will see the opening of our first retail outlet in Lima Peru.

And this will be a flagship store. I will now turn it over to Jeffrey for his comments.

Thank you Martin, before we get into numbers for the first quarter I want to highlight that our results for the quarter include restructuring charges of $2.2 million and acquisition charges of $700,000 for a total of $2.9 million all related to Dorel Juvenile. Last year we had about $900,000 in the first quarter which was manly acquisition cost in Dorel Juvenile, China.

Consolidated revenue for the first quarter was $645.9 million down 2.9% from $665.5 million a year ago. After removing the impact of FX variations, organic revenue decreased by approximately 1% mainly from lower sales in the Juvenile U.S.

market and also planned reduction in third party sales from the factory n Dorel China. Gross profits rose by a 130 basis points to 23.2% versus 21.9% recorded in 2015 due to higher margins.

In almost all Juvenile markets from price increases and production efficiencies as well as in Home Furnishings division. This was partly offset by the margins in the Dorel Sports due to the discounting at the U.S.

IBD sales in order to protect and maintain market share as key competitors decreased their prices to reduce their excess inventories. Adjusted operating profits increased by $9.2 million to $33.8 million from $24.6 million in 2015.

That was Dorel Juvenile's improved margins and improved operating expenses as well as Dorel Home Furnishings higher sales. Currently offset by the lower sales in Dorel Sports due to timing and higher discounting.

Operating expenses decreased by $4.7 million from $120.9 million to $116.2 million. That's mainly due to the cost savings from the Juvenile's restructuring plan somewhere offset by Home Furnishings entire commission expenses linked to its sales growth and increase information technology and administrative costs to support its e-commerce growth.

Our finance expenses increased from $2.3 million to $10.7 million from $8.4 million excluding the impact of the re-measurement of the forward purchase agreement liability, adjusted finance expenses were $10.1 million compared to $8.8 million last year first quarter. Adjusted income before income taxes rose by $7.8 million to $23.7 million from $15.9 million last year.

Effective tax rate was $17.2 million versus $24.3 million and the bulk of the variation is due to the changes in jurisdictions in which our company generates its income. Net income increased by $5.1 million to $16.7 million versus $11.6 million last year and adjusted net income for the quarter was up 66.7% and 19.7% or $0.60 a share from $11.8 million or $0.36 a share in 2015.

Moving over to Juvenile now so Juvenile declined by $21.5 million or 7.8% versus last year excluding the year-over-year OpEx impact, organic revenues decreased by about 4% and again due to some sales in the U.S. which we do believe will turn around by the end of the year as well as the reduced third party sales in the factory in China as we transfer products from third party customers to more of in sourcing or Dorel customer products.

Gross profits increased by 280 basis points to 28.8% from 26% last year. Higher margins in almost all the regions and that's primarily due to increase in pricing in response to currency pressures so that's, our pricing is pretty much covered most of the FX difficulties that we had last year.

Improved factory performances last year as well which has offset some unfavorable volume impacts on margin. Adjusted operating profit rose by 8.3% or $8.3 million or 80.6%.

This is due to both improved margins and lower operating expenses. Almost all FX rates within the segment were weaker against the U.S.

dollar however, the increased pricing in those market places and improved production efficiencies have more than offset any unfavorable OpEx that existed. Despite the reduced third party sales around Dorel Juvenile China's operation was a small contributor to the segment's increased earnings.

Operating expenses declined by $6.7 million or 11%. A lot of that is again cost savings from our restructuring activates that have taken place in China, Europe and in North America.

In China the consolidation of certain facilities and the reduction in headcount in 2015 is accounted for some of the savings. North America, benefits were generated as the U.S.

operation is assumed back office support for the Canadian division which remains focused on sales & marketing activities. And in Europe enhanced efficiencies from process harmonization, the realignment of the sales organization has also led us to some cost savings in Q1.

If we move over to the Sports, revenue decreased by $12.1 million or 5.4% to $216.5 million. After moving the year-over-year impacts FX the organic revenue declined by about 3%, primarily due to a number of items.

But non re-occurrence of higher sales to European dealers, last year in March of 2015 in advance of a April price increase triggered by the currency pressures we had a slew of orders that came in March that weren't repeated this year. Part of this shortfall is due to the shipments of the 2016 IBD, model year bikes we shipped in December 2015 as opposed to the first quarter of 2016.

This was made possible by improvement of our delivery in fourth quarter of last year. Strong bike sales for U.S.

mass channel manly for Schwinn & Mongoose brans partly offset the lower IBD and the favorable weather, and early Easter holiday uplifted sales during the month of March. Gross profits declined by 150 basis points to $21.9 million from $23.4 million last year.

Mostly due to the U.S. and actually other markets as well IBD sales in order to maintain market share as key competitors carry a price decrease to reduce their excess inventory.

If we move over to Home Furnishings now, the home furnishings revenue increased by $14.3 million or 8.8% compared to last year. The e-commerce distribution channel now represents 42% of our total segment sales compared to 30% last year.

And that increase has far exceeded any decrease that we have seen in the brick and mortar area. Gross profits increased by $8.8 million or 400 basis points mainly from higher margins generated by all divisions in our sales.

Operating profits increased by $6.9 million or 72.4% from $9.6 million last year to $16.5 million in the quarter and this is higher margins due to mix and higher operating leverage which is our business growth, partly offset by higher SG&A required by the significant sales in the quarter. Operating expenses rose by $1.9 million or 17.3%.

Before going back to Martin I just like to point out a couple of balance sheet items. Overall our increased a little bit compared to December, I mean traditionally the first quarter requires increase from borrowing as our cash flow activity is generated from operating activity is weighted more towards second half of the year but as we said in the last conference call, we have a renewed focus on balance sheet and on cash flow.

In the fourth quarter of last we did a very good job of bringing down our inventories and increasing our cash flow and I am very pleased with the first quarter here. Last year cash flow, our operating activities used $86.5 million.

This year in the first quarter we only used $5.9 million. A reduction in usage of cash over $80 million compared to last year, that's good coming off a very positive Q4 so with that I am going to pass it back to Martin.

Okay. Thank you, Jeffrey.

As far as outlook 2016 has started with a significant increase in earnings. In our Juvenile segment we have made significant progress due to improved margin and conscientious cost containment.

Second quarter will not exceed the prior year but this is only a function of timing, our component of much better 2016 due to the organic sales growth. They are managing he planned exit of third party competitive sales from China factories, upsetting these sales with our own insourced products and significant improvements in operations.

The second half will continue the positive trend of the first quarter. Home furnishings has started the year with its best quarter in many years as there lines of furniture extremely well suited for the e-commerce sales channel.

Several years ago we realized that this channel is going to be the future of our industry and now we are capitalizing on the operational investments we have made to increasingly capture this business. There is more product in place that customers each year and the results speak for themselves.

While the pace of earnings, improvement will slow somewhat we expect to continue to deliver strong results this year compared to prior years. The Pacific Cycle Division will continue to grow modestly through the year and will continue to surpass 2015 in both sales & earnings.

The Schwinn & Mongoose brands have strong traction with consumers and this has been translated into a solid first quarter in the mass channel. Despite the situation in Brazil Caloi is on target to meet its earnings objectives, although sales will be down year-over-year.

We are pleased with the performance in Brazil. Price competition in the IBD sector is making for a challenging first half and the math of premium bicycles is uncertain.

We foresee improvement during the second half, as the rows lined of year 2017 bikes is compelling. There has been good reaction to our recently introduced Quack & Scalpel and additional models will be introduced this year we will continue to be pro-active in CSG and we will hopefully monitor the situation throughout the year.

Overall, it is expected to see 2015s performance. And one additionally remark in Brazil, despite the economy and politics that are very rough today, both our bike and Juvenile businesses have made the necessary adjustments and both should show a bottom line growth for the year.

I will now ask the operator to open the lines for your questions and please always limit your first round of questions to two.

This is Nick Meyers on for Dave king, how are you doing? It looks like some of the progress on operating margin moves made in the first quarter is expected to continue in the second half?

Can you talk about the major drivers there? Maybe the ASB increases or China transition and why should it occur in the second quarter and level of improvement you are expecting in the second half?

Which segments are your referring to?

Definitely Juvenile, as well as I know Home Furnishings is more of the e-commerce driving that but mostly the Juvenile I am talking about.

I think where we are expected to see improvement in the first quarter, if we plan on continuing to drive that. Well I think we are looking for is we have some new products being placed in the second half of the year so an increase in those products and they tend to carry the really decent gross margins.

Certainly as you mentioned increased factory efficiencies particularly in China. We are having some success in our platforms in U.S.

and that's allowing our factory to become more efficient as well. And we have also invested in the way we like to do business with Europe so you have seen a lot of these costs coming through in the restructuring charges over the last few years and now we are starting to see the results for them and we just expect that to continue.

Okay. Perfect, thank you.

Can you talk about the price competition in the bike business, how you showing about maybe general inventories and IDD channel and…

There is a lot of inventory in the system, it affects us but I want to make sure we have people understand. We actually bought appropriately for this year.

We reduced our purchases going into this year, as an example, we don't have any -- you wouldn't have a natural while at 2016 bikes coming in into inventory and we're just selling them, while I do believe some of our competitors that continue to bring in bike. So they are leading that, we just have to unfortunately match to move our bikes through.

But the way we look at it is it's probably -- it's more likely to be the 2016 model bikes, and again we're going to have a lot less of those than we had the 2015 bikes at this time. We have started introducing some new models, as Martin pointed out, the quick and the Scalpel came to market this week.

Their new 2017 bikes are great bikes; I think they bring a lot to the table. They are being sold at full margin right now.

So we believe that -- I wouldn't say it's going to completely go away in the second half, the pressure, but I think it's going to be alleviated to a point because eventually our competitors are going to run out of excess inventory. Hopefully they got smarter and maybe buying less going forward into next year.

And the market will adjust itself with everybody bought the appropriate amount of inventory, the market will adjust itself and we'll get back to normal margins.

Okay, appreciate it. I'll step back now, and thank you guys very much.

Good luck next quarter.

Thanks. Just a comment on the U.S.

mass channel, you call it out as a positive in the bike space. I was just wondering a lot other supplier type company that said it's been challenging in retail.

Is it a category thing or the products that you guys have on the channel? Any comments there would be helpful.

I think it's a category thing, I won't tell you that we see the retailers being necessarily that strong, although certainly they are in home furnishings. But I think we managed the inventory, and as well I was going to give credit to some of our customers who managed their inventory well this year.

We are in stocks are great, we -- I think they made sure they had the bikes in case there was an early spring. We also had February and March were warm months, April not so much, May I think we're back to a normal month which is great.

May is the biggest tight month for retail sales. So I think it was the combination of having all the inventory in the right place, having the -- not too far inventory but the retailers having the inventory and having a good spring and as well as an early Easter.

I mean that made sense for a lot as well.

Okay. And then just one more on -- you guys called up the online strategy helping in juvenile and in Pacific Cycle as well.

Is that something new? Can you just talk about what exactly you are doing online?

Is it just selling through the retailers online or is that something new you guys are doing on your own?

It's almost -- but we don't do a lot of direct-to-consumer, it's selling through our customers and the e-tailing retailers. We just had more of a focus as somebody said today in a presentation, in the past we used to do it by accident; we sold bikes, we just put them on and now we're focused on -- I think through the home furnishings we really understand what you need to do to be successful online seller of products, and we're now adapting that knowledge more to the bikes and more to the juvenile and we're seeing some success because we're more focused on how to do business there.

It actually can be an advantage where if you go into a mass marketplace to buy a bike, you can -- you generally see one, you do not always have somebody to help you and you see the front of the bike, you see the price and you see the color. While if you go online, we can highlight all the features; we can -- some of the cool stuff that we're designing that needs some explanation, all of that could be found online.

So we're finding from that point of view, there is a lot of better successful way of selling online than we've been doing in the past.

Thank you.

Congratulations on the solid start to the year.

Thank you.

Could you talk a little bit about, you mentioned the European channel with the bikes and that they bought ahead of -- basically a price increase. When do you think they started running out and have to start buying at more normalized levels?

Eric, I was referring to last year where we did a price increase in April of 2015. So everybody bought really, really heavy in March.

So this year because we don't have that price increase in April, it's a normal March, and therefore it's -- our sales are down versus last year. We are expecting a better sales and profit Q in Europe in Q2 than we had last year, Q2 was pretty rough in Europe last year because everybody had inventory for March.

Okay. So you're expecting that to turn there.

Yes, by Q2 -- I mean, we're on-track now. Between that and also the introduction this week of the Scalpel which is a very big European bike.

We've got a good introduction there and then we're already selling those bikes. So between the two, we know our European IVD business will be up versus last year, even with the world of discounting.

Great. And in terms of inventories, which should we be expecting going forward?

I mean, you're right, it was impressive decline last year and you carried that into Q1. What should we expect for the rest of the year in terms of inventory levels?

I think as a goal, I'm going to [indiscernible] what thing business would be -- what we did last year in the group. I mean we're going to try and keep $40 million to $50 million in last year, quarter-by-quarter, I mean I'm not -- I don't know about the fourth quarter but we won't see that spike that we saw last year.

A lot of it was led by -- like I said, bikes, where we bought too many '15 bikes, we actually in April -- as the season was ending we were still receiving bikes in the '15 season. So we got ahead of that this year and made sure we didn't do it and it turned out to be a good thing because as I said, our competitors bought a lot, had too heavy and they still have current year bikes coming in now, so running $30 million, $40 million below last year.

Okay, thank you.

Thank you, good afternoon. I just wanted to circle around on the sports business.

I assume is it correct in understanding that the competitive aspect of the market has crept in the Q2 as well?

Yes.

Okay. And can you quantify like how much of sales were pulled from Q1 into Q4 in the IBD segment of the market?

And I guess along that…

Not really because again, I don't know what item. It wasn't so much pulled, like it wasn't items that we were supposed to ship in Q1.

I think it goes more back to 2015 where we didn't have models in until -- February this year the model came in earlier, came in in October/November, so we're able to ship it earlier. I can't quantify that number, I just know that going into -- we had a good CSG shipping quarter in Q4.

And going into the winter months of January/February, our customers had most of their inventory versus where we had a catch up in previous years but can't quantify it.

Right. Okay.

And on the sports results when you say that you expect to exceed 2015 performance, I assume that's on the profit line?

Correct.

Do you think you'll see enough strength in the Pacific Cycle Group to cause organic growth in the year on the top line?

On the top line; so just to figure out what the top line and you're correct, it's the bottom line that, we're going -- that we've commented on. On the top line -- take a look here.

I mean we're going to be challenged a bit -- I'll tell you what some of the challenge -- the organic was, don't forget, it's going to be close. Let's put it this way, if we do have some growth, it's going to be single digit.

Okay, that's great. And then just one more if I could on the juvenile business.

In terms of the U.S. weakness the you are seeing, is that mostly driven by just like the demand environment or is it more competitive?

And is that something that's secular in nature?

It's a little strange this one but I'm actually pretty optimistic about what's going on in the U.S. in our business; we've got a lot more listing.

We are still looking to grow sales this year in the U.S. Q1 -- it was more about certain customers bought last -- I guess that I think we have more listings and I'm not -- I don't think this is going to continue.

Some of it was timing, some of it is certain customers are buying less now, but with the listings that we should get in the second half, like I said we should beat last year in the U.S. both on the top line and the bottom line.

Okay, great. And then just one final one, casting on Juvenile, can you just reconcile what the impacts are for Q2 expecting to be down year-over-year?

Some of it's just timing, some of its introducing new products only to be shifting Q3. We're not going to be down significantly but we're just -- it was a good quarter last year, Q1 wasn't.

There is some expense timing; there is a number of issues, not one in particular. We're hoping to narrow it from what it could be.

I just -- the bottom line is where everything is sort of going towards plan and it's going to be a nice increase on the bottom line, as well as the small increase in the top line for the end of the year. And I just don't see that in the second quarter, so I was wanting people to expect a down quarter in earnings and then in Q3 and Q4 because of the products that we know that are coming to market in those quarters.

That's why there is a little more certainty that we've got a lot more listings going in and they'll start shipping in like July through November, the new stuff.

Okay, that's great. Thank you very much.

Thank you. Dorel Juvenile China, just in terms of the planned exit of third-party competitors; can you just update us on where you are in the -- there is also timeline for that and when you expect that to be completed?

It's not -- I mean the word we say is planned means we are aware that some of our customers are leaving, not all of them. We're not encouraging them to leave.

So we still have a number of customers that are staying on but some of them are uncomfortable buying from a competitor. So they've moved on to somewhere else, so we expected that.

And we try to put more and more product from other suppliers to the factory, so I'm not sure there is a completion date. In the perfect world 70s customers stay on for long time but the difference -- against the reason we're highlight it is, when we have a third-party customer and we -- let's say given $10 million and they leave, we moved the $10 million of sales, now if we put $10 million of sales to our own customer, we don't record that as revenue.

But I didn't -- our customer, for instance that we're transferring it from a third-party supplier in China, we had that sale anyways before ultimately to our customer and that fact that we're doing it internally doesn't increase our topline, it will increase the bottom line but not the top line. So that's why we're -- we don't have a high topline growth for this year's schedule.

But yet when I looked at our markets, Canada, United States, the individual South American markets, Australia; they are all organically scheduled to grow. We even had some issues like Brazil where organically we actually are going to grow the top line, but by the time you convert it back into U.S.

dollar. We're actually expecting to see a U.S.

dollar and that's currency related so we're pretty bullish that every market, except for China is going to grow organically. I think that's kind of what we're getting at with it.

Okay, thank you and that's helpful. Switching to bikes, you mentioned on certain demand for premiums bikes.

Just wondering if you can elaborate on that if it's just like customer is switching to lower price points or just what you're seeing there.

I think what we're trying to get out there is -- there is a lot of uncertainty in the market with the excess inventories. It's just a lot of uncertainty so we don't have a date when it's all going to go back to normal yet.

So we're just being a little cautious there and saying we're not sure. So there is uncertainty in the marketplace.

Okay, thank you very much.

Thanks guys, you kind of answered on my question there on the last comment. But can you maybe just quantify that you expect for the FX, and the seemingly installed that have a negative headwinds for the remainder of the year.

Well, it we count pricing in there, we're new increased. It's not much; it's not material in the first quarter for instance.

With our pricing, yes, we're still quite a bit behind but we -- like I mentioned, we've finally got with that. So going forward, as long as we don't see any major changes, or certainly a stronger U.S.

dollar from one I've just rephrased it. So if dollar doesn't get stronger, we shouldn't have any more negative impacts.

Okay, great. And just in terms of your international markets, can you -- maybe just rank them in terms of where you're seeing the most growth versus the least.

It sounds like China is at the bottom end but…

China, it's funny we keep talking about China from a factory standpoint. We do have a domestic sales effort in China; I think we've talked about it in the past where we've mentioned they lost $0.5 million in a quarter where they lost this or that.

I mean for the first time, first quarter average actually broke even on the domestic business, so we're turning that around. But again the factory, as I explained before is an issue, we're seeing some good turnaround in places like Australia is doing nicely, Chile continues to move along, although Q4 is a big quarter.

So we're not there yet but Q1 was nice. I mean South America is probably still growing, even Brazil is -- it's a very strange market in Brazil, I think because of our strength, we're able to do things that no one else in the marketplace can do, sometimes it's buying inventory, sometimes it's introducing new products, it's very little new products coming to market except from us and Brazil because of the strength of Dorel So I think South America is probably the biggest area that we're seeing growth.

And by the end of the year, like I said, we should see some growth in North America, and little bit in Europe. Europe is always kind of slow growth, steady profit business.

Okay, great, that's very helpful. Thanks.

Thanks guys, maybe just a few housekeeping questions to start. Your G&A was -- as a percentage of sales was down nicely in Juvenile.

Just wondering if this is the floor that we should expect going forward?

It will increase a little bit, I know that that's one of the places that we're -- I mean some of it is savings, but we are expecting some increases going forward, and part of the reason why we're expecting our Q2 to be down. So it's a bit low, you're right, for the quarter.

Okay. And as well on depreciation, it was about $30 million consolidated and I guess most of that came from the Juvenile segment as well.

Just maybe some guidance there?

Yes, I mean we've got some -- I mean there is a lot of reasons, there is no one reason. Some of it is also, we've taken some of that away in our restructuring, it's been lowered because some of its effect -- some of it just don't have the assets anymore, they are fully down.

And some of it is -- that we've written it off in some of the restructuring because we no longer use those assets.

Okay. And one final one, it's more of a general strategic question on the bikes.

The UCI, they've temporarily suspended the use of the sprites in the pro-peloton and just a couple of things on that. I was just wondering how important is the pro-team or what the team is writing to your overall sales?

And secondly, obviously the industry has made a big portion adapting this great technology and a lot of expenses in R&D. So I was just wondering how this affects your 2018 product development and you're planning, if at all?

Yes, I mean -- I don't consider it to be a major issue and all the issues in the bike industry. Certainly, I don't think it affects our branding or our team.

I mean we have bikes that -- tomorrow morning we can go back to other break -- we probably had to do that overnight. I mean as far as '18, yes, I think that everybody is sitting and waiting to see where it all falls out, how people -- not everybody is using it in a closed peloton race but we certainly have the option of disk brakes or non-disk brakes and not a difficult thing to switch from, right.

In three months from now, everybody decides disk brakes is a bad idea, then you won't see them on, not just our bikes, you won't see them on anybody's bikes and it won't be a big deal going forward. But it is obviously something that we have to deal with, perhaps, I mean again, not that close but I imagine somebody might figure out how to do a disk break in a way that isn't dangerous is what's out there.

All right, I'll leave it there. Thanks.

Okay. Well, thank you all for joining us today.

And just to repeat, we are very pleased with the start to the year. There has been material progress in Juvenile, continued growth in home furnishings online business and a strong position achieved in bikes in the mass channel.

I'd like to remind everybody that our Annual General Meeting will be held in Montreal on Thursday, May 26th at 10:00 AM at The Ritz-Carlton Hotel on Sherbrooke. I encourage you to attend as it is a perfect opportunity to meet with management, and as well as see a wide cross-section of our products.

Thank you again for being with us this afternoon. And everybody have a good day.