Martin Schwartz - President and CEO Jeffrey Schwartz - CFO

Eric Beder - Wunderlich Sabahat Khan - RBC Capital Markets Derek Lessard - TD Securities Dave King - Roth Capital Stephen MacLeod - BMO Capital Markets Ben Pereira - Canaccord Genuity

Thank you. Good afternoon, everybody.

On behalf of Jeffery Schwartz and Frank Rana, thank you for joining Dorel's fourth quarter and year-end conference call. We will be pleased to take your questions following our initial comments, and a reminder that all numbers are in U.S.

dollars. This past year, Dorel successfully managed challenging conditions in several markets.

I am pleased with the results achieved by our teams across our business units. Progress in inventory control and cash flow management was notable, and we are considerably less leveraged than a year ago.

It was another breakout year for Dorel Home, the new name for Home Furnishings. Dorel Juvenile is changing to become more proactive in responding to the industry, returning to its entrepreneurial origins.

The organization has been simplified, concentrating on projects that generate profitable short-term revenue and materially speeding its time to market. At Dorel Sports, despite a reduced top-line, efforts at mitigating the headwinds in bikes were successful as Q4 adjusted operating profit increased almost 11%.

It was a record year for Dorel Home. E-commerce was a major contributor and represented 45% of the segment's volume, compensating for the decline in brick and mortar.

All four divisions performed well, particularly in e-commerce. The benefits of the investments made last year in added facilities and logistics were clear as close to 2 million orders were shipped direct to consumers in 2016.

The segment has steadily augmented its offerings online with substantially more SKUs in various categories in the face of increasing competition and some margin erosion by aggressive marketplace online retailers, mostly in mattresses. Dorel Home has evolved from a traditional furniture company to a best-in-class technological distribution platform for home products, and we feel this new name better reflects the change.

Driving the transformation in our investments, particularly over the past six months in a new state-of-the-art distribution system, allowing Dorel Home to ship the same day. This capability is tremendously important as the ability to ship as quickly as possible sets you apart.

And new automated labeling equipment and full line conveyer systems now let Dorel Home do just that. In addition, their home grown product information management system enables the segment to post new contents about new products on their customers' website without delays.

Dorel Home is now even more competitive and can move forward with added confidence. Dorel Juvenile is working on several key areas to return to profitable growth.

There has been a change of culture with the new sense of urgencies to simplify things with an agile approach. The new business model is consumer-centric, concentrating on projects and initiatives to move the needle, accelerating time to market and capitalizing on short-term, profitable revenues, generating opportunities.

Some of these actions being undertaken include, closing the Taiwan product development location and relocating it to our Zhongshan factory; cancellation of certain projects to concentrate on bigger and better value-added projects; integrating sourcing opportunities to complement our product development pipeline at a better focus and improving time to market; exiting certain licensed third-party brands to develop energy and financial resources for Dorel’s brand; and our Portugal factory is being expanded, increasing stroller capacity in May by 25%. And as announced today, this will result in a onetime restructuring cost which Jeffrey will discuss.

We have a strong innovation pipeline from different brands with a strong emphasis on high-end premium. Quinny Zapp X was shown at this global launch in Taiwan this past December.

It’s Dorel’s first premium stroller that can be used by children from birth to about three years old. Completely modular, it offers total flexibility with three from-birth solutions and two toddler seats.

The Zapp X is currently in stores in Taiwan and is rolling out to Europe this month and will be available in Latin America in May. An extensive omnichannel marketing campaign has been developed encompassing in-store, digital, e-commerce and customization through the Quinny website.

An extensive launch Maxi-Cosi strollers across major markets is planned through Q2, including the Dana X2, the first twins stroller that can accommodate two infant car seats at the same time. The Nova, urban high-end crossover and the Adorra Travel System to be introduced in Europe and Asia following its success in the United States.

As well, expansion to the new Safety 1st Cosco branded car seats in the U.S. is planned, following last year's successful launch of Safety 1st Grow and Go.

Despite a weaker top-line, Dorel Sports delivered improved adjusted operating profit in Q4 due to less discounting at CSG as inventories were at their appropriate level, and boosting margins, improved supply chain efficiencies at the Pacific Cycle and price increases at Caloi. And again, Jeffrey will provide these details.

But overall, Dorel Sports is in pretty good shape. CSG globally is poised for growth with exciting new products, low inventory levels, right pricing and good distribution.

At Pacific Cycle, product remains vibrant and we were awarded numerous new placements for 2017. While Brazil remains economically and politically challenged, the situation is stabilizing.

FX rates are improving and our strategy at Caloi this past year has been working as well as we have reduced working capital, increased cash flow and profit. Good profitability -- good profitable growth potential remains in Brazil in the coming years.

Cannondale’s Moterra, full suspension e-mountain bike was launched in Q4 with strong reviews throughout Europe. The Moterra was developed by Dorel's Freiburg Germany, engineering and design teams and is assembled in our own Dutch factory.

First production runs have been sold out through the end of Q2. The European e-bike category is the most advanced in the world and promises to be very hot this spring.

Cannondale’s city e-bike, the Quick Neo was rated as one of the five hottest e-bikes at the London Bike Show. Cannondale definitely has its finger on the e-bike pulse and is winning reviews.

In short, we are well-positioned to benefit from the popularity of this market. Jeffrey, will now provide the financial perspective.

Jeffrey?

Thank you, Martin. Before I get into the numbers, I want to highlight a few items of importance.

2016, we strongly focused on generating increased cash flows and as a result, cash flows provided by operating activities increased to about $172 million compared to about $79 million last year with the prime focus in lowering our inventory levels throughout the year. Year-over-year, our overall debt less cash and cash equivalents, has been reduced by about $96 million.

And as a result of all this, our indebtedness to adjusted EBITDA ratio improved to 2.28 from just over 3 times at the end of 2015. During the year, our earnings have significantly been impacted by higher product liability expenses when comparing those historically recorded -- to those that have been historically recorded.

And other items such as write-down of deferred developments and severance costs not recorded in restructuring. And I'm going to talk a little bit more about that when we get into the individual segments.

So, as I explained, the recorded net loss for the quarter and the year-end December 30, 2016, and the net income recorded for the comparable period including impairment losses, restructuring and other costs and remeasurements of forward purchase agreement liabilities. As such, I will be discussing adjusted financial information as believe that excluding these items that I mentioned above is more meaningful in comparing our core business performance between periods.

Please refer to the non-GAAP measures section of the press release or the MD&A for the reconciliation to the most directly comparable financial measures calculated in accordance with GAAP. So, I'm going to talk about the quarter in this presentation and not the year-end as well, so I'm just going to be focusing on the quarter numbers.

So, revenue for the quarter, $648 million, down 3% from the $669 million a year ago. Gross profit rose to 23%, an improvement of 70 basis points.

When excluding restructuring and other costs and CSG, international revenue recognition change, the adjusted gross profit actually increased to 23.9 or 160 basis points better than last year. We reported an operating loss of $5.4 million during the fourth quarter compared to an operating profit of 15.8.

Excluding the impairment charge losses, restructuring and other costs, the adjusted operating profit in the quarter declined by $13.8 million from $23.7 million last year and 9.9. The adjusted operating profit was negatively impacted during the fourth quarter by significant increase in product liability costs and the write down of deferred development costs and employee severance that was not included in the restructuring charge.

And all of that's was in the Juvenile segment. Again, when I get to Juvenile segment, we'll expand on those.

Finance expenses for Dorel decreased by $3 million in the quarter. When excluding the remeasurement of forward purchase agreement liabilities, adjusted financial expenses for the quarter decreased by $3.8 million or 30% to 8.9, mainly from a lower interest on long-term debt generated by a lower average interest rates for the quarter compared to last year and of course lower average debt through the period, generating lower borrowing cost.

Now, if we move over to the segments, let's start with Dorel Home. Fourth quarter -- it’s just the continuation of what we’ve been seeing all year.

The fourth quarter revenue increased by $3.2 million or 1.8%, so $177 million, representing the highest fourth quarter in the segment's history. That came from growth in all the product [ph] categories and another record quarter for our sales to online retailers.

Now, we’re at cross the 50% mark. We actually have 51% in the quarter versus 44% in the year before that.

Gross profit in the quarter rose to 16.8%, representing a 190 basis points and again, led by the segment e-commerce growth. Operating profit for the quarter rose $2.6 million or 23.7% to $13.8 million, driven by higher e-commerce sales and improve margins.

That is partially offset by an increase of $1.1 million in selling or SG&A from increased commissions, higher spending on information technology to support the e-commerce platform and increased spending in marketing again related to the e-commerce platform. Now, move over to Juvenile, we’re well aware that this was a very massy quarter.

There is a lot of explanation on numbers. I’ll do my best.

Hopefully, I can get them all; if not, I'm sure during question time, you guys will have more questions on this. So, let's move forward.

Our revenue declined by $4.9 million or 2.1% from $236 million in 2015. After we remove the impact of the varying exchange rates and the planned reduction of third-party sales, our organic revenue was basically flat versus previous year.

Our gross profits in the quarter increased 30 basis points to 30.1% from 29.8% the year before. Almost all of the divisions contributed to that.

Now, if we get down to the earnings, Dorel Juvenile recorded operating loss of $17.3 million during the quarter compared to $1.4 million profit. From adjusted operating loss, that number drops from 17.3, down to 7.1 compared to adjusted operating profit of 8.6 last year.

The difference is -- the restructuring -- and taken it from a loss of 7.3 million down to a loss of 7 million -- 17.3 million to 7 million. Now, the difference between what happens last year and the loss, the adjusted loss can be explained in two areas.

One of them is $7.8 million increase in expenses related to write down of certain differed development costs, which did not meet the segment’s new growth criteria and some employee severance costs that’s not included in restructuring. So what is that?

That is the fact that under our new direction, we looked at the product development pipeline and found it was if anything too full, too many projects and trying to get too much done, at the same time was causing this incredible backlog and really cycling our ability to get the right products to market. So, we made a decision to reduce significantly the amount of projects in the pipeline.

And we did that by removing what I would called the B and C products, ones that were not the best ones and moved up our A products. So, what we've done is we've again brought better products that were, let's say two years out, we moved them up may be to a one year timeline.

And we should be able to get better products to market faster this way. There is a cost of writing off the amounts of work that we've done on these projects that I’ll say, were taking up space, they were in the queue, they were okay, they were higher risk.

So, we removed significant amount of that. And what we like to think of sort of a onetime expense of cleaning up the product pipeline.

In addition to that, we also recorded a $10 million -- $10.2 million product liability cost related to settlement and associated legal expenses during the quarter. I am sorry.

That’s an increase of $10.2 million. For the full year, product liability expenses have significantly impacted Dorel Juvenile’s operating results, as these expenses increased by $23.6 million from the $2.4 million recorded in 2015.

The increase from last year is primarily due to some large settlements that we had during the year which are now behind us. Looking forward, we have significantly less claims and cases, which management’s view is that they don’t come at the same risk level, settled cases.

Therefore, if we look at the five-year average coming into 2016, it is averaging $7.5 million. And going forward, at least for the next couple of years, we’re very comfortable that we will be at the average level or less for the product liability expenses.

So, one year -- that was certainly a very large year; we don’t believe that’s normal. And certainly based on our views, what we have in the -- we call it the pipeline, we don’t foresee, at least for the next couple of years, having any number close to that.

So, if we exclude those three items that we mentioned, the write-down of deferred development costs, the product liability and some employee severance, the segment’s adjusted operating profit of the fourth quarter would have actually exceeded the adjusted operating profit of 2015. In addition, going back to the actual restructuring charge, in the fourth quarter, cost savings and cash generating opportunities were identified that resulted in a $10.1 million charge being recorded.

Of this, the biggest one was $8.8 million, which was a write-down for the excess Chinese facilities that we plan to sell; and then the balance of the charge was for employee severance and termination benefits. Further restructuring is planned for 2017, as Martin mentioned, looking forward with the consolidation of the Asian based product development team into one place in China and additional headcount reduction opportunities overall.

In addition, certain licensed third-party brands that we’ve used in North America will be exited to allow for additional energy and financial resources to be dedicated to Dorel's own brand. So, our total future costs looking forward is about $7.6 million.

And as a result of the restructuring initiatives that we started last year in 2015, the segment now expects annual cost savings of about $13 million, once the restructuring actions are completed in 2017. Dorel anticipates reinvesting a significant portion of these back into our digital capabilities and into enhance our brand support to drive all these products that I talked about, coming to the pipeline.

In addition to the ability to develop and bring meaningful products to market faster is being improved by decreasing complexity and maximizing our best-in-class product development and manufacturing capabilities. So, really, I think summarizing this division, there is a big focus on getting the products to market faster to doing whatever we have to achieve the goal of getting higher margin products, which will then in turn allow for an increase in sales, which we haven't seen for a number of years now, which in turn will lead to greater profitability.

If we look over to Dorel Sports, fourth quarter revenue decreased by $18.4 million or 7.3% to $235 million. Since the third quarter of 2016, the Cycling Sports Group international changed its business model, transitioning from a licensing revenue recognition model to a distribution platform for which the accounting treatment increases both revenues and cost of sales; profitability is not impacted by that but the other two are.

Excluding the revenue recognition change and the foreign exchange rate variations, organic revenue in the fourth quarter actually decreased by 14.6%. The biggest impact there was a change in North American Cycling Sports Group dealer purchasing habit.

In the past, I think we mentioned perhaps in the last quarter where dealers with stock up on inventory at the end of the year throughout sort of Q3, Q4 and hold it as the season started. This year, they are waiting till the season started.

We do have data that supports that. We know that inventory levels at retail stores in the America are down; we know that inventory levels at suppliers such as ourselves are down significantly.

So, even though sales were down in the fourth quarter, things are actually looking brighter in this channel than they were a year ago, today. If we look at gross profit level, profit rose 20 basis points to 20.4.

But if we take into consideration the impact of that change in the revenue model for the international distributors, we actually adjusted our margin up to 23.1%, and that represented 290 basis points improvement. Where does that come from?

Basically the Caloi in Brazil's price increases; Pacific Cycle, we did have a number of issues last year in the fourth quarter on logistics and warehousing that improved. And then the Cycling Sports Group reduced discounting, as we mentioned by not having so much inventory.

That also had a nice impact on our margins. Dorel's operating profit declined by $3.5 million to $5 million for the quarter but the adjusted operating profit actually increased by $1 million or 10.8% to 10.2 when excluding restructuring and other costs.

Margin improvements and cost controls offset unfavorable sales volumes during the fourth quarter. And so, with that, I will pass it back to Martin.

Okay. Thank you.

As we entered 2017, all three segments are positioned to improve earnings. Dorel Home had an excellent year and we remain bullish on their prospects.

The ongoing shift from brick-and-mortar sales to e-commerce has allowed the segment to improve its earnings significantly over the past two years. Given the continual growth of the e-commerce channel, we expect to further increase in earnings, but at a slower pace.

The Dorel Juvenile earnings are expected to improve as last year's exceptionally high product liability costs are unlikely to be repeated. The changes being made to deliver improvements in speeding product to market and driving sales while also controlling cost should translate into improved earnings.

Rise in commodity prices, currency and shrinking U.S. brick-and-mortar channels are a risk for the segment, but we are all well-positioned to manage these challenges as they arise.

Dorel Sports has worked throughout 2016 to position itself for an earnings rebound this year, excess industry inventories have been reduced and ramp in discounting should not be repeated. Improvement in cost controls and supply chain management are expected to contribute to the operating profits, helping to offset any potential sales softness.

While still early in the year, visibility for the full year is difficult, but we are confident in the direction for Dorel Sports. I will now ask the operator to open the line.

And please limit your questions to two on the first round. Operator?

Hi. It’s Eric Beder.

How are you guys, today?

Good. You?

Doing well. Congrats on a year of progress here.

What signposts should we be looking for in the Juvenile space in 2017, and longer-term, what should we be thinking in terms of returns for that division?

Well, Eric, I think every time I've met you, and I guess every other analysts, have always said the secret to Juvenile business is new products. And I think we have some great products and we’ve had some great products in the pipeline.

So, what we’re really focused on is getting into market this year. We have numerous delays last year, we Zapp X was supposed to hit the market in Q3 and Q4, is only hitting in Q1 and Q2.

And then, we have a new -- I guess what was in the pipeline for 2018, we’ve now been able to move up to either Q4 or Q1 of next year. So, I think we’re going to have to -- I don’t think it's an instant return; it's not something that we can instantly turn on and get to the market in three months.

But, I think by the end of this year, you're going to see some significant product introductions. These are products at higher price points, higher margins that I think bring new technology -- I'll call it technology, to the marketplace.

And we’re excited about that. But to be fair, I think what you’re asking for is I think we’re going to have to wait till Q3 and for sure Q4 as we expect to see that.

And the tax situation, the tax rate seems to juggle a lot in 2016. What should we be thinking about as the tax rate going forward?

Well, if we assume the current U.S. tax rate because that’s also a question of all what's going to happen in there.

We're still going to stick with the 15 to 20 that we always. I know we did a lot less this year, but we had a lot of noise in our numbers and those charges often lead to reduced taxes.

But I think on an ongoing basis, 15 to 20 is still the right number.

Just on the Juvenile segment, how much of a revenue impact are you expecting from the exiting of those licensed brands in North America, is it something material?

No. I mean, the problem -- no, not on a revenue basis, I think the problem that we had was, the products weren’t selling but we still had a contract with them.

Minimum royalty.

Yes. We had minimum royalty, so we basically brought us the minimum royalty and we’ll be replacing those products with our own products.

So, I don’t think from a top line it’s going to have an impact but it will improve our earnings going forward.

Okay, thanks. And then, on the home furnishing, it looks like over the last year, the gross margin has trended up a bit and there has also been a little bit of uptake in SG&A, I guess to support the online business.

Should we expect that home furnishing business to continue to see margin improvement or do you think it’s at a mature place now?

I'm going to say it’s at a mature place because I think, as we move more and more to our online retailers that puts pressure on [Technical Difficulty] have a better online. However, costs of raw materials around the world are starting to creep up.

So, I think that’s going to have a negative impact on our margins but, I think the mix is going to keep it positive, and the commodity prices will push it negative. So, we're looking at flat in that area.

So, for us, it’s going to be a matter of gaining -- increasing sales.

Just a follow-up on the tax question, what tax rate were you using to get to your $0.24 EPS adjusted?

I mean the number is the number, right?

Yes. No, I get it, it’s just because...

The mix of all the jurisdiction around the world and it is just is what it is. I mean, you want the actual number we used in adjusted?

No. Just, because from net income to the EPS, I think you're saying there was an adjusted number.

So, I was just wondering what tax rate you got to?

It doesn’t work that way. I think there is also deferred taxes in there.

There has been changes in some of the tax rates going forward, with respect to the deferred tax. So, there is not necessarily a direct relationship between current income and our tax rate to some of that -- in the deferred tax line.

So, it's not an easy question to answer because I don’t think that’s an answer to the way you're looking at it.

Okay, fair enough. So, back to Juvenile, so even if we adjust fully for the extra charges, just wondering why EBITDA margins were flat year-over-year, despite your cost cutting efforts and the aching mix over the past quarters that we've seen?

For the year, I mean, again, we've been struggling to get a lot of new product to market. We’ve had few success.

But, it's difficult to improve your margins or EBITDA margins when your sales are not going up. I mean, we're compensating -- some of our gross margins are up but we're compensating for lack of an increase in the top-line, so.

And just maybe one final one, I’d like to hear your thoughts on the rising U.S. protectionism and border taxes, especially as it ties to your Asian manufacturing.

And I've read some articles that some of the competition is actually increasing their U.S. production, particularly in Juvenile I'm talking about?

I'm not aware -- let's start with the beginning. We don't know obviously what's going to happen, so I can’t give you a comment on how that would affect us.

We do obviously have a factory in China but we also have I think the best U.S. factory for Juvenile products in Columbus, Indiana and certainly have the largest -- I think the newest equipment and the best factory.

So, if we needed to rely more on U.S. production, I think we would be in the best place of all those juvenile companies in America.

I'm not aware of any of our competition materially moving products back into the U.S. I haven't heard that.

But again, if that would be what would be needed to be done, we'd be able to react better than I think anybody else there. In other areas like bikes, there is very, very little U.S.

production. So, if there were to be some type of impact that would be pretty much across the board.

So, I don't think anyone would have really an advantage on bikes. And on the furniture side, we certainly do import a lot but we still maintain a number of factories in North America on the RTA side.

So that would give us a little bit of protection there. But, it’s something that we're obviously keeping our eyes on.

Thanks guys for taking my questions. First, it sounds like some of the bike dealer orders moved from fourth quarter into the first half.

And to what extent have you seen any of those orders materialize that in early March?

Not a lot yet, it still hasn't really opened. The good news for us is that we're still maintaining our selling price, so the industry is not discounting as if today.

And so, what we are selling is going at good margins. But yes, we're still waiting for really U.S.

to open for -- we're seeing it in regions where it’s picked up I guess where the weather has been good. But from -- you’re California, what I understand is there is a lot of rain in California.

And we’ve heard back from bike dealers who complained about rains. And even heard that some of them were saying there was a lot of snow in this key areas out west and they find some of their disposable income that might be spent on bikes in January and February went toward ski.

I'm not -- those are anecdotal stories. So, I don't know how much.

So, we haven't seen California really take off yet and it's still too early for the northern or the northeastern part of the country.

Okay. Great.

Well, thanks for adding color on the selling price you maintained. I guess the follow-up on that question would be, I guess more broadly, with retailers almost seemingly always destocking these days, to what extent are you looking to launch your own websites to go more direct or I guess do more drop shops, similar to what you’ve done for the home business?

We are doing that on the sort mass market bikes; we’re working very heavily with customers like Walmart, like Amazon to increase that part of the business. On the higher end, what we call the IBD bikes, we are not looking to go direct to consumer.

We’re encouraging our dealers to -- if they want to go direct to consumer, we’re helping them there. But, we’ve made a decision, right now we are going to back our dealer network and not go direct to consumer.

Okay. Great.

And I guess my last question would be, it looks like you had further success in reducing inventories despite some of the top line challenges this quarter. Can you talk a little bit about what drove that and how you're thinking about the potential to further improve those working capital levels going forward?

We did have a lot of success. Some of our divisions are running I would say at peak.

So, we’re not actually expecting any improvement. But as much success as we’ve had in some areas, not all the areas have done what they were supposed to do last year.

And I think we still have the opportunity to get better efficiency in those levels. So, we have lot of divisions, a lot of geographies, supply chain we’re working on.

And I do think there is -- it’s not across the board but there is opportunity to become more efficient.

Okay, great. Thanks for taking my question, guys.

And good luck in 2017.

Okay. Thank you.

Thank you. Good afternoon.

Just on the Juvenile side. You’ve talked about the restructuring that you undertook in the quarter and that you’ve begun to -- that you took beginning in 2015.

Do you expect to see some benefits from that in 2016 -- or sorry, in 2017 or has it more been pushed now out to the beginning of 2018?

The benefits from the charges -- well, I mean, the bulk of -- which charge -- the actual $10 million?

No, I'm talking about just the overall restructuring initiatives you've taken since 2015, and then the tax…

Yes. I mean, some of it is already coming through for sure; some of it is coming through in 2017.

As we said, not all of that ends up at the bottom line because we’re trying to use some of that to increase our marketing capabilities. And as we introduce better products, as I think we will be over the next 12 months, 18 months, you're going -- we’re going to need to support that with marketing.

So, we’re looking to take some of that money out of there.

Okay. That’s great.

And just turning back to the sports business. You haven't seen maybe the sales materialize yet, but do you expect -- I mean when do you expect to see sort of historically when have you begun to see an uptick in IBD sales and the NAS sales as well as sort of into Q2 and into Q3?

Well, it should be starting by the end of this month. So, we should start seeing an increase tick at the end of March and then certainly April and May.

April, just throw out some statistics, some facts out there, so this year, Easter weekend is in April; last year it was in May -- sorry, last year, it was in March. So, it's not going to be in Q1, which is a negative for Q1.

However, being later in the season is a better statistical chance that the weather will be warmer and it will be a bigger bike weekend. That certainly has an impact on the mass business.

Otherwise, we should -- it’s definitely a Q2 event. In the meantime, like I think we’ve been saying now for a number of quarters, we're focused on raising the bottom line, even if the top line doesn’t grow.

And I think the things that we're doing, we did of number of restructuring events during 2016 in bikes. And I think we're going to see the impact of that in 2017 on the bottom line.

And again, with again without the disastrous discounting started in Q1 last year, we should be protecting our margins and hopefully see a nice rebound going forward to the bottom line for the bike business.

Okay. That’s fair.

Thank you. And then, just finally, can you give the number for the organic revenue decline when you include the planned reduction in third party sales in Juvenile business.

So that means -- I mean, what we did is we pull out the exchange rate and the third-party. So, you want us to only pull out the exchange rate.

Is that correct?

Yes.

I don’t know if I can get that to you right away, but -- a decline of 1.4% after removing the impact of exchange rate year-over-year. Juvenile, yes, done with Juvenile.

Yes, Juvenile, yes, okay.

So, those from a negative 2.1 to a negative 1.4 if we just take out the exchange rate and don’t touch the third-party.

Okay. And then sorry, one more question if I may.

You reclassified some revenues from Juvenile to Home Furnishing, to the Home segment, will you be providing like the historical quarterlies on that ahead of the comparable periods?

Yes, in Q1, as they come out, yes. What we decided, I mean it all comes down to our current [ph] business which has been operated by our Home Furnishing segment for years and although it’s part of Juvenile, from a product standpoint, we’ve got to the point where we realize that the Juvenile business is not going to take over the current [ph] business.

And if it's being operated and run by everybody in home furnishing, we're going to keep it at home furnishing. So, it is more of an internal change, but it makes more sense internally for us to keep it that way.

So, that’s what the change is all about.

Just looking for little bit more color on the restructuring of the Juvenile division. Could you guys explain a little bit more on your timelines for completing that initiative and how aggressively you're going after it?

So, you’re talking about $7.6 million? We announced 10.1 in the fourth quarter…

Yes…

And again, the bulk of that -- sorry?

The remaining expenses.

Yes, the remaining expenses. That should be over I guess the next six -- yes, 2017, but I would say the bulk of it’s going to be over the next six months.

Yes, guys, just a housekeeping question, just wondering which line item, either G&A or R&D includes the development charge, the product development charge.

R&D.

Okay. I just want everybody to note that we report our Q1 in early May and that at our annual meeting is scheduled for May the 25th.

I just want to thank everybody for joining us today and have a good afternoon.