Thank you. Good morning and thank you for joining us for Dorel's fourth quarter earnings call for the year ended December 30.

Joining me are Jeffrey Schwartz, CFO; and Frank Rana, VP of Finance. We will take your questions following our comments.

As a reminder, all figures are in US dollars. Our three businesses performed quite well and adjusted operating profit was in line with our expectations.

Dorel Sports saw continued strong demand through the quarter despite supply chain constraints, which reduced its performance. Similarly, a lot of product availability at Dorel Home resulted in loss sales opportunities, particularly in e-commerce.

Dorel Juvenile continued its improvement, although a second wave of COVID-19 slowed the momentum, specifically at Dorel Juvenile Europe. As you know Dorel's independent shareholders voted against our proposed privatization by stating their confidence and potential for the company as a public entity.

Going forward, our focus is shareholder enhancement through solid execution. For a review of our three segments, consumer demand for Dorel Sports bicycles remained high and segment revenue grew for the seventh consecutive quarter.

While the cycling group and specific cycle posed gains which would have been greater had it not been for supply constraints which limited growth. [indiscernible] has changed the traditional model year structure to the calendar year.

The change shifted some orders from Q4 but following winter periods to the current first quarter, thus making things more convenient for dealer and notably it's matching inventory with the key spring selling period. Pacific Cycles investment e-commerce during 2020 contributed to its growth.

The division successfully launched Schwinnbikes.com and mongoose.com, which drove incremental sales. Caloi recorded a record volume of orders driven by loosening of COVID restrictions in Brazil.

Their reported revenue was down but up double-digits in local current. Demand for bicycles overall is clearly outpacing the ability to supply and both the IBD and Mass channels.

COVID had been the catalyst which has prompted many new consumers to gravitate to bikes and going forward, we see this demand continuing to grow. More and more people on bikes is becoming a new normal.

This is excellent news, yet current issues are affecting the entire bike industry. The shortage of bicycle component is resulting in very long lead times which is having an impact on CSG.

This is putting a cap on supply of while we are working with various factories to mitigate this. Mass especially are Pacific Cycles division is being challenged by the lack of available time specific containers to meet demand and this is constraining further topline growth.

Costs are also going up. At CSG we're successfully passing on the increases in freight and components to our customers.

However, it's a bit different at Pacific where higher cost [ph], freight and foreign exchange spray or exchange specifically the stronger RMB are only being partially covered by price increase to retail. So in summary, the long-term view is sustainable higher sales, currently being challenged by disrupted supply chain and cost increases.

This summer, Dorel new state-of-the-art plant in Almelo Netherlands will come on stream to multiply the current production capacity of Cannondale bicycles and e-bikes that allow for an increased focus on premium quality products. This will serve as well with the increase in demand particularly for e-bikes, which is becoming a number one selling product mainly in Europe.

At Dorel Home, Q4 demand also remained high, but like sports, sales were limited due to the lack of available containers to ship goods, which has kept inventory low. This curtailed sales particularly in e-commerce which is why this channel represented 57.5% of segment total sales compared to 70% last year.

Brick-and-mortar sales offset this with another strong increase, thanks to solid POS at major mass merchants as stay at homeowners were eased across the US. Dorel Home business is increasingly being comprised of branded sales.

We will see Cosmo and Novogratz again beat prior-year numbers and we expect this growth of our higher-margin branded products to continue and we're also confident our relationships with newer brands such as Queer Eye and [indiscernible] will help support our market improvement plans. [indiscernible] launched last month and initial results have been positive.

Sales in Europe continued to be strong and profits were substantially improved over a year ago. The segment has added resources to expand opportunities outside of the UK into Mainland Europe.

Throughout Juvenile's adjusted operating profits was up significantly over last year as the majority of its markets performed better, but the largest improvement coming from the ongoing transformation program at Dorel Juvenile Europe. Revenue was down slightly due to the second wave of COVID, which slowed the momentum in Europe.

However, e-commerce resulted in a modest year-over-year overall improvement. Sales increased in the US also partly due to the impact of COVID.

On sales and mobility categories, such as car seats and strollers, which was somewhat offset by increases in products for the home. Brazil and Chile both recorded improved revenue in local currency as e-commerce continues to benefit both markets.

Several new products were launched through the quarter in the European and North American markets. Thanks to the innovation of our teams, Dorel Juvenile received an impressive 46 global and regional awards last year, including most trusted demand for car seats, best design, best gear and outstanding customer satisfaction.

The award-winning products are in almost all product categories in all Dorel Juvenile global and key regional reps. Turning to our outlook, looking ahead now in this new fiscal year, many of the conditions of 2020 are continuing.

COVID is still impacting consumer behavior and while our sports segments are benefiting from the higher demand, container availability and higher cost, increasing commodity costs and a stronger RMB [ph] are disrupting our supply chain and are increasing the cost of our products. At Juvenile we're close to deliver earnings improvement over the past several years, but in the short term, store closures in some markets, lower demand in mobility categories and recent evidence of lower birth rates is why the segment is being most negatively affected by the pandemic.

Specifically, demand for Dorel Sports products remains very strong, Despite the industry-wide reality of component availability is limiting production and higher costs, the year is off to a strong start. Q1 expectations for sports are for revenues to increase significantly and for adjusted operating profit be much better than both the prior year and Q4 2020.

The rail home is benefiting from the heightened demand for home products, the demand in sales such as Little Seeds, Cosmo and Novogratz is expected to continue to grow through 2021. Like sports, supply is challenged by a lack of container availability and the spike in cost.

Overall we expect the Home segment to continue to deliver revenue growth with some volatility in earnings. COVID continues to affect Dorel Juvenile.

We remain positive about our longer-term perspectives based on our strategic direction, our best ever product portfolio, advanced e-commerce capabilities and return to more normal shopping conditions. However, Juvenile's first quarter will be difficult due to a number of short term challenges and coupled with increased input cost, this is expected to decrease adjusted operating profit for 2020's Q4 will be more in line with last year's Q1.

On behalf of senior management, I thank Dorel's employees at all our locations worldwide for their contribution in 2020. We recognize that our success of the past year is directly attributable to their hard work and we all look forward to even better days ahead.

I'll now ask Jeffrey to provide the financial perspective. Jeffrey?

For the fourth quarter of 2020, Dorel's revenue increased by almost $51 million to $704 million compared to -- or 7.8% compared to last year. Organic revenue improved by about 8.4% when we removed the variation of foreign exchange.

The improvements were in Dorel Home and Dorel Sports that were offset partly by declines in Dorel Juvenile and the home revenue increased due to strong POS sales in most categories, particularly brick-and-mortar, which we have not seen in a while and I am going to talk a little bit about that later. Dorel Sports revenue improved again for the seventh consecutive quarter.

As Martin said, demand is very, very strong for bikes and it's limited by supply everywhere. Dorel Juvenile growth in both Brazil and Europe driven by e-commerce was offset by some declines in the US due to the last wave of COVID in Q4, which impacted the mobility categories particularly car seats.

Gross profits for the quarter increased 130 basis points to $21.6 million compared to $20.3 million in 2019. When you exclude restructuring costs, adjusted gross profit was $21.7 representing an increase of 140 basis points.

The improvement in the quarter was mainly due Dorel Home and Dorel Juvenile partly offset by the decline of Dorel Sports. The Home margin has improved due to lower rail cost from lower inventories and reduced promotions.

The Juvenile margins improved to favorable foreign exchange rate, better product mix coming from the new products that have been successfully introduced and some lower commodity cost and Dorel Sports' decline is mainly due to increased freight costs and then last year's one time refund of tariffs on kids bikes. Selling expenses for the fourth quarter were just 3.5% higher than last year.

General and administrative expenses however were $68.2 million an increase of $23.4 million versus or 52% higher than last year. The increase was mainly driven by investments in information technology to support the growth of the e-commerce platform, some higher product liability cost, higher people cost and most importantly a one-time $7.5 million costs related to the privatization effort.

So that is like I said a one-time result. Moving over to finance expenses, as our [indiscernible] so has our interest charge and finance expenses were down $5.1 million to $9.4 million compared to the $14.5 million last year.

So that is being -- we're pretty proud of that. On the tax side obviously that's a big one for this quarter.

So the increase in taxes is again a onetime $19.1 million write-off due to the reversal of previously recognized tax benefits related to prior your tax losses in certain jurisdictions around the world. So we in a review of where we would likely be making the profits in the future versus where these deferred taxes lay, we were forced to write off some in certain jurisdictions where we no longer thought we would be making the same amount of money as we had in the past.

In addition the company's effective and adjusted tax rate is always affected by a change in jurisdictions in which the company generates it's income. If we move over now to some of the segments, before that sorry, I am going to go -- just want to talk quickly about probability.

So obviously the net income was down significantly. We had a loss of $22.9 million compared to $0.6 million from last year.

Excluding restructuring cost, the loss was $18 million versus a net income of $2.3 million last year. However, from an adjusted operating profit as we've said in previous press releases, when you remove the $7.5 million of cost related to the privatization, we were very similar to the numbers we did last year.

So we were able to come in where we expected on that area. Now if we break it down by division or segment, we look at Home, Home revenues increased by 10.7% or $22.7 million.

The increased revenue was explained primarily by a very strong POS and brick-and-mortar channel where we grew over 50% in the quarter versus previous year. Now some of that has to do with availability of product.

So again in a world where factories are running at capacity and a shortage of containers, a number of our brick-and-mortar customers have gone towards basically picking up the goods in the factories in Asia and arranging for transportation and those businesses did better because they were able to get more inventory than some of the other businesses in which we have to carry the inventory in North America. So I think that we're very happy about that, but I believe that that's probably an anomaly and I don't expect to see numbers like that continuing forward.

I think we're going to continue to be selling the bulk of our product through Internet channels as we have in the past. Gross profit 15.8% in the quarter, an improvement of 330 basis points from last year.

The fourth quarter improvement was lower, whereas cost was significant as you have a lot less inventory than last year and also last year, we did significant promotions to bring down the inventory to create demand. This year because demand was there and we didn’t have excess inventory, we really shied away from a lot of the promotions that we did last year.

So that would be the results. From the operating profit, it improved by almost 50%, $5.9 million in the quarter to $17.8 million from $11.9 million last year and again the improvements were basically across the board revenue growth, gross margin.

We did had a small increase in expenses, but overall very pleased with the solid quarter there. Over in Sports, revenue increased by 13.8% to $265 million.

When you exclude the impact of foreign exchange rates, the organic revenue growth was actually almost 16%. So again it's very strong demand in the quarter.

Organic growth was in all our divisions, CSG, Pacific and Caloi. Gross profit however, dropped significantly.

It declined by 320 basis points to 20.8% versus 24% last year. Again the decline was an increase in costs, increase in freight.

We have not yet -- sorry, as of the end of the fourth quarter, we have not implemented a lot of our price increases to our customers that happened in Q1 of this year. In addition last year we had a one-time grant of tariffs which are in tariffs related to bikes in the fourth quarter of last year.

So when we put it all together, operating profit was only $1.9 million during the quarter compared to $9.8 million. When we take out restructuring, profits declined by $10.2 million to $3.4 million from $13.6 million last year.

If we look at earlier this year, if we compare to quarters two and three which were so strong, the difference was definitely a drop in sales from reduced container availability and as well as a less favorable customer and geographical mix. So we sold a lot more lower margin products than we did in the previous quarters.

We also like I said, had significant cost increases and most of the price increases only took effect sometime in Q1. So we put all that together was a difficult quarter, but I think one that's behind us and we're expecting better things as we move forward.

If we look at the Juvenile, revenue declined by $3.9 million or 1.9%. Organic revenue actually declined by 2.4% if you take out foreign exchange from the calculations.

The decline in the quietly was really a little bit of weakness in the US, particularly in the car seat category due to the resurgence of COVID and even if you talk about Australia, had a lot of shipping delays from China as did a lot parts of the world. Haven’t talked a lot about that in juvenile, but the container issue did definitely push back sales as well, but not to the same extent as the other two divisions.

If we look at gross profit, it was definitely increased. It was 29.3%, an improvement of 520 basis points.

Again favorable foreign exchange was behind that. Most importantly a better product mix, more of the new products that we introduced this year are selling then ever better from a new product standpoint.

We're very excited about that going forward. Selling expense in the quarter decreased by $3 million or 11%.

The decrease in selling expense is explained mainly by cost containment measures initiated to mitigate the impact of the lower sales. So we are reacting and people really need to understand that although COVID has treated our Bike and Home business well, it has not been favorable for the Juvenile business and if we look around the world even today there is numerous, numerous of our customers are closed still.

Places all over Europe, Peru is in pretty bad shape from that point of view. Brazil is bad shape.

So we still continue to suffer from that but nevertheless we put together a good plan for 2021. Operating profit in the division was $1.9 million during the quarter compared to an operating loss of $4.1 million.

If we exclude restructuring costs, adjusted operating profit improved by almost $8 million to $5.6 million from a loss of $2.3 million last year. So a good solid quarter despite all of the headwinds that COVID is bringing to this division.

If we look at our balance sheet, we're in a much better, much stronger place from we were one year ago. Our debt is down, our covenants are in a earn a much better place as our earnings are up and we are working to finalize the new long-term debt deal with our banks and hope to find that in place for the next couple of months.

So with all that, I'll pass it back to Martin.

Thank you, Jeffery. Okay now I'll ask the operator to open up the lines for your questions and request that you please limit on your first round to two questions.

Operator?

I was wondering if you could maybe just talk about some of the feedback you might have gone from investors particularly those who might have proposed to going private transaction and wondering how you maybe plan on integrating some of the feedback or ideas that they might've provided to you?

Okay, really what we've taken away from it is that shareholders see deep value in the business, the assets of the business, the opportunities in the future, which we share and a lot of them have given us some feedback that they know it's bumpy and they know quarter-by-quarter it's not consistent which is something that we continue to stress to the market and the reality is after all these 25-30 years of doing this and we've tried to be consistent, it's just not the nature of our business given that we do a lot of this low-margin, high-volume stuff, which causes volatility. So I think, we accept the fact that and we agree that there is some long-term value here and we're going to try to get at it and grow this businesses and get to that value, but like I said, it could be a bumpy ride.

We said this to shareholders during the process that it's bumpy, look, we're writing off the deferred tax asset. We've had goodwill, the restructuring, are we finished restructuring, hopefully not because our restructuring plans for the most part it worked, our European plan is doing very well, but that's just the nature of our business.

So if you buckle up, we're in three different businesses from your seatbelt and we all think we're going to get to a much better place while it's probably not going to be a smooth ride. I think that's the vision that we have.

Okay. And obviously you're managing the business on a short-term basis, but your vision you're lookout five, ten, like you have a longer-term objective.

I mean we can't. The things changed so fast at our business, in our industries nobody five-year plan is a joke, but obviously we're looking farther than just the next quarter and building the value, we've done a good job in the bike business.

The hard part for shareholders and analysts is what part of the Dorel's results are COVID related and what part is Dorel related? What have we done internally that have improved or the wrong way versus what the market is doing and that's difficult.

We see some of that -- that's difficult to see outside of this and it's -- we'll have to wait and see. An example would be I think we've done a great job on our new products in Juvenile right, but with stories being and demand being down a little bit and distribution being challenged, it's hard to really document that, but I know where we were a year ago with new products is particularly true, which was really bad and we had a really good year in 2020 with our new products, but basically see those numbers yet.

And I guess maybe on one of those COVID I guess driven businesses in bikes, I guess I was wondering you guys have said or you’ve expressed confidence that you expect demand to continue in a post-COVID world. Just wondering what gives you that confident and the second is how you think about the business in a post-COVID world knowing that you do have these headwinds coming up right if you're up in some tougher comps and you've got now some supply chain constraints?

It is going to be challenging on the top line. People -- what we were saying was Q2 and Q3 last year, particularly Q2, we had a lot of inventory right.

So we were able to really push the sales very hard. We're going in with a lot less inventory and limited supply as you know.

These are not Dorel problems, these are industry problems. They start at the component level really.

There's just not enough components being made today by those manufactured people like the derailers and suspension forks and that's the limiting factor in the industry and it's not going to change in two months from now. So that's going to be challenge.

We do have some good things happening, particularly in the area [ph] where the product continues to improve, the operations continue to improve, the customers, we've more customers today. Things are really good aside from just what I'll call industry demand, but you're right, there is going to be a limit to how high you can go this year.

I just wanted to follow up a little bit on Derek's question just what the deal agreement being not successful. I know Jeffrey gave a little bit of color, but is there anything from a strategic or initiative perspective that maybe that you focus on now that the privatization transaction hasn't happened?

Like is there any -- are there any targets or metrics that you're working towards that as part of a broader strategic plan now that you are continuing to be a public entity?

I think that's what we're working on right now is figuring out the direction that we're going to go. It's only been a few weeks.

So yeah, we will have that. We're in the process now of going through exactly what that is.

So I am not ready to communicate any changes in our strategy.

And then maybe just a couple of more acute or near-term questions, you talked a little bit about the model your shift being negative for Q4, positive for Q1 in the bikes business. Can you -- are you able to quantify what that impact looks like, how much it maybe took out in Q4 and then when you think about how much you give to Q1 and when you combine that with increased demand, you're talking about revenue being up significantly on a year-over-year basis.

Are you able to give a little more color on what that magnitude looks like?

On your first question, not really because what again the limited supply, that's really container limitations and component limitations is really the whole story. So it's difficult to quantify exactly what the shipment this year.

I know what we in theory we thought it would be much greater than it probably will be this year. But having said that, again I am not going to use the word unlimited, but obviously we're not going to get anywhere near the amount of bikes that we could get to sell if we had them in Q1.

So again I am not going to give you a forecast there, but last year was a very difficult Q1 from an earnings standpoint in sales and now everything that's coming in is going out pretty much and the good part is there's no real -- there is still an inventory build ahead. So the big question is what happens if supply catches up the demand?

I don't think it's going to be -- I don't think it's going to be like a light switch. Look we had that back in 2013 perhaps where literally the market shut down and it was way too much supply and people were in trouble in February of that year.

There is no inventory anywhere at the retail level, factory levels and whatever comes in is going out quickly. Having said that, we want to look -- we aren’t expecting a large double-digit increase in Q1 on the topline and again it was difficult -- it's an easy comp right, let's say that was an easy comp last year, but I think the key thing is the underperformance in the sports of Q4 is not going to repeat itself in Q1.

We're still expecting to do quite well in Q1, but it is a challenge versus Q2 and Q3 because we don't have that extra inventory that we had back then. That's the thing the market needs to understand is no nobody does.

Nobody has whatever was $50 million to $100 million of goods that we can throw into a quarter.

That's helpful color. Thank you.

And then when you think about the container issues, obviously impacting sports as well as the home business, do you have any visibility into when those, when those constraints begin to ease up?

All I can say yeah is I guess it's not getting any worse for the first time in four months or five months. When will it get better I don't know.

This is a worldwide problem right. This is way beyond Dorel.

I don't even think the press is even getting half of it. It's affecting food, it's affecting just all commodities and costs are going to go up, I think this can drive inflation on its own almost as it's difficult.

We'll catch up -- it might later in the year we don't know, but honestly this again it's beyond that we talk to all the experts in the logistic industry and people just have guesses. So anything you can find online would be as good as what we know.

And then maybe just finally on the tax side, are you able to give a little bit color on the call about the tax accrual reversal, is there anything else to it more specific about some of the geographic movements and then secondly, how do you expect the tax rate to -- where do you expect it to normalize to this year?

The first part, no it's in numerous different places. Again as our business shifts, if you have some deferred taxes sitting in a region where you're not -- where we don't think we're going to get the same income that we thought three years ago, you have to look at that and then you're right off those results and it could mean that we just income in a different area where we don't have as much deferred tax or losses from previous periods.

So that's really what's behind that. This is again a one-time thing.

We can clean that up. Going forward, Frank, do you want to…

25 to 30 is probably a right range.

Okay that sounds great. Thank you.

Thank you. That concludes today's call.

I just want to thank you all for being with us and everybody have a pleasant weekend.