Dorel Industries Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Doral Industries' third quarter 2024 results conference call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. Before turning the meeting over to management, please be advised that this conference call will contain statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. I would like to remind everyone that this conference call is being recorded today, November 14th, 2024. I would now like to turn the call over to Martin Shorts, President and CEO. Please go ahead, sir.

Okay, thank you. Good afternoon, and thank you for joining us for Daryl's third quarter earnings call for the period ended September 30th. With me are Jeffrey Schwartz, CFO, Frank Grana, Chief Strategy Officer, and Jason Kwasnick, VP of Finance. We will take your questions following our comments. Again, all figures mentioned during this call are in U.S. dollars. The low juvenile earnings again exceeded last year's comparative quarter, driven by an organic revenue increase of over 9%. Impressively, this revenue growth was in all three of our regions, North America, Europe, and international. We had several significant customer events in the quarter, and the reception to our new product launches in all regions has been very strong, with key deliveries being in the quarter. Conversely, the rail home faced significant challenges, resulting in a 14% decline in revenue compared to the same period last year. We initiated substantial cost reductions in the quarter as we continue to right-size the business to current realities. I'll look now at our two segments in more detail. In juvenile, our quarter-over-quarter earnings improvement continues. Our organic revenue growth and better gross margins is allowing us to deliver improved earnings and cash flow. Our second quarter product launches, as detailed in our last conference call, continue to fuel the segments of results and demand outstripped availability in many cases. So we are very optimistic about the fourth quarter and beyond, as customer anticipation and demand remains strong. The marquee event in the quarter was the annual Juvenile Products Trade Show held in Cologne, Germany. Our layout showcased Aurel's global footprint, and while the majority of customers attending are European, the breadth of our product portfolio across the globe was on display. All of our divisions attended, and we had customers from around the world visit our location. Europe in particular introduced the Maxi-Cosi Emerald 360 Pro Car Seat, featuring SlideTech. The seat is the first premium all-in-one car seat in Europe, designed for 12 years of comfort and protection. This innovative car seat targets the fastest-growing category in the market, offering a unique and competitive solution that combines premium quality, styling, and safety for all ages, and is set to provide a strong and long-term competitive advantage for Maxi-Cozy and its customers. In North America, Maxi Cozy, Costco Kids, and Safety First were recognized at the Bump 2024 Editorial Awards. These awards celebrate the top pregnancy, postpartum, and baby products of the year, evaluated by real parents and industry experts. This recognition underscores Darrell Juvenile's commitment to innovation and quality. We want also to recognize Safety First, which celebrated its 40th anniversary this quarter. As evidenced by the Bump Awards, Safety First, as well as Costco Kids, remain an important part of our portfolio. Safety First partnered with Camp, a family experience company, to offer a free day of fun at camp stores across the U.S. This event hosted well over 2,000 children and parents nationwide. It featured immersive show parties, hand-on craft activities, exclusive giveaways, and a showcase of Safety First innovative products. Influencers amplified the event's reach through social media, contributing to a substantial brand impact for Safety First. A post-event study revealed that participants were 87% more likely to purchase Safety First products 91% more likely to feel the brand aligns with its mission of safety and exploration. I want to congratulate our teams across the segments on their success and the way in which we are delivering our message of best-in-class safety, comfort, and innovation to the market. If we look back just a couple of years, our juvenile business was quite different. We were losing money and market share. I'm very proud to say that with our many new senior executives and their local teams, Juvenile has gained market share and become the leading brand in many areas and is profitable. Now turning to the real home. Sorry to say the situation is not like juvenile. The industry and the real home is still finding it challenging. Although overall revenues decline, we observe positive momentum in indoor seating, TV stands, and stepstools within our home categories. However, this was insufficient to counterbalance declines in other categories. We are driving sales through promotional pricing, which, when combined with lower production efficiency, led to gross margins being lower than anticipated. From a cash perspective, we reduced inventories again this quarter, positively contributing to our cash flow. Following the end of the quarter, we attended the annual High Point Furniture Show in North Carolina. Our new product designs were very well received at the market, which will help position Borel for the future. Our Costco home and office division continues to perform well and showcase several new innovative products in High Point, which should continue to drive growth for that division. Despite this, the furniture industry continues to face challenges due to the lack of a significant increase in demand. exemplified by the recent cancellation of the annual European Furniture Show in Cologne scheduled for January. We are right-sizing the business and initiated the previously announced closure of the RTA manufacturing facilities in Tiffin, Ohio, transferring production to Cornwall, Ontario. This move is expected to result in one highly efficient and profitable facility for domestic RTA furniture production starting in 2025. We are committed to finding more cost reductions within the segment and expect to take further actions by the end of the year and into next year. While the return to profitability is taking longer than desired, the actions we are undertaking in 2024 position us for improved earnings in the future. As we look ahead, Dorrell Juvenile remains committed to driving sustainable growth through strategic investments in product innovation, market expansion, and operational efficiency. We anticipate continued strong performance in our key markets, supported by our robust e-commerce channels and successful partnerships with key suppliers and retailers. Despite potential challenges from currency fluctuation and container costs, we are confident in our ability to navigate these headwinds and deliver sequential earnings improvement in the fourth quarter. We at the Real Home are on a path to reduce its cost and match its footprint to current revenue expectations, which are substantially lower than our peak years of 2020 and 21. We have expanded our restructuring plan announced at the end of 23 with the consolidation of our RTA facilities in the third quarter, and we'll be initiating other aggressive actions going forward to right-size the business. We acknowledge that we are operating within a challenging industry, but we believe we can operate profitably with our dual sourcing business model and efficient domestic production coupled with overseas imports. With our recent success at major brick and mortar retailers and traditional leadership in e-commerce, we will focus on key profitable categories and targeted promotional activities. We remain confident in our ability to adapt to market conditions and deliver value to our shareholders. I will now ask Jeffrey to review the financials.

Thank you, Martin.