Quebec-based manufacturer Dorel Industries Inc. has incurred a $4.9-million bad debt expense because of Toys "R" Us winding down its U.S. business and liquidating its inventory.

Dorel is also reporting a reduction of about $4 million in net income for both its fourth quarter and year-end financials.

Dorel says it raked in $17.3 million in revenue from sales to Toys "R" Us's U.S. business in its first quarter.

It says Toys "R" Us's U.S. business accounted for three per cent of its 2017 revenues and that it has $22.2 million in trade accounts receivable from the toy giant's U.S. operations.

It says the limited information around the future of Toys "R" Us means its losses might differ from those it is predicting, so it will continue to monitor Toys "R" Us's dealings and revise its totals if needed.

In Canada, Toys "R" Us stocks toddler beds, car seats, strollers and nursery furniture from Dorel.