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Dorman Products, Inc. Reports Sales and Earnings for the Second Quarter Ended July 1, 2017

  • Q2 Sales increased 9.4% to $229.3 million

  • Q2 EPS increased 10.7% to $0.83 per diluted share

  • Year to Date Sales increased 7.9% to $450.9 million

  • Year to Date EPS increased 15.1% to $1.68 per diluted share

COLMAR, Pa., Aug. 01, 2017 (GLOBE NEWSWIRE) -- Dorman Products, Inc. (NASDAQ:DORM), a leading supplier in the automotive aftermarket, today announced sales and EPS for the second quarter.

2nd Quarter Financial Results
Net Sales for the second quarter ended July 1, 2017 increased $19.7 million, or 9.4%, to $229.3 million from $209.6 million for the second quarter ended 2016. Diluted Earnings Per Share for the second quarter increased 10.7% to $0.83 per share from $0.75 per share in the second quarter of 2016.

“The team delivered very solid results in the second quarter. Despite an overall challenging automotive aftermarket demand environment, our top line sales growth remained robust, driven by the continued growth of new products. Some key highlights in the Quarter were:

  • We launched 1,011 Unique SKU’s in the second quarter, a 16% increase over last year
  • Dorman HD Solutions sales grew 26% over the second quarter of 2016
  • Complex Electronics lines grew 17% over the second quarter of 2016

In the quarter, we also started to realize meaningful revenue from the launch of our Dorman Premium full line chassis program. We are truly excited to see the results of a lot of hard work by the team as we strive to become a market leader in this category. Overall, we continue to execute well, and although we are very pleased with our first half growth, we remain cautious entering the back half of the year given current market conditions. However, our previously issued full year guidance for top and bottom line growth remains unchanged” said Matt Barton, President and Chief Executive Officer.

Gross Profit for the second quarter increased 10.6% to $90.9 million (or 39.6% of Net Sales) from $82.2 million (or 39.2% of Net Sales) in the second quarter of 2016. Product mix (higher sales concentration of higher margin products) was the main driver of the year over year Gross Margin percentage improvement. Selling, General and Administrative Expenses for the second quarter increased 11.4% to $45.9 million (or 20.0% of sales) from $41.2 million (or 19.6% of sales) in the second quarter of 2016. Continued investment in new product development, variable expenses tied to growth and general wage and benefit inflation drove the year over year increases.

Operating Cash Flow was $3.8 million in the quarter compared to $12.6 million in the same quarter last year. Investment in inventories (of approximately $29 million in the quarter), to ensure high customer fill rates, was the driver of the decreased Operating Cash Flows. We expect inventory to plateau in the third quarter and begin to decline slightly in the second half of the year.

Under its share repurchase program, Dorman repurchased 300.6 thousand shares of its common stock for $24.0 million at an average share price of $79.73 during the second quarter ended July 1, 2017, bringing year to date purchases to 439.5 shares at an average price of $79.64

Dorman Products, Inc. is a leading supplier of Dealer “Exclusive” replacement parts to the Automotive, Medium and Heavy Duty Aftermarkets. Dorman products are marketed under the Dorman®, OE Solutions™, HELP!®, AutoGrade™, First Stop™, Conduct‑Tite®, TECHoice™, Dorman® Hybrid Drive Batteries and Dorman HD Solutions™ brand names.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the Company’s future growth rates. Words such as “believe,” “demonstrate,” “expect,” “estimate,” “forecast,” “anticipate,” “should” and “likely” and similar expressions identify forward-looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, competition in the automotive aftermarket industry, concentration of the Company’s sales and accounts receivable among a small number of customers, the impact of consolidation in the automotive aftermarket industry, foreign currency fluctuations, imposition of new taxes or duties, and other risks detailed in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The Company is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.

DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
13 Weeks
13 Weeks
Second Quarter (unaudited) 7/1/17 Pct. 6/25/16 Pct.
Net sales $229,262 100.0 $209,573 100.0
Cost of goods sold 138,410 60.4 127,409 60.8
Gross profit 90,852 39.6 82,164 39.2
Selling, general and
administrative expenses 45,853 20.0 41,175 19.6
Income from operations 44,999 19.6 40,989 19.6
Interest income (expense), net 241 0.1 (62) (0.1)
Income before income taxes 45,240 19.7 40,927 19.5
Provision for income taxes 16,803 7.3 14,945 7.1
Net income $28,437 12.4 $25,982 12.4
Diluted earnings per share $0.83 $0.75
Weighted average diluted
shares outstanding 34,225 34,626

DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
26 Weeks
26 Weeks
Second Quarter (unaudited)7/1/17 Pct. 6/25/16 Pct.
Net sales$450,887 100.0 $417,721 100.0
Cost of goods sold 271,292 60.2 254,963 61.0
Gross profit 179,595 39.8 162,758 39.0
Selling, general and
administrative expenses 89,554 19.8 82,838 19.9
Income from operations 90,041 20.0 79,920 19.1
Interest income (expense), net 305 0.0 (119) 0.0
Income before income taxes 90,346 20.0 79,801 19.1
Provision for income taxes 32,722 7.2 29,148 7.0
Net income$57,624 12.8 $50,653 12.1
Diluted earnings per share$1.68 $1.46
Weighted average diluted
shares outstanding 34,350 34,669

DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
7/1/17 12/31/16
Assets:
Cash and cash equivalents $129,208 $ 149,121
Accounts receivable 230,414 230,526
Inventories 200,383 168,851
Prepaid expenses 5,048 3,116
Total current assets 565,053 551,614
Property, plant & equipment, net 90,216 88,436
Goodwill and other intangible assets, net 32,642 29,788
Deferred income taxes, net 15,095 12,429
Other assets 42,028 29,525
Total assets $745,034 $711,792
Liabilities & shareholders’ equity:
Accounts payable $ 90,611 $ 72,629
Accrued expenses and other 21,058 31,219
Total current liabilities 111,669 103,848
Other long-term liabilities 8,724 6,302
Shareholders’ equity 624,641 601,642
Total liabilities and equity $745,034 $711,792

Selected Cash Flow Information:
(in thousands) 13 Weeks (unaudited) 26 Weeks (unaudited)
7/1/17 6/25/16 7/1/17 6/25/16
Depreciation, amortization
and accretion $5,187 $4,680 $10,192 $9,179
Capital expenditures $6,314 $4,520 $11,932 $10,118


Contact: Kevin Olsen, CFO, kolsen@dormanproducts.com, (215) 997-1800. Visit our website at www.dormanproducts.com

Source:Dorman Products