Dorman Products, Inc. Reports Sales and Earnings for the Third Quarter Ended September 28, 2013

Marketwired

COLMAR, PA--(Marketwired - Oct 29, 2013) - Dorman Products, Inc. (NASDAQ: DORM)

Third Quarter Highlights:

  • Sales increased 14% to $178 million.

  • Income from continuing operations increased 16% to $22.9 million, or $0.62 per diluted share.

  • Operating margin increased to 20.0% from 19.9% during the same period last year.

Dorman Products, Inc. (NASDAQ: DORM) today announced sales for the third quarter ended September 28, 2013 of $178.0 million, an increase of 14% from $156.4 million in the third quarter of 2012. The Company also announced income from continuing operations of $22.9 million, or $0.62 per diluted share, for the third quarter ended September 28, 2013, up 16% from the prior year's income from continuing operations of $19.8 million, or $0.54 per diluted share. 

"Strong demand for our products, including those introduced in the last 24 months, resulted in the 14% sales increase during the third quarter. We are especially pleased with this strong sales increase in light of the fact that sales growth in the third quarter of 2012 was 20%," said Mr. Steven Berman, Chairman and Chief Executive Officer.

Gross profit margin was 39.2% for the third quarter ended September 28, 2013, compared to 38.2% for the same period last year. The improvement in margin is primarily the result of a favorable change in sales mix and lower transportation costs. Selling, general and administrative expenses increased 19% in 2013 to $34.0 million from $28.6 million in 2012. Cost increases were primarily the result of higher variable costs associated with the 14% sales growth, increased spending on product development activities, and depreciation and other related support costs associated with our recent enterprise reporting system implementation. 

For the nine months ended September 28, 2013, sales increased 14% over the prior year period to $494.7 million from $435.4 million last year. Income from continuing operations in 2013 increased 20% to $61.3 million from $51.2 million in the same period last year. Diluted earnings per share from continuing operations in 2013 rose 19% to $1.67 from $1.40 in the same period last year. Research and development spending for the year increased 22% to $9.5 million from $7.8 million last year. 

"We continue to make investments in new product development activities to allow future growth opportunities for us and our customers. We are very excited about the launch of our Dorman Hybrid initiative. Early customer and end user feedback on the initiative has been positive," said Mr. Berman. "Our booth at November's Automotive Aftermarket Parts Expo (AAPEX) will provide a showcase for many of our latest new-to-the-aftermarket parts, including our Hybrid Drive Batteries. As with prior years at AAPEX, everything at the Dorman booth will be new -- giving our customers the opportunity to see highlights of the over 2,700 new parts we have released in 2013."

Dorman Products, Inc. is a leading supplier of Dealer "Exclusive" automotive replacement parts, automotive hardware, brake products, and household hardware to the Automotive Aftermarket and Mass Merchandise markets. Dorman products are marketed under the Dorman®, OE Solutions™, HELP!®, AutoGrade™, First Stop™, Conduct-Tite®, renew™, TECHoice™, Dorman HD Solutions™ and Symmetry® brand names. 

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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, dependence on senior management 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 29, 2012. 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
Third Quarter (unaudited)   9/28/13   Pct.   9/29/12   Pct.
Net sales   $ 177,953   100.0   $ 156,411   100.0
Cost of goods sold     108,249   60.8     96,665   61.8
Gross profit     69,704   39.2     59,746   38.2
Selling, general and administrative expenses     34,034   19.2     28,615   18.3
Income from operations     35,670   20.0     31,131   19.9
Interest expense, net     47   -     38   -
Income from continuing operations before income taxes     35,623   20.0     31,093   19.9
Provision for income taxes     12,736   7.1     11,337   7.3
Income from continuing operations     22,887   12.9     19,756   12.6
Income from discontinued operations     -   -     586   -
Net income   $ 22,887   -   $ 20,342   -
Diluted earnings per share:                    
  Continuing operations   $ 0.62   -   $ 0.54   -
  Discontinued operations     -   -     0.02   -
  Diluted earnings per share   $ 0.62   -   $ 0.56   -
                     
Weighted average diluted shares outstanding     36,632   -     36,622   -
                     
 
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
 
    39 Weeks   39 Weeks
Third Quarter (unaudited)   9/28/13   Pct.   9/29/12   Pct.
Net sales   $ 494,657   100.0   $ 435,406   100.0
Cost of goods sold     299,774   60.6     272,038   62.5
Gross profit     194,883   39.4     163,368   37.5
Selling, general and administrative expenses     98,551   19.9     82,103   18.8
Income from operations     96,332   19.5     81,265   18.7
Interest expense, net     148   0.1     90   0.1
Income from continuing operations before income taxes     96,184   19.4     81,175   18.6
Provision for income taxes     34,883   7.0     30,019   6.9
Income from continuing operations     61,301   12.4     51,156   11.7
Income from discontinued operations     -   -     4,506   -
Net income   $ 61,301   -   $ 55,662   -
Diluted earnings per share:                    
  Continuing operations   $ 1.67   -   $ 1.40   -
  Discontinued operations     -   -     0.13   -
  Diluted earnings per share   $ 1.67   -   $ 1.53   -
                     
Weighted average diluted shares outstanding     36,610   -     36,489   -
                     
 
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
 (in thousands)
 
    9/28/13   12/29/12
Assets:            
Cash and cash equivalents   $ 48,335   $ 27,708
Accounts receivable     178,702     140,180
Inventories     149,098     145,270
Deferred income taxes     20,093     20,559
Prepaid expenses     2,799     2,332
Total current assets     399,027     336,049
Property & equipment     58,717     48,758
Goodwill and other intangible assets     30,114     26,553
Other assets     1,734     1,323
Total assets   $ 489,592   $ 412,683
             
Liabilities & Shareholders' Equity:            
Accounts payable   $ 49,136   $ 42,387
Accrued expenses and other     28,654     21,298
Total current liabilities     77,790     63,685
Other long-term liabilities     5,779     3,447
Deferred income taxes     12,449     12,679
Shareholders' equity     393,574     332,872
Total Liabilities and Equity   $ 489,592   $ 412,683
             
                 
Selected Cash Flow Information:                
(in thousands)   13 Weeks (unaudited)   39 Weeks (unaudited)
    9/28/13   9/29/12   9/28/13   9/29/12
Depreciation and amortization   $ 2,684   $ 2,017   $ 7,417   $ 5,973
Capital expenditures   $ 5,863   $ 4,983   $ 12,949   $ 14,437
                         
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