EXHIBIT 99.1
Published on
Exhibit
99.1
NEWS
RELEASE
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Corporate
Headquarters:
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Dorman
Products, Inc.
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3400
East Walnut Street
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Colmar,
Pennsylvania 18915
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Fax:
(215) 997-8577
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For
Further Information Contact:
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Visit
our Home Page:
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Mathias
J. Barton, CFO
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www.dormanproducts.com
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(215)
997-1800 x 5132
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E-mail:
MBarton@dormanproducts.com
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Dorman
Products, Inc. Reports Sales and Earnings for the Fourth Quarter and Year Ended
December 27, 2008
Colmar,
Pennsylvania (February 27, 2009) – Dorman Products, Inc. (NASDAQ:DORM) today
announced financial results for the fourth quarter ended December 27,
2008.
Sales
decreased 4.5% to $80.7 million for the three months ended December 27, 2008
from $84.5 million last year. The revenue drop was the result of a
decline in demand across most of our product lines.
Reported
net income in the fourth quarter of 2008 was $4.9 million compared to net income
of $3.7 million in the same period last year. Reported diluted
earnings per share in the fourth quarter of 2008 were $0.27 compared to $0.20 in
the same period last year. Excluding the impact of the one-time items
shown in the reconciliation of non-GAAP measures below, net income in the fourth
quarter of 2008 was $4.2 million compared to net income of $4.4 million in the
same period last year and diluted EPS in the fourth quarter of 2008 decreased to
$0.23 from $0.24 in the same period last year.
Despite
softness in the U.S. economy, revenues for the twelve months ended December 27,
2008 were up 4.5% to $342.3 million from $327.7 million last
year. Revenue growth resulted from higher new product sales and
further penetration of existing automotive lines.
Reported
net income for the twelve months ended December 27, 2008 was $17.8 million
compared to net income of $19.2 million in the same period last
year. Reported diluted earnings per share in the twelve months ended
December 27, 2008 were $0.99 compared to $1.06 in the same period last
year. Excluding the impact of the one-time items shown in the
reconciliation of non-GAAP measures below, net income in 2008 was $17.1 million
compared to net income of $19.1 million in the same period last year and diluted
EPS in 2008 decreased to $0.95 from $1.05 in the same period last
year.
For the
year ended December 27, 2008 and December 29, 2007:
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Gross
profit margin was 32.2% in 2008 compared to 34.3% in the prior
year. The decrease is primarily the result of strategic
investments to grow market share and higher material and shipping
costs.
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·
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Selling,
general and administrative expenses in 2008 increased 4.7% to $81.8
million from $78.1 million in 2007. The increase is the result
of higher variable costs related to our sales growth and increased
staffing levels in product development, engineering and quality
control. These increases were partially offset by incentive
compensation expense which was $1.8 million lower in 2008 than in the
prior year due to lower earnings levels. Results for 2007 also
include a $1.4 million reduction in vacation expense due to the vacation
policy change mentioned above.
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Interest
expense, net, decreased to $0.9 million in 2008 from $1.9 million in 2007
due to lower borrowing levels and interest
rates.
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Our
effective tax rate decreased to 35.2% from 40.2% in the prior
year. The decrease is primarily the result of a $0.7 million
tax benefit realized upon the disposition of our Canadian
subsidiary.
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Mr.
Richard Berman, Chairman and Chief Executive Officer, said, "Our OE Solutions
product lines continued to grow at double digit rates in the fourth quarter
while most other lines declined due to softened demand. Our customers
and end users continue to support our new products despite the weak
economy. The strength of our balance sheet affords us the opportunity
to make investments in new product development so that we can continue to
enhance our leadership position in the aftermarket with innovative new products
and solutions for our customers and end users.”
Dorman
Products, Inc. is a leading supplier of OE 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 OE Solutions (TM), HELP! (R), AutoGrade (TM),
First Stop (TM), Conduct-Tite (R), Symmetry (R) and Scan-Tech (R) brand
names.
Forward-looking
statements in this release are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date
hereof. Factors that could cause actual results to differ materially
include, but are not limited to, those factors discussed in the Company's 2007
Annual Report on Form 10-K under "Item 1A - Risk Factors."
DORMAN
PRODUCTS, INC. AND SUBSIDIARIES
Consolidated
Statements of Operations
(in
thousands, except per-share amounts)
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13 Weeks
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13 Weeks
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|||||||||||||||
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Fourth
Quarter (unaudited)
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12/27/08
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Pct.
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12/29/07
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Pct.
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Net
sales
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$ | 80,687 | 100.0 | $ | 84,462 | 100.0 | ||||||||||
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Cost
of goods sold
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54,875 | 68.0 | 56,343 | 66.7 | ||||||||||||
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Gross
profit
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25,812 | 32.0 | 28,119 | 33.3 | ||||||||||||
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Selling,
general and administrative expenses
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19,318 | 24.0 | 20,220 | 23.9 | ||||||||||||
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Goodwill
impairment
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- | - | 414 | 0.5 | ||||||||||||
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Income
from operations
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6,494 | 8.0 | 7,485 | 8.9 | ||||||||||||
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Interest
expense, net
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146 | 0.1 | 305 | 0.4 | ||||||||||||
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Income
before income taxes
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6,348 | 7.9 | 7,180 | 8.5 | ||||||||||||
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Provision
for income taxes
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1,498 | 1.9 | 3,496 | 4.1 | ||||||||||||
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Net
income
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$ | 4,850 | 6.0 | $ | 3,684 | 4.4 | ||||||||||
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Earnings
per share
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Basic
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$ | 0.27 | - | $ | 0.21 | - | ||||||||||
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Diluted
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$ | 0.27 | - | $ | 0.20 | - | ||||||||||
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Average
shares outstanding
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Basic
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17,649 | - | 17,699 | - | ||||||||||||
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Diluted
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18,018 | - | 18,132 | - | ||||||||||||
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52 Weeks
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52 Weeks
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Year
to Date
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12/27/08
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Pct.
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12/29/07
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Pct.
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Net
sales
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$ | 342,325 | 100.0 | $ | 327,725 | 100.0 | ||||||||||
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Cost
of goods sold
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232,140 | 67.8 | 215,256 | 65.7 | ||||||||||||
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Gross
profit
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110,185 | 32.2 | 112,469 | 34.3 | ||||||||||||
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Selling,
general and
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administrative
expenses
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81,781 | 23.9 | 78,083 | 23.8 | ||||||||||||
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Goodwill
impairment
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- | - | 414 | 0.1 | ||||||||||||
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Income
from operations
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28,404 | 8.3 | 33,972 | 10.4 | ||||||||||||
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Interest
expense, net
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920 | 0.3 | 1,856 | 0.6 | ||||||||||||
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Income
before income taxes
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27,484 | 8.0 | 32,116 | 9.8 | ||||||||||||
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Provision
for income taxes
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9,671 | 2.8 | 12,923 | 3.9 | ||||||||||||
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Net
income
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$ | 17,813 | 5.2 | $ | 19,193 | 5.9 | ||||||||||
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Earnings
per share
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Basic
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$ | 1.01 | - | $ | 1.08 | - | ||||||||||
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Diluted
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$ | 0.99 | - | $ | 1.06 | - | ||||||||||
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Average
shares outstanding
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Basic
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17,675 | - | 17,693 | - | ||||||||||||
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Diluted
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18,049 | - | 18,132 | - | ||||||||||||
DORMAN
PRODUCTS, INC. AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
(in
thousands)
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12/27/08
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12/29/07
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Assets:
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Cash
and cash equivalents
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$ | 5,824 | $ | 6,918 | ||||
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Accounts
receivable
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77,101 | 76,897 | ||||||
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Inventories
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93,577 | 80,565 | ||||||
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Deferred
income taxes
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11,626 | 10,111 | ||||||
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Prepaid
expenses
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2,135 | 1,921 | ||||||
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Total
current assets
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190,263 | 176,412 | ||||||
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Property
& equipment
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25,053 | 25,680 | ||||||
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Goodwill
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26,553 | 26,662 | ||||||
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Other
assets
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1,553 | 1,901 | ||||||
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Total
assets
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$ | 243,422 | $ | 230,655 | ||||
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Liability
& Shareholders' Equity:
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Current
portion of long-term debt
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$ | 86 | $ | 8,654 | ||||
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Accounts
payable
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21,900 | 18,752 | ||||||
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Accrued
expenses and other
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8,040 | 10,718 | ||||||
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Total
current liabilities
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30,026 | 38,124 | ||||||
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Long-term
debt and other
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17,464 | 10,811 | ||||||
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Deferred
income taxes
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8,088 | 7,862 | ||||||
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Shareholders'
equity
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187,844 | 173,858 | ||||||
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Total
Liabilities and Equity
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$ | 243,422 | $ | 230,655 | ||||
Selected
Cash Flow Information:
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(in
thousands)
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13 Weeks (unaudited)
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52 Weeks (unaudited)
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12/27/08
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12/29/07
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12/27/08
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12/29/07
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Depreciation
and amortization
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$ | 1,965 | $ | 1,992 | $ | 7,672 | $ | 7,744 | ||||||||
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Capital
Expenditures
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$ | 1,531 | $ | 1,310 | $ | 7,323 | $ | 5,371 | ||||||||
DORMAN
PRODUCTS, INC. AND SUBSIDIARIES
Reconciliation
of Non-GAAP Measures
(in
thousands, except per-share amounts)
This
press release contains non-GAAP measures which adjust net income and diluted
earnings per share to exclude the impact of the following one-time
items:
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Effective
December 31, 2006, we changed our vacation policy so that vacation is
earned ratably throughout the year rather than at the end of the preceding
year. This change resulted in a reduction in our vacation
accrual of $1.8 million in 2007, $0.4 million of which was recorded in the
three months ended December 29,
2007.
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Results
for the thirteen weeks and year ended December 29, 2007 include $0.4
million in non-cash write downs of goodwill of our Canadian subsidiary as
a result of a strategic review and realignment of the business as well as
a $0.6 million non-cash charge to our provision for income taxes to
provide a valuation allowance for deferred tax assets of the
subsidiary.
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Results
for the thirteen weeks and year ended December 27, 2008 include a $0.7
million tax benefit realized upon the disposition of our Canadian
subsidiary.
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The
presentation of these non-GAAP measures is intended to enhance the usefulness of
the financial information by providing measures which the Company’s management
uses internally to evaluate the Company’s baseline performance. A
reconciliation of net income and diluted earnings per share
follows:
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13
Weeks (unaudited)
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12/27/08
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12/29/07
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%
Change
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Net
income, as reported
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$ | 4,850 | $ | 3,684 | 31.7 | % | ||||||
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Less:
Vacation adjustment, net of tax
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- | (274 | ) | N/A | ||||||||
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Less:
Tax benefit upon disposition of subsidiary
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(673 | ) | - | N/A | ||||||||
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Add:
Asset write down
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- | 998 | N/A | |||||||||
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Net
income, as adjusted
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$ | 4,177 | $ | 4,408 | -5.2 | % | ||||||
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Diluted
EPS, as reported
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$ | 0.27 | $ | 0.20 | 35.0 | % | ||||||
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Less:
Vacation adjustment, net of tax
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- | (0.02 | ) | N/A | ||||||||
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Less:
Tax benefit upon disposition of subsidiary
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(0.04 | ) | - | N/A | ||||||||
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Add:
Asset write down
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- | 0.06 | N/A | |||||||||
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Diluted
EPS, as adjusted
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$ | 0.23 | $ | 0.24 | -4.2 | % | ||||||
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52
Weeks (unaudited)
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12/27/08
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12/29/07
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%
Change
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Net
income, as reported
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$ | 17,813 | $ | 19,193 | -7.2 | % | ||||||
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Less:
Vacation adjustment, net of tax
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- | (1,094 | ) | N/A | ||||||||
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Less:
Tax benefit upon disposition of subsidiary
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(673 | ) | - | N/A | ||||||||
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Add:
Asset write down
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- | 998 | N/A | |||||||||
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Net
income, as adjusted
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$ | 17,140 | $ | 19,097 | -10.2 | % | ||||||
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Diluted
EPS, as reported
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$ | 0.99 | $ | 1.06 | -6.6 | % | ||||||
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Less:
Vacation adjustment, net of tax
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- | (0.06 | ) | N/A | ||||||||
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Less:
Tax benefit upon disposition of subsidiary
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(0.04 | ) | - | N/A | ||||||||
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Add:
Asset write down
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- | 0.05 | N/A | |||||||||
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Diluted
EPS, as adjusted
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$ | 0.95 | $ | 1.05 | -9.5 | % | ||||||