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

COLMAR, PA -- (Marketwired) -- 10/29/13 -- 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

Source: Dorman Products, Inc.

Released October 29, 2013