Dorman Products, Inc. Reports Sales and Earnings for the Second Quarter Ended June 29, 2013

COLMAR, PA -- (Marketwired) -- 07/30/13 -- Dorman Products, Inc. (NASDAQ: DORM)

Second Quarter Highlights:

  • Sales increased 13% to $162.3 million.

  • Income from continuing operations increased 20% to $19.3 million, or $0.53 per diluted share.

  • Operating margin increased to 19.0% from 17.8% during the same period last year.

Dorman Products, Inc. (NASDAQ: DORM) today announced sales for the second quarter ended June 29, 2013 of $162.3 million, an increase of 13% from $144.2 million in the second quarter of 2012. The Company also announced income from continuing operations of $19.3 million, or $0.53 per diluted share, for the second quarter ended June 29, 2013, up 20% from the prior year's income from continuing operations of $16.1 million, or $0.44 per diluted share.

"Our growth continues to be fueled by our new product introductions, as 21% of our sales in the second quarter were from parts introduced in the last 24 months," said Mr. Steven Berman, Chairman and Chief Executive Officer. "During the first half of 2013, we released nearly 1,700 new parts to the automotive aftermarket, up from 1,300 in the first half of 2012."

Gross profit margin was 39.7% for the second quarter ended June 29, 2013, compared to 36.9% for the same period last year. The improvement in margin is primarily the result of a favorable change in sales mix, lower transportation costs and a lower provision for excess and obsolete inventory during the quarter. Selling, general and administrative expenses increased 23% in 2013 to $33.6 million from $27.4 million in 2012. Cost increases were primarily the result of higher variable costs associated with the 13% sales growth, additional product development and selling expenses, and depreciation and other related support costs associated with our recent enterprise reporting system implementation.

For the six months ended June 29, 2013, sales increased 14% over the prior year period to $316.7 million from $279.0 million last year. Income from continuing operations in 2013 increased 22% to $38.4 million from $31.4 million in the same period last year. Diluted earnings per share from continuing operations in 2013 rose 22% to $1.05 from $0.86 in the same period last year.

"Our success continues to be attributable to our contributors' drive to deliver new products to the market, and our customers' ability to have our parts immediately available to the technician and DIYer. We are continuing to make additional investments in new product development activities to expand the breadth of new product introductions," said Mr. Berman.

We have begun an expansion of our Warsaw, Kentucky distribution facility to provide additional capacity to support the current and projected growth of the business. The addition and related equipment, which will cost approximately $7 million, will add approximately 170,000 square feet of warehouse space and is expected to be completed in the fall of 2013. Mr. Berman added, "We are excited with the opportunity to expand our operation in Warsaw and to offer additional employment opportunities in that community. We have every confidence in our contributors to meet the challenges of growing our business."

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
Second Quarter (unaudited) 6/29/13 Pct. 6/30/12 Pct.
Net sales $ 162,261 100.0 $ 144,172 100.0
Cost of goods sold 97,906 60.3 91,026 63.1
Gross profit 64,355 39.7 53,146 36.9
Selling, general and administrative expenses 33,601 20.7 27,419 19.1
Income from operations 30,754 19.0 25,727 17.8
Interest expense, net 53 0.1 38 -
Income from continuing operations before income taxes 30,701 18.9 25,689 17.8
Provision for income taxes 11,359 7.0 9,583 6.6
Income from continuing operations 19,342 11.9 16,106 11.2
Income from discontinued operations - - 3,636 -
Net income $ 19,342 - $ 19,742 -
Diluted earnings per share:
Continuing operations $ 0.53 - $ 0.44 -
Discontinued operations - - 0.10 -
Diluted earnings per share $ 0.53 - $ 0.54 -
Weighted average diluted shares outstanding 36,685 - 36,636 -
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per-share amounts)
26 Weeks 26 Weeks
Second Quarter (unaudited) 6/29/13 Pct. 6/30/12 Pct.
Net sales $ 316,704 100.0 $ 278,995 100.0
Cost of goods sold 191,525 60.5 175,373 62.9
Gross profit 125,179 39.5 103,622 37.1
Selling, general and administrative expenses 64,517 20.3 53,488 19.1
Income from operations 60,662 19.2 50,134 18.0
Interest expense, net 101 0.1 52 -
Income from continuing operations before income taxes 60,561 19.1 50,082 18.0
Provision for income taxes 22,147 7.0 18,682 6.7
Income from continuing operations 38,414 12.1 31,400 11.3
Income from discontinued operations - - 3,920 -
Net income $ 38,414 - $ 35,320 -
Diluted earnings per share:
Continuing operations $ 1.05 - $ 0.86 -
Discontinued operations - - 0.11 -
Diluted earnings per share $ 1.05 - $ 0.97 -
Weighted average diluted shares outstanding 36,658 - 36,573 -
DORMAN PRODUCTS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
6/29/13 12/29/12
Assets:
Cash and cash equivalents $ 39,691 $ 27,708
Accounts receivable 151,207 133,806
Inventories 146,075 145,270
Deferred income taxes 21,047 20,559
Prepaid expenses 5,734 2,332
Total current assets 363,754 329,675
Property & equipment 51,136 48,758
Goodwill and other intangible assets 30,147 26,553
Other assets 1,466 1,323
Total assets $ 446,503 $ 406,309
Liabilities & Shareholders' Equity:
Accounts payable $ 44,809 $ 42,387
Accrued expenses and other 12,094 14,924
Total current liabilities 56,903 57,311
Other long-term liabilities 5,765 3,447
Deferred income taxes 12,382 12,679
Shareholders' equity 371,453 332,872
Total Liabilities and Equity $ 446,503 $ 406,309
Selected Cash Flow Information:
(in thousands) 13 Weeks (unaudited) 26 Weeks (unaudited)
6/29/13 6/30/12 6/29/13 6/30/12
Depreciation and amortization $ 2,465 $ 2,003 $ 4,733 $ 3,956
Capital expenditures $ 4,240 $ 4,959 $ 7,086 $ 9,454

Source: Dorman Products, Inc.

Released July 30, 2013